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China lawmakers gather to approve long-awaited fiscal stimulus

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China lawmakers gather to approve long-awaited fiscal stimulus

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China’s lawmakers will begin a week-long session on Monday that is expected to approve the country’s largest fiscal package since the pandemic to boost confidence in the world’s second-largest economy.

Beijing has yet to indicate the scale of the measures, but finance minister Lan Fo’an last month promised it would help resolve some of the trillions of dollars of debt weighing down China’s cash-strapped local governments.

Analysts believe China needs to spend up to Rmb10tn ($1.4tn) over three years to help reflate an economy that has been hit by a prolonged property slump.

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But they warn that China will need to target fiscal spending not just at local government debt but also at households, which have suffered from the real estate crisis, if it is to rekindle confidence in the economy.

Fiscal easing “holds the key for the effectiveness of the ongoing stimulus package”, Goldman Sachs analysts said in a report, highlighting the importance of this week’s NPC meeting.

China’s stimulus drive started abruptly in late September when the central bank and other financial regulators announced interest rate cuts and other monetary measures to prop up the stock and real estate markets.

Economists believe China’s leaders became concerned after GDP in the three months to the end of September grew at a rate below the official annual target of 5 per cent for the second quarter in a row.

China is grappling with what some call a two-speed economy, with strong exports offsetting weak domestic demand.

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But market excitement over Beijing’s initial change of heart on the stimulus has been tempered by the slow release of details of the next phase of the campaign: the fiscal spending package.

NPC Observer, a website tracking China’s parliament, said the NPC would probably announce its decision on the fiscal package on state television evening news on Friday, with the details to come later that day.

China’s deputy minister of finance Liao Min said in Washington late last month that the package would involve “a series of powerful measures” to resolve debt problems at local governments, which were heavily reliant on land sales until the country’s property bubble burst in 2021.

He said the policies would also aim to stabilise the real estate market and spur domestic demand with schemes to encourage industry to upgrade its equipment and consumers to replace home appliances and other goods.

“China is confident that it will achieve the annual economic growth target . . . and continue to inject momentum into global economic growth,” Liao said, according to the finance ministry website. 

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Analysts believe the NPC could raise the debt ceiling to allow the issuance of up to Rmb6tn of swaps for local governments to refinance off-balance sheet debt.

Economists said the NPC could also approve an additional Rmb1tn in special sovereign bonds to recapitalise large state banks.

Goldman said the government might raise the official central government fiscal deficit target to 3.6 per cent of GDP next year from 3 per cent this year. It said the fiscal package would be smaller than during Covid and earlier years.

Most analysts cautioned that while tackling local government debt was good for financial stability and might spur some consumption if it led to the payment of civil servant salaries and arrears to suppliers, it would not add much to demand. Nor would the recapitalisation of banks.

“Any additional borrowing approved for these policies won’t provide much of a fiscal boost,” said Leah Fahy, China economist at Capital Economics.

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Macquarie economist Larry Hu also warned that the aim of the stimulus was mainly to meet official growth targets.

“The stimulus measures announced so far are sufficient to achieve 5 per cent GDP growth this year, but not enough to reflate the economy. Consumer and homebuyer confidence remains low,” Hu said.

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Win McNamee/Getty Images

The Supreme Court on Monday intervened in New York’s redistricting process, blocking a lower court decision that would likely have flipped a Republican congressional district into a Democratic district.    
  
At issue is the midterm redrawing of New York’s 11th congressional district, including Staten Island and a small part of Brooklyn. The district is currently held by a Republican, but on Jan. 21, a state Supreme Court judge ruled that the current district dilutes the power of Black and Latino voters in violation of the state constitution.  
  
GOP Rep. Nicole Malliotakis, who represents the district, and the Republican co-chair of the state Board of Elections promptly appealed to the U.S. Supreme Court, asking the justices to block the redrawing as an unconstitutional “racial gerrymander.” New York’s congressional election cycle was set to officially begin Feb. 24, the opening day for candidates to seek placement on the ballot.  
  
As in this year’s prior mid-decade redistricting fights — in Texas and California — the Trump administration backed the Republicans.   
 
