Category Archives: Global Developments And Analysis: Weekly Monitor

Global Developments and Analysis: Weekly Monitor, 05 December – 11 December, 2022

Economic
South Korea Orders Truckers Back to Work as Labor Tensions Rise Globally

South Korea has ordered more striking truck drivers to return to work, in an effort to limit damage to the economy and supply chains as governments around the world grapple with a rise in labor unrest driven by inflation. On Dec 08, South Korean President Yoon Suk-yeol widened the scope of a back-to-work order to include the steel and petrochemical industries, after issuing a similar order for the cement sector last week. South Korea is just one of many countries where workers are demanding better pay and working conditions as the costs of goods and services rise. Labor tensions have led to strikes across the energy, steel and auto industries in France, Germany, Spain and Austria. In recent weeks, the U.K. has seen walkouts in the transport and health sectors. In the U.S., President Biden signed legislation last week to prevent a strike by railway workers over wages and paid time off. Labor economists say that inflation has prompted workers worldwide to demand higher wages to compensate for the increase in food and energy costs. In the U.S. alone, the number of strikes that have taken place this year is up roughly 34% compared with the previous year, said Johnnie Kallas, director of the Labor Action Tracker project at Cornell University’s School of Industrial and Labor Relations. Click here to read…

China wants to drop dollar in oil trade – Reuters

Beijing will work to make energy purchases in yuan instead of the US dollar signalling another step towards shifting further away from the greenback, China’s President Xi Jinping has told Gulf Arab leaders as cited by Reuters. China’s leader highlighted the necessity of the move while speaking at a Chinese-Arab summit that was hosted by Saudi Arabia earlier this week. Xi had held separate talks with the heads of the Persian Gulf states at the summit that reportedly brought together 30 leaders from across the region. The world’s biggest crude importer, China in November ramped up purchases of oil by 12% year-on-year, marking the 10-month high despite the severe pandemic-related restrictions. Chinese state refiners stepped up purchases of US crude oil, while maintaining high imports of Russian oil prior to the December 5 European embargo and imposition of an oil price cap. China’s independent refiners also moved a record amount of deeply discounted Iranian crude passed off as oil sourced from Malaysia, which is commonly used as a transfer point for oil originating from the sanction-hit Venezuela and Iran. Saudi Arabia was China’s number one oil supplier in the first ten months of 2022, making up 18% of China’s total crude oil purchases, with imports totalling 73.54 million tons, or 1.77 million barrels per day, Chinese customs data showed. Click here to read…

Europe Cold Snap Tests Gas Reserves After Russian Supply Cut

Frigid temperatures are boosting demand for natural gas in parts of Europe, providing an early test of the continent’s readiness for winter without Russian energy. Gas demand for Europe, including the U.K., was up 44% this week compared with the middle of last month, according to data from price-reporting agency ICIS. The U.K.’s National Grid PLC, which operates the country’s energy system, said it expects demand in the country to rise to 417 million cubic meters a day by Dec 09, up 65% from the middle of last month. For policy makers, the cold weather offers an early indication of how consumers will respond to pleas by governments to conserve energy this winter. The continent has enjoyed an unseasonably warm fall, which lowered gas demand significantly and allowed European governments and utilities a few extra weeks to fill up gas inventories. Last month was the fifth-warmest November on record, according to the European Centre for Medium-Range Weather Forecasts. Earlier this year, countries embarked on a race to save and import gas to build up storage levels and avoid shortages or disruptions. The moves came after European capitals pivoted away from Russian supplies in the wake of Moscow’s invasion of Ukraine. Russia responded by largely cutting off its exports. Click here to read…

US to add more than 30 Chinese companies, including Yangtze Memory, to trade blacklist

The Biden administration plans to put Yangtze Memory Technologies and more than 30 other Chinese companies on a trade blacklist that would prevent them from buying certain American components, deepening tensions between the world’s two economic superpowers. The US Commerce Department will add China’s leading maker of memory chips and the others to the so-called Entity List as early as this week, according to a person familiar with deliberations who asked not to be named discussing a sensitive matter. Companies on the Entity List are blocked from buying technology from US suppliers unless they get a special export license from Commerce. The move would represent the latest escalation in the US-China conflict over technology. The Biden administration unveiled a sweeping set of restrictions on China’s ability to buy semiconductors and chipmaking equipment in October, putting Yangtze Memory and other companies on a list for further scrutiny at the time. At the time, the US Commerce Department added 31 organizations including Yangtze Memory to what’s known as the Unverified List, which means American authorities are not able to prove that those companies are not supporting the Chinese military. That set in motion a 60-day countdown during which the companies would have to prove their businesses were not involved in activities that jeopardised US national security. Click here to read…

