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Both US President Donald Trump and the European Union set their sights on Ukraine's mineral resources. Study shows China remains an attractive destination for investment despite growing concerns over Sino-US relations. And Iran and Russia's foreign ministers have condemned the unilateral sanctions by the US and the West.
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.
Ukraine and the United States have reportedly reached an agreement on a deal that includes access to Ukraine's rare earth minerals. It's part of Kyiv's efforts to win security support from Washington. U.S. President Donald Trump says the minerals deal will recoup the billions of dollars owed by Ukraine in military aid.
Ukrainian President Volodymyr Zelensky could sign the deal during his visit to Washington as early as Friday. Meanwhile, the European Union also proposed a new deal aiming to seize a piece of Ukraine's resources.
During European Commission President Ursula von der Leyen's visit to Kiev, she presented an agreement on critical materials to Ukraine in which 21 of the 30 critical raw materials required by Europe can be sourced from Ukraine.
So for more on this, let's have Kamal Makilia-Liev, affiliated researcher at Raoul Wallenberg Institute of Human Rights and Humanitarian Law in Sweden. Kamal, first of all, President Trump has insisted that the U.S. should receive "returns" for its assistance to Ukraine in resisting Russia, demanding access to resources like rare earth minerals and oil.
How does this stance reflect the US true position in the Russian-Ukraine conflict?
Well, because Trump insists on the returns that the U.S. should have in forms of like rare earth minerals and oil for its assistance in Ukraine, it actually signals this fundamentally transactional and what people used to call real politic kind of approach to the conflict. So rather than viewing it as an aid or moral strategic imperative or moral duty, Trump views this as something that American support needs.
should yield tangible economic benefits to the United States. Otherwise, in practical terms, that wouldn't reflect his America First idea. Not just to the United States, the EU has also proposed...
a quote-unquote "win-win" agreement with Ukraine, emphasizing that it will never ask for a non-mutual agreement. But given the power dynamics, can the EU truly offer an equal and mutually beneficial agreement? What deeper strategic intentions might lie behind this proposal? Yeah, I agree that it's presented as a win-win, but there is, of course, as you say, there is a power dynamics behind it.
EU asserts that its proposals are based on reciprocity, but it also holds a lot of economic and political influence over Ukraine. And that influence can, of course, shift negotiations in favor of European strategic interests. On the other hand, there's also an understanding that securing resources is important for the EU. And behind the rhetoric of mutual benefit, there's also strategic drive to secure a very long-term access to Ukraine's mineral wealth.
And this could help EU diversify supply of chains of rare earth minerals from other regions of the world, of course, and reduce dependency on other global players, right? At the same time, it would kind of push Russia even more out of the European region in terms of resources. In other terms, you also publicly disavow the loans that President of France Macron was very vocal about, right?
But that stands in contrast with efforts to lock down resource agreements. So what is it actually, charity or it's actually, you know, agreement on resources from European sides? Ukraine has yet to respond to the latest statements from EU officials. But following President Trump's announcement that the U.S. and Ukraine are close to reaching an agreement, President Volodymyr Zelensky stated Ukraine will not sign a deal that would burden future generations.
But he also stressed the importance of security guarantees as part of any mineral agreement. What do you think of his position given the external pressure and Ukraine's development needs? How can Ukraine protect its interests and sovereignty in negotiations over resources with the U.S. and the EU?
Well, Zelensky's declaration is of course showing that he wants to both protect Ukraine's long-term sovereignty, but will also secure some kind of economic well-being for the country that has been so severely ravaged by war. Zelensky is trying to pull kind of a balancing act, right? He is also very much aware that there is immediate need for support to counter the Russian aggression, but he also insists that the deal must preserve Ukraine's future. So
So it's kind of this trade-off that we're talking about. And demand of this kind of robust security guarantees as a part of the Minero Agreement then secures for him this goal of balancing national security, but also not sacrificing long-term economic development.
and that's the whole idea behind the balancing act we would be turned into the long-term strategy right because this call for the agreements it can provide immediate benefits but we would also lay groundwork for sustainable growth that's the question because ukraine's natural wealth can both support its economic or domestic development but it also can flow out of ukraine and then make ukraine poorer in the long term
So this is the dilemma that Zelensky is struggling with. Building on that, if a mineral agreement between the U.S. and Ukraine is signed in Washington, what impact would this have on Ukraine's foreign policy and international standing? Will this increase Ukraine's diplomatic reliance on the U.S., potentially affecting its relations with other countries? Well, should this agreement be signed, of course, we're going to see increased
the reliance of Ukraine on the US, right? Because that would deepen Ukraine's economic and diplomatic ties with the United States automatically. But that also might provide short-term stability and resource access, especially the military resource access.