Voters and the State of New York contended it’s too soon for the Supreme Court to wade into this dispute. New York’s highest state court has not issued a final judgment, so the voters asserted that if the Supreme Court grants relief now “future stay applicants will see little purpose in waiting for state court rulings before coming to this Court” and “be rewarded for such gamesmanship.” The state argues this is an issue for “New York courts, not federal courts” to resolve, and there is sufficient time for the dispute to be resolved on the merits. 
  
The court majority explained the decision to intervene in 101 words, which the three dissenting liberal justices  summarized as “Rules for thee, but not for me.” 
 
The unsigned majority order does not explain the Court’s rationale. It says only how long the stay will last, until the case moves through the New York State appeals courts. If, however, the losing party petitions and the court agrees to hear the challenge, the stay extends until the final opinion is announced. 
 
Dissenting from the decision were Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Writing for the three, Sotomayor  said that  if nonfinal decisions of a state trial court can be brought to highest court, “then every decision from any court is now fair game.” More immediately, she noted, “By granting these applications, the Court thrusts itself into the middle of every election-law dispute around the country, even as many States redraw their congressional maps ahead of the 2026 election.” 

Monday’s Supreme Court action deviates from the court’s hands-off pattern in these mid-term redistricting fights this year. In two previous cases — from Texas and California — the court refused to intervene, allowing newly drawn maps to stay in effect.  
  
Requests for Supreme Court intervention on redistricting issues has been a recurring theme this term, a trend that is likely to grow.  Earlier last month  the high court allowed California to use a voter-approved, Democratic-friendly map.  California’s redistricting came in response to a GOP-friendly redistricting plan in Texas that the Supreme Court also permitted to move forward. These redistricting efforts are expected to offset one another.     
   
But the high court itself has yet to rule on a challenge to Louisiana’s voting map, which was drawn by the state legislature after the decennial census in order to create a second majority-Black district.  Since the drawing of that second majority-black district, the state has backed away from that map, hoping to return to a plan that provides for only one majority-minority district.    
     
The Supreme Court’s consideration of the Louisiana case has stretched across two terms. The justices failed to resolve the case last term and chose to order a second round of arguments this term adding a new question: Does the state’s intentional creation of a second majority-minority district violate the constitution’s Fourteenth and Fifteenth Amendments’ guarantee of the right to vote and the authority of Congress to enforce that mandate?    
Following the addition of the new question, the state of Louisiana flipped positions to oppose the map it had just drawn and defended in court. Whether the Supreme Court follows suit remains to be seen. But the tone of the October argument suggested that the court’s conservative supermajority is likely to continue undercutting the 1965 Voting Rights Act.   

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Map: Earthquake Shakes Central California

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Map: Earthquake Shakes Central California

Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

A minor earthquake with a preliminary magnitude of 3.5 struck in Central California on Monday, according to the United States Geological Survey.

The temblor happened at 7:17 a.m. Pacific time about 6 miles northwest of Pinnacles, Calif., data from the agency shows.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Monday, March 2 at 10:20 a.m. Eastern. Aftershocks data is as of Monday, March 2 at 11:18 a.m. Eastern.

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US says Kuwait accidentally shot down 3 American jets

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US says Kuwait accidentally shot down 3 American jets

The U.S. and Israel have been conducting strikes against targets in Iran since Saturday morning, with the aim of toppling Tehran’s clerical regime. Iran has fired back, with retaliatory assaults featuring missiles and drones targeting several Gulf countries and American bases in the Middle East.

“All six aircrew ejected safely, have been safely recovered, and are in stable condition. Kuwait has acknowledged this incident, and we are grateful for the efforts of the Kuwaiti defense forces and their support in this ongoing operation,” Central Command said.

“The cause of the incident is under investigation. Additional information will be released as it becomes available,” it added.

In a separate statement later Monday, Central Command said that American forces had been killed during combat since the strikes began.

“As of 7:30 am ET, March 2, four U.S. service members have been killed in action. The fourth service member, who was seriously wounded during Iran’s initial attacks, eventually succumbed to their injuries,” it said.

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Major combat operations continue and our response effort is ongoing. The identities of the fallen are being withheld until 24 hours after next of kin notification,” Central Command added.

This story has been updated.

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