Wednesday, January 20, 2021

The inauguration's sad symbolism

Neil J. Young
 OPINION THE WEEK

Illustrated | Getty Images, iStock
January 20, 2021

Like almost every other aspect of the past year, Wednesday's inauguration of Joe Biden and Kamala Harris won't look like any we've seen before. Aside from the alterations that have been made due to the coronavirus pandemic, the special measures being taken because of the January 6 attacks on the U.S. Capitol and the ongoing threat of violence from Trump loyalists mean that this day will be a terrifyingly unique moment in history.

The security measures are extensive. As many as 25,000 troops have been deployed to Washington, D.C. The National Mall, normally filled with as many as one million spectators, has been declared off limits, and barricades circle the Capitol where the inauguration ceremony will take place. Across the city, various zones have been marked off to restrict traffic and general movement. As The New York Times recently reported, "the security perimeter…is necessary to prevent an attack from domestic extremists. Such groups 'pose the most likely threat' to the inauguration, according to a joint threat assessment from the FBI and Department of Homeland Security."

None of those threats should be confused with the legitimate and lawful protests that often accompany a presidential transition. Indeed, peaceful protests have been a regular feature of presidential inaugurations — and of American history itself. But the violence that has marked this presidential transition, and that possibly overshadows Wednesday's events, demonstrates the particular danger Trumpism still poses to the country and how much it has assaulted the basic foundations of American democracy.

Especially in the 20th century, when inaugurations became enormous public spectacles, Americans have regularly protested the events. Sometimes they protested the person taking office. Other times, they used the moment to direct attention to a cherished cause.

That was the case at the first major protest to mark an inauguration. In 1913, over five thousand women marched down Pennsylvania Avenue on the day before Woodrow Wilson's swearing in as president in what became known as the Women's Suffrage Parade. Wanting to bring focus to their call for a constitutional amendment giving women the right to vote, the marchers instead drew the ire of thousands of spectators, many of whom unleashed violent attacks on the women as police stood by. But the parade gave a boost to the growing suffrage movement. Seven years later, the Nineteenth Amendment fulfilled their goal.

In the second half of the century, protests at presidential inaugurations accelerated. Anti-Vietnam War protestors gathered in Washington for Richard Nixon's first and second inaugurations in 1969 and 1973. At the latter, as many as 60,000 anti-war activists shouted, "Nixon, Agnew, you can't hide; we charge you with genocide." Opponents of another war, this time in Iraq, descended on George W. Bush's second inauguration in 2005. By then, Bush was used to it. Four years earlier, 20,000 of what The New York Times described as "loud but mostly peaceful protestors" had shown up to demonstrate against what they believed had been a stolen election.

Much smaller protests visited Barack Obama's two inaugurations. His successor, however, would witness the largest protest ever assembled for a presidential inauguration when nearly half a million people in D.C. — and at least four million more in cities across the United States — joined in the Women's March the day after Donald Trump was sworn in.

Predictably, Trump took to Twitter to offer a rather unpredictable response to the protests against him. "Peaceful protests are a hallmark of our democracy. Even if I don't always agree, I recognize the rights of people to express their views."

That rare endorsement of democratic traditions and Constitutional guarantees was quickly overshadowed by Trump's long record of illiberal actions and anti-democratic impulses as president, especially his love of violence carried out on his behalf. At his numerous rallies, Trump regularly greeted protestors with threats of violence by his ravenous crowds. His continual encouragement of white nationalists and hate groups yielded devastating and deadly results.

All of that culminated with the events of January 6. Rather than accepting the results of a free and fair election, Trump, and his willing surrogates, stoked anger and outrage among supporters with their lies of rampant voter fraud and a stolen election. Instead of conceding his loss and initiating the process for a peaceful transfer of power — a bedrock condition of any functioning democracy — Trump spewed heated rhetoric while Congressional Republicans planned their outrageous challenge of the Electoral College results.

Riled up and enraged by all of it, Trump's core supporters showed up to carry out violence in his name, certain theirs was a righteous cause. In his inciting speech to the crowd shortly before the attack, Trump raged, "We will not let them silence your voices," while the crowd roared back, "Fight for Trump! Fight for Trump!"

