Modi's China outreach: Resetting ties?
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Israel has carried out the deathless attacks on Hamas targets in Gaza since the January ceasefire. Indian Prime Minister Narendra Modi has called for strengthening ties with China, and Chinese cities have strengthened policy efforts to help stabilize real estate markets.

Welcome to Road Today, a news program with a different perspective. I'm Ge'anna in Beijing. To listen to this episode again or to catch up on previous episodes, you can download our podcast by searching Road Today.

Over 300 people have been killed and 1,000 others injured as Israeli military carried out extensive airstrikes in Gaza. It's by far the deadliest attacks since Israel and Hamas agreed to a ceasefire in mid-January. But the two sides are unable to agree on how to sustain the next phase ceasefire.

Hamas says the Israeli raids targeted densely populated residential areas as well as camps for displaced individuals. To delve into the latest development in Gaza, let's have Associate Professor Zhang Chuchu, Deputy Director at Center for Middle Eastern Studies at Fudan University.

The Israeli forces launched their largest airstrikes on Gaza since the ceasefire on January. What do you believe were Israel's primary strategic considerations in breaking the ceasefire at this time?

Well, from my observation, Israel's decision to launch its largest airstrike on Gaza since the January ceasefire likely stemmed from several factors. So above all, I think according to the ceasefire deal, when entering the second phase, Israel needs to totally withdraw from Gaza in exchange for the release of the rest of the hostages.

So Netanyahu refuses at the moment, and Hamas also does not want to make further compromise. So we can now see that the ceasefire negotiations are deadlocked. So at present, Netanyahu is trying to use military pressure to force concessions of Hamas.

And secondly, as the United States has recently launched its military actions towards the Houthi rebels in Yemen, Netanyahu believes this as an opportunity to pressure Hamas, given that its allies under attack itself and can hardly provide support.

The Israeli Prime Minister's office stated the airstrikes were aimed at dismantling Hamas military and governing capabilities and rescuing hostages. From a practical standpoint, can such large-scale airstrikes

realistically achieve this goal, what unintended consequences might arise from this escalation? Well, in fact, from a practical standpoint, I would say large-scale airstrikes are very unlikely to fully dismantle Hamas military and governing capabilities or secure the release of hostages.

and in fact israel has already been launching a very large large scale of airstrikes for a long time and it has still not achieved its goals and also it is very hard to differentiate the hamas activists

um from the local people um so um i think there are a lot of challenges and right now netanyahu's purpose is to keep aiming as the leadership and commanders of the organization undermine it as much as possible and make the local geopolitics more fragmented and and i would say that possible unintended consequences could include radicalizing more local residents

and exacerbating a humanitarian crisis. And also, I think there is the danger of increasing the risk faced by hostages. Then building on that point, a senior Hamas official claimed the attack signaled Israel's unilateral termination of the ceasefire agreement. What irreversible impact does

Could this help on the regional peace process? Does it further diminish the prospects of resolving the Israeli-Palestinian conflict through peaceful negotiations? At the moment, Hamas' claim of unilateral ceasefire termination could severely damage trust in future negotiations because let's see the January 2025 ceasefire occurred by the United States, Qatar and Egypt.

was very fragile, but it's at least represented a rare pause after 15 months of war. So at least it was somehow an achievement, but right now it's

sort of collapse with massive airstrikes might convince Hamas and its supporters that Israel prioritizes military dominance over diplomacy. And this can actually demotivate both sides from further negotiation, and it can push them towards escalation of conflicts. So I think in some this escalation could further entrench both sides, and which reduces the ceasefire second phase to a very distant hope.

Then turning to diplomatic dynamics, an anonymous Israeli official stated the Israeli government had informed the Trump administration in advance about the airstrikes and their military objectives. Could you please elaborate more on the role that the U.S. played in this escalation? How significantly has Washington's stance influenced Israel's action?

Well, I think the United States role is, of course, very pivotal. We all know that the United States has always been the most important supporter of Israel. But right now, Trump and his team have prioritized hostage release and countering Hamas. Recently, we have seen Trump, who has proposed a U.S. takeover of Gaza, while also suggesting a permanent displacement of Palestinians from Gaza.

uh and in and meanwhile the united states has also launched attacks towards the houthi rebels in yemen

And we have to note that the Trump administration has minimal criticism of the humanitarian crisis in Gaza. So all these actions are very likely to embolden Israel to act. Expanding on the issue of ceasefire negotiations, Winner Hamas is much more committed to the initial ceasefire agreement, which was supposed to enter its second phase earlier this month.

