The aging population is by far the biggest driver of the sharp increase in social spending in Germany, a leading economic research institute said in a report on Monday.

Germany’s social spending reached a record 32% of the budget in 2025, driven largely by an aging population and rising health care costs, the ifo Institute said.

Spending related to old age and illness accounted for around 70% of Germany’s total social expenditure last year, according to the Munich-based institute.

The findings were included in its latest analysis, titled “Expansion of the Welfare State: Germany’s Social Budget 1992-2025.”

The two categories accounted for more than 80% of the inflation-adjusted increase in social spending since 1992, with the institute identifying demographic change as the main structural cost driver.

“The key structural cost driver behind this trend is demographic change, which is exacerbating the shift in the burden within the German welfare state between the generations,” ifo researcher Lilly Fischer said.

Germany’s inflation-adjusted social spending has risen by around 70% since 1992, while its share of gross domestic product (GDP) increased by nearly 6 percentage points, according to the analysis.

The institute, however, said that the welfare system also served as an automatic stabilizer during periods of economic crisis, cushioning households against economic downturns.

Sharp increase since 2019

Inflation-adjusted social expenditure increased by 11.5%, or around 104 billion euros ($121.3 billion), between 2019 and 2025, according to the institute.

Additional health and long-term care spending for an aging population, along with higher federal pension payments, were the main contributors to the increase.

“The social budget is growing faster than the gross domestic product, which is why the weak economy is also contributing to the increase in the social budget share,” ifo researcher Emilie Hoslinger said.

The institute said aging would continue to place an upward pressure on social spending in the coming years, warning that the trend could only be contained through reforms to Germany’s social security systems.

Tax-financed assistance and support programs, including basic income support and child benefits, accounted for nearly 20% of the country’s social budget in 2025, according to the institute.

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Shein is seeking to raise up to $1.8 billion in a Hong Kong IPO that would value the fast-fashion retailer at about 70% below its private-market peak four years ago, as slower growth prospects are expected to weigh on investor demand.

The long-awaited Hong Kong IPO comes after Shein, known for selling $5 dresses and $10 ⁠jeans to shoppers in about 160 countries, scrapped plans to list in New ⁠York and London over the past four years.

Shein on Monday launched the process to sell 280 million shares at between HK$47.60 and HK$49.50 per share, the company’s filings showed, raising up to HK$13.86 billion ($1.77 billion) and valuing it at close to $27 billion at the top of that range.

The marked decline in valuation ​comes as tariffs, intensifying competition and rising costs cloud Shein’s outlook. Shein was valued at $64 billion in 2023 and April 2024.

Even after it sharply cut the valuation, analysts said the growing headwinds in its core markets of the United States and Europe would weigh on the company’s fundraising.

“The drop in Shein’s valuation largely reflects the change in prospects for the company from, say, two to three years ago when its IPO was first mooted,” said Lorraine Tan, Singapore-based director of equity research for Asia at Morningstar.

“We believe interest in Shein by global investors has probably cooled as a result, leading to the reduced listing price.”

At $27 billion, Shein is valued at around 0.7 times forecast sales, more expensive than European rival Zalando’s 0.4 times, but cheaper than H&M and Inditex, which trade at around 1.1 times and 4.0 times, respectively.

“Public investors are no longer paying for hyper-growth,” said Winston Ma, an adjunct professor at New York University School of Law and former head of North America for China’s sovereign wealth fund CIC.

“They are underwriting a mature cross-border platform that must now defend its profit margins against trade tariffs, higher compliance costs, and regulatory scrutiny in both the U.S. and China.”

Growth slows sharply

The China-founded, Singapore-headquartered company will announce the final IPO price on Aug. ⁠31 and ⁠start trading on Sept. 1.

Cornerstone investors led by existing shareholders Boyu, Tiger Global and General Atlantic have subscribed for about $383 million worth of Shein shares, the prospectus showed. Tencent, Greenwoods, Taikang Life and UBS Asset Management will also take stock.

Shein said it would use about 80% of the cash raised in the IPO to improve its technology and increase its brand and global presence. It has agreed to pay up to about $3.5 billion in cash to certain investors who bought special shares in earlier private funding rounds, according to the prospectus.