They didn't need any last minute encouragement to violence, of course. Trump spent four years cultivating insurrectionary sentiments among his followers. But the rot goes much deeper than the several thousand who showed up to storm the Capitol. Nearly half of Republicans surveyed have said they support the attack. In just one presidential term, Trump has shifted the most extreme and out-of-bounds positions to the center of his party — and right into the mainstream of American politics.

That's why although Trump will no longer be president after Wednesday, Trumpism still dangerously lingers, perhaps even more inflamed.

Faced with a rampant pandemic and a cratering economy, Joe Biden must tackle some of the biggest challenges this nation has seen. But none may be bigger than attending to the lasting damage Trump has done to American democracy, now all-too-visible in a presidential inauguration conducted under heavy guard.

7:39 p.m.

The Biden administration held its first press briefing on Wednesday evening, with White House Press Secretary Jen Psaki promising that every weekday, there will be a news conference.

"There are a number of ways to combat misinformation," Psaki said. "One of them is accurate information and truth and data and sharing information, even when it is hard to hear." She added that her daily briefings will include COVID-19 updates from health officials.

Psaki said President Biden's first call with a foreign leader will be on Friday with Canadian Prime Minister Justin Trudeau, and she expects "they will certainly discuss the important relationship with Canada as well as the decision on the Keystone pipeline that was announced today." Shortly after taking office on Wednesday, Biden signed an executive ordhalting construction on the pipeline, meant to transport crude oil from Canada to the Midwest.er 

Biden is expected to spend the next several days calling "partners and allies" of the United States, Psaki said, because "he feels that's important to rebuild those relationships and address the challenges and threats we're facing in the world."

Psaki was also asked about the letter former President Donald Trump left for Biden, which he earlier described as being "very generous." Biden said because it was "private," he will "not talk about it until I talk to him." Psaki reiterated that the letter was "generous and gracious," but she does not believe a call from Biden to Trump is imminent. Catherine Garcia


It's a little known fact that the presidential inauguration actually doubles as a fashion show of preppy winter 'fits, and President-elect Joe Biden's was no different. But the winner of the Capitol steps on Wednesday wasn't Michelle Obama, in her plum Sergio Hudson, or Vice President-elect Kamala Harris' step-daughter, Ella Emhoff, in her embellished coat, or Jill Biden, in her custom blue Markarian.

No, it was the grumpy chic outfit of Vermont Sen. Bernie Sanders:

Sanders, naturally, wears mittens made by a teacher from Essex Junction, Vermont, and knit from "repurposed wool sweaters and lined with fleece made from recycled plastic bottles," BuzzFeed News' Ruby Cramer reportsJeva Lange

Biden administration 'to declassify report' into Khashoggi murder

Stephanie Kirchgaessner in Washington

Tue, January 19, 2021
Photograph: AP

The Biden administration will declassify an intelligence report into the murder by the Saudi government of journalist Jamal Khashoggi, according to Avril Haines, who has been nominated to serve as director of national intelligence.

The decision means that the US is likely to officially assign blame for Khashoggi’s brutal murder to the kingdom’s de facto ruler, Crown Prince Mohammed bin Salman.

Khashoggi, a Washington Post journalist and US resident who wrote critical columns about the Saudi crown prince, was murdered by Saudi agents inside the Saudi consulate in Turkey in October 2018.

While media reports have said that the US intelligence community determined with a medium to high degree of confidence that Prince Mohammed ordered the killing, that assessment has never officially been stated. The crown prince has denied he ordered the murder.

Related: Jamal Khashoggi’s fiancee urges Joe Biden to release CIA report

Since then, Khashoggi’s fiancee Hatice Cengiz and other human rights activists have called on Biden to release the classified report into the murder, saying that doing so was the first step towards seeking accountability.

During Haines’s confirmation hearing on Tuesday, the Oregon senator Ron Wyden said that, if confirmed as the new DNI, she would have the opportunity to “immediately” turn the page on the “excessive secrecy” and “lawlessness” of the Trump administration, and submit an unclassified report on “who was responsible” for Khashoggi’s murder, as required under a February 2020 law that the Trump administration in effect blocked.

