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Authored by Daniel Lacalle,

The latest social financing figures from China show an economy that is increasingly relying on government debt while private demand for credit remains weak. The strength of the Chinese technology sector and its exporting companies gives enough room for leverage. However, behind the weak private sector credit demand lies an evident economic slowdown that the Chinese government acknowledges, challenging consumption patterns, a significant overcapacity problem, and the depth of the housing crisis.

The current economic model, focused on delivering 5% real economic growth, requires larger doses of debt to achieve smaller increments of growth, especially productive sector growth. The government has focused on reducing debt and overcapacity imbalances while reorienting its exports and financial system to lessen dependence on the US dollar; however, the main challenge for the Chinese economy remains boosting consumer demand, despite rate cuts and easing financial conditions.

To understand the intensity of debt of the Chinese model, we must go to the year 2000 and see the acceleration in the flow of debt, not just the current stock. At that time, real GDP growth was around 8–9%, so each percentage point of growth came with roughly 13–16 points of debt-to-GDP. Government debt was very low, at around 25% of GDP, and most leverage sat in the state-owned corporate sector with modest household debt. China was able to deliver near-double-digit growth with a total non-financial debt ratio barely above 120% of GDP.

By 2023, non-financial sector debt had risen to about 285% of GDP, more than doubling its level of 2000. Chinese think-tanks and official commentators put the “macro leverage ratio” closer to 300% of GDP by 2025, according to the Chinese Academy of Social Sciences. The macro leverage ratio rose by 11.8 percentage points to 302.3 percent in 2025, exceeding the 10.1-point increase reported in 2024.

Over the same period, the trend of real GDP growth has slowed to roughly 4–5%, so each percentage point of growth now requires around 60–75 points of debt-to-GDP, more than three times the debt per point of growth required in 2000. Furthermore, it comes mostly from government debt.

In January 2026, aggregate social financing jumped by 7.22 trillion yuan, significantly higher than in the same month of 2025 and above market expectations, consistent with 5% annual GDP growth and a larger composition of the public sector in the mix. Outstanding social financing reached 449.11 trillion yuan at the end of January, rising 8.2% year-on-year, while money supply (M2) rose by 9%.?

New yuan bank loans were 4.7 trillion yuan, about 420 billion less than a year earlier and significantly below consensus, showing the weak private-sector credit demand and the prudent approach of Chinese customers and businesses to debt addition. RMB loans outstanding stood at 276.62 trillion yuan, up only 6.1% year-on-year, clearly below the pace of overall financing and money growth.

The driver of credit growth in China is no longer households and private firms but the government and state-owned companies.

The real estate problem has impacted Chinese families in numerous ways. Not only did most of them see the value of their homes decline, but many families invested in the attractive yields of real estate developers’ commercial paper, which led to large losses and even the wipe-out of savings for many. Additionally, despite the excess in supply of houses, prices have not fallen enough to warrant enough appetite for new mortgages, as affordability remains an issue and the traditional prudence of Chinese citizens when it comes to consuming and borrowing adds to the challenge.

Beijing plans to issue 4.4 trillion yuan in local government special-purpose bonds in 2025, 500 billion more than in 2024, looking to boost government investment and a “proactive fiscal policy,” knowing that raising taxes would be exceedingly negative for growth and consumption.

Local governments are expected to issue more than 10 trillion yuan in bonds in 2025, including refinancing, general bonds, and new special bonds.

The Chinese government knows that it can manage more debt but also sees the weak investment and household spending and acknowledges that large tax increases would be counterproductive.  However, to prevent future debt-driven stagnation, a focus on productivity is necessary.

The official budget sets a deficit of 4% for 2025. However, once all budget items are consolidated, including government funds, special bonds, and off-budget vehicles, this true fiscal deficit in 2025 is closer to 9%, up from 7.7% in 2024, according to Rhodium Group and JP Morgan. China increasingly relies on hidden or almost fiscal borrowing to support growth.