The shares sold in the IPO will have one-tenth the voting rights of the shares held by the company’s founders. Co-founders Sky Yangtian Xu, Maggie Gu, Molly Miao and Tony Ren will control 90% of Shein’s voting rights, the prospectus showed.

Slowing revenue growth and weaker core earnings are weighing on Shein’s business, while shrinking margins have also raised concerns that its expansion is running into headwinds from higher trade costs, tighter regulatory scrutiny and intensifying competition across global e-commerce.

Shein said in the prospectus its ⁠first-half 2026 revenue growth is expected to be broadly in line with the 1.1% growth posted in the first quarter, while its operating margin is expected to be slightly lower than the first-quarter level.

The company said this is due to new European import charges, pricing pressure and weaker demand in the Middle East linked to the Iran war.

“I’m not that positive on the Shein IPO. Their growth has slowed down a ​lot already,” Dickie Wong, executive director of research at uSMART Securities in Hong Kong.

“I expect the subscription response to be just average. While the valuation has come down significantly, ​I would not recommend subscribing at this stage given the slower growth outlook and regulatory pressures.”

Sliding valuation

Shein swung to a $99 million quarterly loss after the U.S. removed an import duty exemption on small packages, and a $328 million fair-value charge on convertible redeemable preferred shares following an accounting change.

The de minimis rule had allowed packages worth ⁠less than $800 ordered online ‌from China to enter ‌the U.S. duty-free.

Shein previously said Chinese-origin products sold by it or through its marketplace and shipped to the ⁠U.S. are now subject to tax rates ranging from 10% to 87.5%.

In its prospectus, Shein said it faces ‌a “significantly higher level of duties and taxes” in the United States, which directly triggered a 14.3% drop in U.S. revenues during the first quarter this year.

The company said it has set aside about $80 million at end-March for ongoing legal and ​regulatory cases. These include a U.S. Federal Trade Commission (FTC) investigation ⁠that could result in significant payments, an EU Digital Services Act investigation and data privacy cases in France and Ireland.

Shein’s purchase of ⁠U.S. clothing brand Everlane in May for $80 million is now facing a national security review by the Committee on Foreign Investment in the United States (CFIUS), according to a person ⁠familiar with the matter.

Shein’s IPO is the largest new share sale in Hong Kong in 2026, surpassing autonomous driving firm Momenta Global’s $751 million offering in July.

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Tesla is recalling nearly 3 million cars in China over interior door handles that could hinder a person’s ability to exit the vehicle during an emergency, Beijing’s national market watchdog said.

Eight Chinese carmakers also filed recalls over similar safety risks, China’s State Administration for Market Regulation (SAMR) announced on Friday.

Some recalls were effective immediately, while others began over the weekend and on Monday.

Tesla’s recall involves 2.9 million domestically-made units of its Model 3 and Model Y electric cars and begins on Sept. 25.

The U.S. carmaker – which operates a huge factory in Shanghai – is also recalling around 46,000 imported units of its Model 3, Model X and Model S cars, the SAMR announcement said.

The recalled cars have inner emergency mechanical handles “similar in color to the interior, making them difficult to identify and operate” in emergencies, the watchdog said.

In Tesla’s Model 3, for example, passengers must reach into a compartment inside the door pocket and find a release cable to manually open the rear door, according to the company’s website.

“In extreme situations such as severe collisions causing the vehicle’s low-voltage system to fail, (the handles) may affect passengers’ ability to quickly open car doors for escape and rescue operations outside the vehicle,” SAMR said.

SAMR said Tesla was separately recalling 2.7 million domestically-made Model 3 and Model Y EVs over issues with monitoring systems while a driver is using steering assist functions.

It was not clear whether some Teslas were counted in both recalls.

Chinese EV makers including Xiaomi, XPeng, Geely, Chery and Leapmotor are also recalling cars with handles that blend in with their interior.

Xiaomi began recalling around 390,000 units of its 2024 SU7 series on Friday, and XPeng started recalling nearly 265,000 cars on Saturday.

Beijing-based BAIC BluePark, a subsidiary of state-owned automaker BAIC, on Saturday began recalling around 46,000 Arcfox Kaola EVs over a “lack of dedicated text prompts” near the emergency mechanism on its right rear sliding door.