Asked whether she would release the report, Haines replied: “Yes, senator, absolutely. We will follow the law.”

In a statement, Wyden praised the move, saying it was “refreshing to hear a straightforward commitment to follow the law” from Haines.

Bruce Riedel, a former CIA analyst and director at the Brookings Institution, said: “It is a useful way to put the question of accountability for Khashoggi’s murder in the public domain early in the new administration.”

One of the most outspoken advocates for justice for the murder, Agnès Callamard, also praised the move, saying the information would provide the “one essential missing piece of the puzzle of the execution of Jamal Khashoggi”.

Callamard, the UN special rapporteur on extrajudicial killings, said she hoped other information would also come to light, such as any new details about the whereabouts of Khashoggi’s remains, and whether a risk assessment had ever been done by the US about whether Khashoggi was in danger before his trip to Turkey.

Callamard, who will be named the new head of Amnesty International later this year, also pointed to other threats that have reportedly been lodged against human rights defenders and former Saudi officials in Canada and Norway by Prince Mohammed’s agents, who have been called a “death squad” in media reports.

“At some point, if the US intelligence has information about those operatives, then I think they should really make that information publicly available,” Callamard said.

The release of the Khashoggi report will also raise a host of new questions for both the US and Saudi Arabia.

“If the document fingers MBS as responsible for the murder it will raise the question what is Biden going to do to hold him accountable?” said Riedel.

During the 2020 election campaign, Biden issued scathing attacks against the crown prince, saying Saudi Arabia needed to be treated as “a pariah”. It is expected that the Biden administration would seek to curb weapon sales to Saudi Arabia, but it could also take more targeted actions against Prince Mohammed, including financial sanctions.

Russia applies for registration of COVID-19 vaccine in Europe 

Wed, January 20, 2021

Jan 20 (Reuters) - Russia's sovereign wealth fund has filed for registration of Sputnik V in the European Union and expects it to be reviewed in February, the official account promoting the COVID-19 vaccine tweeted on Wednesday.

The Sputnik V and European Medical Agency (EMA) teams held a scientific review of the vaccine on Tuesday, the Sputnik V account said, adding the EMA will take a decision on the authorization of the vaccine based on the reviews. (https://bit.ly/39OQZDR)

The vaccine has already been approved in Argentina, Belarus, Serbia and other countries.


(Reporting by Amruta Khandekar; Editing by Shinjini Ganguli)

WALL ST.VS MAIN ST.

Goldman bankers collect best 

pay packets for a decade

Lucy BurtonLucy Burton

Goldman Sachs
Goldman Sachs

Goldman Sachs has increased pay for its bankers to the highest level in a decade following a year in which much of Wall Street emerged unscathed from the pandemic.

The investment bank spent $13.3bn (£9.8bn) on pay and bonuses in 2020 despite Covid triggering a recession, up 8pc from the previous year but still $2bn less than the 2010 total.

The bumper payouts came despite some of its best-paid bankers having their pay slashed after Goldman was fined by regulators for violations in connection to Malaysia's 1MDB fund.

While Covid has left many households significantly poorer, Wall Street’s results season has highlighted just how well investment banks fared last year after market volatility triggered a trading boom and clients raised debt and equity.

Goldman rival JP Morgan posted record results last week.

The pay boost at Goldman suggests that traders and investment bankers received large payouts for driving up profits.

It unveiled a profit of $4.5bn for the fourth quarter, double that for the same period a year ago, while the $9.5bn annual profit exceeded expectations.

Chief executive David Solomon said: “Our people responded admirably to a series of professional and personal challenges, while working from home or in offices that were reshaped dramatically.”

The bumper results follow a year in which Goldman reached a $2.9bn settlement with global authorities to end a probe into its role in the 1MDB scandal.

Billions of dollars of public money was looted to buy luxury items and was even funnelled into the Hollywood film The Wolf of Wall Street.

