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China’s treatment of local debt ‘ulcer’ threatens growth target

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China’s treatment of local debt ‘ulcer’ threatens growth target

China is scrapping a string of infrastructure projects in indebted regions as it struggles to reconcile a need to save money with this year’s target for economic growth.

Beijing has ordered a dozen highly indebted areas, many of them less-developed and far from the coast, to curb infrastructure spending as it tries to unwind a decade-long investment binge many believe is unsustainable.

But analysts say the austerity drive may make it even more difficult to achieve the ambitious 5 per cent target for annual growth set by Premier Li Qiang during China’s “Two Sessions” political gathering this month — with potentially far-reaching implications for the global economy.

Among the projects being scrapped are a highway in Yunnan province and a tunnel in Gansu. Guizhou province has sidelined so many infrastructure schemes that provincial outlays for major projects this year are projected to fall 60 per cent.

China’s economy is still bearing the impact of a real estate sector crisis that began after authorities sought to rein in developers’ vast borrowing.

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“In 2021 they went after property, this year they have been addressing the infrastructure side of the equation and local government debt,” said Michael Pettis, a finance professor at Peking University.

Investment in property and infrastructure had been significant sources of economic expansion, Pettis said. “So the question is: where is growth going to come from?”

In a policy document seen by the Financial Times, the State Council, China’s cabinet, ordered 10 debt-laden provinces and regions and two major cities to strengthen oversight and approvals of government projects.

The rules, which took effect on January 1, bar the 12 areas from launching many types of new projects, such as building highways or government buildings, and call for a suspension of some early-stage schemes.

“Governments of all levels better get used to belt-tightening and start to understand that this is not a temporary need, but a long-term solution,” finance minister Lan Fo’an told a press conference during the Two Sessions, which closed on Monday.

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Officials from several provinces sought debt relief from state bankers in discussions on the sidelines of the parallel sessions of the National People’s Congress, China’s rubber-stamp parliament, and the Chinese People’s Political Consultative Conference, an advisory body.

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Provincial delegates hailed the government’s clampdown on infrastructure spending.

“If you have an ulcer and you ignore it, you may just look healthy but actually are not,” said Wang Chunru, a CPPCC member from debt-stricken Inner Mongolia, one of the 12 province-level governments targeted. “Only by treating it and getting rid of it can you actually live longer and better.”

But analysts at Goldman Sachs describe the push to shelve projects in some of the most indebted areas, while providing enough fiscal stimulus elsewhere to boost economic growth, as a “balancing act”.

Beijing is betting that increasing infrastructure investment in richer coastal provinces such as Zhejiang or Guangdong can offset the cutbacks in the 12 targeted areas, which include the province-level cities of Tianjin and Chongqing and rustbelt north-eastern provinces.

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Together, Goldman said the 12 areas accounted for 22 per cent of China’s fixed asset investment and 18 per cent of gross domestic product last year.

Fixed asset investment was expected to fall this year by 60 per cent for the western province of Guizhou and between 11 per cent and 15 per cent for several others, Goldman said.

At the NPC, Premier Li said: “We will make concerted efforts to defuse local government debt risks while ensuring stable development.”

But analysts believe that will be easier said than done.

Li has signalled more support for the economy in 2024, with plans to issue Rmb1tn in long-term central government special bonds — an instrument used to raise extra funds.

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This should help overly indebted local governments to deleverage, said Chris Beddor of Gavekal Dragonomics. The deleveraging process started last year, with state banks restructuring debts. Local governments have also issued more than Rmb1.4tn in bonds to repay implicit debt from off-balance sheet financing vehicles.

“It’s clear that policymakers think they can get around this by essentially having the central government issue more bonds and do more of the fiscal work itself for the local governments while at least some of them engage in a sort of fiscal retrenchment,” said Beddor. “I think it creates a lot of room for policy error.”

While it was not his “base case”, it was possible the government could fail to calibrate the adjustment properly and the economy would actually “get a drag instead of a push”, Beddor said.

The enthusiasm for a spending clampdown expressed by some of those attending the Two Sessions is also likely to fuel economists’ concerns about the strength of Chinese consumption.

“All of us Chinese people need to tighten our belts, not just local governments,” said Zhang Shuyang, a Guizhou NPC delegate. “Living frugally is our glorious tradition as the Chinese nation.”

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Guizhou, one of China’s poorest provinces, is now home to nearly half of the world’s highest 100 bridges, including four of the top 10. Yuekai Securities estimates the province’s infrastructure building spree has left it with total debt, including off-balance-sheet liabilities, at 137 per cent of its GDP.

Chinese local government debt, including off-balance-sheet financing vehicles and shadow credit, was probably equivalent to between 75 and 91 per cent of national GDP in 2022, according to a paper last year by Victor Shih and Jonathan Elkobi of the University of California San Diego.