And as you mentioned, according to this phase, Israel was expected to fully withdraw from Gaza and agree to a permanent end to the war in exchange for the release of remaining hostages. But we also witness Israel's reluctance to proceed with the second phase. What deeper attitudes and intentions does this reflect regarding the conflict?

How might this stance affect the long-term stability of the region? Right, I think Israel's reluctance to enter the ceasefire second phase signals a deep-seated rejection of any outcome which could preserve Hamas power.

So I think the current and ongoing airstrikes and Netanyahu's rhetoric about increasing military strength reflect his intention to prioritize security through force over compromise. And in the meantime, we should also note that Netanyahu's coalition includes a lot of far-right elements, and obviously he faces pressure from them.

So right now, these far-right elements advocate Palestinian displacement, advocate the continuation of war. So right now, I think it is very unlikely for Israel to make further concessions. And this stance risks long-term instability. So in general, I say that doubling down on military solutions might lead to the continuation of cycles of violence.

In light of these tensions, U.S. Middle East envoy Steve Witkoff had proposed a transitional plan to extend the first phase of the agreement for several weeks, during which Hamas could release five hostages. But Hamas rejected this proposal. What do you believe were the key reasons behind Hamas' refusal?

Well, I think Hamas likely rejected this proposal because it did not address its core demands, which is a permanent ceasefire and a full Israeli withdrawal from Gaza. So Hamas' insistence on immediate phase two talks reflects its distrust in Israel's intentions, especially after strikes during the truce.

Also, I would say releasing hostages without guaranteed concessions might also weaken Hamas leverage, particularly right now with not many believed alive among the hostages.

So meanwhile, accepting a temporary extension could also undermine its narratives and its image in the region. So all these reasons have actually a very strong influence on Hamas' refusal of the proposal. Finally, turning to the humanitarian crisis,

in the region. The large-scale airstrikes have reportedly resulted in at least 300 deaths, drawing a widespread international condemnation. What actions can the global community take now? And how might Trump's approach to Gaza influence the international community's response to this situation? From my perspective, I think the global community faces very limited options at this stage.

And also it is very uncertain whether Qatar, Egypt will and are able to continue the mediation efforts. So obviously there are many challenges and a more worrisome scenario is that humanitarian aid can be even more interrupted.

So I think Trump's approach at the moment is not very helpful for reaching an international solution. And right now, I think the immediate mission for the international society is how to bring the two sides back to the negotiation table and how to reduce the humanitarian crisis in Gaza.

That was Associate Professor Zhang Chuchu, Deputy Director at Center for Middle Eastern Studies at Fudan University. Coming up, Indian Prime Minister Narendra Modi has called for strengthening ties with China. This is Rail Today. Stay with us. Hello, my name is Alessandro Golombievs Teixeira. I'm a professor of public policy management at Tsinghua University in Beijing.

I am a great listener of The World Today. In my opinion, The World Today is one of the best China radio programs. In The World Today we can get the best news and analysis in what is happening now in the world. So please, come to join us!

You are listening to Road Today. Indian Prime Minister Narendra Modi has called for strengthening ties with China. When talking to a U.S.-based podcaster, he emphasized that India and China should engage in a healthy and natural competition while ensuring that differences do not escalate into disputes. Speaking on India-China relations, Modi highlighted the deep historical ties with China in global trade and cultural exchange. He said,

stating that both nations have learned from each other for centuries and were once economic powerhouses together. The Chinese ministry and foreign affairs later responded, the prime minister's positive remarks are appreciated, and China is willing to work with India to fully implement the consensus reached by the leaders of the two countries and promote the healthy and stable development of the relationship.