Japan, Netherlands to join U.S. in China chip curbs: Report

Japan and the Netherlands have agreed in principle to join the U.S. in tightening controls over the export of advanced chipmaking machinery to China, Bloomberg News reported on Dec 12, citing people familiar with the matter. In October, the Biden administration published a series of curbs aimed at stopping the export of chipmaking technology and certain chips made through U.S. equipment anywhere in the world to China. Apart from some U.S. gear suppliers, Japan’s Tokyo Electron and Dutch lithography specialist ASML Holding were the two critical players needed to make the sanctions effective, making their governments’ adoption of the curbs a key milestone, the report said. The new curbs may be announced in the coming weeks, it added. Japan’s Ministry of Economy, Trade and Industry as well as the Netherlands’ Foreign Affairs Ministry did not immediately respond to Reuters’ requests for comment. Click here to read…

China sues US in WTO over chip export control measures

China took legal action against the US in the WTO over chip export control measures on Dec 12, China’s Ministry of Commerce (MOFCOM) said in a statement posted on its website. Filing a lawsuit with the WTO is a way of seeking to address Chinese concerns through legal means, and a necessary way to defend China’s legitimate interests, the ministry said. “In recent years, the US has been generalizing the concept of national security and abusing export control measures, which hinders the normal international trade in chips and other products, as well as threatening the stability of the global industrial chain and supply chain,” the MOFCOM statement said. It noted that the move is a typical trade protectionism practice as it disrupts the international economic and trade order, violates international economic and trade rules as well as basic economic laws, and harms the global interests of peaceful development. The ministry urged the US to give up its zero-sum game mindset, correct its wrongdoings in a timely manner, and stop disrupting trade in high-tech products such as chips, so as to maintain normal economic and trade exchanges between China and the US, and maintain the stability of the global supply chain for important industrial goods such as semiconductors. Click here to read…

China’s massive older chip tech build up raises US concern

China’s largest chip maker SMIC is ramping up production of a decade-old chip technology, key to many industries’ supply chains, setting off alarm bells in the United States and prompting some lawmakers to try to stop them. The United States and allied nations could further step up restrictions if China announces a trillion yuan (US$144 billion) support package for its chip industry, as Reuters exclusively reported on Dec 13, said TechInsights’ chip economist Dan Hutcheson. Starting with the Trump administration, the United States has been tightening the noose around China’s high-tech ambitions. It cut off the world’s largest telecommunications firm Huawei Technologies from the US market and technologies, as well as cut off air supply to China’s advanced chip making through a series of rules this year. But why worry about older chip technology? China, which in 2020 had 9 per cent of the global chip market, has a track record of dominating key technologies by flooding the market with cheaper products and wiping out global competition, say China watchers. “28 nanometer” refers to a chip technology commercially used since 2011. It is still widely used in automotive, weapons and the explosive category of internet of things gadgets, said Hutcheson. “The Chinese could just flood the market with these technologies,” he said. “Normal companies can’t compete, because they can’t make money at those levels.” Click here to read…

China GDP to surpass US around 2035, years later than previously expected, Goldman Sachs predicts

Although the pace of China’s economic rise has slowed in recent years, it appears on track to end the United States’ lengthy run as the world’s largest economy by around 2035, according to the latest projection by economists at Goldman Sachs. The new estimate is 10 years later than the investment bank had predicted in 2011. But economists Kevin Daly and Tadas Gedminas said that potential growth in China still remains significantly higher than in the US. “China has already closed most of the gap with US GDP,” they said in a report published on Dec 13, adding that China’s gross domestic product has risen from 12 per cent of the US’ in 2000 to a little under 80 per cent. China’s annual economic growth will be around 4 per cent from 2024 to 2029, compared with 1.9 per cent in the US, according to the report, which projects what the global economy will look like through 2075. Factors for predicting GDP growth potential include the number of people in the workforce, the amount of capital they have to work with, and technical progress, according to the report. “Growth is projected to slow over time in most economies, owing to a smaller contribution from labour force growth, but this decline is expected to be particularly marked in China,” the economists said. Click here to read…

During Xi’s visit to Middle East, China and Saudi Arabia sign 34 energy and investment deals

Chinese President Xi Jinping met Saudi Arabia’s rulers on Dec 08 on his first visit to the kingdom since 2016. He was received by Prince Mohammed bin Salman at the al-Yamamah Palace early on Dec 08 afternoon, before the pair sat down for talks, followed by a meeting between Xi and King Salman. The reception came after China and Saudi Arabia signed 34 energy and investment deals as Xi vowed to strengthen the comprehensive strategic partnership with Riyadh. The Saudi Press Agency reported that Chinese and Saudi Arabian companies signed dozens of agreements – covering green energy, information technology, infrastructure and health – on Dec 07 as Xi started his state visit to Saudi Arabia. The Chinese president will attend two key summits with Arab and Gulf countries over the next two days. The total value of the 34 deals was not revealed. But the agency reported earlier that the two countries had aimed to sign 20 preliminary agreements worth US$29.26 billion. Saudi Arabian energy minister Abdulaziz bin Salman also announced a plan to establish a regional centre for Chinese factories to further boost energy supply chains. “The Kingdom of Saudi Arabia has strong and close strategic relations with China in many fields, the most important of which is energy,” the Saudi Press Agency quoted him as saying. “The Kingdom of Saudi Arabia will remain China’s credible and reliable partner in this field.” Click here to read…

