Category: US

Hong Kong
CNN
 — 

China’s economy grew at least 4.4% in 2022, according to leader Xi Jinping, a figure much stronger than many economists had expected. But the current Covid wave may hobble growth in the months ahead.

China’s annual GDP is expected to have exceeded 120 trillion yuan ($17.4 trillion) last year, Xi said in a televised New Year’s Eve speech on Saturday. That implies growth of more than 4.4%, which is a surprisingly robust figure.

Economists had generally expected growth to slump to a rate between 2.7% and 3.3% for 2022. The government had maintained a much higher annual growth target of around 5.5%.

“China’s economy is resilient and has good potential and vitality. Its long-term fundamentals remain unchanged,” Xi said. “As long as we are confident and seek progress steadily, we will be able to achieve our goals.”

In his remarks, Xi made a rare admission of the “tough challenges” experienced by many during three years of pandemic controls. Many online commentators noted that his tone appeared softer and less self congratulatory than his New Year’s addresses over the past two years.

In 2020, Xi devoted much time to praising China’s economic achievements, highlighting that it was the first major global economy to achieve positive growth. Last year, he emphasized the country had developed rapidly and that he had won praise from his counterparts for China’s fight against Covid.

However, in 2022, China’s economy was hit by widespread Covid lockdowns and a historic property downturn. Its growth is likely to be at or below global growth for the first time in 40 years, according to Kristalina Georgieva, managing director of the International Monetary Fund.

Chinese policymakers have vowed to seek a turnaround in 2023. They’re betting that the end of zero-Covid and a series of property support measures will revive domestic consumption and bolster growth.

But an explosion of Covid infections, triggered by the abrupt easing of pandemic restrictions in early December, is clouding the outlook. The country is battling its biggest-ever Covid outbreak.

Last week, Beijing announced it will end quarantine requirements for international arrivals from January 8, marking a major step toward reopening its borders.

The sudden end to the restrictions caught many in the country off guard and put enormous strain on the healthcare system.

The rapid spread of infections has kept many people indoors and emptied shops and restaurants. Factories have been forced to shut down or cut production because workers were getting sick.

Key data released Saturday showed factory activity in the country contracted in December by the fastest pace in nearly three years. The official manufacturing purchasing managers’ index (PMI) slumped to 47 last month from 48 in November, according to the National Bureau of Statistics.

It was the biggest drop since February 2020 and also marked the third straight month of contraction for the index. A reading below 50 indicates that activity is shrinking.

The non-manufacturing PMI, which measures activity in the services sector, plunged to 41.6 last month from 46.7 in November. It also marked the lowest level in nearly three years.

“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative,” said Georgieva in an interview aired by CBS News on Sunday. “The impact on the region would be negative. The impact on global growth would be negative.”

Analysts are also expecting the economy to face a bumpy start in 2023 — with a likely contraction in the first quarter, as surging Covid infections dampen consumer spending and disrupt factory activity.

However, some forecast the economy will rebound after March, as people learn to live with Covid. Many investment banks now forecast China’s 2023 growth to top 5%.

Editor’s Note: A version of this story appeared in CNN’s Meanwhile in China newsletter, a three-times-a-week update exploring what you need to know about the country’s rise and how it impacts the world. Sign up here.

Hong Kong
CNN
 — 

After a tumultuous end to a momentous and challenging year, China heads into 2023 with a great deal of uncertainty – and potentially a glimpse of light at the end of the pandemic tunnel.

The chaos unleashed by leader Xi Jinping’s abrupt and ill-prepared exit from zero-Covid is spilling over into the new year, as large swathes of the country face an unprecedented Covid wave.

But the haphazard reopening also offers a glimmer of hope for many: after three years of stifling Covid restrictions and self-imposed global isolation, life in China may finally return to normal as the nation joins the rest of the world in learning to live with the virus.

“We have now entered a new phase of Covid response where tough challenges remain,” Xi said in a nationally televised New Year’s Eve speech. “Everyone is holding on with great fortitude, and the light of hope is right in front of us. Let’s make an extra effort to pull through, as perseverance and solidarity mean victory.”