So for more on China-India relations, joining us on the line is Rong Ying, Chair Professor with the School of International Studies at Sichuan University. Thanks for joining us, Professor. Thank you for having me again. Professor, Prime Minister Modi emphasized dialogue over discord and the need to ensure differences don't turn into disputes. How do you interpret this statement in the current geopolitical context? Well,

Well, let me first make a point that the context and the background of these remarks, I think the fact that Prime Minister Modi

made these remarks on the eve of the 75th anniversary of the establishment of diplomatic relationship, certainly is very much noted. And as your question, I think, alluded that in the current uncertain and fast-changing world where geopolitics, I mean, create a lot

A lot of uncertainties and also I think a lot of challenges. The very fact that India's relationship, India with China, I mean the largest, one of the largest neighbors and also a very important, I think, country

country for India, which over the past years, particularly the past five years since the Galawan incident, has been sort of some difficulties while in last year when the two leaders met and they have more or less taken a different sort of approach. But the momentum, I mean, is not very stable. So the fact that

the prime minister himself came up and make a statement and emphasizing many important principles. And also I think

about how to manage the question of cooperation and competition, how to ensure differences, which is natural between neighbors, in this case China and India, that would not become a dispute, and how to ensure the disputes or problem differences will be managed through dialogue.

And more importantly, I think they emphasize - the historical cultural exchanges and the China-India cooperation, - the role of this significant that for the region and the world.

Last but not least, of course, the boundary issues. He also mentioned about the coming back to the normalcy and so on and so forth. So taking as a whole, I thought it was a very positive and important statement, and naturally it's being responded by the Chinese side that – which I think – I

would prepare the ground for the coming celebrations of the 75th anniversary and other expected interactions, even at the various levels, particularly at the highest levels, if you look at the agenda of both China and India. Professor, let's delve further into your assessment of these remarks.

made by Prime Minister Modi. We know Modi has rarely made public remarks about China-India relations over the years, with tougher stance typically voiced by his foreign minister. What key factors do you believe contributed to this change? What political, economic or strategic considerations within India might be driving this shift?

- I just too, I think Prime Minister Modi has rarely made remarks in the past five years. But I think when he spoke,

Usually, I mean, the remarks, the statement are very much important. Talking about the factors contributing these remarks or the statement, I think politically India and of course China want the relationship become stabilized, and this is very much, I think,

consensus, the agreement that has been reached by President Xi and Prime Minister Modi when they met in Qatar on the sideline of the BRICS conference. So that is very much important. Secondly, I think if you look at the diplomatic front,

it certainly makes sense for India as now pursuing a kind of multi-allied sort of a strategy by developing a kind of relationship, stable relationship with all the major countries, of course, more or less on its terms. And economically, China has been one of the major sort of partners

in terms of trade and arguably, I think if you look at the potentialities of investment, even though over the past years we have seen India has made some restrictions on Chinese investment and trade, but it did not stop the growth, rapid growth of that. And so a stable relationship, both in terms certainly makes sense with China

in terms of India. And of course, I think domestically, if you look at the domestic political dynamic, it is the second year of Brahmin's, well, the third term. So he is more or less, I think, very much in control. So I think it is all right, or it makes political sense for the BJP government and the Prime Minister Modi.

to make some gestures or in the hope that a stable relationship with china would help more prime minister body to fulfill its own domestic agenda political economic and and diplomatic

Professor, about ongoing issues or challenges, like you mentioned, the border dispute, India has maintained a firm stance on resolving these matters bilaterally. Interestingly, during Modi's visit to the United States last month, U.S. President Donald Trump reportedly offered to help in ending China-India border dispute, but Modi rejected the offer.

emphasizing that a bilateral approach is the best approach. So how do you interpret India's position in this regard? What does this decision suggest about India's desire for greater autonomy in managing its relationship with China? I think that to be fair, India has always wanted to be a meaningful power.

power to be reckoned with. And for that, India, I think, would have to – diplomatically would have to exercise greater strategic autonomy. And related that is, of course, those major issues, issues of great significance in terms of political and economic, and certainly I think related to relations with China,

China has to be, I think, under control. And it has always been very consistent that the policy of India, that its disputes with China, boundary disputes and others, look for a kind of a so-called one to deal with in a bilateral way. So bilateralism has always been there. And India has consistently

that reject any third party intervention. So it's understandable in the face, of course, it is also very significant for Prime Minister Modi to reject when President Trump offered that. And of course,