Kishida appeals for higher taxes to bolster Japan’s defense

Japanese Prime Minister Fumio Kishida made a plea for higher taxes to strengthen the nation’s defenses at a news conference on Dec 10, saying Japan faces greater uncertainty over its security, given rising geopolitical tensions in Asia. “To protect our peaceful lives and fulfill [our] responsibility to future generations, I would like to ask for the cooperation of the Japanese people,” Kishida said at a news conference following the conclusion of the 69-day extraordinary parliamentary session. The session was held to pass a major economic spending program designed to shield the economy from a global economic slowdown, and another bill aimed at offering support to victims of the Family Federation for World Peace and Unification, widely known as the Unification Church. But the deliberations have been overshadowed by the Russian invasion of Ukraine and mounting tensions over Taiwan. The Kishida government is drawing up a new defense framework aimed at strengthening Japan’s defense capabilities and doubling the level of defense spending to 2% of gross domestic product. Kishida ruled out issuing new debt to pay for the defense spending increase. “Funding has been identified for three quarters of the expected increase in defense spending, through the reallocation of the budget, and use of reserve funds and nontax government income,” Kishida said. But he added: “I have to ask for the cooperation of the Japanese people for the remaining quarter” of the funding needs. Click here to read…

Hold the Nuclear Fusion Hype

The news Dec 13 that U.S. scientists have performed the world’s first controlled nuclear fusion reaction that generates a net energy gain is a refutation of American declinism. But don’t believe the hype that a fossil-fuel free world is near if only the government spends more. Scientists have spent decades studying how to replicate in labs the nuclear fusion reactions that power the sun and stars. The fission reactions that power today’s nuclear plants involve splitting atoms and result in radioactive waste. Fusion entails combining atoms and theoretically could provide abundant, clean energy with no hazardous waste. Hydrogen, fusion’s input, is the most abundant element in the universe, and no country dominates its supply, unlike some minerals used in lithium-ion batteries and wind turbines. The reactions also don’t generate CO2. But a stumbling block has long been figuring out how to generate more energy from the fusion reactions than is used to ignite them. In the experiment that resulted in Dec 13’s breakthrough, the Lawrence Livermore National Laboratory used 192 lasers to heat and compress hydrogen atoms at more than 180 million degrees Fahrenheit. The reaction released 3.15 megajoules of energy for every 2.05 megajoules of input—with some major caveats. The lasers are less than 1% efficient and used about 300 megajoules. Click here to read…

EU strikes deal on world-first carbon border tariff

After all-night negotiations, the European Union struck a political deal on Dec 13 to impose a carbon dioxide emissions tariff on imports of polluting goods such as steel and cement, a world-first scheme aiming to support European industries as they decarbonise. Negotiators from EU countries and the European Parliament reached a deal at around 5am in Brussels, on the law to impose CO2 emissions costs on imports of iron and steel, cement, fertilisers, aluminium and electricity. Companies importing those goods into the EU will be required to buy certificates to cover their embedded CO2 emissions. The scheme is designed to apply the same CO2 cost to overseas firms and domestic EU industries – the latter of which are already required to buy permits from the EU carbon market when they pollute. Mohammed Chahim, European Parliament’s lead negotiator on the law, said the border tariff would be crucial to EU efforts to fight climate change. “It is one of the only mechanisms we have to incentivise our trading partners to decarbonise their manufacturing industry,” Chahim said. The aim of the levy is to prevent European industry from being undercut by cheaper goods made in countries with weaker environmental rules. It will also apply to imported hydrogen, which was not in the original EU proposal but which EU lawmakers pushed for in the negotiations. Some details on the law, including its start date, will be determined later this week in related negotiations on a reform of the EU carbon market. Click here to read…

FX swap debt a $80 trillion ‘blind spot’ BIS says

Pension funds and other ‘non-bank’ financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said. The BIS, dubbed the central bank to the world’s central banks, also said in its latest quarterly report that 2022’s market upheaval had largely been navigated without major issues. Having repeatedly urged central banks to act forcefully to dampen inflation, it struck a more measured tone and picked over crypto market troubles and September’s UK bond market turmoil. Its main warning concerned what it described as the FX swap debt “blind spot” that risked leaving policymakers in a “fog”. FX swap markets, where for example a Dutch pension fund or Japanese insurer borrows dollars and lends euro or yen before later repaying them, have a history of problems. They saw funding squeezes during both the global financial crisis and again in March 2020 when the COVID-19 pandemic wrought havoc that required central banks such as the U.S. Federal Reserve to intervene with dollar swap lines. The $80 trillion-plus “hidden” debt estimate exceeds the stocks of dollar Treasury bills, repo and commercial paper combined, the BIS said. It has grown from just over $55 trillion a decade ago, while the churn of FX swap deals was almost $5 trillion a day in April, two thirds of daily global FX turnover. Click here to read…

