MICHEL MARTIN, HOST:
Russian President Vladimir Putin heads to China for a two-day summit with Chinese leader Xi Jinping starting tomorrow.
STEVE INSKEEP, HOST:
It is Putin's first trip abroad following his inauguration, starting his fifth term in office. Russia and China have found common cause in challenging the West.
MARTIN: Joining us to talk more about this is NPR's Charles Maynes in Moscow. Good morning, Charles.
CHARLES MAYNES, BYLINE: Good morning, Michel.
MARTIN: So even though this is Putin's fifth term, you know, that first trip abroad is usually significant. So what does this signal about the importance of China to Putin right now?
MAYNES: Well, you're right. You know, it's a - the first trip abroad is a sign of who your closest allies are. Putin and Xi famously signed what they called a no-limits partnership back in 2022. And that seemed to include no limits to the number of meetings. This is their 43rd time getting together. But of course, their relationship has been tested by Putin's decision to invade Ukraine. The war not only upended the global economy, including China's. It puts Xi in something of a bind in other ways. Formerly, China is neutral on the war, but Xi has provided Moscow with diplomatic cover, endorsing the Russian view that this conflict was provoked by NATO, and he's rebuffed Western calls for him to reign in Putin. Moreover, Xi has provided economic cover with Chinese trade protecting Russia from Western sanctions. And Xi has done all of this while trying to keep Chinese economic interests in the West, which are, of course, much larger than its trade with Russia, on a stable course. So it's no easy task.
MARTIN: So given all that, what's on the agenda?
MAYNES: Well, there's some symbolic events. Xi and Putin are celebrating 75 years since the Soviet Union recognized the People's Republic of China. They'll also kickstart a year of cultural exchanges. But the more substantive part of this visit is focused on booming trade between the two sides amid the war in Ukraine. That includes Chinese imports to Russia, where Chinese businesses have replaced Western suppliers for goods like cars and home electronics. But, of course, Russian exports to China, cheap Russian gas and oil in particular, as Russia has seen its European businesses dry up. So now, the problem here is that this arrangement has come under strain recently, as the U.S. has sanctioned some Chinese exporters and threatened to go after Chinese banks that the White House says are aiding the Russian war machine. Beijing denies the charge, but it's put a drag on trade recently, and either way, President Putin is clearly looking to resolve these new sanctioned snags. In fact, he'll be joined by a large delegation that includes key banking and energy representatives, as well as his top economic team.
MARTIN: And, you know, we have to note that this trip comes as Russia seems to be making progress on the battlefield in Ukraine, and we've been talking about that this week. How does that affect the Russian-Chinese relationship?
MAYNES: Well, it can't hurt, to feel like you're backing the side that has the upper hand. But even in previous meetings, when things weren't going so well for Russia on the battlefield, Putin repeatedly made this pitch to Xi, that what we're experiencing in Ukraine is the same as what China is experiencing in Taiwan and elsewhere. In other words, the West is out to contain both of our countries. And this is our common challenge, and you don't want us to lose.
MARTIN: So you don't want us to lose. OK, so I guess that's one reason Putin's bringing along his new defense minister.
MAYNES: Well, not only that, Putin's bringing his former defense minister, and that's notable not only given Western suspicions that Beijing has been helping the Russian military all along. It also tells the Chinese there's no chaos here behind the scenes.
MARTIN: That is NPR's Charles Maynes in Moscow, Charles, thank you.
MAYNES: Thank you.
(SOUNDBITE OF MUSIC)
MARTIN: Nearly 1 out of 5 credit card users has maxed out on their borrowing.
INSKEEP: That's according to the Federal Reserve Bank of New York, which says more people are falling behind on their monthly bills for credit cards. It's one sign of the financial stress that comes after years of rising prices and high interest rates.
MARTIN: NPR's Scott Horsley is with us now to tell us more about this. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Michel.
MARTIN: So who is most at risk of being unable to pay their credit card bill?
HORSLEY: According to the New York Fed, people under 30, as well as lower-income families, are the most likely to be maxed out, and that means they're at greater risk of missing a payment. Nearly 1 out of 6 Gen Z credit card users are at or close to their credit limit, and that's compared to just 1 in 20 baby boomers. Of course, baby boomers also typically have higher credit limits, but they're also generally less dependent on borrowed money to cover their everyday expenses. Renters have also seen a bigger jump in monthly debt payments than homeowners have. Charlie Wise, who's a senior vice president at the credit reporting company TransUnion says, it's really kind of a mixed picture.
CHARLIE WISE: Consumers are keeping their head above water, but there are a lot of pockets of consumers, renters, people that maybe are in industries that we've seen, that are struggling, are falling behind.
HORSLEY: Wise says even in good economic times, some people wrestle with what he calls their own private recessions. Of course, one concern is if people are falling behind on credit card payments now when unemployment is under 4%, what might happen if the job market were to weaken?
MARTIN: Yeah, that's an interesting sort of question since unemployment is so low. So why are people running up these big credit card debts?