Goldman admitted that its Malaysian subsidiary bribed officials with more than $1bn so it could win a lucrative contract to help 1MDB issue more than $6bn in bonds.

It agreed to pay $3.9bn to Malaysian authorities in July and Malaysia dropped criminal charges against the bank and some of its top executives last year.

After hitting a record high of almost $308 last week, Goldman shares dipped just under $300 in New York leaving it worth about $103bn.

Commentary: Fox News helped create the Big Lie. Now, as ratings slide, it can't escape it

Lorraine Ali

Tue, January 19, 2021, 
Images of Fox News personalities Bret Baier, left, Martha MacCallum, Tucker Carlson, Laura Ingraham and Sean Hannity on the front of the News Corp. offices in New York City. (Drew Angerer/Getty Images)

America's most militarized Inauguration Day in modern history is ours to witness Wednesday when Joe Biden is sworn in as the nation's 46th president surrounded by 25,000 National Guard troops, armored vehicles and razor wire. The National Mall, which was packed for Barack Obama's ceremony and less so for Donald Trump's, will be closed to the public. Things are so precarious since Jan. 6's deadly breach of the U.S. Capitol by pro-Trump extremists that American Airlines is suspending alcohol service on all flights to and from Washington, D.C., until Jan. 21.

If only Sean Hannity could be taken off the menu like a single-serving bottle of vodka.

It's doubtful Trump could have radicalized as many Americans as he has without the help of media juggernaut Fox News. Hannity, along with colleagues Tucker Carlson, Laura Ingraham, Lou Dobbs and the rest of the crew, have been instrumental in mainstreaming Trump's far-right positions on everything from immigration to policing, parroting his lies and threats, and giving credence to his absurd conspiracy theories — including the debunked claims of election fraud that led to the Capitol insurrection. And if there's any question as to how the conservative news network became a legitimizer of Trump's propaganda and deep-state fantasies, Fox News’ devolution has been televised.

The crown jewel of Rupert Murdoch’s media empire, at least in the U.S., has propagated any number of the Trump administration's most consequential and damaging falsehoods, many in the service of exonerating or supporting the president himself in a time of scandal or crisis. (Which, as we've all experienced firsthand, was essentially his entire term.) Staffer Seth Rich involved in DNC email leak! Immigrant caravans at the border riddled with MS-13 gang members! Hunter Biden’s laptop! COVID-19 is a hoax! Stop the steal!

But years of unquestioning support for the president, including sowing mistrust about anything that challenges the White House's narrative, is beginning to have consequences. Fox News’ unholy alliance with Trump brought with it white supremacists, hateful militias and conspiracy theorists who believe the outgoing president is the only person standing between humanity and a nefarious ring of Satan-worshipping, cannibalistic pedophiles. The news organization's ratings have been in decline since election day, a slide many attribute to competition from media sources even further to the right; on Tuesday, it laid off political director Chris Stirewalt and others.

Now, as Trump leaves office, the cable news network that fueled his rise to power faces an ugly dilemma of its own making: continue to feed the monster it helped create or be destroyed by the monster's wrath.

Fox News is hardly the only media organization advancing the lies of Trumpism. Newsmax, "The Rush Limbaugh Show," One America News, Breitbart and Parler are all, to varying degrees, fonts of disinformation and active cheerleaders of the president. Social media behemoths that largely refused to clamp down on viral conspiracy theories and hate speech during the Trump era, including Facebook, Twitter and YouTube, are also complicit.

But since before the 2016 Republican primary, Fox News has arguably been the most high-profile pro-Trump provocateur, next to the president himself.
Sean Hannity on Fox News on Aug. 14, 2017, discussing events surrounding that summer's "Unite the Right" rally in Charlottesville, Va. (Fox News / YouTube.com)

Fox News did not move from "fair and balanced" to de facto arm of the White House communications department overnight. As Showtime's 2019 docudrama "The Loudest Voice" reminds us, longtime Chief Executive Roger Ailes initiated the conservative network's hard-right turn toward fear and outrage in the aftermath of 9/11. By 2009, its primetime hosts, including Hannity, were championing and amplifying the "gotcha" videos of conservative operative James O’Keefe, eager for undercover "exposés" of liberal hypocrisy. Fox News covered O'Keefe's undercover "sting" impugning the community organizing group ACORN often and with plenty of verve, yet little scrutiny despite the iffy provenance of the video footage. Its high-powered spotlight contributed to the dissolution of the nonprofit organization in the U.S., though O'Keefe's work was later debunked as having been misleadingly obtained and edited.