But it also risks skewing Ukraine's foreign policy very much towards American interests, right? While there is also EU involved, as we've just discussed. So that can be potential for skewing the balance towards United States and the balancing act might suffer as a trade-off. There are also strategic reorientation kind of worries, because if this agreement signals that
This is Ukraine's only strategic alignment and the major strategic alignment. It might become a destabilizing factor when it comes to the talks with Russia. And it risks positioning Ukraine as overly dependent on the external power in both economy and security, as well as its development.
But from an economic development perspective, how might the U.S. and EU's efforts to divide Ukraine's mineral resources affect Ukraine's future? What challenges might arise for Ukraine's economic structure and industrial development as a result of such arrangement?
Well, I would say there are quite heavy long-term risks, right? There's a risk of over-dependence, that right now the capital inflows in technology might spur the short-term development, but over-reliance on external partnerships, it can reduce the opportunities for the future resource extraction and can undermine Ukraine's control over its natural wealth, basically. This, in turn, could limit its ability to develop resources
a kind of robust diversified industrial base that is needed to come out of the post-war situation there is also you know environmental challenges intensive extraction may lead to environmental degradation
and resource depletion if not managed sustainably. There is nothing in the previous history that says that extractionist policies in this part of the world have been sustainable. So there are significant risks that are carried with environmental damage that might occur because rare earth minerals are notoriously hard to extract sustainably. This is also one of the risks.
There is also sovereignty and development trade-offs, right? As I said, ultimately, Ukraine must navigate the tension between harnessing its resources for immediate economic benefit
and then retaining long-term control over them and to be able to drive some kind of sustainable development. How do these developments with both the EU and the US focusing on Ukraine's resources impact the ongoing conflict between Ukraine and Russia? Do these resource deals influence the power dynamics on the ground?
Yes, to a certain extent, of course, not too much extent right now, because we're right in the beginning of any process of kind of coming to serious talk about talks between Russia, Ukraine, United States.
So resources are here. The Ukrainian resources here are seen as leverage. Any resource deals, they can act both as an economic boom for Ukraine, right, but then also drive more into the geopolitical context with Russia. It can also provoke Moscow by deepening Western influence in the region in the long-term future. So that might make Russia less negotiable in the short term.
There is also, you know, battlefield situation where the securing resources for Ukraine is needed right now to be able to successfully defend itself on the battlefield. But that might also be only a short-term effect of all this. There are no dynamics that are showing that Ukraine can turn this into a strategic win on the battlefield.
And of course, there's more strategic calculations for Russia and the shift of resource control away from its influence. It also represents economic and even symbolic loss on the battlefield, right? Or the things that Russia would not be able to secure. And this could also, of course, lead to more heightened tensions and again, make Moscow less interested in seeking, you know, at least a ceasefire, if not peace. But as the US and EU risk to
seize a piece of Ukraine resources, what can the international community do to prevent exploitations of smaller nations like Ukraine? Well, international mechanisms around the resource wealth are not really there in the world because resources are genuinely...
and fundamentally seen as a part of the sovereignty of each and every state that has them in their sovereign possession. So that means that whatever the state decides to do with them remains within the state's sovereign decision-making, and the international community doesn't have any kind of control over overseeing mechanisms. It's usually decided
through bilateral or multilateral diplomacy. And that's why when one country finds itself in the kind of more vulnerable position, the bigger actors that can provide necessary means can then exploit the resources. And we've seen that with the countries of so-called global south going through this again and again since the process of decolonization. When they are struggling with issues like conflict, poverty, lack of development,
And then they trade their natural resources into financial aid from the countries of the global north. And unfortunately, that doesn't lead to a sustainable development, but also leads to more problem and more extractionists and this kind of vulnerability of those states. So it's a huge global question about how we can make the system more sustainable.