Xi had previously staked his political legitimacy on zero-Covid. Now, as his costly strategy gets dismantled in an abrupt U-turn following nationwide protests against it, many are left questioning his wisdom. The protests, which in some places saw rare demands for Xi and the Communist Party to “step down,” may have ended, but the overriding sense of frustration has yet to dissipate.

His New Year speech comes as China’s lockdown-battered economy faces more immediate strain from a spiraling outbreak that has hit factories and businesses, ahead of what is likely to be a long and complicated road to economic recovery.

Its tightly-sealed borders are gradually opening up, and Chinese tourists are eager to explore the world again, but some countries appear cautious to receive them, imposing new requirements for a negative Covid test before travel. And just how quickly – or keenly – global visitors will return to China is another question.

Xi, who recently reemerged on the world stage after securing a third term in power, has signaled he hopes to mend frayed relations with the West, but his nationalist agenda and “no-limits friendship” with Russia is likely to complicate matters.

As 2023 begins, CNN takes a look at what to watch in China in the year ahead.

The most urgent and daunting task facing China in the new year is how to handle the fallout from its botched exit from zero-Covid, amid an outbreak that threatens to claim hundreds of thousands of lives and undermine the credibility of Xi and his Communist Party.

The sudden lifting of restrictions last month led to an explosion of cases, with little preparation in place to deal with the surging numbers of patients and deaths.

The country’s fragile heath system is scrambling to cope: fever and cold medicines are hard to find, hospitals are overwhelmed, doctors and nurses are stretched to the limit, while crematoriums are struggling to keep up with an influx of bodies.

And experts warn the worst is yet to come. While some major metropolises like Beijing may have seen the peak of the outbreak, less-developed cities and the vast rural hinterland are still bracing for more infections.

As the travel rush for the Lunar New Year – the most important festival for family reunion in China – begins this week, hundreds of millions of people are expected to return to their hometowns from big cities, bringing the virus to the vulnerable countryside where vaccination rates are lower and medical resources even scarcer.

The outlook is grim. Some studies estimate the death toll could be in excess of a million, if China fails to roll out booster shots and antiviral drugs fast enough.

The government has launched a booster campaign for the elderly, but many remain reluctant to take it due to concerns about side effects. Fighting vaccine hesitancy will require significant time and effort, when the country’s medical workers are already stretched thin.

Beijing’s Covid restrictions have put China out of sync with the rest of the world. Three years of lockdowns and border curbs have disrupted supply chains, damaged international businesses, and hurt flows of trade and investment between China and other countries.

As China joins the rest of the world in living with Covid, the implications for the global economy are potentially huge.

Any uptick in China’s growth will provide a vital boost to economies that rely on Chinese demand. There will be more international travel and production. But rising demand will also drive up prices of energy and raw materials, putting upward pressure on global inflation.

“In the short run, I believe China’s economy is likely to experience chaos rather than progress for a simple reason: China is poorly prepared to deal with Covid,” said Bo Zhuang, senior sovereign analyst at Loomis, Sayles & Company, an investment firm based in Boston.

Analysts from Capital Economics expect China’s economy to contract by 0.8% in the first quarter of 2023, before rebounding in the second quarter.

Other experts also expect the economy to recover after March. In a recent research report, HSBC economists projected a 0.5% contraction in the first quarter, but 5% growth for 2023.

Despite all this uncertainty, Chinese citizens are celebrating the partial reopening of the border after the end of quarantine for international arrivals and the resumption of outbound travel.

Though some residents voiced concern online about the rapid loosening of restrictions during the outbreak, many more are eagerly planning trips abroad – travel websites recorded massive spikes in traffic within minutes of the announcement on December 26.

Several Chinese nationals overseas told CNN they had been unable or unwilling to return home for the last few years while the lengthy quarantine was still in place. That stretch meant major life moments missed and spent apart: graduations, weddings, childbirths, deaths.

Some countries have offered a warm welcome back, with foreign embassies and tourism departments posting invitations to Chinese travelers on Chinese social media sites. But others are more cautious, with many countries imposing new testing requirements for travelers coming from China and its territories.

Officials from these countries have pointed to the risk of new variants emerging from China’s outbreak – though numerous health experts have criticized the targeted travel restrictions as scientifically ineffective and alarmist, with the risk of inciting further racism and xenophobia.