The racist birtherism conspiracy about Obama, touted by then-reality show star Trump and echoed by Fox News, was the next step in undermining trust, though many other outlets gave Trump's wild claims a platform they didn't deserve. Calls to “Lock her up!” — based once again on cherry-picked facts and outright lies about 2016 Democratic presidential candidate Hillary Clinton, now with an added distaste for the rule of law — weren’t far behind.

Once Trump took office, the last guardrails of truth seemed to lift, and Fox News — no stranger to the benefits of deregulation — jumped right in to defend and parrot the president, or at least to let his lies go unchallenged. Almost as often, the process appeared to work in reverse: In the earliest days of his term, Trump caused an international incident after citing a fictitious terror attack in Sweden. His source? Carlson.

In running untruths about Rich's involvement in the leak of Democratic National Committee emails during the 2016 campaign, and legitimizing cruel conspiracy theories about Rich's 2016 shooting death in what police have said was likely an attempted robbery, several of the network's hosts went further — and landed their employer in legal hot water. “This blows the whole Russia collusion narrative completely out of the water," Hannity said. When Fox News retracted the story, Hannity remained resolute: “I am not Fox.com or FoxNews.com,” he said on his radio show. “I retracted nothing.” Rich’s parents sued Fox News over its repeated false claims about their son, and the case was settled for millions before Hannity and Dobbs were scheduled to testify under oath in the case.

That the ensuing investigation into the Trump campaign's ties to Russia was frequently deemed a “witch hunt” by Trump and his supporters at Fox News suggests that the vicious tarring of a dead man's reputation was not exactly a chastening experience. Special Counsel Robert Mueller became the new target, as did top levels of American law enforcement. “There is a cleansing needed in our FBI and Department of Justice,” railed Fox News host Jeanine Pirro. “It needs to be cleansed of individuals who should not just be fired but who need to be taken out in handcuffs.”
Tucker Carlson on the set of his Fox News show in Manhattan in 2018. (Jennifer S. Altman / For The Times)

When newly emboldened white supremacists marched in Charlottesville, Va., in summer 2017, in what now reads as a clear precursor to the Capitol attack — with one right-winger plowing his car into counterprotesters, killing one — Trump said there were “very fine people, on both sides.”

Fox News, now locked into the pattern, followed suit. Hannity floated the lie on his radio show that protesters at the rally may have been “actors hired by a publicity firm.” Carlson performed his own "both sides" shuffle in a widely reviled segment, calling "the left" "every bit as race-obsessed" as the white supremacists of "Unite the Right."

All that was just in Trump’s first year.

By the time the COVID-19 pandemic arrived, Fox News was poised to defend Trump at all costs, even if it meant putting viewers' lives in danger. Several on-air personalities and guests reinforced the idea that the pandemic was a hoax cooked up by House Speaker Nancy Pelosi (D-Calif.) and her pals. “This is yet another attempt to impeach the president,” Fox Business host Trish Regan said, before being ousted for her comments. Hannity went further: “They’re scaring the living hell out of people, and I see it again as like, ‘Oh, let’s bludgeon Trump with this new hoax.’”

The election presented a new conundrum. Though the network's decision desk received rightful plaudits — and provoked the president's ire — for sticking to the facts and calling the election for Biden, a number of its hosts backed Trump's baseless claims that the election had been stolen. Watchdog group Media Matters reported that the news network cast doubt on the results nearly 800 times just in the two-week period after Biden emerged as the victor.

"You should be outraged, you should be worried, you should be concerned at what has happened in the election and the lead-up to the election," Hannity said. "And frankly, you should be angry at what is building and building and building in the last four years in this all-out assault against a duly elected president that we the people elected.”