That was Kamal Makili-Aliyev, affiliated researcher at Raoul Wollemberg Institute of Human Rights and Humanitarian Law in Sweden. Coming up, study shows China remains an attractive destination for investment despite growing concerns over Sino-U.S. relations. This is World Today. Stay with us.
Gold prices are soaring, hitting new highs more than 10 times this year. How unusual is this? What's driving the surge in addition to America's tariff plan? We'll also explore the ripple effects on the global economy and how rising gold prices could impact our daily lives. Get it all on this week's chat lounge, on your favorite podcast platform and CGTN radio.
You are listening to Road Today. Despite growing concerns over China-U.S. relations, China remains an attractive destination for investment. According to a recent survey by the American Chamber of Commerce in southern China, U.S. firms in the Asian country are continuing to expand their operations.
It says American companies are setting aside about US$50 billion for reinvestment in China over the next three to five years. That's a nearly 34% increase from previous figures. Among all businesses surveyed, nearly 90% of American firms reported profits last year in China, higher than 87% for Chinese companies and 81% for other companies worldwide.
Haley Searing, chairman and the president of the chamber, says businesses are increasing their commitments in China to secure a stronger foothold in this critical market. So to delve into this, let's have Dr. Yao Shujie, Chang Kong professor of economics at Chongqing University. Thanks for joining us, Professor. Hello.
Professor, despite ongoing trade tensions, why do you think American companies continue to reinvest heavily in China? What are the biggest factors driving foreign firms to stay committed to China despite challenges?
The biggest driving factor is China provided a very conducive environment for foreign multinational companies. And the figure actually showed the confidence of the American company invested in China. 90% of them made profit. I mean, this is significantly higher than other comparable company in China or within the domestic markets.
So profitability is the major factors for multinational companies and their confidence. Another factor is political stability. China provided the most stable political stability for foreign investment since it opened up the door to the foreign company a few decades ago.
And the third factor, I think, of course, is the Chinese attitude, the government attitude to continue to protect the interests of foreign-invested firms and foreign investors, including foreign experts who are working in China. So these three factors together provide probably the fairly stable environment for
foreign investors and foreign companies. And this is why the American firms are so confident - in investing in the Chinese market.
Professor, the surge in reinvestment with a 34% increase from U.S. companies, I think reflects not just a reaction to the past year, but also a strong signal of their long-term confidence in China's market, right? Could you please elaborate more on this? What does this surge tell us about the future prospects that foreign companies see in China?
Yes, 34% increase is quite a significant amount and it's higher than we expected. I think this is because the Chinese economy has shown a very strong resilience, not only during the COVID-19 pandemic periods, but nowadays I think the economy is recovering fully.
after the COVID pandemic. And this provided a very stable business environment. And also China encouraged much more investment into different areas of industrial and services, also including agriculture, of course. So it opened a fairly wide window for foreign investors to spot opportunity of making investment.
But nowadays, I think China is probably encouraging the high-end manufacturing and high-end services, including financial services and logistic support. So this gives a fairly significant opportunity for multinational companies to make profit while they expand their operations in China.
While we can see the confidence from foreign investors, there are still some challenges ahead. China-U.S. relations played a crucial role on the investment. The survey shows that only one quarter of respondents are optimistic about the future of U.S.-China relations with China.
optimism among American companies dropping to 25%, while 27% of them hold a pessimistic view. How do you interpret this growing pessimistic view on China-U.S. relations, especially among American firms?
Yes, I think we are living in a very dilemma environment. On the one hand, China provides a very good environment for American investing firms. On the other hand, the China-US declaration has undergone a very turbulent period of development, particularly in the first term of the Trump administration, followed by Biden and now followed by Trump again.
So foreign business, they are highly pessimistic about the relationship. But this relationship is more or less related to the political motivation of the US administration. It doesn't actually affect the sentiment of investors in foreign companies.
Because foreign companies, as long as they are legally operating within China and they are also legally protected by the US government, they should be able to make steady investment into the Chinese market and make business as well as profit.