China Props Up Belt-and-Road Borrowers Via Unusual Channel

China’s central bank has funneled billions over the past decade to around 20 countries, including Pakistan, Sri Lanka, Argentina and Laos, via swap lines that allow overseas central banks to exchange their domestic currencies for Chinese yuan. The transactions, researchers say, are part of a broad but opaque effort by Chinese authorities to prop up governments that borrowed heavily from Chinese banks as part of Beijing’s $1 trillion Belt and Road Initiative to finance infrastructure projects and win influence across the world. By replenishing other countries’ reserves, the PBOC may be helping some of the world’s most indebted countries avoid rising borrowing costs. But economists say the swaps also help paper over problems that led to their financial troubles in the first place. The transactions also represent another potential liability for borrowers as rising interest rates, rocketing inflation, slowing growth and sinking currencies squeeze countries’ ability to repay their debts. The swaps are often rolled over, sometimes for years, and researchers estimate the average interest rate for using them has been around 6% of the value drawn. That is higher than what the Federal Reserve charges other central banks to swap their currencies for dollars as well as the rate on typical International Monetary Fund loans to poor countries. Click here to read…

US commits $55 billion to Africa over next three years: White House

The White House said Dec 12 ahead of the U.S.-Africa Leaders summit that it was pledging $55 billion in economic, health and security support for Africa over the next three years. One day before President Joe Biden hosts 50 African heads of state as Washington vies for influence in the continent, White House National Security Advisor Jake Sullivan said the United States aims to help African countries achieve their own goals. “Working closely with Congress, the U.S. will commit $55 billion to Africa over the course of the next three years across a wide range of sectors to tackle the core challenges of our time,” Sullivan told reporters. Sullivan declined to give details, saying they would be revealed during the coming three days of bilateral and multilateral talks and a dinner hosted by Biden at the White House for his African counterparts. He stressed that the guiding theme would be the African Union’s own Agenda 2063, its plan for sustainable socio-economic development of the continent. “The entire first substantive session that the president will chair at the summit is on Agenda 2063,” Sullivan told reporters. “That is not an American document. It is not an American Vision. It is the African Union’s document . . . So we are lifting up African voices and African priorities in what we are doing in this summit,” he said. Click here to read…

Strategic
China’s Xi on ‘epoch-making’ visit to Saudi as Riyadh chafes at U.S. censure

Chinese President Xi Jinping began a visit to Saudi Arabia on Dec 08 that Beijing said marked its biggest diplomatic initiative in the Arab world, as Riyadh expands global alliances beyond a long-standing partnership with the West. The meeting between the global economic powerhouse and Gulf energy giant comes as Saudi ties with Washington are strained by U.S. criticism of Riyadh’s human rights record and Saudi support for oil output curbs before the November midterm elections. The White House said Xi’s visit was an example of Chinese attempts to exert influence, and that this would not change U.S. policy towards the Middle East. “We are mindful of the influence that China is trying to grow around the world,” White House National Security Council spokesperson John Kirby told reporters. China, the world’s biggest energy consumer, is a major trade partner of Gulf oil and gas producers. Bilateral ties have expanded under the region’s economic diversification push, raising U.S. concerns about growing Chinese involvement in sensitive infrastructure in the Gulf. Energy Minister Prince Abdulaziz bin Salman on Dec 07 said that Riyadh would remain a “trusted and reliable” energy partner for Beijing and that the two countries would boost cooperation in energy supply chains by establishing a regional center in the kingdom for Chinese factories. Click here to read…

Xi’s China-Arab summit success in Riyadh raises temperatures in Iran

Iranian President Ebrahim Raisi has “seriously demanded compensation” for his country over last week’s meetings between Arab leaders and Chinese President Xi Jinping in Riyadh. In a meeting with Chinese Vice-Premier Hu Chunhua in Tehran on Dec 13, Raisi said some of the positions raised during Xi’s meetings with leaders from around the region “caused dissatisfaction and complaints of the nation and the government”. The statement from the Iranian presidential office did not give details of what compensation may be sought. Nor did it refer to Dec 09’s declaration by China and the Gulf Cooperation Council (GCC), which is known to have angered Tehran. Iran’s “strong dissatisfaction” over the joint statement was made clear on Dec 10, at a meeting between China’s ambassador to Tehran Chang Hua and the Iranian foreign minister’s deputy for Asia-Pacific affairs. At their summit, Xi and the Arab leaders agreed to make sure that Iran’s nuclear programme was peaceful, and also that GCC member United Arab Emirates should resolve its territorial dispute with Iran – over strategic islands in the Strait of Hormuz – by negotiation. Iran took control of the islands of Abu Musa and the Greater and Lesser Tunbs in 1971, before the governing Gulf sheikdoms gained independence from Britain to form the UAE with other sheikdoms. Tehran has maintained that its sovereign claim over the three islands is non-negotiable, while the UAE has said Iran’s control of the islands violates international law. Click here to read…