As China emerges from its self-imposed isolation, all eyes are on whether it will be able to repair its reputation and relations that soured during the pandemic.

China’s ties with the West and many of its neighbors plummeted significantly over the origins of the coronavirus, trade, territorial claims, Beijing’s human rights record and its close partnership with Russia despite the devastating war in Ukraine.

The lack of top-level face-to-face diplomacy certainly didn’t help, neither did the freeze on in-person exchanges among policy advisers, business groups and the wider public.

At the G20 and APEC summits, Xi signaled his willingness to repair relations with the United States and its allies in a flurry of bilateral meetings.

Communication lines are back open and more high-level exchanges are in the pipeline – with US Secretary of State Antony Blinken, French President Emmanuel Macron, Dutch Prime Minister Mark Rutte and Italy’s newly elected Prime Minister Giorgia Meloni all expected to visit Beijing this year.

But Xi also made clear his ambition to push back at American influence in the region, and there is no illusion that the world’s two superpowers will be able to work out their fundamental differences and cast aside their intensifying rivalry.

In the new year, tensions may again flare over Taiwan, technological containment, as well as China’s support for Russia – which Xi underlined during a virtual meeting with Russian President Vladimir Putin on December 30.

Both leaders expressed a message of unity, with Xi saying the two countries should “strengthen strategic coordination” and “inject more stability into the world,” according to Chinese state media Xinhua.

China is “ready to work” with Russia to “stand against hegemonism and power politics,” and to oppose unilateralism, protectionism and “bullying,” said Xi. Putin, meanwhile, invited Xi to visit Moscow in the spring of 2023.

Beijing has long refused to condemn Russia’s invasion of Ukraine, or even refer to it as such. It has instead decried Western sanctions and amplified Kremlin talking points blaming the US and NATO for the conflict.

As Russia suffered humiliating military setbacks in Ukraine in recent months, Chinese state media appeared to have somewhat dialed back its pro-Russia rhetoric, while Xi has agreed to oppose the use of nuclear weapons in Ukraine in meetings with Western leaders.

But few experts believe China will distance itself from Russia, with several telling CNN the two countries’ mutual reliance and geopolitical alignment remains strong – including their shared vision for a “new world order.”

“(The war) has been a nuisance for China this past year and has affected China’s interest in Europe,” said Yun Sun, director of the China Program at the Washington-based think tank Stimson Center. “But the damage is not significant enough that China will abandon Russia.”

CNN
 — 

The House January 6 committee on Sunday released another wave of witness interview transcripts.

The new release is part of a steady stream of transcript drops from the House select committee in recent days, complementing the release of its sweeping 845-page report.

The latest transcript drop comes as the panel winds down its work with the House majority set to change hands from Democrats to Republicans on Tuesday at the start of the new Congress.

The transcripts released so far have shed new light on how the House committee conducted its investigation of the January 6, 2021, attack on the US Capitol – and new details about what key witnesses told the panel.

Here are some of the highlights from the latest disclosures:

Mark Meadows, former President Donald Trump’s White House chief of staff, provided the select committee with 6,600 pages of email records and approximately 2,000 text messages, according to a transcript of a deposition for which Meadows did not appear in December 2021.

Investigators ran through some of the items they had hoped to ask Meadows about if he had appeared, including a December 2020 email from Meadows stating, “Rudy was put in charge. That was the President’s decision,” according to the committee transcript.

The committee also hoped to ask Meadows about certain passages in his book, specific text message exchanges and his outreach to the Justice Department “encouraging investigations of suspected voter fraud.” The committee also planned to ask Meadows about his communications regarding deploying the National Guard on January 6, “including a January 5th email from Mr. Meadows in which he indicates that the Guard would be present at the Capitol to, quote, ‘protect 153 pro-Trump people,’ end quote.”

The committee similarly convened no-show deposition meetings for former Trump aide Dan Scavino, former Trump administration official Peter Navarro and right-wing media personality Steve Bannon, who previously worked in the Trump White House. The brief transcripts of those meetings document the failure of the witnesses to appear and communications the committee had with the witnesses or their representatives.