Now, the US government, of course, they are fully aware of the advantage and benefit of US firms investing in China because
the US state or the government can actually get lots of benefit from this investment in China. So I don't think they are going to stop US operation in the Chinese market. They will probably just increase some more difficulty, for example, like barrier, like tariff for domestic manufacturing firm from China exporting to the United States.
But on the man, I mean, despite the pessimistic attitudes of the firms, I think China is still doing the best to make them feel optimistic.
And this is a long-term uncertain relationship between the United States and China. I think in the future, both sides should realize, they should provide certainty and support for bilateral, directional investment between China and the US, and the US to China both way. So this is the long-term trajectory that we can predict.
there's no point of precipitating investors to entering into the Chinese market. So although the attitude is pessimistic about the political relationship, but in their mind, I think business perspective, they are still very optimistic.
But looking at this from an industrial perspective, where are American companies focusing their investments in China right now? Because given the current state of U.S.-China relations and ongoing trade tensions, for example, Trump has signed a memorandum to further restrict a two-way investment between China and U.S. enterprises globally.
Do you foresee any changes in the sectors where American companies will invest in China in the near future? Yes. The U.S. companies investing in China are focusing on the traditional industries, for example, traditional manufacturing. And now to some extent over the recent years, they moved to the upper end manufacturing, high-tech manufacturing. But for the fairly high end, for example, like the semiconductors and other things, they
and computer software, AI, and the related industry. I don't think the United States would be allowing lots of companies to enter China because they fear that the high technology could be learned by the Chinese counterparts. So this is a dilemma faced by the business and the US government.
But this doesn't mean that the traditional industry will be curtailed because you look at the profit they make, they can invest into China to expand the traditional manufacturing.
As you mentioned, like car manufacturing, car components, low-end semiconductors, production services and so on, agricultural technology, manufacturing machinery. Those are the kinds of investments that the US still have some competitive advantage.
in the Chinese market. But of course, these US companies are facing fierce competition from the domestic firms. The Chinese domestic firms have made huge progress in terms of technological advance.
But there are still lots of complementarity between the U.S. multinational firm and the domestic company in China. Thank you very much, Professor, for your insightful opinion. That was Dr. Yao Shujie, Chang Kong Professor of Economics at Chongqing University. More to come, Iran and Russia's foreign ministers have condemned the unilateral sanctions by the U.S. and the West. You're listening to Road Today. We'll be back after a short break.
You've been listening to Road Today with Mika Anna in Beijing. Let's continue our discussion on Iran-Russia's relationship. Russia and Iran have aligned their positions on Iran's nuclear program. Days after Moscow held initial talks with the United States on the Ukraine conflict and bilateral ties,
During his one-day trip to Iran, Russian Foreign Minister Sergey Lavrov met top leaders in Tehran and reaffirmed Moscow's backing for diplomatic measures to resolve issues around the Iranian nuclear program. Iranian Foreign Minister Abbas Arachi dismissed any chance of direct nuclear talks with the United States as long as Washington continues what he calls aggression.
The U.S. earlier announced sanctions on more than 30 vessels and people accused of shipping and selling Iranian oil. So for more on this topic, let's have Dr. Wang Jing, associate professor at Northwest University in Xi'an, China. Professor, thanks for joining us. We know Russia and Iran have aligned their position on Iran's nuclear program. Just days after Moscow held initial talks with the United States on the Ukraine conflict,
and their bilateral relations. How do you interpret the timing of Russian foreign ministers' visit and what message does it send to the United States and the international community? I think the timing is very critical because as you mentioned, the United States and the Russians are now actually improving their relations and their stances and attitudes towards the Russian-Ukrainian war now become more and more close.
So during the very critical time now the Russian foreign minister visited Iran to hope to enhance bilateral relations and to further improve their bilateral shared ideas over the international and regional issue. Particularly, we have to know that during this year, I mean 2025,
particularly before October, that the Iran nuclear-related countries, I mean, not only that we're talking about Russia, we're also talking about United States, we're also talking about the European countries, they have to conclude very new shared countries
understandings about how the Iran nuclear issue should develop and what stances should be reorganized. So that is why against this very particularly backdrop that Iran and the Russian foreign minister, they met each other and they hope to share their views on the international ongoing transformation
situation and also share their views on what should be done in the future to safeguard or to reach a new understanding over the Iranian nuclear issue and other religion related original issues. Professor Iran has stated that it will not negotiate with the United States under threat,
But following the recent improvements in U.S.-Russia relations, do you see there is a possibility that Iran and the U.S. could resolve the nuclear issue through diplomatic means? I think...
