Good morning, readers!

Happy Friday as well. Here we are, at a week’s end, ready to provide you with updates on unfolding situations in Niger, Sweden, Pakistan, and Ukraine.

➕ We've got a brand-new story on a controversy involving a Chinese shadow bank.

Today’s geopolitics hotspots:

ECOWAS finally ready to intervene?

The regional bloc gathered on Thursday to discuss how it can best solve the Niger coup situation. The world was holding its breath to hear what kind of bold action they would take next.

Then it was met with an announcement that “most” of ECOWAS members are willing to send troops to restore democracy in Niger, with the exception of a few neighbors that are under military rule and Cape Verde.

🥶 Cold feet?

Call it diplomatic. Call it cold feet. Call it what you will, but here’s its track record:

• ECOWAS first gave a one week ultimatum to reinstate Niger’s President Bazoum, with a threat of military intervention. Nothing happened.

• ECOWAS sternly “activated” its standby force. Nothing happened.

• Now, ECOWAS says that most of its bloc member nations are willing to contribute their soldiers to the standby force.

Will it follow through with its threat this time?

🫙 Empty threats

Although diplomatic solutions are always desired, as opposed to use of violence, making empty threats is just as harmful. It risks further escalating the situation where:

• the party being threatened is emboldened by the empty threats,

• while the party making the threats tries to overcompensate in fear of disintegrating into irrelevance.

Solution? Only make threats that can undoubtedly be carried out.

Rare protest in China

How often do you hear about protestors in China? Let alone in its capital of Beijing?

💭 What happened?

On Wednesday, a group of furious investors in China stormed the office of a major shadow bank, demanding their money back after the company failed to pay them on time—accusing the company of fraud.

The company, Zhongrong International Trust, is part of a huge and risky sector that lends money to real estate developers and other businesses. Here’s what you need to know.

👤 A shadow bank?

In case you’ve never heard of a shadow bank before: it is a financial institution that operates outside the formal banking system. They're often not regulated as much as regular banks, which means they can take on more risk. This is why they attract brave and wealthy clients who seek high-risk investment products that yields high interest payments. In essence: high risk, high reward.

🤬 Why protest?

The question is, why did the investors flip out if they were aware of the risks? Sure, Zhongrong International Trust are at fault for failing to pay them on time, but surely they didn’t think this was a guaranteed get-rich-quick cheat code.

Despite the apparent risks, China’s real estate market was long touted as a “safe sector” to invest in. It wasn’t too long ago the Chinese people thought their population boom was out of control.

To a layman:

Population Boom + Real Estate 
= 💰 Easy Money

But now we know that it is shrinking and aging rapidly.

💭 So what’s the issue?

Zhongrong International Trust is one of the largest shadow banks in China.

• It manages $82 billion worth of assets.

• It has 270 products worth $5.4 billion that are due this year.

To put it in perspective, the shadow banks command about 10% of China's overall credit landscape, playing a huge role in bankrolling the real estate sector. Now, this real estate arena chips in around 30% of China's GDP. So if the shadow banking sector tumbles, it could set off a chain reaction impacting the broader economy.

🌟 Today’s gem

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