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Over the weekend, mainland China experienced something it hadn’t seen in over 30 years: thousands of protesters flooding the streets, defying the Communist Party.
The protests had an immediate impact on global markets and raised questions about the way forward for China’s increasingly sluggish economy.
What’s going on?
The protests began on Friday after 10 people were killed in a blaze in China’s Xinjiang province, where Covid lockdown restrictions reportedly prevented first responders from reaching the blaze.
The blaze catalyzed three years of frustration with the country’s zero Covid policy, which has seen millions locked down for weeks on several occasions.
Quarantines and testing protocols have had psychological and economic consequences. Growth has collapsed and unemployment is on the rise. During the lockdown, many residents complained of inhumane conditions, facing shortages of food and medicine. A human rights group has reported at least five suicides in Lhasa, Tibet, where some residents have been living in lockdown for more than 100 days.
People are at their breaking point and their anger is aimed directly at President Xi Jining and the Party leadership. On the first night of protests in Shanghai, a crowd shouted “Get down, Xi Jinping! Quit, Communist Party!
Meanwhile, the prospect of social upheaval in the world’s second-largest economy has chilled global markets.
On Monday, the Dow fell more than 500 points, following declines in European and Asian indices. Oil prices fell sharply as investors feared rising Covid cases and protests in China could sap demand from one of the world’s biggest oil consumers. US oil hit its lowest price in nearly a year, falling 2.7% to $74 a barrel.
Beijing officials are in deep trouble here.
To fix its economy, China needs to ease lockdowns to allow its people to resume their lives.
But that – in a country that has almost no natural immunity to the virus and has shunned the idea of importing Western-made boosters – could lead to a deadly outbreak.
Xi, who has just started a third term and has doubled zero-Covid, does not want to risk a public health disaster that would undermine his credibility. And certainly, cracking down on peaceful protesters and continuing the brutal policy is an option — an option that China has been deploying for a long time. But all of Xi’s options are far from ideal for a leader long concerned with stability.
Related: Twitter searches for protests in China have returned a flood of spam, pornography and gibberish that researchers say may be a deliberate attempt by the Chinese government or its allies to drown out images of the protests.
The label on a cup of Velveeta’s microwaveable macaroni and cheese states that the food will be “ready in 3 and a half minutes”. A Florida woman disputes this claim, claiming $5 million.
Yup, someone has filed a proposed class action lawsuit against Kraft Heinz, alleging that its Velveeta shells and cheeses are taking longer than expected to prepare, according to court documents.
His lawyers argue that the three-and-a-half-minute promise ignores the other four steps needed to prepare the dish: remove the lid and sauce packet, add water, microwave and stir, according to court documents.
Kraft Heinz dismissed the lawsuit as “frivolous” in a statement.
Introducing the latest victim of the financial contagion unleashed by the collapse of Sam Bankman-Fried’s empire…
Crypto lending firm BlockFi filed for bankruptcy today. Its collapse was not a huge surprise in the crypto world – the company has essentially been under scrutiny for three weeks – but it is still an important player to bring down in the FTX contagion.
Earlier this month, as FTX crashed, BlockFi (think of it as a crypto bank – it made loans using digital assets as collateral) halted withdrawals, citing “significant exposure” to Bankman-Fried’s FTX exchange, as well as its sister hedge fund Alameda. FTX and Alameda, of course, are now bankrupt and virtually synonymous with corporate mismanagement at the hands of the calculating eccentric known as SBF.
There’s a kind of tragic interconnectedness in how the dominoes fall after FTX. BlockFi was one of many recipients of SBF’s modern JP Morgan plays. Over the summer, as the value of digital assets plummeted, SBF stepped in, creating financial lifelines for struggling businesses.
For BlockFi, this was equivalent to a $400 million line of credit from FTX.
There was a feeling, before this month, that SBF was The Good Crypto Guy. That for all the internet-bro-y-ness that is (rightly) used to slander the crypto faithful, there was something wholesome about the ragtag nerds risking their own necks for the greater good.
Clearly, we now know that it was all just an act – a bold and admittedly effective strategy to distract investors from the reality that FTX and Alameda were built on a house of cards.
(And again, I understand that the crypto space in general and FTX in particular can seem like a confusing mess of internet nonsense, so I’ve written a few simple stories that attempt to put it all in plain language. This one is about cryptocurrencies. This one is about FTX. )
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