It is also, I think, the positions of China, of the Chinese, that bilateral issues should be left with, I mean, countries are concerned. In this case, China and India, we feel we can address, manage our issues. And all in all, if you look at the past decades, particularly the past two decades and the

when China and India reach an important agreement on the political guiding principles and political parameters on addressing the boundary issues. So they are very important and consistent sort of understanding that political approach. So this is, I think, a very important position, very important principle that we uphold by

by India and of course by China. Professor, I think dialogue alone may not be enough to improve China-India relations, right? Especially given the challenge of rebuilding mutual trust between the two nations. Now with Modi's recent positive remarks and China's expressed willingness to expand cooperation, how do you think both sides can leverage this opportunity to enhance people-to-people exchanges and

and economic cooperation and to foster greater mutual understanding between the two nations.

It is true. I think dialogue is important, but not enough. Most importantly, I think given the importance, the complexities of the relationship between China and India, I mean, cultural exchanges, people to people interactions and so on and so forth would very much help. And this is why over the past decades, I mean, before the Gala one incident,

There are a lot of efforts that have been made, and there are mechanisms called high-level cultural people-to-people interactions being established. Unfortunately, that has been not fulfilled, I mean, followed through because of the incident. The first few steps or sort of efforts made by the two governments in after the

two leaders meeting in bringing the relationship back is, I think, one of the priorities, people to people and culture. And this is very much important because China and India are both, I mean, we're rich culture and very much, I think, our neighbors. And we need to learn

have better understanding. And this is in this context, I think while the political dialogue, economic engagement and diplomatic negotiations going on, people to people interaction, cultural exchanges becomes an important report. And it is very good for Prime Minister Modi to mention in his remarks the importance of

people cultural ties by looking, I mean, going back to the history, but the most important that I believe that we need to look ahead to the future and the, I mean, not only the society as a whole, but most important that I think the younger generation, the future generations, that should be the priority areas where China and India focus on when we talk about cultural exchange and people to people relations.

Indeed. Thanks, Professor, for your insight of analysis. That was Dr. Rong Yin, Chair Professor with the School of International Studies at Sichuan University. This is Road Today. We'll be back after a short break. Welcome back to Road Today with Mika Anna in Beijing.

Official data shows that commercial home prices in China dipped slightly in February in China's 70 large and medium-sized cities amid the spring festival sales off-season. The National Bureau of Statistics says new home prices in first-tier cities, including Beijing and Shanghai, increased 0.1 percent from a month ago.

In second-tier cities, prices of new homes stayed flat, while those for resold homes dropped by 0.4%. Since the start of the year, cities including Shenzhen, Dalian, Suzhou and Beijing have introduced new policies for housing provident funds. In China, housing provident fund is a government policy that involves both employees and employers in contributing to savings for housing purchases.

So for more on this, my colleague Zhao Yang spoke with Qu Qiang, fellow of the Belt and Road Research Center at Minzu University of China. So Professor Qu Qiang, first, what is your assessment of the housing market in China's 70 large and medium-sized cities this year?

Well, I think from the January to February, at least according to our latest data, we've been observing that the performances of the housing market was in the 70 major cities in China. Actually, we can call it a divergent.

Why is that? It's because within the current mix of our data, we find out some of the cities have actually been very stabilized and also some are even minor rising up, but some others are slowing down and also drop a little bit. So there is no clear pattern in here. For example, I think in first tier cities, they are still very much stable and a bit

strong, like in Beijing, like in Shanghai, like in Shenzhen, we've been finding that their turnovers for the housing market actually has been moving up. And also the second-hand home has also been rising. But the son of the second-tier or third- or fourth-tier cities are

you know, very much different. For example, in the city like Suzhou and Chengdu, those are very, very strong second tier or the star second tier cities. And their turnovers and the rising of the prices are even faster than Beijing, Shanghai and Shenzhen. But for some other third and fourth tier cities, for example, in the England city or in the western regions are still slowing down or still continue with the drops.

So it's very hard to say that the whole market in the housing sectors are stabilized. But what we can tell is that in the major cities, because there are economic fundamentals, because of the inflow of the populations, and we can say their housing market are basically okay right now.

And since September, China has announced a series of policies to stabilize the property market. So, Professor Xu, do you expect there will be more housing market supportive measures this year?

