April 1, 2023 – U.S. and Eurozone inflation slows; China’s BRI bailouts surge; Jack Ma returns

Welcome to the April 1, 2023, issue of Business News Digest by Simple Finance and Economics. The highlights of this issue: The U.S. and Eurozone inflation slows, China’s BRI lending leads to bailouts surge, and Jack Ma returns while Alibaba reorganizes.

U.S. and Eurozone inflation slows

US inflation has been slowing consistently over the past year, with the Bureau of Labor Statistics consumer price index (CPI) report expected to show a 5.2% YoY increase in March, compared to 6% in February. Core CPI, excluding volatile food and energy sectors, is expected to have risen by 5.6% YoY. The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, slowed to 5% in February from 5.3% in January, while core PCE slowed slightly to an annual increase of 4.6%.

Eurozone inflation also experienced a decrease in March. The inflation data may have provided relief for central banks, as they balance addressing inflation with interest rate hikes while minimizing risks to their banking sectors.

China’s BRI bailouts surge

China’s lending practices under the Belt and Road Initiative (BRI) have made it one of the world’s largest creditors, financing infrastructure projects across Asia, Africa, and Europe. A recent study by the World Bank, Harvard Kennedy School, Kiel Institute for the World Economy, and AidData reveals that between 2008 and 2021, China provided $240 billion in bailout loans to 22 countries, primarily BRI debtors, such as Argentina, Pakistan, Kenya, and Turkey. This trend of rescue lending has accelerated in recent years.

Jack Ma returns

Jack Ma, Alibaba Group’s billionaire co-founder, returned to China after about a year overseas amid Beijing’s efforts to boost confidence in the tech sector. Concurrently, Alibaba announced its reorganization into six independently run companies, potentially seeking separate IPOs. This development follows the Chinese government’s signals of easing the regulatory crackdown on powerful tech companies.

Ma has kept a low profile since his 2020 speech criticizing China’s regulators and stepped down as Alibaba’s executive chairman in 2019.

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