With outstanding social financing now around 449 trillion yuan and real growth around 4–5%, each incremental point of GDP is increasingly linked with a much larger stock of debt than a decade ago. This rising credit intensity of growth may prevent a significant slowdown but may create a significant fiscal challenge in the future. The Chinese model demands high growth and low taxes; any change to the fiscal system will be negative.

For years, local governments relied on the sale of land for property development to collect tax receipts. Thus, the drag from real estate is evident in the economy and in fiscal sustainability. Real estate development investment fell 13.9% year-on-year in the first three quarters of 2025, with residential investment down 12.9%, the steepest drop since 2021, according to official figures. Property investment and sales both posted double-digit declines in 2024, and forecasters expect real estate investment to fall another 11% and sales to drop 7.5% in 2025, according to Reuters, with further declines in 2026 before stabilizing only in 2027… if it happens as fast as consensus estimates.

The property sector, once a key engine for economic growth and tax receipts, absorbs new credit to stabilize its accounts without boosting growth or creating a multiplier effect.

Additionally, China’s industrial capacity utilization remained at 74.9% at the end of 2025, well below the 78.4% peak reached in 2021. Overcapacity is clear in steel, autos, legacy chips, and parts of sectors like green tech, where expansion has surpassed domestic and external demand. Thus, the purchasing managers’ indices show weak new orders and foreign demand, while bankruptcies and insolvencies have risen, although not to levels that would indicate a financial crisis.?

The Chinese economy needs to reopen, improve investor and legal security and allow the housing slump to materialize fully to see the type of productive economic growth it needs to avoid much larger increases in debt. Otherwise, the risk of stagnation will likely be elevated as population growth stalls, overcapacity remains, and the stock of unsold property becomes a larger liability.  

Moscow just potentially created a big opening for Ukrainian elections to actually happen, with an unexpected overture:

Russia is ready to ensure that there will be no airstrikes on election day in Ukraine if Kiev decides to hold elections, Russian Deputy Foreign Minister Mikhail Galuzin said an interview with TASS.

However, the big question remains of if President Zelensky decides to actually proceed with an election. Given that months ago he didn't even cave to Trump pressuring him to do so, it's very up in the air whether he wants to actually see this through, or if martial law will continue to be used as an excuse to block a vote.

Russian President Vladimir Putin himself has floated willingness to halt airstrikes deep into Ukraine on election day if elections are held there - but he's also also recently said that the millions of Ukrainians currently living in Russia should have the right to vote.

These are mostly Russian-speaking Ukrainians who lived in the Donbass - as well as Crimea - before war broke out, or who are still there amid the conflict.

"Of course, Russian President Vladimir Putin's statements remain relevant. But, as I earlier noted, there is no talk yet of the practical organization of voting in Ukraine," Galuzin said.

"I would like to draw attention to our experience. In March 2024, presidential elections were held in Russia, and polling stations - even taking into account the ongoing military operations -were opened in close proximity to the combat zone. Kiev tried every way possible to disrupt the electoral process in the frontline regions, not shying away from resorting to terrorist means and sabotage. However, it proved unable to achieve its goal," Galuzin added.

He then emphasized that Russia "will not stoop to Kiev's practices and will allow the people of Ukraine to fully exercise their constitutionally enshrined electoral rights and independently determine the future development of their country."

"Of course, if the Kiev regime finally decides to take this democratic step," the Russian Deputy Foreign Minister added.

Ukraine has said a parliamentary committee is still studying the issue, and that the total safety of all citizens would have to be guaranteed - also by international powers - while the vote proceeds.

Via Middle East Eye

Indonesia is readying 1,000 troops to be deployed in Gaza as early as April as part of the UN-mandated International Stabilization Force, an army spokesperson said on Monday.

A total of 8,000 Indonesian soldiers will be ready for deployment by June, while the final decision will be made by Indonesian President Prabowo Subianto. "The departure schedule remains entirely subject to the political decisions of the state and applicable international mechanisms," the spokesman said in a text message to news agency Reuters.

Indonesian Army Chief of Staff Maruli Simanjuntak previously estimated that between 5,000 and 8,000 military personnel could be deployed, with final numbers "still being negotiated". 