Everyone hopes that the diplomatic way could work. And we all believe that the diplomatic means should be considered as the only reliable solution to end the crisis or end the disputes between Iran and United States over the Iran nuclear issue.
And we all hope that there might be the new possibilities of restarting negotiation between Iran and the United States over Iran nuclear issue. But the problem is that, as you mentioned, on the one hand, the United States still impose new pressure, particularly new sanctions against Iran and threaten to do more.
And on the other hand, Iran is very strongly and assertively resisting the pressure from United States. And inside Iran, the public idea, although divided, but the political voice are very coherent and very united that Iran will continue to resist the dialogue with United States unless United States give up their sanctions and soften their stances. So against this backdrop, I think there may be possibilities
between the two countries to restart the dialogue and negotiation. But given the, but that would happen only when the United States withdraw some kind of the very assertive or aggressive means towards Iran and also Iran will also make some concessions, which would be very unlikely in the recent future. So we hope that the nuclear issue
through diplomatic means could be reached, but I don't think it is very realistic at the very particular time right now. And then Professor, Iran and Russia signed a comprehensive strategic partnership agreement in January covering political, security, economic, energy and military cooperation. How do you assess this agreement in helping both countries overcome the challenges posed by U.S. and Western sanctions?
I think this comprehensive strategic partnership agreement in January is a very signal to the Western countries, including the United States, that they would closely work together to resist the pressure.
against the West. And also they hope to violate the efforts of the West to contain and to constrain Iran and Russia. So that's why this is a very major signal that they will work closely with each other.
Although maybe, although that we know that the two countries, their bilateral cooperation might not be so covered, so many areas, will not cover everything. Although they are in the documents, they actually
promise to do something more. But although that the reality that they cannot fulfill all the promises that they made and all this area that they hope to cover, but it would be considered, it should be considered as a signal that the two countries will continue their partnership
closely with each other to resist the pressure from the West. And the two countries will also continue to work closely to share their, to reach the shared understandings over the faster transforming situation, not only in international level, but also in regional level.
Building on this, Iran and Russia have signed a transport and transit cooperation roadmap as well as a supplementary agreement for the Rasht and Astera railway project. From a geopolitical and economic perspective, what long-term impact will this transportation project have on the regional landscape and the economic ties between the two nations?
I mean, we were talking about the railway project, particularly the Rasht-Astala railway project. Actually, it's a major project.
connecting in the future, not only between Russia and Iran, but also will include, for example, Azerbaijan. And also maybe particularly in the future, they hope to include India. And also it's the major
the railway big system and very comprehensive and overall system were connecting the Indian Ocean and then with Russia. So actually it's a very railway system with political and geopolitical importance. But we know that this railway system project has been proposed
as a very early of the 21st century. But then, although a lot of discussion has been made and a lot of document has been signed and a lot of promise has been made, very little process has been pushed forward because no country has enough money to realize this project.
according to the timeline. And also no country has a very strong determination to invest enough money to push the forward. So that is why now every country, particularly Russia and Iran, they re-mentioned
this project and that would be considered as a determination or the willingness for the two countries to further cooperate with each other, particularly the railway system. But given the difficulties with that we have already mentioned, I don't think it would be the easy project and maybe suggest the political shared understanding, but it should not be considered as an easy task, particularly from the perspective of economic perspective.
Thanks for your analysis. That's Dr. Wang Jing, associate professor at Northwest University in Xi'an, China. Coming up, Syria's interim president has called for unity and the rebuilding of the fractured nation. We'll be back. Hello, my name is Alessandro Golombievski Teixeira. I'm a professor of public policy management at Tsinghua University in Beijing.