Beginning on Monday, Geely is recalling around 92,000 cars from its luxury brand Zeekr.

Companies offered to attach warning labels near the handles for free, and some said they would remotely upgrade software involving lowering windows after a crash.

Safety concerns have risen in China recently over sleek car designs that are prone to losing operability in the event of a crash.

The mass recalls are in line with China’s plan to ban hidden door handles on cars from Jan. 1, 2027, local media reports said.

Those rules, announced in February by the Ministry of Industry and Information Technology, will require door handles to have both interior and exterior mechanical releases.

Electronic door handles were introduced with Tesla’s 2012 launch of the Model S, later becoming popular with Chinese EV brands prioritizing high-tech features.

Folding into the body of the car, such door handles provide a slight boost to efficiency by reducing drag while the vehicle is in motion.

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Türkiye’s central bank resumed one-week repo auctions Monday after a nearly six-month suspension, as part of its Turkish lira liquidity management framework.

The Central Bank of the Republic of Türkiye (CBRT) announced Friday that it had decided to restart one-week repo auctions, which had been suspended on March 1 after the outbreak of the Iran war.

The CBRT offered TL1 billion ($21 million) in one-week funding at 37% Monday. In its last auction, the interest rate stood at 40.06%.

What does it mean?

One-week repo auctions are among the central bank’s main tools for managing liquidity in the banking system and meeting banks’ lira funding needs.

Under repo transactions, banks provide eligible securities as collateral to obtain Turkish lira funding from the central bank for a specified period, in this case one week.

Analysts foresaw normalization

Analysts said last month the bank was likely to pursue a gradual normalization of monetary policy in the remainder of the year before considering interest rate cuts.

The bank kept its benchmark one-week repo rate at 37% last month, leaving borrowing costs unchanged for a fourth consecutive meeting.

Policymakers thus maintained a cautious stance amid heightened geopolitical uncertainty and lingering inflation risks amid the Middle East conflict.

Economists had said the central bank would likely first unwind its temporary monetary tightening by shifting funding back toward one-week repo auctions before lowering the benchmark policy rate, provided global conditions improve.

Since the conflict started, the bank has halted an easing cycle that began in late 2024 and taken other liquidity steps.

FAST transfer limit to triple

In a separate announcement Monday, the CBRT also said it would raise transaction limits on the FAST instant payment system from Wednesday.

The maximum amount for money transfers and payments made through the “Request to Pay” service will increase threefold to TL 300,000 from TL 100,000.

The CBRT said the change reflected growing user demand for FAST and the evolving needs of the payments ecosystem.

For dynamic verified merchant payments made using FAST-TR QR codes, the transaction limit will also rise to TL 300,000 from TL 250,000.

FAST, which was launched on Jan. 8, 2021, enables instant payments around the clock and has increasingly become an alternative to cash and card payments for retail transactions.

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As China and Türkiye mark the 55th anniversary of diplomatic relations, the partnership is evolving from one centered on trade into a broader strategic relationship driven by infrastructure, green technology, digital transformation and closer political coordination, a Chinese expert said.

“Today, China-Türkiye relations are not merely transactional; they are strategic and structural,” said Hou Na, an anchor of state-owned Chinese broadcaster CGTN, in an exclusive interview with Daily Sabah.

China is one of Türkiye’s largest trading partners, with bilateral trade increasing fortyfold over the past two decades, Hou said. Yet the relationship is increasingly moving beyond a simple exchange of goods toward deeper economic interdependence, with the two countries expanding co-investment in infrastructure, clean energy and advanced manufacturing, from battery production lines to grid-scale energy storage projects.

The evolution of China-Türkiye relations from a traditional trade mindset toward co-investment could be seen as both a result and a reflection of the convergence of the two countries’ development visions. “The synergy between China’s Belt and Road Initiative (BRI) and Türkiye’s Middle Corridor is not just a diplomatic talking point,” Hou said. “It is being operationalized through transport corridors, logistics hubs and enhanced rail-sea connectivity.”