The true "all-out assault" that had been "building and building and building in the last four years" was an assault on truth itself, led in large part by Hannity and his ilk, and it's seemingly escaped the network's control. Myths about widespread election fraud were an easy sell after the network's ceaseless information warfare and the drip, drip, drip of normalizing outlandish tinfoil-hat conspiracies. Now, Fox News appears poised to double down on its preference for opinion over news and for personalities like Maria Bartiromo willing to carry water for the president and his dead-enders.

But the fear and outrage Fox News have inspired are all too real, changing not just viewership patterns but also the political landscape itself. In the aftermath of the domestic terror attack at the Capitol under the banner of "Stop the Steal," it's not just politicians who need to be held accountable for incitement. It's also media outlets like Fox News, which shaped and happily sold the Big Lie and must now confront, if there's any justice, the monsters of its own creation.

This story originally appeared in Los Angeles Times.

Parkland families, Florida lawmakers denounce GOP Rep.’s tweets denying Parkland shooting



Bianca Padró Ocasio
Wed, January 20, 2021, 4:00 AM

Newly surfaced Facebook messages from 2018 show U.S. Rep. Marjorie Taylor Greene agreeing with comments spreading the conspiracy that the Parkland school shooting where 17 students and faculty members at Marjory Stoneman Douglas High were killed was a “false flag planned shooting.”

In a post about a story from Fox News that she shared on May 15, 2018, Greene questioned why Broward Sheriff’s school resource deputy Scot Peterson was receiving his state pension. Peterson resigned from BSO after surveillance footage showed he took cover outside the school building while the Feb. 14, 2018, shooting was going on.

Several people commented saying it “sounds like a payoff” for “going along with the evil plan.”


“My thoughts exactly!!” said Greene said in one of the responses.

Green is an adherent of the QAnon conspiracy movement. Twitter temporarily suspended her account on Sunday after she tweeted conspiracy-laced theories about the Georgia elections, 11 days after pro-Trump mobs overtook the Capitol in Washington on Jan. 6, resulting in the deaths of five people, including a Capitol Police officer.

Greene’s 2-year-old interactions were first reported by Media Matters For America, the progressive watchdog monitoring conservative misinformation.

Greene, a newly elected Republican from Georgia, championed Trump’s false claims about voter fraud in the 2020 presidential election, claims scores of judges threw out of court for lack of evidence.

Several South Florida Democrats denounced Greene’s comments that have just come to light, including U.S. Rep. Ted Deutch, who represents Parkland.

“Radical conspiracy theorists cruelly came to our community in the days after the mass shooting at Marjory Stoneman Douglas High School to outrageously deny that 17 people were killed,” Deutch said. “It’s infuriating that someone like that was elected to Congress.”

Deutch said Greene should “disavow these comments, she should apologize to everyone that she has offended, and, most importantly, she should tell her followers the truth.”

Florida’s Director of Emergency Management Jared Moskowitz, of Coral Springs, said in a tweet that Greene should resign from her position and come to speak to the families of the victims at Marjory Stoneman Douglas High School.

Fred Guttenberg, the father of 14-year-old shooting victim Jamie Guttenberg, said in a series of tweets that Greene should resign and apologize for her past comments.

“It appears you think or at one time thought the school shooting in Florida was a false flag. I know you have met Parkland parents. This is my daughter Jaime, she was killed that day. Do you still believe this? Why would you say this?” Guttenberg tweeted.


China says it is ready to help Kenya with debt

Mon, January 18, 2021

China stands ready to help Kenya deal with its debt challenges, it's embassy in Nairobi said on Monday (January 18) adding that both sides are holding "smooth" talks over the issues.

Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade.

But after months of lockdown measures, the East African country's revenues have been pummeled, its debts are falling due and it is grappling with gaping fiscal deficits.

In a statement the embassy in Nairobi said China attaches "great importance" to debt suspension and alleviation in African countries, including Kenya.

The embassy said China has signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative.

That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June but last week World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of private sector support for the initiative at a time when many countries are grappling with economic and health crises.