I am a great listener of The Wall Today. In my opinion, The Wall Today is one of the best China radio programs. In The Wall Today we can get the best news and analysis in what is happening now in the world. So please, come to join us!
Welcome back to Road Today. Syria's interim president has called for unity and the rebuilding of his fractured nation. Ahmed al-Sharra made a call during the National Dialogue Conference just three months after the fall of President Bashar al-Assad. The interim leader also struck the need for armed groups to integrate into the military and for the state to have a monopoly on weapons. So
So for more on this, our Zhao Ying joining us in the studio. Thanks for joining us, Zhao. Thanks for having me. Could you please explain the key goals of this national dialogue and how significant is it for the country's future?
I think this is a pivotal step in the country's journey toward rebuilding and establishing a more inclusive democratic political system. The key goals of the dialogue are to address Syria's fractured political landscape, foster national unity, and chart a clear path toward the formation of a new government.
And a significant focus has been placed on drafting a new constitution that reflects the country's diverse ethnic and religious communities, and that promotes principles like justice, equality, and freedom. And one of the most crucial aspects of this dialogue is its attempt to
to reconcile different factions within Syria. The dialogue seeks to lay the groundwork for a government that includes all Syrians, not just one group or sect. And the significance of the dialogue lies not only in addressing immediate political questions, but also in setting the tone for Syria's long-term stability,
whether it can pave the way for a system that respects the rights of all its citizens, including minorities and women, and whether the government can follow through on its promises of fostering an environment where all Syrians feel represented and heard. And moreover, I think the dialogue will also have important implications for Syria's relations with the international community.
Countries like Russia, Iran, Turkey, as well as the U.S. and European nations, they are watching closely to see what will come next for this country. We know Syrian leaders have promoted the conference as the first step to drafting a new constitution for the country. Any idea what the new constitution will look like?
Well, the new constitution will be a cornerstone of Syria's political transition. And while we do not have all the details yet, there are some clear expectations and themes that are emerging from this national dialogue.
Ahmed al-Sharas have emphasized that the new constitution must reflect the diversity of Syria's population, and this includes ensuring that the country's many religious, ethnic, and sectarian groups, such as the Sunni Muslims, Alawites, Druze, Christians, and Kurds,
all have a voice in the political process. And also at its core, the new constitution is better to establish a system based on justice, equality, and the rule of law. And there's been talk of creating a balance of power between the different branches of government to ensure a fair distribution of authority to prevent any one group from dominating, which perhaps has been a major issue in the past.
And another area of focus will be human rights and freedoms. The new constitution will likely include stronger protections for freedom of speech, freedom of assembly, and other basic civil rights. And there's also a strong emphasis on ensuring that women's rights are protected,
like there are calls for greater female participation in politics and society. And if you look at the closing statement of the dialogue, it actually highlighted the importance of rejecting discrimination based on gender, race and religion. But that being said, the process of drafting this new constitution is still in its early stages and the timeline for completion is uncertain.
And some suggest it could take several years to finalize, especially given the complexity of the issues at hand. And ultimately, it will serve as a blueprint for Syria's political future and how it balances these competing interests will be crucial for the country's long-term stability. But Ahmed Al-Sharra emphasized that non-state armed groups had to disarm and hand over their territory.
Is it realistic to expect such groups to give up their weapons and accept centralized control? Well, that's really one of the key challenges in this transition. Although al-Shara has spoken of the need to unite Syria's many diverse groups to build a new nation, many are still skeptical of the country's new Islamic leaders, and some have criticized the lack of minority representation at the conference.
And we know the Kurds make up about 10% of Syria's population, and some of them were actually invited to the national dialogue. But the Kurdish-led Syrian Democratic Forces, or the SDF, was not invited. And the SDF controls large swaths of northern Syria, including areas that are rich in resources and are strategically important.
and they have been a crucial ally to the U.S. in the fight against ISIS. And the interim government has demanded that the militia disarm and join this unified national military force as a condition for joining this dialogue. But the group's
kind of affairs losing the autonomy they have gained over the past several years, especially as many in their leadership sees the Syrian government as deeply sectarian and are likely to offer fair representation to Kurdish and other minority groups.