On Saturday, Indonesia's foreign ministry said that its military's participation in Gaza as part of the peace plan devised by US President Donald Trump should not be interpreted as a normalization of political relations with Israel. 

"Indonesia consistently rejects all attempts at demographic change or the forced displacement or relocation of the Palestinian people in any form," the ministry said.

The deployment, which has a non-combatant, humanitarian mandate, could only be carried out with the consent of the Palestinian Authority, the ministry said.

"Indonesian troops will not be involved in combat operations or any action leading to direct confrontation with any armed group," the statement said. Indonesian troops would also have no mandate to demilitarize any party, it added.

However the mandate of the stabilization force includes ensuring "the process of demilitarizing the Gaza Strip" and "the permanent decommissioning of weapons from non-state armed groups". The resolution authorizes the force to "use all necessary measures to carry out its mandate".

$5bn to rebuild Gaza 

Indonesia confirmed last week that President Prabowo Subianto will attend the inaugural leaders’ meeting of Trump’s "Board of Peace", whose members have pledged $5bn toward "rebuilding war-ravaged Gaza". 

Indonesian foreign ministry said that Prabowo would use the forum on 19 February to advocate for the protection of Palestinians and push for a sustainable peace based on a two-state solution, which envisions the establishment of an independent Palestinian state.

Prabowo is also expected to sign a tariff agreement with the United States during the trip, the government said. "We are just preparing ourselves in case an agreement is reached and we have to send peacekeeping forces," Prabowo told journalists.

The president also said he will seek to negotiate the board’s reported $1bn membership fee. Indonesia’s foreign ministry said that its troops' participation in Gaza would not be aimed at imposing peace, but would instead focus on humanitarian objectives. 

Indonesia is one of the largest contributors to UN peacekeeping operations globally, with more than 2,700 personnel deployed in missions across Africa and the Middle East.

Indonesia's largest deployment is with the United Nations Interim Force is in Lebanon. Public support for Palestine is strong in Indonesia, where mass demonstrations have taken place against Israel's genocide in Gaza. 

On August 3, thousands of Indonesians gathered at Jakarta's National Monument, waving Palestinian flags and holding placards demanding justice for Gaza.

Indonesia, the world’s largest Muslim-majority country, has consistently called for an end to Israeli genocide in Gaza and has pushed for a two-state solution through international forums. Its government has also provided humanitarian aid, medical support and diplomatic backing for Palestinian institutions.

In November, Indonesia's defense minister announced that its military had trained 20,000 troops for healthcare and construction efforts in Gaza. Jakarta has also provided humanitarian aid, including the delivery of 10,000 tonnes of rice in August last year, and has launched a long-term cultivation initiative in Sumatra and Kalimantan to support Palestinian food security.

Last summer North Korea began for the first time airing footage which provided public confirmation that it was receiving many of its soldiers home in coffins after they served alongside Russian forces in the context of the Ukraine war.

It's believed that the some ten to fourteen thousand DPRK troops dispatched to assist Moscow had primarily fought in Russia's Kursk province, where they helped repel the previous six-month Ukrainian occupation of the southern border oblast (in 2024-2025).

On Monday, North Korean leader Kim Jong Un unveiled that families of soldiers killed in the battle abroad would receive free new housing. He presided over a ribbon-cutting ceremony marking the completion of a new block of apartments for that purpose, state media reported Monday.

"The new street has been built thanks to the ardent desire of our motherland that wishes that... its excellent sons, who defended the most sacred things by sacrificing their most valuable things, will live forever," Kim said in a speech, as cited by the Korean Central News Agency.

This comes after Kim last week having publicly declared he's ready to "unconditionally support" all of Russian President Vladimir Putin's policies and decisions.

"Before their death, the heroic martyrs must have pictured in their mind's eye their dear families living in the ever-prospering country," the North Korean leader said.

KCNA images also showed Kim touring the new apartments alongside his teenage daughter Ju Ae, believed to be the most likely future successor to Kim.

International reports based on South Korean intelligence estimates say that around 2,000 North Korean soldiers have been killed while fighting alongside Russia so far.