"Looking at it from the standpoint of the private sector, they say a contract is a contract. But I guess I would push back and say throughout history there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I'm, I'm, I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors."

The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal.

Last week Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
Video Transcript

- China stands ready to help Kenya deal with its debt challenges, its embassy in Nairobi said on Monday. Adding that both sides are holding smooth talks over the issues. Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade. But after months of lockdown measures, the East African country's revenues have been pummeled. Its debts are falling due and it's grappling with gaping fiscal deficits.

In a statement, the embassy in Nairobi said China attaches great importance to debt suspension and alleviation in African countries, including Kenya. The embassy said China had signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative. That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June. But last week, World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of support for the initiative from the private sector, at a time when many countries are grappling with economic and health crises.

DAVID MALPASS: Looking at it from the standpoint of the private sector, they say a contract's a contract. But I guess I would push back and say throughout history, there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors.

- The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal. Last week, Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
Irresistible? Pension funds plot move on China's $16 trillion bond market

Dhara Ranasinghe and Saikat Chatterjee
Tue, January 19, 2021


Irresistible? Pension funds plot move on China's $16 trillion bond market
FILE PHOTO: Chinese Yuan banknotes are seen in this illustration

By Dhara Ranasinghe and Saikat Chatterjee

LONDON (Reuters) - China's $16 trillion bond market is the proverbial elephant in the investment room. But it's becoming too big to ignore, even for the most risk-averse Western investors.

A large, A+ rated sovereign market that pays 3% yields, with minimal volatility? It's looking increasingly alluring for European pension funds swimming in sub-zero bond yields as aging populations stretch their finances.

For some, the benefits are beginning to outweigh the political risks, and they are upping allocations to China, or considering doing so, according to Reuters' interviews with half a dozen firms that advise and manage money for pension funds.

"Not all our clients invest in China's bond market, but they are all looking into it," said Sandor Steverink, head of Treasuries at APG, which manages a third of the assets of the 1.5-trillion-euro ($1.8 trillion) Dutch pension industry.

Dutch 10-year bond yields are languishing at around -0.4%, spelling losses for any investor who holds them to maturity, a picture reflected across Europe.

Such fund interest is a boon for Beijing, which is seeking to internationalise its financial markets and lure big-ticket overseas investors as its once-mighty trade surpluses dwindle. Europe's pension industry alone is worth $4 trillion.

China's debt market is the world's second-largest after the United States. Yet while foreigners own a third of the U.S. Treasury market, they hold just 9.7% of China's sovereign debt, according to government data.

Western pension funds make up a tiny cohort of the foreign investors in yuan bond markets, but their presence is growing.

Of the $9.5 trillion of assets under management from corporate and public pension funds globally, 0.26% was held in Chinese bonds as of the third quarter of 2020, up from 0.04% in 2015, according to data from institutional asset managers shared with financial data provider eVestment.

Beijing's drive to draw foreign money has taken a whack of late as tensions with the United States have resulted in the ejection of several Chinese companies from U.S. equity indexes and curbs on U.S. government pension funds investing in China. There have also been defaults by state-owned firms.

Investors also cite potential pitfalls such as less market transparency and liquidity, with some Japanese investors protesting China's inclusion into FTSE Russell's World Government Bond Index.

In addition, some say the country still has further to go in opening up its markets and worry that while capital controls, which made repatriation of profits difficult, have been eased, they could also be tightened.

China's relatively successful handling of the COVID-19 crisis and brighter economic prospects has buoyed confidence, though.

APG runs around 100 million euros in a local Chinese bonds strategy it started just over a year ago. Steverink acknowledged that political risks gave clients "cold feet", but predicted that would change as more cash swept into the debt.

"You have to explain if you invest in China. You don't need to explain if you don't invest. That's how it is for the time being," he said.

"In the decades to come, it will be the other way around."

2020: WATERSHED YEAR

Pension funds themselves are famously secretive about their investment allocation trends, and more than two dozen contacted by Reuters, mostly European, declined to comment on this.

However, their money managers, and certain central banks that track investment flows, can provide a window.