In a transcript with Alexandra Preate, who worked as a spokeswoman for Bannon, the committee asked about their text exchanges. In one, the two appeared to be discussing – days after the Capitol was attacked – 1 million people surrounding the Capitol after Joe Biden’s inauguration on January 20, 2021.

The committee interviewer quotes Bannon’s text as saying, “I’d surround the Capitol in total silence.”

When asked if she and Bannon talked about bringing people back to Washington, DC, even after January 6, Preate said, “I don’t recall that” and it was “not my deal.” Preate also said she believes Trump lost the election.

Read the full transcript of the no-show deposition with Mark Meadows.

Read the full transcript of the interview with Alexandra Preate.

Republican National Committee Chair Ronna McDaniel told the committee that the former president called her on January 1, 2021, and asked her about her relationship with then-Vice President Mike Pence.

“I do have a recollection of him asking me what my relationship was with the Vice President, and I said I didn’t know him very well,” McDaniel told the select committee, according to a transcript.

McDaniel said she could not recall if they specifically discussed the role Pence would play in certifying the Electoral College vote five days after that call. But McDaniel said that later on, after the US Capitol attack, Trump conveyed to her privately “in one way or another that, you know, the Vice President had the authority to – I don’t know the correct legal term, but he had the authority to not accept the electors.”

She also said Trump called her on January 7 but they did not talk about the attack.

The panel revealed during its hearings over the summer that Trump called McDaniel directly in December to tell her about the plan for a group of states to submit alternate slates of electors and connected her to his elections lawyer John Eastman, but her full transcript reveals more details about what was shared between the RNC, Trump White House and the Trump campaign at the time.

In the lead-up to January 6, McDaniel testified that she did not know that the alternate slates of electors were being considered for anything other than contingent electors in case legal challenges changed state election results. She added she was not privy to a lot of those discussions and that she was going through ankle surgery around the time of the Capitol attack.

McDaniel told committee investigators that after that December call, she called the Trump campaign’s counsel Justin Clark, who gave her the impression that the campaign was aware of the so-called alternate elector plan and was working on it. She also testified that on December 14, when she was informed that false electors met, she sent a note to former Trump White House aide Molly Michael.

As for fundraising emails from the RNC about the 2020 election, McDaniel said the RNC worked closely with Clark but that once Giuliani took over Trump’s legal efforts, he “was doing his own thing and didn’t really reach out to the RNC.”

Read the full transcript of the interview with Ronna McDaniel.

A Trump campaign attorney described to the committee a request by Giuliani to be paid $20,000 per day for his post-election legal work – a request that Giuliani has denied making.

Matthew Morgan, who was general counsel for former President Donald Trump’s reelection campaign, described to the committee how the campaign handled requests by Giuliani and his team – which took over the campaign’s litigation strategy in mid-November 2020 – to bring on outside attorneys and firms.

“Rudy Giuliani himself, he requested an engagement letter, and he requested through a surrogate what was viewed as a large amount of compensation,” Morgan said, according to a transcript of an April interview that was made public Sunday.

“And when I presented this to (Trump deputy campaign manager) Justin Clark, Justin Clark didn’t think that was a number the campaign was willing to pay and I relied on then Justin to tell me if we could do such an engagement letter and then it never materialized.”

Morgan told the House committee the ask was made via an associate of Giuliani’s, Maria Ryan, and that it was for $20,000 per day. He declined to answer further questions from the committee about the pushback from the campaign to the request.

CNN previously reported that Giuliani was asking for $20,000-per-day in November 2020, citing a source. At the time, Giuliani denied to The New York Times that he was seeking that figure.

Read the full transcript of the interview with Matthew Morgan.

Trump White House aides offered conflicting accounts of how the former president reacted when he learned he would not be taken to the US Capitol on January 6, 2021.

While Cassidy Hutchinson, in her testimony, described Trump’s reaction as an angry outburst, Robert “Bobby” Engel – the lead agent in Trump’s motorcade the day of the riot – apparently told others in the White House that Trump simply “shrugged it off” when he was told he would not be taken to the Capitol.

When Engel returned to the White House after Trump’s January 6 speech, he stopped by the office shared by former White House deputy chief of staff Tony Ornato and William “Beau” Harrison, the special assistant to the president for operations.