Well, I do think so. I think last year, Chinese government has really made a very unprecedented move towards the housing market. For example, our front payment ratio has been cutting to the historic low. And also, I think the mortgage ratio has also been dropped continuously in the whole last year. And starting from this year, and I think we just wrap up the two sessions, and according to our observations,

On the two sessions, I think stabilization of the housing market still has been mentioned frequently. So according to this guidelines and the policies, I think we're probably going to continue the trends of last year. So even though the upfront payment ratio is already low in history, but still compared to its matured market like Japan, like South Korea, like Western European countries,

I think we'll still have the leeway to cut more of the front payment. And also talking about mortgage rate, even though right now I think it's very, very low according to the Chinese own historic data, but compared to some other markets, as I just mentioned, like Japan, like United States, like European Union, I think we still have the further space to cut out LPR. For example, in the lowest timeframes,

I think in America you only need to pay like 1% of the mortgage rate and in Japan is even much lower like 0.5 or even like 0.1% of the mortgage ratio. So I think we still are, you know, rather high compared to the average ratio of the matured market. So anyway, we can still cut it further. And more than that, I think the government allows a larger leverage ratio if you've got the provided fund and also

I think most of the major cities can also have what we call the administrative method. For example, in the big cities like Beijing and Shanghai, Shenzhen, they still have some limits on the numbers or on the house numbers or how many years of the social credit you need to pay or the taxation you need to pay to the local government so you can buy the houses. And now I think they probably will have more of this

space to remove all this ban to attract more of the people to come into the market to buy the houses. And as you mentioned during the two sessions, the government work report said, quote, we will introduce the city specific policies on adjusting or reducing the property transaction restrictions. So how should we understand that?

Well, I think China is a very, very large market. It was probably the largest, what we call the qualified buyers of the houses, which India is basically also a very large market, but not many people can buy the city houses. In America, they only have 300 million population.

And their city's number is much smaller than China. So I think which makes Chinese housing market regulation even more difficult. So I think right now, if we will have just one answer, just one regulation or policy towards the housing market, let's say remove all the ban and the

lower the rate, lower the limits to the bottom line immediately. I think the city like Beijing and Shanghai and Shenzhen, their house market probably would not only have been stabilized, but rather rebound very brutally. Probably the house prices will skyrocket again. That's something the central government don't want to see. But on the other hand,

on smaller cities, even though we will allow them to have very, very favorable policies that lower the bottom line, lower the ratio to the bottom line. But probably people wouldn't go back immediately to buy the houses because they are not still prepared in the economic fundamentals of their job market. And also their whole industry is not prepared. So the government

We want to see that happen because there will be a major turbulence in the whole housing market. So I think the current policy, which is best step across the river by filling the stone, is absolutely correct. We want to smooth the curve of the rebound, but also we don't want to cause major disruption towards the whole housing market and further the financial market.

And local authorities like Beijing and Shenzhen, they have all issued some policies easing the purchasing requirements or mortgage rates. So what does it mean for people who are looking to purchase a property, especially who want to sell their original one and buy better ones? And what does it mean for the housing market?

Well, I think this is a very important policy that can facilitate the turnovers and the whole turnover volumes and turnover rate to speed up the whole market. While we have to understand the market like Beijing and Shenzhen are quite different. Just imagine London, Los Angeles, New York or San Diego or Paris.

Well, in there, the housing market or the sheer price for each house are very, very large. So it's not very easy to attract the home buyers to buy their first home to pay full and with such a large amount. It's not easy in anywhere in the whole world, in a city like Beijing, Shanghai or London or Los Angeles.

But I think the second hand or what we call the improvement home buyers are still there and they have a very large base numbers. For example, I have already got a rather smaller house or big, big house in the suburb. I want to switch it for a better home is the city center or was a bigger, you know, flow area. So I can, you know, sell my own original home and just a,

add up a little bit more of the mortgage or some money borrowed from my relatives so I want to buy a new one to improve my living condition. And I think that is very, very doable. So I think the government realized, well, if it's difficult to attract the first home buyer, but how about we revitalize the home market by helping those second home buyers or improvement home buyers?

So I think that's the purpose of releasing all these policies in the first place is reducing their burden, help them with financing and lower their threshold of the market entry, and also improve their living conditions. With a bigger home, you probably will consider about a better interior decor and also to buy some new furnitures, house appliances, and that means another round of the boost in the consumption.