And also the SDF has political aspirations and their vision include more local autonomy, even if they aren't necessarily pushing for full independence. But for them, giving up their weapons and control would likely feel like a surrender to a government that you have historically been at odds with.
But that said, the Syrian government's insistence on a unified, centralized state is non-negotiable in their view because it's a question of sovereignty and territorial integrity. So in short, while it's clear that a deal on disarmament would be a key step towards stabilizing the country, the practicalities of getting the SDF and other groups to give up their weapons and accept central control will be an incredibly challenging task.
But the country we know is still facing severe sanctions from Western nations. How can the new Syrian government gain legitimacy both domestically and internationally?
Well, I think domestically, legitimacy will largely depend on how inclusive and representative the new government can prove itself to be. Because after years of war, displacement and suffering, Syrians will be looking for a government that addresses their grievances and provides tangible improvements in their daily lives. And this means prioritizing economic recovery, offering justice for the atrocities committed during the conflict, and
and fostering national reconciliation between the country's various sex and ethnic groups. And if the government can succeed in these areas, it may earn domestic support for Syrians who are wary of the long civil war and yearning for stability, economic opportunity, and peace.
But internationally, legitimacy is more complex. The West, especially the U.S. and the EU, they have long pushed for democratic reforms in Syria and imposed sanctions. And these sanctions are hindering reconstruction efforts and are exacerbating the suffering of millions of Syrians struggling to access their critical rights.
But we know that the EU actually recently lifted some of the sanctions on Syria as part of a broader effort to support the country's political transition. But the United States, on the other hand, continues to enforce economic sanctions against Syria, despite some exemptions introduced in January. So I think
more sanctions need to be lifted, which will be a first step to alleviate the suffering of Syrian people and help with the reconstruction efforts in Syria. Thanks, Jo. That was my colleague Jo Ying.
The German economy contracted in the final quarter of 2024. Official data shows Europe's largest economy shrank by 0.2% from October to December compared with the previous quarter. Exports of goods and services were down considerably, falling 2.2%. This is also the sharpest decline since early 2020.
What are the main factors that have contributed to the slowdown of the German economy? What measures are needed to move its economy forward? For more on this, our Zhao Yang spoke with Yan Liang, professor of economics at Willamette University. So Germany's economy shrank by 0.2% in the final quarter of 2024. So Yan, what are the main challenges the German economy is facing now?
Right. So this negative 0.2% of growth actually is overall for 2024, followed by a negative 0.3% growth back in 2023. So two years in a row, the German economy has been in recession, negative growth.
So I think there are long-term structural issues that have been facing Germany's economy for quite a while. And that includes, for example, population aging and labor shortages. It was estimated by the IMF that the German economy is losing 0.6 percentage points of its working population.
in the next five years. And that is not offset by immigrant workers. So that continues to be a problem for Germany's economy. But there's also other problems like the lack of public investments. And that's due to the self-imposed
physical discipline. So, for example, public investment as a percent of GDP was only about 2.6% in Germany between 2018 to 2022. And that is much lower than countries like U.S., France, Norway and others.
And so this lack of public investment means there's a shortage in a lot of these critical infrastructures like the digital economy and also in renewable energies. And finally, I think the long-term structural issue has to do with some of these red tapes and inefficient bureaucratic measures.
So, for example, it takes about five to six years to get permits in Germany to build an onshore wind farm. And it takes more than 120 days to get a business license, which is double the OECD average. So all these long term structural issues coupled with the more complex
temporal kind of shock, right, with the Russian-Ukraine war and rising energy costs. I think all of these are basically dragging down the German economy in the past few years. And the exports of goods and services fell 2.2% in quarter four. This is the sharpest decline since 2020. So what are the main reasons for that?
Well, the biggest reason is that there was a weak, I think, foreign demand for manufacturing goods. So for Germany, as we know, that it has been really reliant on, for example, automobiles exports. That has been under some kind of tension, under some hit.
Because on the one hand, the energy cost has been rising. And on the other hand, they have been seeing competition from China in the automobile industries. And German's auto industry is also slow in adopting some of these changes, including transition to the green, you know, the electric vehicles. None of the top sellers in the EV vehicles is actually German brand.