The apartments for families of fallen soldiers is a program clearly intended to create incentives for the military to support Pyongyang's foreign adventurism on behalf of Moscow, and to deflect potential criticism.

Kim Jong Un opens new Saeppyol Street housing in Pyongyang

Homes built for families of fallen soldiers, KCNA reports

Ceremony marks what he called a 'heroic era' pic.twitter.com/kBxdAtm564

— RT (@RT_com) February 16, 2026

Ukraine has bitterly complained about the foreign contingencies helping Russia, and in previously claimed that North Korea could send up to 30,000 - though there's been little evidence of such a high figure.

Authored by Autumn Spredemann via The Epoch Times,

Across the artificial intelligence (AI) supply chain, insiders describe a precarious, high-turnover workforce with limited support and stability.

This “invisible” human labor that labels data, evaluates outputs, and filters harmful material has become a revolving door of talent that navigates high-pressure gigs and burnout. Moreover, workers and industry experts say this talent churn can degrade the very AI models workers are paid to improve.

Across the board, workers who are hired to support, evaluate, or operationalize AI systems face similar challenges: high-stress environments that often involve complex tasks, unrealistic timelines, job instability, and low wages.

It’s no secret that the tech industry has long suffered from high turnover rates. Numbers vary, but many studies put the average rate of talent churn in the tech sector at between 13 percent and 18 percent.

This becomes clear when considering the cost of replacing tech talent, which can be up to 150 percent of a worker’s salary, including recruitment expenses, onboarding time, productivity losses, and impacts on customer relationships.

Some believe that the loss of institutional knowledge alone makes worker retention critical.

“People love to talk about the ‘magic’ of AI, but the work culture behind it is a meat grinder. I’ve seen talent turnover in model evaluation hit record highs because the work is repetitive and psychologically draining,” Barry Kunst, vice president of marketing at Solix Technologies, told The Epoch Times.

“When you lose a lead researcher to churn, you don’t just lose a body; you lose the ‘why’ behind the model’s safety guardrails,” Kunst said.

This is why he’s adamant about AI workforce stability, which he said correlates directly with model reliability: “If you’re rotating contractors every six months to keep labor costs low, your data governance will fail, period.”

Sovic Chakrabarti, the director of digital marketing agency Icy Tales, said, “Team turnover is more common than people expect.

“In some groups, especially those tied to model training, evaluation, or data labeling pipelines, churn can happen every few months. Short contracts, project-based funding, and constant reorganization mean people cycle in and out quickly,” he told The Epoch Times.

A technician works at an Amazon Web Services AI data center in New Carlisle, Ind., on Oct. 2, 2025. Noah Berger for AWS/Reuters

Chakrabarti has worked on the development and support side of AI systems long enough to see patterns that, as he put it, “rarely make it into public discussions.”

“That [workforce] churn absolutely leads to lost knowledge,” he said. “Important context about why a dataset was filtered a certain way, why a safety rule exists, or why a model behaved oddly in testing often lives in someone’s head.”

When that person leaves, documentation rarely captures the full story, according to Chakrabarti.  “New hires inherit systems without understanding the original tradeoffs, which can quietly introduce risks,” he said.

The Human Cost

Burnout rates among information technology (IT) workers are high. LeadDev’s Engineering Leadership Report 2025 found that 22 percent of the 617 polled engineering leaders and developers felt critically burned out at work.

An additional 24 percent of respondents reported feeling “moderately” burned out, while 33 percent reported low levels of burnout.

Some of this is driven by job-security fears after two years of layoffs at big tech companies, but the pay for many of the workers fueling the AI revolution is often low.

The Alphabet Workers Union (AWU), Communications Workers of America (CWA), and TechEquity led a study on the working conditions of U.S.-based data workers and found conditions similar to those of tech contractors in developing countries.

In a survey of 160 U.S. data workers, 86 percent worried about being able to pay their bills, and 25 percent relied on public assistance to get by. The same group reported a median hourly wage of $15, with a median annual salary of $22,620.