China has only stepped up efforts to open up bond markets in the past decade, so foreign investment is starting from a low base. While an increase in broader investment interest is not a new phenomenon, pension funds - the biggest and most cautious players - are now beginning to go with the flow.

The investors interviewed by Reuters said 2020 had been a watershed year, with more developed world bond yields collapsing into negative territory on the back of massive monetary stimulus, combined with China relaxing restrictions on foreign investment.

Insight Investments is looking into setting up a Chinese bond fund on behalf of UK pension funds, Sabrina Jacobs, a fixed-income investment specialist at the $1 trillion asset manager told Reuters.

She declined to give details to protect the anonymity of her clients but said her company, part of the BNY Mellon Group, had also been asked by other UK and European-based pension funds to explore Chinese debt investment.

Jacobs said China met many of the criteria pension investors had when investing overseas - besides size and credit ratings, the yuan is less volatile than other emerging currencies.

Essentially, that means daily swings with the potential to wreck returns are less common; in fact yuan volatility is lower than some G10 currencies such as the Australian dollar.

Jacobs also said Chinese markets moved less in tandem with global peers.

"While you have a very high correlation between, say (German) Bunds and Treasuries, Chinese government bonds are only 15 to 20% correlated to other bond markets, the big ones globally. So, it is an attractive diversifier as well."

Insight currently holds around $400 million of Chinese debt within its emerging market and global government bond funds.

Some other investors who allocate funds on behalf of European pension fund clients, including Pictet Asset Management and Willis Towers Watson, also said they were seeing more interest in Chinese bonds from the pension industry.

'A LOT FURTHER TO GO'

Pictet, with assets of $600 billion, does not break down flows by investor type but said inflows to its Chinese bond fund had risen from $144 million to $770 million in 2020.

Shaniel Ramjee, part of Pictet's multi-asset team, is confident that Chinese debt has moved past being a niche asset for large institutions like pension funds, but said the trend was in its early stages.

"We haven't seen those dedicated allocations come through in large amounts yet, so there's a lot further to go on this," he added.

Dutch pension funds held 22.4 billion euros in overall investments in China as of the third quarter of 2019, mainly in stocks, with just 300 million euros in bonds, the Netherlands central bank said. That's up from 200 million euros in bonds in 2017.

Latest available data from Germany's central bank shows that German funds, including pension funds, invested a total of 2.5 billion euros in Chinese bonds in November 2020 alone, a 62% rise from the same month a year earlier.

Sweden's AP2, a national pension fund and a rare example of one that publishes its allocation to China, has had a stable 1% allocation to Chinese government bonds since 2017. It manages roughly $43 billion of assets.

'LOOKING HARD AT CHINA'

China, for its part, needs overseas pension money as its shift towards a consumption-driven economy has diminished its trade surpluses.

Pension money also has a particular cachet, because of size - retirement savings in the top 22 economies currently top $45 trillion - and its "sticky", long-term nature.

All this has motivated China to smooth access to its markets, enabling its bonds to join high-profile debt benchmarks compiled by FTSE Russell and Bloomberg/Barclays.

China's interbank bond market regulator did not respond to requests for comment on foreign pension fund holdings in Chinese bonds.

Data from the Central China Depository & Clearing Co (CCDC), shared with Reuters, shows almost 200 foreign funds had invested in Chinese bonds as of end-September via the China Interbank Bond Market (CIBM), 42% above year-ago levels. The CCDC does not compile specific data on pension fund flows.

"Pensions funds say they are now looking hard at China as an alternative," said Robin Marshall, FTSE Russell's director of bond market research. "They would not have looked at it a few years ago."

($1 = 0.7375 pounds; $1 = 0.8245 euros)

(Corrects headline, first and seventh paragraph to clarify $16 trillion refers to entire bond market; paragraph 38 to refer to interbank bond market regulator, not central bank)

(Reporting by Dhara Ranasinghe and Saikat Chatterjee; Additional reporting by Toby Sterling in AMSTERDAM; Maiya Keidan in TORONTO, Andrew Galbraith in SHANGHAI and Karin Strohecker in LONDON; Editing by Sujata Rao and Pravin Char)