That was Professor Qu Qiang, fellow of Belt and Road Research Center at Minsu University of China. Coming up, the new Canadian Prime Minister has picked France over the United States for his first foreign visit. This is Road Today. We'll be back. Hi, I'm Einer Tangen, a political and economic analyst and senior fellow at the independent Taihe Institute.

World Today is news without the hype and business commentary that is informed and up to date, presenting the facts and asking incisive questions. So join us if you are someone who needs to know what is happening in China as it is happening.

Welcome back. Canadian Prime Minister Mark Carney says his country must reduce its reliance on the United States and will turn towards its reliable European allies. Instead of making his first foreign trip to the United States, Carney headed to Europe, where he first met French President Emmanuel Macron in Paris.

He then headed to London and met British Prime Minister Keir Starmer. Carney said Canada is also looking to ease its reliance on the U.S. for security and is seeking alternatives to its $13 billion deal to buy 88 U.S. fighter jets.

The former Bank of England governor, also a former head of the Bank of Canada, became the leader of the ruling Liberal Party this month by depicting himself as an outsider with a history of tackling crises.

So to talk more on this, let's bring in Professor Joseph Mahoney, Professor of Politics and International Relations at East China Normal University. Professor, Canadian Prime Minister Carney chose France and the UK for his first official visit, emphasizing the need to strengthen ties with reliable alliances.

How do you interpret this significant shift in Canadian foreign policy amid strained U.S.-Canada relations? What strategic implications does this diplomatic shift hold for Canada? Well, first, you know, I think it's a bit amusing to recall that in the past, Canadians

sometimes took umbrage with US presidents who made London their first official foreign visit with American leaders pointing out the US-UK special relationship when doing so. And, you know, Biden also did this after taking office in 2021.

meeting with Queen Elizabeth. Now, despite the fact that the British monarch is Canada's head of state, this did little to assuage the ruffled feathers in Canberra. And it's amusing to recall this as the new Canadian prime minister also privileges France and the UK as his first trip abroad, thereby touching the two European states that had the biggest

cultural influences in Canada, despite the much more important relationship Canada has with the U.S. Second, obviously, is that Trump's trade war aggressions and comments contrary to Canadian sovereignty have made a trip to Washington politically toxic for Canadian leaders, and all the more so because both Trump and his vice president have shown a willingness to attack foreign leaders, above all allies,

whether hosting them in the White House or while traveling abroad. And as for reliable allies, we've heard European leaders pushing back against Trump's annexation rhetoric direct against Canada and Greenland. And this is a clear example of a reliable versus unreliable ally. Third, Canada's frustrations with Trump are especially acute for another reason.

During the first Trump presidency, Canberra bent over backwards to accommodate Trump's demands with respect to NAFTA. But Trump has recently violated that agreement through his new trade war. Now, some believe that former Canadian Prime Minister Justin Trudeau was too deferential towards Washington. And it's clear that many Canadian voters wanted someone who would stand stronger.

I think consequently, even though Carney might have more in common with Trump politically than Trudeau did, this would also require him taking a stronger stand. And above all, because when you reach a deal with Trump, you can't expect him to honor it. Professor, during his meeting with President Macron, Carney made some intriguing remarks.

He said Canada is the most European-like country outside of Europe And a poll by UPCA's data reviewed that 44% of Canadians believe Canada should join the EU While 34% oppose this idea What does this suggest about Canada's self-perception today and its attitude toward Europe? How might this shape Canada's future role in global affairs?

Well, you know, Canada is also unfortunately at risk for political polarization, with some actually favoring closer relations with the U.S. and others favoring them with Europe. Now, some Canadian business leaders actually criticized Trudeau for not doing what Trump wanted in recent months.

More recently, we've seen the premier of Alberta, who has long harbored separatist sympathies, has been trying to cut a deal with Trump behind closed doors independently rather than holding the line.

Now, joining the EU, unfortunately, would present Canada with a number of challenges. For example, the UK is not a member of the EU anymore. So how strange would it be for the British monarch post-Brexit to be the head of state of an EU country? Mm-hmm.

