Economist 2016.11.25

1.What are sanctuary cities?

Assuage: make sth less intense

Conspicuous: attracting attention

Synonyms: slash, cut, block(funding)

Sanctuary cities refers to American cities that protect its immigrants without an official identity from being exiled by the federal authorities. Sanctuary cities endorse basic human rights to undocumented immigrants despite the fact that they are illegal residents.

However, disputes over sanctuary cities arose upon killings conducted by illegal immigrants, to an extent that the new government has announced to cut their funding in the new term.Again this decision seemed impractical to follow through and has turned silent recently.

2.China’s state firms borrow cheaply

Prop up: support from falling

Draconian: excessively harsh and severe

In China, the financing cost for state owned companies is relatively cheaper as they are expected to be bailed out by the government in times of trouble. A study is conducted to analyse the price advantage for these firms, by charting their credit ratings.

The chart is composed of two axis, horizontal line representing the initial rating, and vertical their final rating after factoring government support.

Clearly shown on the chart,private companies without government back all fall on the 45 degree diagonal line. Whereas state owned companies mostly clustered in the realm above the diagonal line, indicating lower credit risk, which translates into lower finance cost. And that discount is quite substantial.

Another characteristic observed is that the bigger the debt, the harder for the government to drop it after supporting them from falling for so long.