Japan is upgrading China to a defence ‘threat’. A long overdue move?

Japan will upgrade China to an “unprecedented strategic challenge” in its revised National Security Strategy, with analysts saying the move that took nearly a decade of discussions is long overdue given geopolitical changes in the region. The ruling Liberal Democratic Party and its coalition partner Komeito agreed on Dec 12 to revise the strategy document for the first time since it was drawn up in 2013. The policy paper, along with the updated National Defence Strategy and National Defence Programme Guidelines, will be submitted to the cabinet for confirmation this week before going to the Diet for approval. It coincides with the recent announcement by Prime Minister Fumio Kishida that Japan would significantly raise defence spending, to account for 2 per cent of gross domestic product by 2027. Tokyo has for many years adhered to an unofficial policy that limited defence spending to 1 per cent of GDP, although that has been creeping higher over the last decade. According to media reports, the new version of the National Security Strategy document refers to China as “a threat”, a significant escalation from the 2013 paper which described Beijing as “an issue of concern to the international community”. That phrasing prompted a debate within the ruling coalition, with Komeito apparently resisting the use of the word “threat”. The solution appears to have been to keep the term “threat” but delete the direct reference to Japan, although there is little doubt about Tokyo’s position today.
https://www.scmp.com/week-asia/politics/article/3203144/japans-move-describe-china-defence-threat-long-overdue-observers-say” target=”_blank”>Click here to read…

North Korea fires over 130 rounds after South Korea-U.S. drills

North Korea said it fired more than 130 artillery shells into the sea off its east and west coasts on Dec 05 after detecting military drills across the border in the South. Some of the shells landed in a buffer zone near the sea border in what Seoul said was a violation of a 2018 inter-Korean agreement designed to reduce tensions. The South Korean military sent several warning communications to the North over the firing, the ministry of defense said in a statement. North Korea’s military conducted its firing after detecting dozens of “projectiles” fired in the South near the shared border, state news agency KCNA reported, citing a spokesperson of the General Staff of the Korean People’s Army. “The enemy should immediately cease military actions that cause escalation of tensions in areas near the front lines where visual surveillance is possible,” the unnamed spokesperson said, warning that the North would respond firmly and with overwhelming military action to any provocation. “We sternly warn the enemy not to stir up unnecessary escalation of tension along the front lines.” South Korea and the United States were conducting a joint land-based firing drill near the border in Cheorwon County in the middle of the peninsula on Dec 12. Their drill will continue on Dec 13Click here to read…

Six Pakistanis, one Afghan soldier killed in cross-border clash

Cross-border shelling and gunfire between Afghanistan and Pakistan killed six Pakistani civilians and one Afghan soldier on Dec 11, officials on both sides of the frontier said, with each side accusing the other of starting the fighting. The Pakistan army said Afghan border forces had opened “unprovoked and indiscriminate fire of heavy weapons including artillery/mortar on to the civilian population” at the Chaman border crossing, which links Pakistan’s western Balochistan province with Afghanistan’s southern Kandahar province. Six civilians were killed and 17 wounded on the Pakistani side by Afghan fire, leading Pakistani troops to retaliate, the Pakistan military said in a statement. Pakistani Prime Minister Shehbaz Sharif said the killings “deserve the strongest condemnation.” “The Afghan interim government should ensure that such incidents are not repeated,” Sharif further said in a statement. Haji Zahid, a spokesman for Kandahar’s governor, said the fighting began after Pakistan objected to Afghan forces building a new checkpoint. “They didn’t want us to build these posts on our side of the border,” he told Reuters, adding it led to a two-hour-long gun battle. Kandahar police spokesman Hafiz Saber said one Afghan soldier was killed and 10 people, including three civilians, were wounded. Afghanistan and Pakistan have for decades had territorial disputes at their border and the Chaman crossing was closed for several days after similar clashes in November. Click here to read…