Now let's assume that wouldn't be such a big deal. The broader problem is that joining the EU doesn't change the fact that the US will probably remain Canada's largest trading partner and the EU, like Canada, is already in a security trap vis-a-vis American control of NATO.

Furthermore, I just returned from Rome a couple of days ago, and despite the huge pro-EU solidarity rally there on Saturday, the general mood in many European capitals is that the EU is unable to respond collectively in an effective way to confront

growing challenges associated with the return of great power competition above all that coming from Washington. So in short, while many in Europe still want the EU to work, not many have much faith that it can do so. Consequently, joining the EU might bring more problems than solutions.

Now, finally, I was discussing these developments with a Canadian professor who says he doesn't think the Canadian ruling class seriously wants to join the EU. And meanwhile, joining the EU is actually favored by less Canadians than people in Turkey.

Additionally, Carney, who I think, as you mentioned, was the governor of the Bank of England and Canada, the latter during the financial crisis, he understands the liabilities and lack of autonomy imposed by European central banking, something that would be a very significant risk if the conflict with the U.S. accelerates.

That said, these kinds of unity narratives can help reinforce, rhetorically at least, already strong ties and encourage new trade agreements. Then, Professor, looking at Carney's European visit, could you please elaborate what specific support is he seeking from European allies in response to U.S. tariffs and sovereignty concerns? How might European allies respond to Canada's request based on their own interests?

There's a lot of room to promote freer trade between Canada and Europe, and this would certainly help offset some of the increased costs and risks both sides are facing from Washington. Aside from the rhetorical support for Canadian sovereignty, and given the fact that it's not clear the US will sustain its role in NATO, we might also see new strategic partnerships between Canada and Europe that could strengthen Canadian national security.

Professor, during a press conference in London, Carney issued his strongest criticism yet of the U.S. President Donald Trump, demanding that Trump hot disrespectful remarks before engaging in negotiations. And Carney then stated that he currently has no plans to visit the United States, but is open to dialogue.

While also holding back on retaliatory tariffs, how would you assess this strategy from Carney? Given Canada's economic size, does it realistically have the leverage to confront the United States in trade disputes? Well, Canada is greatly disadvantaged due to the size of its economy and its higher level of exposure to U.S. trade, along with other concerns like dependence on the U.S. for security.

Nevertheless, Canada is a developed nation. If Trump decides to wage an unrelenting trade war, and if Canada fights back, experts believe prosperity could be restored after a deep and painful process of adjustment. Unfortunately, this could take 10 to 20 years, and it's not clear that most voters are willing to make that sacrifice.

However, we already see these kinds of scenarios being discussed in Canada, as well as their potential upsides. For example, extreme economic hardship might also promote national unity to face that crisis, and this could help discourage separatism being promoted by some in Alberta, Quebec, and a number of indigenous regions.

Thanks, Professor, for your time and insights. That was Professor Joseph Mahoney, Professor of Politics and International Relations at East China Normal University. This is World Today. Stay tuned.

Welcome, I'm Elav Elad, economics professor and member of the Data Science and AI Center at New York University, Shanghai. On the World Today program, you can find in-depth and impartial insight, as well as critical commentary on key trends in the Chinese economy, financial technology, business and blockchain. To prepare for the world tomorrow, join me on World Today.

You are listening to Road Today. U.S. consumer sentiment plunged to a nearly two-and-a-half-year low in March amid policy uncertainties and tariff whiplash.

The University of Michigan Consumer Sentiment Index plummeted 11 percent in March, the third consecutive monthly job and the lowest rating since November 2022. The survey also showed inflation expectations were rising both for the year ahead and over a five-year horizon. The data comes as President Donald Trump has declined to rule out a recession. He said the country will see a period of transition as his policies take effect.

So for more on this, my colleague Zhao Ying is joining us in the studio. Thanks for joining us, Zhao. Hi. Let's start with the bigger picture here. American consumer confidence has taken quite a hit lately. What's driving this sharp decline? Well, as we can see in this report released by the University of Michigan, consumer confidence has fallen sharply as Americans of all ages, income groups and political affiliations turn even more downbeat about the trajectory of the economy.

And it's not only about personal finance, but also the job markets and stock markets. And I think there are multiple factors driving this trend. First and foremost, Trump's tariffs, tariff policies are front and center. He's been rolling out these sweeping tariffs like 25% on goods from Canada and Mexico, threats of 200% on European wine and cognac. And then

playing this on-again, off-again game. One day they're imposed, the next they're suspended, and then they're back with a vengeance.