The connection is rooted in the two initiatives’ shared focus on linking Asian and European markets. The Trans-Caspian East-West-Middle Corridor, known as the Middle Corridor, is a multimodal trade route running from China through Central Asia and the Caspian Sea, then through Azerbaijan, Georgia and Türkiye to Europe, according to information obtained from Türkiye’s Ministry of Foreign Affairs. The ministry describes it as a key component of efforts to revitalize the ancient Silk Road. The corridor is seen as complementary to China’s Belt and Road Initiative, which seeks to strengthen connectivity between East and West.

For Hou, that alignment reflects a shared belief that connectivity itself can be an engine of prosperity.

Toward deeper ties

However, economic ties tell only part of the story. While co-investment is bringing the two economies closer, lasting partnerships are ultimately built not only through trade and investment, but also through mutual understanding between societies. The social dimension of the relationship is already taking shape in several areas, from tourism and education to cultural exchange, Hou said. Yet she believes these connections have significant room to deepen.

Tourism offers one of the most visible areas for closer interaction. Turkish Airlines (THY) has expanded its China schedule, with its Istanbul-Shanghai route operating up to 11 weekly flights during the peak season, Hou said. Beyond connecting two destinations, she said, these flights bring together businesspeople, students and first-time visitors, “who return home as informal ambassadors.”

Education and academic exchange offer another, potentially longer-lasting, channel for mutual understanding. More Turkish students are studying at Chinese universities, while interest in Mandarin and China studies is growing in Türkiye, Hou said. At the same time, Chinese students are drawn to Türkiye’s rich history and its role as a crossroads of civilizations. Such exchanges, she argued, “weave a fabric of long-term understanding” that cannot be built through government programs alone.

“Culturally, both nations represent ancient civilizations with deep reservoirs of art, philosophy and craftsmanship,” Hou said. For her, that shared heritage offers a foundation for dialogue that extends beyond formal diplomacy. Recent efforts to promote Chinese governance literature in Ankara, including an event attended by senior Turkish officials, are one example of this growing intellectual exchange.

Still, Hou believes the relationship could reach further into the lives of people in both countries. More co-produced documentaries, joint reporting projects and other forms of storytelling, she said, could help people in China and Türkiye see each other beyond politics and gain a better understanding of everyday life in the other country.

That broader understanding, Hou suggested, would also require looking beyond the countries’ major political and economic centers. While China-Türkiye relations are often viewed through Beijing-Ankara or Istanbul-Shanghai ties, second-tier cities could develop their own connections through culture, sports and gastronomy. Chengdu and Izmir or Xi’an and Bursa, could offer examples of how such links might grow at the local level.

Such connections could extend to younger generations as well, whose lives are increasingly shaped by digital platforms. Virtual exchange programs, hackathons and startup competitions between Chinese and Turkish universities could give young people new ways to connect, collaborate and build relationships across borders, Hou said.

For all the weight carried by trade, investment and diplomacy, Hou believes the relationship is ultimately sustained by something less tangible: human connections. As she put it, “If trade builds the skeleton of our relationship, then people-to-people ties are the blood and tissue that keep it alive.”

Looking ahead

From the movement of goods and capital to the movement of people and ideas, China-Türkiye relations have steadily expanded into new territory. But that expansion is unfolding against a global landscape that is becoming more complex and uncertain. For Hou, sustaining the momentum will depend on keeping three elements in balance: political trust, practical cooperation and cultural empathy.

Economically, the relationship is likely to be shaped by two forces already transforming economies around the world: the green transition and digital transformation. Türkiye’s carbon- neutrality goals and China’s expertise in solar, wind and battery technologies could open new avenues for cooperation. “The joint ventures we are seeing today in lithium battery production and energy storage are just the beginning,” she said. “I expect to see cooperation expand into electric vehicle supply chains, smart grids and even joint R&D in critical minerals.”

Connectivity, meanwhile, is likely to move beyond infrastructure itself. As the alignment between the Middle Corridor and the Belt and Road Initiative develops, Hou expects greater focus on logistics and trade facilitation, including digital customs platforms and standardized rail tariffs.

Beyond the bilateral relationship itself lies a changing world. As the international landscape grows more complex and unpredictable, Hou sees “strategic patience and multilateral coordination” as increasingly important. “Whether it is within the G-20, the Shanghai Cooperation Organization, or the U.N., China and Türkiye share an interest in a rules-based order that reflects the realities of the 21st century – not the 20th,” she said.