Monk militia: The Buddhist clergy backing Myanmar’s junta

In a monastery in central Myanmar, a Buddhist monk, Wathawa, rallies his militia with a cry: “What’s our spirit like?” “The spirit of iron!” shout a group of rifle-bearing men, loyalists of the military junta that seized power last year, now fighting to crush fledgling pro-democracy groups. The scene, from a video posted online by army-linked media, would have seemed unimaginable to previous generations in the overwhelmingly Buddhist nation. Now, it underscores the close alliance the military has forged with the Buddhist hierarchy. Myanmar’s Buddhist clergy previously sought to topple successive military dictatorships that kept citizens impoverished and isolated. Monks were part of the 1988 uprising that brought Nobel laureate Aung San Suu Kyi to prominence. Thousands thronged the streets during 2007 anti-government protests known as the Saffron Revolution. Many are now supporters of the new junta. As the new junta suppresses opponents, religious leaders have been largely absent from the widespread resistance to last year’s army coup, which ended the decade-long democratic experiment that brought Suu Kyi to power. In public comments and state media broadcasts as recently as November, the military has acknowledged forming militia in some villages “based on their demands,” but has denied arming monks. Click here to read…

Bangladesh government digs in against protests as economy teeters

Political tensions in Bangladesh are boiling after a weekend that saw tens of thousands take to the streets against the government, raising fears of violence and repression as well as concerns over the impact on an already fragile economy. A series of demonstrations organized by the opposition Bangladesh Nationalist Party (BNP) in recent months culminated in a huge rally in Dhaka on Dec 10, despite extensive government efforts to keep a lid on it. The BNP’s head office in the capital was cordoned off, while roads were blocked to prevent party leaders and activists from joining the protest. This came three days after at least one BNP activist was reported killed and hundreds were arrested as the party was preparing for Saturday’s rally. The detainees included a number of party leaders. The BNP has put forward a 10-point list of demands and vowed to fight until the Awami League government of Prime Minister Sheikh Hasina quits to make way for a nonpartisan administration, which would see the country through a general election that is expected in January 2024. The Awami League’s landslide victory in 2018 was marred by reports of violence and allegations of vote rigging — charges denied by the government. With tempers running hot and maturing foreign loans looming over the dollar-strapped and inflation-gripped economy, Bangladesh appears to be heading into an especially treacherous period. Click here to read…

Blinken readies for first China trip in New Year

American and Chinese officials are finalizing plans for Antony Blinken to make his first visit to China as U.S. secretary of state sometime in early 2023, with priority given to finding ways to avoid accidental clashes arising from unforeseen circumstances. This follows Joe Biden’s first in-person meeting as president with Chinese counterpart Xi Jinping last month in Bali, Indonesia. The leaders agreed to maintain dialogue between senior officials in such areas as climate change, global economic stability and food security. Both sides saw eye to eye on Blinken visiting China to follow up on the progress in these communications. On Dec 11, the U.S. sent Daniel Kritenbrink, assistant secretary of state for East Asian and Pacific affairs, and Laura Rosenberger, the National Security Council’s senior director for China and Taiwan, on a four-day trip through Asia, with China as the first stop. Kritenbrink and Rosenberger will follow up on the Biden-Xi meeting “to continue responsibly managing the competition between our two countries and to explore potential areas of cooperation,” the U.S. State Department said Dec 10. Chinese Vice Foreign Minister Xie Feng held talks with Kritenbrink and Rosenberger in Hebei Province on Dec 11-12, said Wang Wenbin, a spokesperson for China’s Ministry of Foreign Affairs. Click here to read…

U.S. military bill features up to $10 billion to boost Taiwan

The U.S. Congress is expected to start voting as soon as Dec 07 on a massive military policy bill including authorization of up to $10 billion in security assistance and fast-tracked weapons procurement for Taiwan. The compromise version of the annual National Defense Authorization Act, or NDAA, does not include some controversial provisions of Taiwan legislation lawmakers proposed this year, including sanctions in the event of “significant escalation in aggression” against Taiwan by China, or a proposal that Taiwan be treated as a “major non-NATO ally.” China considers Taiwan its territory and has never renounced using force to bring it under its control. Beijing responded angrily when the Senate Foreign Relations Committee approved broader Taiwan legislation in September despite concern within President Joe Biden’s administration that the bill could go too far in heightening tensions with China. The Senate and House Armed Services committees unveiled the NDAA late on Dec 06. The $858 billion military policy bill is expected to pass Congress and be signed into law this month. The “Taiwan Enhanced Resilience Act” included in the NDAA authorizes appropriations for military grant assistance for Taiwan up to $2 billion per year from 2023 through 2027, if the U.S. secretary of state certifies that Taiwan increased its defense spending. Click here to read…