And actually nearly half the people surveyed, 48%, pointed to tariffs as a big reason they are expecting prices to climb. And that unpredictability is a nightmare for anyone trying to budget or plan ahead. And then there's the fear of inflation. Consumers are now expecting 4.9% inflation over the next year,

which is the highest since late 2022. And over five years, they're bracing for 3.9%, a level we haven't seen since 1993. And on top of that, you've got a stock market that's been on a roller coaster. And also there's Trump's government efficiency push through slashing federal jobs and threatening cuts of things like social security, as well as his plan to order the American immigration system

So I would say this drop in consumer confidence is largely driven by Trump's policies, even though Trump claims this is just a period of transition for something very big. And whether it's temporary or not, we need to wait and see. But the pains are real. Are we actually seeing people cut back on spending or is this more about consumer anxiety and uncertainty?

Well, I think this is not just a psychological reaction. We are definitely seeing hard evidence that consumers are cutting back. For instance, according to Retail Next, a consultancy, food fall to U.S. stores dropped 4.3% year-on-year in early March.

and that's been sliding since the start of the year. And Placer.ai, which aggregates signals from consumers' mobile devices, it's seen fewer visits to big box stores like Walmart, Target, and Best Buy in recent weeks.

And according to the Commerce Department, retail sales in February only inched up 0.2%, and that's way below the 0.7% economists hoped for. And that comes after a 1.2% drop in January. And if we break it down, department stores down 1.7%, restaurants and bars off 1.5%, and gasoline stations down 1%. And also according to Revenue Management Solutions,

Traffic to U.S. fast food restaurants was down 2.8% in February, with breakfast trips tanking double digits because the consultancy said breakfast is the easiest meal to make at home or just skip meals.

And even the airlines are flagging slowdown with leisure travelers pulling back. So all of these figures show that it is not just in people's imagination because U.S. consumers are really cutting back on their spending. But of course, the psychological side is also real and is actually amplifying all this. There are talks and reports that

lower-income households are feeling the most pressure. How is this economic strain playing out across different income groups? Well, lower-income consumers are definitely taking the hardest hit right now. For example, Dollar General's CEO said that their customers who are mostly lower-income are so squeezed by inflation that they're down to just the bare essentials, sometimes even sacrificing basics like food or household goods. They're

But it is not just them, because economic anxiety is rippling across all income groups just in different ways. If you look at the wealthier Americans, the ones who are driving a lot of consumption, about 60% of them own stocks. And the stock market's recent tumble has dented their investment portfolios.

And that's real money they are counting on for retirement or big investments and is shaking their confidence too. So everyone is feeling the impact, although the low-income groups are always the most vulnerable. Now, U.S. President Donald Trump's been calling this a period of transition and refused to rule out a recession. But with people feeling real financial pain, do you think

that could change how his supporters or the public more broadly view his leadership today. Yeah, Trump's calling this a period of transition, like it's just a tough time before things get better. And yes, he declined to rule out a recession. But I think

The real pain people are feeling could definitely change how they see him as a leader, even his biggest supporters like the mega crowd and his tariffs like the tariffs on products from Canada and Mexico are making everyday things more expensive because half of the US fruit comes from Mexico. So your grocery bill might jump $20 to $30 a week for things like avocados or berries.

And gas could cost more if Canada fights back on oil, and cars might get pricier because the auto parts also come from there. And for Trump's base, those who really believe in him, this could get messy because they voted for him because they thought he'd make the economy strong. It was the top issue of his election campaign. But if things don't turn out as they expected, if they're paying more for food, gas, and losing jobs or benefits,

they might think twice on whether they'll continue to support him. And of course, Trump may shift the blame on China or Democrats, but if the pain gets too big, like a recession, where jobs vanish, stocks crash more, and people cannot afford their basics,

his supporters might as well turn away and he's promised them a better life, a great America. But when they feel this squeeze every day, it's tough to keep cheering for him. Thanks, my colleague Zhao Ying. That's all the time for this edition of Road Today. I'm Ge'Anna in Beijing. Thank you so much for listening. Bye for now.