HORSLEY: Clearly, one factor is inflation. When the cost of rent and gasoline and car insurance goes up, it's harder to balance the household budget every month. And increasingly, people turn to credit cards to help close that gap. Overall, credit card debt was a little over a trillion dollars in the first quarter, 13% higher than last year. What's unfortunate, according to Ted Rossman of Bankrate, is that with today's high interest rates, credit card debt is a very costly form of borrowing.
TED ROSSMAN: Credit card balances are near record highs. Credit card rates are near record highs. There's a cumulative effect to all of this. I mean, if you make minimum payments towards the average credit card balance at the average rate, you could be in debt for nearly two decades.
HORSLEY: Now, on the other hand, more than half of all credit card users pay their balance off in full every month. They're not affected by those high interest rates. The challenge is, because those folks who pay every month are insulated from the high cost of credit card debt, there's no real reason for them to cut back on spending. And so long as spending stays high, it's harder to get inflation under control.
MARTIN: OK, so that brings us back to interest rates. So what does it take to get interest rates down so maybe credit cards won't be quite so expensive?
HORSLEY: In a word, patience. Most investors now think it's going to be September before the Federal Reserve is ready to start cutting interest rates. Inflation has come down a lot from where it was a couple of years ago, but prices are still climbing faster than most of us would like. And Fed Chairman Jerome Powell said, yesterday, he understands how frustrating that is.
(SOUNDBITE OF ARCHIVED RECORDING)
JEROME POWELL: You tell people inflation is coming down, and they think, I don't understand that. You know, the price of all of the things that I buy hasn't come down. They're not wrong. I mean, they're suffering. Particularly people at the lower end of the income spectrum are very hard-hit by inflation from the start, which is why we're so strongly committed to restoring price stability and keeping it in place.
HORSLEY: Now, we're going to get an update on the April inflation rate a little bit later today. Powell said yesterday, he does believe that inflation will continue to cool off this year, but after a few hot readings in the early months of the year, he's not as confident about that as he was. So the Federal Reserve is going to be cautious about lowering interest rates, and that likely means we're in for another summer of high-cost credit card bills.
MARTIN: That is NPR'S Scott Horsley. Scott, thank you.
HORSLEY: You're welcome.
MARTIN: OK, wildfire season is underway in Mexico and Canada.
INSKEEP: In Mexico, drought affects most of the country, creating conditions for fire. In Canada, entire communities have evacuated at the start of what looks like another hard season.
MARTIN: Journalist Emma Jacobs is with us now to talk about the fires in Western Canada. Good morning, Emma.
EMMA JACOBS: Good morning.
MARTIN: So could you just start by giving us a sense of where these fires are and how bad they are?
JACOBS: It's early on in Canada's wildfire season, but we have already seen fire spreading very quickly and getting close to a number of towns and cities in Western Canada. On Tuesday afternoon, around 6,000 residents of neighborhoods around Fort McMurray in Alberta got ordered to evacuate. The regional fire chief, Jody Butz, said this is about getting residents out of harm's way.
JODY BUTZ: The reason why this is so important is to clear them out so that we can mobilize our fire resources to fight this fire and defend these neighborhoods.
JACOBS: Fort McMurray is an oil production hub that was fully evacuated in 2016 due to a wildfire. It became one of the costliest natural disasters in Canadian history. Now 50 separate fires are burning in Alberta. More wildfires in the provinces of British Columbia and Manitoba have forced thousands to evacuate.
MARTIN: Now, you were reminding us that Canada's 2023 wildfire season was the country's worst on record. So what are the conditions as this season gets underway?
JACOBS: Some of the fires burning now actually began last season. They're what's called zombie fires that have been smoldering underground all winter in the soil and peat. This spring, these fires reignited and spread. And fires do not normally burn over the winter in Western Canada. So this is a very unusual effect of how bad last season was. Last year, total evacuations reached 230,000 people, and fires burned nearly 50 million acres, but emergency preparedness officials in Canada say this season could be even worse. Western Canada has also had a very bad drought, which has created a lot of fuel for fires that's combined with warmer temperatures and less winter snow to help fires grow a lot faster - all factors predicted to worsen with climate change.
MARTIN: I think we've all figured out that the effects of wildfires are not contained by borders. Last year, Canadian wildfires affected air quality in the U.S. Can we expect a similar impact this year?
JACOBS: It depends how the smoke moves, but wildfire smoke is particularly hazardous for people. In the last couple of days, Minnesota, Montana, North and South Dakota have all had air quality alerts related to smoke from Canadian wildfires. Fire can also create other ripple effects. For example, we saw telecom disruptions over the weekend in Northern Canada. Fires damaged fiber optic cables that reach communities in the far north. So a lot of serious disruption can happen far from the fires themselves, and we could see a lot more of it the summer.
MARTIN: That is journalist Emma Jacobs reporting from Montreal. Emma, thank you so much.
JACOBS: Thank you. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