EU-Asean statement drops language about Taiwan ahead of summit

Language on Taiwan has been dropped from a joint communique on the eve of a meeting of European Union and Asean leaders in Brussels, after a sharp disagreement over how to describe Taiwan’s political status. The dispute centred on whether there was a universal “one-China principle”, with Asean negotiators pushing for text that was closer to that of Beijing’s position on the matter, EU sources said, ahead of the first summit between the European Union and the Association of Southeast Asian Nations on Dec 13. China considers Taiwan as an “inalienable part of China’s territory” that will eventually be taken back, by force if necessary. Brussels preferred to highlight that it has its own autonomous one-China policy, one that allows space for cooperation with Taiwan too. In the end, “they preferred not to have any text at all”, an EU official said. Rather than focusing on Taiwan, the communique focuses on issues pertaining to the South China Sea. “We reaffirm the importance of maintaining and promoting peace, security, stability, safety, and freedom of navigation in and overflight above the South China Sea, in accordance with international law, including Unclos,” read a draft text. Unclos stands for the United Nations Convention on the Law of the Sea. “We reaffirm the need to enhance mutual trust and confidence, exercise self-restraint in the conduct of all activities and avoid actions that could increase tensions and the risk of accidents, misunderstandings, and miscalculation,” it continued. Click here to read…

Japan to include standoff missile unit for enemy ‘counterstrikes’

The government will include a “standoff missile unit” capable of long-distance strikes against enemy bases under what it calls “counterattack capabilities” in three key national security policy documents that are now being revised. The government presented the plan to a meeting of the ruling Liberal Democratic Party on Dec. 13. The outline for the three documents said the standoff missile unit will become a core feature of the Ground Self-Defense Force for striking enemy bases that are planning to attack Japan, according to sources. The unit will comprise seven surface-to-ship missile regiments, two high-speed gliding missile battalions for island protection, and two long-range guided missile troops. Under the government’s plan, the unit will be armed with U.S.-made Tomahawk cruise missiles, Japan-made Type 12 surface-to-ship guided missiles, which are currently being upgraded, and hypersonic guided missiles. The Type 12 missiles will include those that can be fired from the ground, ships and aircraft. In addition, the GSDF and the Maritime Self-Defense Force will each have one new “information warfare unit.” Since Russia started invading Ukraine in February, Japan’s Defense Ministry has been considering establishing warfare units to deal with information spread on the internet, including through social media platforms. Click here to read…

Turkey seeks proof of insurance from Russian oil tankers

Turkey says it has started requesting proof of insurance from tankers loaded with Russian crude oil as Moscow expressed concern about a build-up of oil tankers in the Bosphorus Strait. At least 20 oil tankers queueing off Turkey face more delays to cross from Russia’s Black Sea ports to the Mediterranean as operators race to adhere to new Turkish insurance rules added in advance of a G7 price cap on Russian oil, industry sources said on Dec 06, as cited by the Reuters news agency. Russia is discussing the issue with insurance and transport companies, Russian news agency RIA cited Russian deputy foreign minister Alexander Grushko as saying on Dec 07. “We are aware of this situation. Of course, it causes us concern from the point of view of the interests of our operators. This problem is being discussed with transport and insurance companies. After all, insurance companies insure, not the state,” Grushko was quoted as saying. “If the problem is not solved, of course, there will be involvement on the political level.” Turkish maritime authorities issued a notice seen by Reuters last month asking for additional guarantees from insurers that transit through the Bosphorus would be covered starting from the beginning of this month. Disruptions in tanker traffic from Russia’s Black Sea ports to the Mediterranean are a result of a new Turkish insurance rule, not the price cap on Russian oil agreed by a coalition of G7 countries and Australia, an official with the group said on Dec 06. Click here to read…

US will send Patriot missiles to Ukraine – CNN

The administration of US President Joe Biden is finalizing plans to send Patriot missiles to Ukraine, CNN reported on Dec 13. Kiev has been requesting the American air defense systems for months, as Russia continues its strikes on Ukrainian military and infrastructure targets. The plan is in its final stages and needs approval from Defense Secretary Lloyd Austin before it can be sent to Biden’s desk for his signature, the report stated, citing three anonymous US officials. Austin’s approval is expected, and an announcement could be made as soon as this week, the officials told CNN. A single Patriot missile battery comprises a power unit, a command station, a radar unit and antennae, and up to eight truck-mounted launchers, each holding four surface-to-air missiles. Developed by US defense contractor Raytheon, the system has a range of up to 99 miles (160km), and can intercept incoming missiles or aircraft. The Patriot system was tested extensively during the Gulf War, with the Pentagon claiming it successfully intercepted 45 out of 47 Iraqi Scud missiles during the six-week conflict. However, the Israeli military later revealed that “one or possibly none” of the Scuds were actually intercepted, while a 2017 New York Times report found the Patriot system ineffective when used by Saudi Arabia against Houthi missiles fired from Yemen. It is unclear how many Patriot systems the US will send to Ukraine. Click here to read…

UN Security Council adopts resolution on humanitarian “carve-out” to UN sanctions