Eighty-five percent of the study group said they’re expected to be “on call” for work, but only 30 percent reported being paid for this time. More than a quarter of respondents reported spending more than 8 hours per week on call.

“If there’s anything I wanted the general public to know, it is that there are low paid people [in the United States] who are not even treated as humans—just little more than employee ID numbers —out there making the 1 billion dollar, trillion dollar AI systems that are supposed to lead our entire society and civilization into the future,” Kirn Gill II, a search quality rater working on Google products at Telus, told the CWA.

Chakrabarti said the work culture behind AI fuels these challenges.

“There is real pressure to keep labor costs low. I have seen unrealistic timelines, understaffed teams, and expectations to ‘do more with less’ while the stakes keep rising. That tension creates stress, especially when the systems affect millions of users,” he said.

Chat GPT app icon is seen on a smartphone screen, in Chicago, on Aug. 4, 2025. AP Photo/Kiichiro Sato, File

He added that being part of the shadow workforce behind AI can also be psychologically demanding.

“You carry responsibility without always having authority or time to do things properly. ... As tools evolve, roles shift fast, and many people feel replaceable even while being essential,” Chakrabarti said.

Nicky Zhu, an AI Interaction Product Manager at Dymesty, agrees that the cost-containment pressure on data workers is “unrealistic” and is fueling the burnout phenomenon.

“Companies employ contractors instead of using permanent staff, mandate 60-hour crunch weeks, and expect rapid learning of intricate systems. I have witnessed multiple capable engineers exit the field of AI completely because of the high levels of instability and the unmanageable workload,” Zhu told The Epoch Times.

Zhu said the mental strain associated with data work is often unacknowledged.

“Staff are regularly exposed to disturbing material during safety testing, including assessing harmful content. Knowing that your work impacts millions of users increases the stress. The combination of rapid AI development, job uncertainty, and high turnover is mentally overwhelming,” she said.

In the data worker conditions analysis, respondents reported limited or no access to mental health benefits, despite being what the study authors called a “first line of defense, protecting millions of people from harmful content and imperfect AI systems.”

Only 23 percent of data workers surveyed reported having employer-provided health benefits.

The International Labor Organization noted that large language AI models such as ChatGPT and Claude still require “invisible workers” who fine-tune AI responses, mitigate biases, and eliminate toxic or disturbing content behind the scenes.

“As a result, workers are routinely exposed to graphic violence, hate speech, child exploitation, and other objectionable material. Such constant exposure can take a toll on their mental health and trigger post-traumatic stress disorder, depression, and reduced ability to feel empathy,” the International Labor Organization stated.

Revolving Door Risks

A knock-on effect of AI’s constant labor change is an increase in cybersecurity risks.

“Labor turnover literally impacts the quality, safety, and reliability of models,” Janero Washington, education director at ACSMI Cybersecurity Certification, told The Epoch Times.

“Large turnover interferes with domain knowledge, delays in the iteration process, and the probability of missing key details in the development.”

Washington said this could have a “direct influence on the accuracy and strength of [AI] models, particularly during deployment phases.”

He added that low labor costs are the primary pressure point in AI projects, which tend to prioritize cost-efficiency over balanced investment in skilled labor.

“It may result in corners being cut, including overworking teams, unrealistic deadlines, or having to use less experienced hires to keep budgets,” he said.

Zhu has seen firsthand how workforce churn affects the efficiency of AI tools: “Knowledge is lost faster than it is documented. Important information about model edge cases, limitations, safety procedures, and related details is lost when contractors leave after six or 12 months.”

When she started her current position, Zhu found that three teams had attempted to resolve the same set of problems using an AI feature that had already been built.

“Still, no one had documented the rationale for the different design decisions. Ultimately, we had to remake previously developed design solutions for problems that had already been solved. This is an all-too-common reality for the industry,” she said.

The data security platform Cyberhaven observed that 24 hours before a layoff or employee resignation, organizations can experience a 720 percent surge in data exfiltration. This includes everything from downloading sensitive files to forwarding emails or copying customer lists, all of which can have significant consequences.

Washington said that critical knowledge or details can be easily lost when a data team is reliant on a short-term contract or experiencing a high talent turnover.