Twelve province-level governments had outstanding bonds alone equivalent to more than 50 per cent of their GDP, they wrote. China says its total central and local government debt is less than 51 per cent of GDP.

In the Chinese capital last week, Guizhou governor Li Bingjun said he understood living frugally was the new norm and pledged to strictly manage projects and cut expenditures.

“We continue to reduce various festivals, forums and exhibition activities,” Li told reporters. “If it’s not necessary, we don’t hold it.”

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Additional reporting by Wenjie Ding and Nian Liu in Beijing

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Video: First Batch of Epstein Files Provides Few Revelations

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Video: First Batch of Epstein Files Provides Few Revelations

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First Batch of Epstein Files Provides Few Revelations

The Justice Department, under pressure from Congress to comply with a law signed by President Trump, released more than 13,000 files on Friday arising from investigations into Jeffrey Epstein.

Put out the files and stop redacting names that don’t need to be redacted. It’s just — who are we trying to protect? Are we protecting the survivors? Or are we protecting these elite men that need to be put out there?

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The Justice Department, under pressure from Congress to comply with a law signed by President Trump, released more than 13,000 files on Friday arising from investigations into Jeffrey Epstein.

By McKinnon de Kuyper

December 20, 2025

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Apple, Google tell workers on visas to avoid leaving the U.S. amid Trump immigration crackdown

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Apple, Google tell workers on visas to avoid leaving the U.S. amid Trump immigration crackdown

With reported months-long consulate and embassy delays, Google and Apple say employees on H-1B visas should stay put in the U.S. right now to avoid the risk of getting stranded abroad. The latter tech company’s headquarters campus is seen in Mountain View, Calif.

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Apple and Google are warning some U.S-based employees on visas against traveling outside of the country to avoid the risk of getting stuck coming back, as the Trump administration toughens vetting of visa applicants, according to recent internal memos from the tech companies that were reviewed by NPR.

U.S. consulates and embassies have been reporting lengthy, sometimes months-long delays, for visa appointments following new rules from the Department of Homeland Security requiring travelers to undergo a screening of up to five years’ of their social media history — a move criticized by free speech advocates as a privacy invasion.

For Apple and Google, which together employ more than 300,000 employees and rely heavily on highly-skilled foreign workers, the increased vetting and reports of extended delays were enough for the companies to tell some of their staff to stay in the U.S. if they are able to avoid foreign travel.

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“We recommend avoiding international travel at this time as you risk an extended stay outside of the U.S.,” Berry Appleman & Leiden, a law firm that works with Google, wrote to employees.

The law firm Fragomen, which works with Apple, wrote a similar message: “Given the recent updates and the possibility of unpredictable, extended delays when returning to the U.S., we strongly recommend that employees without a valid H-1B visa stamp avoid international travel for now,” the memo read. “If travel cannot be postponed, employees should connect with Apple Immigration and Fragomen in advance to discuss the risks.”

Apple and Google declined to comment on the advisories, which were first reported by Business Insider.

It’s the latest sign of how the Trump administration’s aggressive immigration policies are affecting the foreign-born workforce in the U.S.

Earlier this year, the White House announced that companies will be subjected to a $100,000 fee for all new H-1B visas, a type of visa popular among tech companies eager to hire highly skilled workers from abroad.

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H-1Bs typically last three years, and applicants have to return to an embassy or consulate in their home country for a renewal, but reports suggest such a routine trip could lead to people being stranded for months as a result of the Trump administration’s new policies.

On Friday, The Washington Post reported that hundreds of visa holders who traveled to India to renew their H-1Bs had their appointments postponed with the State Department explaining that officials needed more time to ensure that no applicants “pose a threat to U.S. national security or public safety.”

At Google, the Alphabet Workers’ Union has been campaigning for additional protections for workers on H-1B visas. Those workers would be particularly vulnerable in the event Google carried out layoffs, since losing employer sponsorship could jeopardize their legal status, said Google software engineer Parul Koul, who leads the union.

The need to support H-1B holders at Google, she said, has “only become more urgent with all the scrutiny and heightened vetting by the Trump administration around the H1B program, and how the administration is coming for all other types of immigrant workers.”

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U.S. launches strikes in Syria targeting Islamic State fighters after American deaths

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U.S. launches strikes in Syria targeting Islamic State fighters after American deaths

President Donald Trump and Defense Secretary Pete Hegseth salute as carry teams move the transfer cases with the remains of Iowa National Guard soldiers Sgt. William Nathaniel Howard, 29, of Marshalltown, Iowa, and Sgt. Edgar Brian Torres-Tovar, 25, of Des Moines, Iowa, and civilian interpreter Ayad Mansoor Sakat, who were killed in an attack in Syria, during a casualty return, Wednesday, Dec. 17, 2025 at Dover Air Force Base, Del.

