
Cash-trapped (part 2): drowning in debt
In the second episode of a two-part series, we're asking Chinese families, young professionals and business owners about their money troubles. This week, Jiehao Chen, The Economist 's China researcher, and James Miles, our China writer-at-large, explore why so many Chinese people are struggling with their repayments.

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Economist
4 hours ago
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Arms race: how good is Chinese AI?
More than six months on from DeepSeek's breakthrough, how much has China's AI ecosystem evolved? As it turns out, quite a bit. In an extended interview with Alex Hern, The Economist 's AI writer, we examine the major players in China, their models and how Chinese AI stacks up against its Western rivals. Now that the White House has lifted restrictions on the export of high-end chips to China, how might the battle for AI supremacy unfold?


Scottish Sun
6 hours ago
- Scottish Sun
Claire's on edge of collapse with 281 stores at risk as fashion retailer to file for administration
GOING BUST Claire's on edge of collapse with 281 stores at risk as fashion retailer to file for administration Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) CLAIRE'S has confirmed it will file for administration putting 281 stores at risk. The jewellery and accessories chain has said it wants to appoint administrators to secure the future of the brand. Sign up for Scottish Sun newsletter Sign up 1 Claire's UK has confirmed it has appointed administrators Credit: EPA The retailer said that stores will continue to stay open and trade as normal and no jobs will be lost. The firm plans to use the administration process as a way to continue trading in the UK. Its website is also currently operational. Consultancy firm Interpath are expected to be drafted in in the coming days to oversee the administration. Chris Cramer, chief executive officer, said: "This decision, while difficult, is part of our broader effort to protect the long-term value of Claire's across all markets. "In the UK, taking this step will allow us to continue to trade the business while we explore the best possible path forward. "We are deeply grateful to our employees, partners and our customers during this challenging period." It comes after the US parent business of Claire's filed for bankruptcy in the US for a second time, earlier this month. The ear-piercing favourite also declared itself bust in 2018 due to unpaid loans. Claire's operates 2,750 stores across 17 countries, but reports suggested the UK arm was unlikely to find a buyer. Potential buyers, like Hilco Capital, have pulled out of making offers recently after realising how serious the chain's problems are, a senior insolvency expert said. Earlier this week, it was reported Claire's staff had been told to not let bailiffs enter stores to take anything, following the collapse of the US parent business. Claire's UK arm has struggled financially, racking up £25million in losses over the past three years. In the year to March 2024, it reported a £4.7million loss, slightly better than the £5million loss the previous year, with turnover slipping to £137million. The company blames inflation, rising costs, and supply chain issues for its struggles. It has also been hit hard by US tariffs on Chinese imports, as much of its low-cost merchandise comes from China. Retail experts have said Claire's is struggling to stay relevant in a competitive market. Budget-conscious shoppers are now turning to online platforms for affordable jewellery and accessories, and increasingly away from physical high street branches. Julie Palmer, partner at Begbies Traynor, said: "Claire's low-price offering is clearly not strong enough to win over its core customers – teens and young adults – as they now have access to a vast array of affordable and convenient products online through platforms like Amazon and Temu. "So, with fewer reasons for its customers to visit their stores, the retailer has struggled to stay relevant." RETAIL SECTOR STRUGGLES The retail sector has struggled since the onset of online shopping and the coronavirus pandemic. Higher inflation since 2022 has also hit shoppers' budgets while businesses have struggled with higher wage, tax and energy costs.


Reuters
7 hours ago
- Reuters
EM portfolios see second biggest monthly inflow in four years, IIF data shows
NEW YORK, Aug 13 (Reuters) - This year's popularity of emerging market assets is showing no sign of let-up as international investors poured a combined $55.5 billion into EM stock and bond portfolios in July, the second-largest monthly total in four years. The total compared with $42.8 billion in June and $47.6 billion in July 2024, according to data on Wednesday from the Institute of International Finance. July's total was the largest net inflow since $63.5 billion in September and the second-largest since June 2021. The data showed Chinese debt attracted a net $30.8 billion, the most since March, while another $10 billion that went into non-Chinese EM stocks was the largest amount since December 2023. The strong numbers were backed by performance, with MSCI's 24-country EM stock index (.MSCIEF), opens new tab up 17% this year, compared to the S&P 500's (.SPX), opens new tab 9.5% advance. EM debt in dollars is up 8% (.JPMEGD), opens new tab while local currency debt (.JPMGBIEMTRD), opens new tab gained over 11% through July. "Flows into high-carry currencies have been persistent," said Jonathan Fortun, a senior economist at the IIF, a banking trade group. "This has been particularly visible in markets like Brazil, Mexico, and South Africa, where elevated real rates have combined with more stable exchange rates to deliver strong total returns." He said "passive allocations" have amplified the trend, with local government bond ETFs registering steady inflows, reflecting a growing comfort with currency risk given this year's weakening of the dollar. Despite a dollar rebound in July, the EM currency index (.MIEM00000CUS), opens new tab is up nearly 6% this year. The greenback has lost almost 8% against its main developed market peers (.DXY), opens new tab and the weakness has spilled into August too. Importantly, a weak U.S payrolls number last week tilted expectations towards as many as three rate cuts from the Federal Reserve before the end of the year. "The weaker dollar has also bolstered carry trade performance, with investors able to capture high local yields without facing the same level of (currency) depreciation risk seen in past cycles," said Fortun. Overall, EM equities saw a $16.3 billion inflow, the most since September, and $39.2 billion funnelled into debt, the most since March. The report highlighted equity inflows to South Korea which more than offset flows out of Taiwan. The Seoul benchmark (.KS11), opens new tab is up about 33% so far this year while the won has gained more than 6% against the dollar. Foreign ownership of South Korean stocks has risen steadily since mid April according to Goldman Sachs, yet at 29.6% it remains below the recent peak of 32% from July 2024.