“It was brought to our attention that the President asked where am I going. You know, am I going – am I going back to the White House. And Bob said, yeah, you know, we’re going back to the White House,” Harrison told committee investigators in an August 2022 interview, according to the transcript.

“And at that point I have a specific memory of Bobby telling both Tony and myself, as we were in the room, no one else was in the room, that the President almost kind of shrugged it off,” Harrison told the committee. “He just kind of moved on.”

Harrison told congressional investigators he had never heard of a heated argument in the vehicle until he saw Hutchinson’s testimony on television. “I would also add that, if something like had been described had occurred, I 100 percent would have known about it and would have heard that.”

When Hutchinson testified, Harrison got a call from Ornato. Ornato said, essentially, “Can you believe this?” and “Where is this story even coming from,” according to Harrison’s committee transcript.

Notably, Harrison told investigators he was not paying for his legal representation and was not sure who was footing the bill.

Harrison’s attorney for his committee interview was Stefan Passantino, who previously represented Hutchinson and allegedly encouraged Hutchinson to provide misleading testimony. Passantino has insisted he represented Hutchinson “honorably” and “ethically.”

Read the full transcript of the interview with Beau Harrison.

Kenneth Chesebro – the Trump attorney described by the House January 6 committee as the architect of the post-2020 election fake electors scheme – declined to answer the bulk of the panel’s questions in an October deposition, according to a transcript.

Chesebro invoked both his Fifth Amendment right against self-incrimination as well as attorney-client privilege when asked questions about a variety of topics, including his interactions with Trump, his role in the plot to put forward Trump electors to rival the Biden electors in states that Biden won and the push to have Pence disrupt Congress’ certification of Biden’s win.

“I believe my Fifth Amendment privilege covers this entire subject matter in terms of any involvement with the alternate electors,” Chesebro said at one point in the deposition. At its start, his lawyer referenced the criminal probes in Fulton County, Georgia, and by the Justice Department, which are both looking closely at the fake electors scheme.

Chesebro did answer some of the committee’s more abstract questions about how he learned of the legal questions that shaped the theories he promoted after the 2020 election. However, citing the Fifth Amendment, he refused to say whether he went to the White House on December 16, 2020, as suggested by an email obtained by the committee, or if he was in Washington, DC, on January 6, 2021.

He also refused to confirm that he was the Kenneth Chesebro listed on some emails obtained by the committee that investigators sought to ask him about.

“I think I would take the Fifth in terms of authenticating a document that is related to the subject matter as to which I’m taking the Fifth,” he said.

Read the full transcript of the interview with Kenneth Chesebro.

As rioters were breaking into the Capitol on January 6, Trump called his executive assistant, Molly Michael, to ask her what she thought and she described the scene that was unfolding, according to a transcript of her interview with the committee.

“The President of the United States in the middle of a riot at the Capitol calls you and asks you what you think, not what you see but what you think, and you don’t recall what you told him other than just reporting what was on TV?” investigators asked.

“The TV is very large, and the coverage was on probably all four of the stations. So that was really all I was seeing,” Michael said. “The images I was seeing is the predominant memory I have.”

Committee investigators pressed her for more details on how Trump reacted during their call.

“You don’t remember him expressing any distress, any frustration, any anger, any anything. Is that right?” investigators asked.

Michael responded, “The phones were ringing. A lot was happening. I don’t recall.”

Michael’s lengthy interview transcript was heavy with moments she did not recall, such as Trump’s demeanor at the end of the day on January 6.

When congressional investigators asked Michael if she was aware in the run up to January 6 of a “very serious, acrimonious conflict” between Trump and Pence, Michael said she couldn’t recall but there were often heated conversations playing out in the Oval Office.

Her committee interview also revealed more details about Trump’s activities the night before the Capitol attack, when he was apparently directing his assistant to share election fraud claims with GOP senators.

Trump directed Michael to send Sens. Lindsey Graham and Josh Hawley a document entitled “The Art of the Steal” – apparently authored by Navarro – on the evening of January 5, according to emails investigators reviewed with Michael during her committee interview.

Congressional investigators asked Michael about the emails, which she sent on Trump’s behalf with the subject line “From POTUS.”

Read the full transcript of the interview with Molly Michael.