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WASHINGTON — The Trump administration launched military strikes Friday in Syria to “eliminate” Islamic State group fighters and weapons sites in retaliation for an ambush attack that killed two U.S. troops and an American civilian interpreter almost a week ago.

A U.S. official described it as “a large-scale” strike that hit 70 targets in areas across central Syria that had IS infrastructure and weapons. Another U.S. official, who also spoke on condition of anonymity to discuss sensitive operations, said more strikes should be expected.

“This is not the beginning of a war — it is a declaration of vengeance. The United States of America, under President Trump’s leadership, will never hesitate and never relent to defend our people,” Defense Secretary Pete Hegseth said on social media.

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The new military operation in Syria comes even as the Trump administration has said it’s looking to focus closer to home in the Western Hemisphere, building up an armada in the Caribbean Sea as it targets alleged drug-smuggling boats and vowing to keep seizing sanctioned oil tankers as part of a pressure campaign on Venezuela’s leader. The U.S. has shifted significant resources away from the Middle East to further those goals: Its most advanced aircraft carrier arrived in South American waters last month from the Mediterranean Sea.

Trump vowed retaliation

President Donald Trump pledged “very serious retaliation” after the shooting in the Syrian desert, for which he blamed IS. Those killed were among hundreds of U.S. troops deployed in eastern Syria as part of a coalition fighting the militant group.

During a speech in North Carolina on Friday evening, the president hailed the operation as a “massive strike” that took out the “ISIS thugs in Syria who were trying to regroup.”

Earlier, in his social media post, he reiterated his backing for Syrian President Ahmad al-Sharaa, who Trump said was “fully in support” of the U.S. effort.

Trump also offered an all-caps threat, warning IS against attacking American personnel again.

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“All terrorists who are evil enough to attack Americans are hereby warned — YOU WILL BE HIT HARDER THAN YOU HAVE EVER BEEN HIT BEFORE IF YOU, IN ANY WAY, ATTACK OR THREATEN THE U.S.A.,” the president added.

The attack was conducted using F-15 Eagle jets, A-10 Thunderbolt ground attack aircraft and AH-64 Apache helicopters, the U.S. officials said. F-16 fighter jets from Jordan and HIMARS rocket artillery also were used, one official added.

U.S. Central Command, which oversees the region, said in a social media post that American jets, helicopters and artillery employed more than 100 precision munitions on Syrian targets.

How Syria has responded

The attack was a major test for the warming ties between the United States and Syria since the ouster of autocratic leader Bashar Assad a year ago. Trump has stressed that Syria was fighting alongside U.S. troops and said al-Sharaa was “extremely angry and disturbed by this attack,” which came as the U.S. military is expanding its cooperation with Syrian security forces.

Syria’s foreign ministry in a statement on X following the launch of U.S. strikes said that last week’s attack “underscores the urgent necessity of strengthening international cooperation to combat terrorism in all its forms” and that Syria is committed “to fighting ISIS and ensuring that it has no safe havens on Syrian territory and will continue to intensify military operations against it wherever it poses a threat.”

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Syrian state television reported that the U.S. strikes hit targets in rural areas of Deir ez-Zor and Raqqa provinces and in the Jabal al-Amour area near the historic city of Palmyra. It said they targeted “weapons storage sites and headquarters used by ISIS as launching points for its operations in the region.”

IS has not said it carried out the attack on the U.S. service members, but the group has claimed responsibility for two attacks on Syrian security forces since, one of which killed four Syrian soldiers in Idlib province. The group in its statements described al-Sharaa’s government and army as “apostates.” While al-Sharaa once led a group affiliated with al-Qaida, he has had a long-running enmity with IS.

The Americans who were killed

Trump this week met privately with the families of the slain Americans at Dover Air Force Base in Delaware before he joined top military officials and other dignitaries on the tarmac for the dignified transfer, a solemn and largely silent ritual honoring U.S. service members killed in action.

The guardsmen killed in Syria last Saturday were Sgt. Edgar Brian Torres-Tovar, 25, of Des Moines, and Sgt. William Nathaniel Howard, 29, of Marshalltown. Ayad Mansoor Sakat, of Macomb, Michigan, a U.S. civilian working as an interpreter, also was killed.

The shooting near Palmyra also wounded three other U.S. troops as well as members of Syria’s security forces, and the gunman was killed. The assailant had joined Syria’s internal security forces as a base security guard two months ago and recently was reassigned because of suspicions that he might be affiliated with IS, Interior Ministry spokesperson Nour al-Din al-Baba has said.

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The man stormed a meeting between U.S. and Syrian security officials who were having lunch together and opened fire after clashing with Syrian guards.

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