And also they're slow in integrating some digital technologies, AI technologies in terms of, for example, autonomous driving in their vehicles. So I think this just represents the challenges for some of the industries that Germany used to have a leadership sort of role, not to mention some of the energy intensive production like machinery and power.
chemicals and also papers. And many of these industries that rely on the cheap energies in the past to gain competitive advantage now will no longer have that competitive edge. So I think all of these weigh on Germany's export performance, right? Because the demand side and the supply side both are
in a way, working against German's export prospect. And Germany was once seen as Europe's economic powerhouse, but now the economy is in slump. And you mentioned the manufacturing industry, but what about those new industries like digital economy, chips, AI, and what about the green industries?
Well, I think that's exactly the problem, which is that the traditional industry that Germany has the competitive advantage now that advantage is eroding. And yet at the same time, Germany is making very slow transition into this sort of new growth engines. Right. So you mentioned you mentioned things like, you know, the digital economy, AI and renewable energies, right?
In none of these industries, I think Germany is currently leading. And so I think that's a major problem. And again, I think there are some problems that are quite structural, for example, the lack of skilled workers, but also the lack of public investment in the digital infrastructure and also the green economies. So none of this is easy to sort of make a
swift change in the short term. But nonetheless, I think this is important because without these new innovative firms to make breakthrough developments in these new industries, German economy will continue to suffer. And what measures do you think need to be taken by the German government to make its economy to be able to really moving forward or how to jumpstart the German economy again?
That's a great question. So as we know, there has been political obstacle to have a three party coalition in the government to put forth consistent policies. But the new election that just happened again, I think holds some promise to bring the CDU, the AFD and the SPD, the three major parties together to form a three party again coalition. And hopefully that would help to roll out some of the policies.
you know, once these political obstacle is somehow mitigated, then the question is what kind of policies Germany needs at this point. I think there has been a path dependency in German's policymaking, right? So their fiscal policy has been really conservative. When you look at their deficit to GDP ratio right now is 2.8%. You compare that to the US around 6, 7%. And also the debt to GDP ratio in Germany is 6,
62.7%, which is way lower than countries like France, US, and any other sort of advanced economies at this point. So I think they could really ramp up their fiscal spending to build, you know, these public infrastructure that is very much needed for their digital economy
and their renewable energy and other, you know, AI industries and so on and so forth. But of course, we also talked about, you know, monetary policy. I think, you know, it used to be relatively restrictive because of the high inflation. Now that inflation gradually, you know, goes down, then it's expected that the monetary easing will continue on and that would be helpful for its economy. And finally, I think, you know, to be able to streamline some of the
regulations and bureaucratic institutions, right, to make them more efficient. Like I mentioned earlier, there are a lot of inefficiency in their system to be able to grant business licenses to the businesses, encourage more investments in Germany. So I think at least those are the, I would say, three or four things that German government can do to really help their economy back on track. And what about German economy fitting into the wider European landscape?
Well, that's a great question. So as we know, you know, both Germany and France, the two largest EU economies, were in this very slow mode, very slow growth in the past few years. And again, I think the Russian-Ukraine war with the energy crises, with uncertainties, have in some ways slowed down the economy. Whereas other countries like Italy and Spain, which rely less on manufacturing and rely more on the service industry, they have been doing better. So I think going forward, you know, Germany and France,
need to, again, reinvest in their economies when it comes to infrastructure, when it comes to technologies. And hopefully that would be helpful for them to continue to take a lead role. So even if, you know, Italy and Spain are doing better, but they're still relatively small in terms of the size. So I think Germany and France are still needing to be sort of the locomotive for the European economy. So if they continue to slow down, that's not going to be good news for the entire European economy.
That's Yan Liang, professor of economics at Willamette University. That's all the time for this edition of World Today. A quick recap of today's headlines. Both U.S. President Donald Trump and the European Union set their sights on Ukraine's mineral resources.
Study shows China remains an attractive destination for investment, despite growing concerns over China-U.S. relations. Iran and Russia's foreign ministers have condemned the unilateral sanctions by the U.S. and the West. Syria's interim president has called for unity and the rebuilding of the fractured nation. You've been listening to Road Today. I'm Gaena in Beijing. Thank you so much for joining us. Bye for now.