The challenge now is making those strands work together. Economic cooperation can create local employment and training opportunities, helping build social acceptance. Cultural exchanges can bring business communities closer to the human context of their deals, while political dialogue can keep the relationship oriented toward “a long-term partnership, not a tactical alignment.”

If these elements continue to complement one another, Hou believes “The next decade will not just be a continuation of the past 55 years. It will be a qualitative leap forward.”

Trade tensions between the U.S. and Canada escalated over the weekend as Canadian Prime Minister Mark Carney announced retaliatory tariffs on Saturday, after walking away from what he termed as a “bad deal” in a deepening rift between the longtime allies.

Negotiations between the neighboring countries broke down on Friday in Washington, putting into force new 50% U.S. tariffs impacting about $20 billion worth of goods, or 5.5% of Canadian exports to the U.S.

Impacted products range from hockey sticks to cement.

“You’re at war when you get attacked. We got attacked,” Carney said.

U.S. President Donald Trump hit back at Canada on Sunday, saying, “Canada wants the benefits of being a State, without being one!!!”

“They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!” Trump added in a post on Truth Social.

New Canadian tariffs will notably target the U.S. steel and dairy industries and are set to take effect on Sept. 8. More details would come next week, Carney said.

Trump had previously said Washington “should be able to have a deal with Canada,” citing his “good relationship” with Carney.

However, on Saturday, Canada’s prime minister said that Trump set conditions that were ultimately unacceptable, even though earlier talks had been positive.

“In recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,” Carney said in Ottawa.

“We cannot accept what they’ve offered, and we will not give what they’ve asked.”

U.S. Trade Representative (USTR) Jamieson Greer told the New York Times (NYT) on Saturday that the U.S. had offered to reduce its tariffs on steel, aluminum and autos, as well as eliminate a recently imposed tariff on Canadian lumber.

Greer said those measures would have given Canada “the most preferential treatment of any trading partner,” according to the Times.

Greer told Fox News on Saturday that Washington was “moving forward with measures that respond to Canadian retaliation.”

He said no new talks were planned with Canadian negotiators.

A senior U.S. official characterized this week’s talks in Washington as candid and not acrimonious.

‘Significant pressure’

Canada has been seeking relief from Trump’s tariffs on autos, steel and aluminum, which have battered the country’s economy, forced job losses and strained what was once an iron-clad trade relationship.

The White House had alleged “discriminatory treatment” by Canada against U.S. alcohol, automobile and dairy products in introducing the duties.

They were originally set to take effect on Wednesday, before Trump issued a three-day reprieve citing progress in talks.

Carney said one reason the deal collapsed was that U.S. negotiators – at the eleventh hour – were introducing restrictions on Canadian trade deals with other countries.

U.S. negotiators also made unacceptable “threats” to the French language and “Quebec culture,” he said, referring to the French-speaking province in eastern Canada.

The escalating trade war was met with anger by Democratic lawmakers and governors from border states, including Minnesota, New York and Washington, who blamed Trump for triggering chaos that will raise costs on U.S. businesses and families.

“Needlessly picking fights with our allies and raising prices here at home. That’s Trump’s economic policy in a nutshell,” New York Governor Kathy Hochul posted on X.

Beyond the latest tariffs, the U.S. and Canada still have to agree on revisions to the North American free trade agreement, or USMCA, which Trump declined to renew in its current form.

Trump’s threats to make Canada the 51st U.S. state have also antagonized Canadians.

Lunch money

Carney has repeatedly said relations with the U.S. have been forever altered, and that Canada must reduce reliance on its southern neighbor, which currently accounts for roughly 70% of Canadian exports.

“We’ve been under no illusions. We recognized from the start that America has changed,” Carney said Saturday. “We recognize that sometimes, its signature was written in pencil.”

Carney spoke with provincial leaders to outline next steps.

One of them, Ontario Premier Doug Ford, said Canadians must remain united.

Trump “can’t be trusted, simple as that,” Ford told reporters.

“President Trump is the type of person who would steal your lunch money.”

The Business Roundtable, a group of 200 chief executives of leading U.S. corporations, warned the new tariffs “risk raising costs for American businesses and families,” and urged both governments to resume negotiations.

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