Reuters World News - Blinken meets Xi and Chinese bankers rein it in

Episode Date: June 19, 2023

U.S. Secretary of State Anthony Blinken is in China for a much-anticipated visit – but with few real breakthroughs expected. How U.C. Berkeley tried to buoy enrollment of Black students without affirmative action. Plus, why China’s big-spending bankers are being told to stop flashing the cash. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt-out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Secretary of State Blinkins in China, but hopes are limited for any Thor in relations. California banned race-based college enrollment factors 25 years ago. We look at how the elite UC Berkeley tries to increase black enrollment without affirmative action. And China's big spending bankers are told to stop flashing the cash. It's Monday, June 19th. This is Reuters World News. with everything you need to know from the front lines in 10 minutes every weekday. I'm Kim Vinald back after a week's break.

Hope you didn't miss me too much. Candid, substantive and constructive. That's how the State Department describes talks between Anthony Blinken and Chinese foreign minister, Chin Gang. Blinken's long-awaited trip was originally postponed because of a dispute over a suspected Chinese spy balloon. Ties have been frosty, between the world's largest economies.

Blinken is the highest ranking U.S. official to visit China since President Joe Biden took office in January 2021. Humera Pamuk is on the ground in Beijing for us. So, Humerra, what's the reception been like for Blinken? Foreign Minister Chingang greeted Secretary Blinken at the door, and I'm told by some local colleagues that that's actually a little bit unusual. some of the local colleagues here interpreted the fact that Jingang greeted him at the door, waited for him at the door and walked with him on the red carpet as some sort of a goodwill

gesture to show him that he's a very important guest. What's the most urgent thing on the agenda? Well, the most urgent thing is basically defining the relationship itself and agreeing that it needs to remain as a strategic rivalry and that it should never veer into conflict. And to ensure that setting up, establishing some sort of a crisis communication mechanism. What's the risk if relations don't start to thaw? The biggest risk is that there might be kinetic conflict over Taiwan in the future. And if there isn't any diplomatic or military-to-military dialogue between these two countries, there could be a miscalculation that can veer into conflict any time.

What's the significance of Blinken meeting Chinese Premier Xi Jinping during the trip? That would be the most crucial, consequential and important meeting of this entire trip. US officials are hoping that Blinken's visit and meeting with Xi Jinping. Xi Jinping is going to pave the way for more mutual visits between the two countries and eventually is going to lead the way and facilitate a possible Xi-Biden meeting in the coming months. Now for the other headlines making news around the world. Hundreds gather outside a secondary school in Uganda, where attackers from a group with links to Islamic State killed at least 37 students.

Members of the rebel Allied Democratic forces, or ADF, also abducted six students and fled across the border. Uganda's president, Yoadimsevani, has ordered more troops to the area. Israeli commandos backed by a military helicopter carry out a raid on the Palestinian city of Janine. Three Palestinians, including a teenager, were killed during the fierce clashes with local gunmen. Dozens were wounded. North Korea has said last month's botched military satellite launch was the gravest failure. Leader Kin Jong-un told a ruling party meeting that the country should prepare for another launch in the near future.

Russia is reporting fierce fighting on the front line in Ukraine, as the death toll from the breached Kukova Dam rises to 52. Moscow has declined United Nations offers to help residents affected by the dam's floodwater. It's a pretty subdued day in markets with a holiday in the United States. The action is set to kick off later in the week with central bank meetings in the UK, Switzerland and Norway, and we can expect rate hikes in all three places. China, on the other hand, is moving in the other direction. Its central bank is widely expected to cut key lending benchmarks. Authorities are trying to rev up a slowing recovery.

But cuts of around 10 basis points are hardly going to push the needle much. Mortgage rates have already fallen by a lot more to no avail. So what markets are really looking for is the Chinese government to spend more. And in China, they're looking for bankers to spend less, at least publicly. Chinese banks are telling well-paid employees to rein in their flashy lifestyles. The requests come as the country's economic recovery is faltering, widening the gap between the haves and the have-nots. Sumit Chatterjee is in Hong Kong and is here to explain why finance years are being asked to scale back.

So, Semeet, what exactly are these bankers being told to do? The bankers are basically being told to not show off their wealth, either at their workplaces or on social media. What we have seen is that some of the bankers and their close family members, whenever they try to show off their wealth, you know, expensive clothes, packs and watches on the social media that drew very strong public criticism. In China, public criticism means that at some point the government authorities will step in and make sure that there is no kind of social unrest. This is mainly happening because

President Xi Jinping launched a common prosperity campaign about two years ago to bridge the wealth gap. And as the Chinese economy has slowed and as the unemployment rates have gone up, the push factor for the firms are coming from two sides. One is the government is more mindful of the growing wealth gap. And the second is that the financial firms themselves are feeling pressure on their businesses. So help me understand how the Chinese economy has softened recently. And what is the outlook moving forward? So there was a lot of expectations that as China reopens the economy after three years of COVID lockdown, the economy will bounce back. But that's not happening. Big companies in China, they are laying off their

staff because they are directly getting impacted by the economic slowdown. And these are pretty unusual measures. We don't see mass layoffs in China, especially by the big organizations. The youth unemployment rate has hit a record. And because of that, there's growing pressure on companies. Not many are betting on a quick turnaround in the economic outlook. Like when you come to campus, you see like black athletes on the walls and stuff like that. But then when you get on the campus and you're like one black student in like a class of 80 people, it's like, okay, what's going on? Senior Tyler Mahomes on black enrollment at UC Berkeley. The Supreme Court is set to rule on two key affirmative action cases in

any day now. If the High Court were to end race-conscious considerations for college enrollment, universities will likely turn to California for guidance. The state banned race-based enrollment factors 25 years ago. Sharon Bernstein has been looking into how that decision has played out in the decades since. So Sharon, how has UC Berkeley navigated a post-affirmative action world? So the university system for the past 25 years, has been using socioeconomic status and neighborhood school information to try to make their incoming classes diverse without using affirmative action. It has worked to a degree. The system as a whole has recovered and in some cases surpassed the level of black and Hispanic enrollment that it had

in 1995 before the rules were changed. But at the most elite campuses, which would be Berkeley and UCLA, that's been a harder thing to achieve. So what lessons can be learned, if any, from how a school like Berkeley is struggling to boost diversity without race-conscious considerations? There's two pieces to this. There's going into the schools as young as elementary school and starting to prepare students to apply to an elite university like the University of California and like Berkeley.

then there's a level of reaching out and persuading students who've been accepted to actually enroll in the university. And then the last piece is creating a sense of community for students on campus once they arrive. So they feel at home and so that they feel good enough about the university to later send their own children to recommend it to friends and to keep building that goodwill and that. representation. Now, some might enjoy relaxing on the water over the weekend. Others might prefer something a little bit more competitive. Why not combine both, like the competitors at Belgium's World Pedal Boat Championship. Contestants had to pedal a 450-yard lake circuit continuously for four hours straight. A team of eight men called Kifir won the event after completing 54 laps. That's it for this edition of Reuters World News.

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