“This affects continuity of knowledge of datasets, edge cases, or versioning issues, causing inefficiencies and possibly a rework of the same issue,” he said.

Chakrabarti agreed. “When teams are stretched thin or constantly rebuilding, issues get patched instead of deeply solved,” he said.

Remember Obama's 2012 Colombian prostitution scandal? Turns out, Jeffrey Epstein was involved...

Newly released Department of Justice documents from the Epstein files have exposed a previously unknown connection between a 2012 White House advance-team scandal in Cartagena, Colombia, and Kathryn Ruemmler - the former Obama White House counsel who later became Goldman Sachs’ top lawyer.

Ruemmler resigned from Goldman late last week, after the latest Epstein document dump revealed her extensive, affectionate, and years-long correspondence with the convicted sex offender. The emails show she called him “Uncle Jeffrey,” accepted expensive gifts, and turned to him for advice on sensitive legal and reputational matters - including how to respond to a 2014 Washington Post report that accused her of helping suppress evidence of prostitution involving a rich kid White House aide whose daddy was a huge Obama donor. 

The WaPo report, by all accounts, cost Ruemmler a job as Obama's Attorney General. 

The 2012 Cartagena Prostitution Scandal

In April 2012, ahead of President Obama’s trip to the Summit of the Americas in Cartagena, Colombia, at least 20 Secret Service agents, military personnel, and others were involved in hiring prostitutes. The scandal led to multiple firings and disciplinary actions.

A lesser-known element involved Jonathan Dach, a 25-year-old Yale Law student and unpaid White House advance-team volunteer (son of prominent Democratic donor Leslie Dach). Hotel records obtained by investigators showed a prostitute was checked into Dach’s room at the Hilton Cartagena shortly after midnight on April 3, 2012.

Secret Service Director Mark Sullivan briefed White House counsel Kathryn Ruemmler on the evidence. The White House conducted a review, interviewed advance-team members (including Dach), and publicly declared “no indication of any misconduct” by White House personnel. Dach was later cleared and went on to work at the State Department.

More recently, Dach was found to have 'chronically violated state rules' in his role as former chief of staff to Connecticut Gov. Ned Lamont (D) by using a state vehicle as his personal car for nearly two years "and driving at speeds constituting reckless driving under Connecticut law."

The 2014 Washington Post Revival and Ruemmler’s Response

In October 2014, while Ruemmler was in private practice at Latham & Watkins and reportedly under consideration to replace Eric Holder as Attorney General - WaPo published new details. Reporters Carol D. Leonnig and David Nakamura revealed that the White House had received specific evidence (hotel records and witness accounts) implicating a White House advance-team member but had not fully investigated or disclosed it.

On October 9, 2014, Epstein emailed Ruemmler: “Doing fine. Was talking to reporters until late in the morning last night. Trying to isolate/contain wapo.”

On October 17, 2014, Ruemmler forwarded Epstein a draft of her response to the Post reporter and asked for his input. In the draft she downplayed the allegations, writing:

“The whole thing is ridiculous - they had to obtain the record ‘under the table’ because the last thing the Hilton wanted to do is to voluntarily give over info implicating the privacy of their guests. The procedure for checking in prostitutes is hardly rigorous.”

Epstein replied with suggestions, including the line: “Important point.”

Ruemmler ultimately withdrew from consideration for Attorney General on October 24, 2014 - one week after the email exchange.

Finally, here is the letter that then-Obama White House Deputy Press Secretary Eric Schultz sent in coordination with Ruemmler, to Carol Leonnig who wrote the WaPo article exposing Jonathan Dach's prostitution scandal, where they beg her to "from this point forward refrain from using Mr. Dach’s name," as "He has served his purposes for your reporting—repeating his name in connection with these allegations only deepens the wounds he has already suffered."

Beyond the obvious questions over the Obama admin prostitution scandal cover-up - which Congress/DOJ should finally ask - the most important question is: why did Obama's top lawyer summon the help of disgraced pedophile Epstein in planning her defense against the Obama admin's biggest prostitution scandal?