The UN Security Council on Dec 09 adopted a resolution on establishing a standing humanitarian exemption to the asset freeze measures imposed by the United Nations. Resolution 2664 decides that the provision, processing or payment of funds, other financial assets or economic resources, or the provision of goods and services necessary to ensure the timely delivery of humanitarian assistance or to support other activities that support basic human needs are permitted and are not a violation of the asset freezes imposed by the Security Council or its sanctions committees. The humanitarian “carve-out” applies to a wide range of entities, including UN programs, funds, agencies, humanitarian organizations having observer status with the UN General Assembly, and certain nongovernmental organizations, according to the resolution. Resolution 2664 decides that the carve-out will apply to the sanctions regime against the Islamic State and al-Qaida for a period of two years from the date of adoption of this resolution, and that the Security Council may extend the application. It requests that the UN secretary-general issue a written report on unintended adverse humanitarian consequences of Security Council sanctions measures, including travel ban and arms embargo measures, as well as those measures that are unique to particular sanctions regimes, within 9 months of the adoption of this resolution. Click here to read…

Middle East country boasts world’s most powerful passport

Citizens of the United Arab Emirates now wield the globe’s most powerful passport, enjoying easy visitor access to all but 9% of the world’s countries, according to the latest Passport Index ranking by Canadian financial advisory firm Arton Capital. The UAE-issued document surpassed the likes of those from Germany, Sweden and Luxembourg to claim the top spot, Arton reported on Dec 07. Holders of a passport from the federation of sheikhdoms in the Persian Gulf have visa-free access to 121 countries and can obtain a visa upon arrival in 59 other states, giving them a combined mobility score of 180, up from 160 a year ago, according to Montreal-based Arton. The oil-rich Emirates, which include Dubai and Abu Dhabi, previously ranked as the top Middle East nation in the Passport Index. It’s also home to the most multinational corporate headquarters in the region. The UAE has forged several key trade and diplomatic agreements in recent years, including normalization of relations with Israel in 2020. It has attracted thousands of expatriates through a new remote-worker visa program that was launched last year. European nations held 10 of the top 11 spots in the Passport Index rankings, with only the UAE slipping ahead of them. Germany and other EU states have visa-free access to more countries, but the UAE surpasses them when it comes to eligibility for visa issuance upon arrival. Click here to read…

Health
US lawmakers look to repeal Pentagon vaccine mandate

US House and Senate members are poised to force President Joe Biden’s administration to end its Covid-19 vaccine mandate for members of the military by folding the provision into an annual defense funding bill. Democrats have agreed to a compromise with Republicans under which they allowed an amendment to the National Defense Authorization Act (NDAA) requiring the Pentagon to end its jab order. The final draft of the NDAA was released on Dec 06 night and is scheduled to be voted on by the House later this week. The move comes amid a military recruiting crisis, which has been blamed at least partly on the vaccine mandate, as well as claims by Republicans that Biden has infringed on the freedoms of US troops. Representative Thomas Massie, a Kentucky Republican, previously confirmed the agreement, saying he had gained more than 90 co-sponsors for an earlier bill that would end the mandate. “Now it looks like the intent of this legislation could become a reality in the NDAA this month.” All branches of the US military have struggled to meet their recruiting quotas. In fact, the US Army missed its fiscal year 2022 hiring target by 15,000 troops, or 25%.Click here to read…

Beijing hospitals battle staff shortage and patient influx after China’s sudden zero-Covid switch

Hospitals in China’s capital Beijing are battling staff shortages and struggling to keep their doors open amid a flood of Covid-19 cases a week after the country’s sudden switch from strict pandemic controls to living with the virus. The city reported only 1,027 infections on Dec 13 morning but the true scale of cases is believed to be much greater, with residents no longer required to have PCR tests or report their antigen test results. There are big concerns whether China can safely make the shift from its former strict zero-Covid policy without rampant infections in the community crushing the health system. Since more relaxed rules were announced last week and the capital stopped trying to control growing outbreaks, hospitals in Beijing have been trudging through difficult waters. Hospitals have not yet been stretched to breaking point but staff shortages are common as healthcare workers are struck down by the virus. Some facilities have cancelled non-emergency surgery just to keep their services running. “The rapid development of the epidemic has led to greater pressure on health services in the short term,” Li Ang, deputy director of Beijing’s health commission said on Dec 12. Vice-premier Sun Chunlan, who has been in charge of Covi-19 control for the past three years, inspected several hospitals and pharmacies in Beijing on Dec 13 and said the focus of work should be changed from controlling infection to treatment. Click here to read…

Global Developments and Analysis: Weekly Monitor, 28 November – 04 December, 2022

Economic
Six taikonauts of two missions in historic gathering in China Space Station, give country the largest population in space

Marking a first in China’s aerospace history, taikonauts of two manned spaceflight missions made their victorious gathering in the China Space Station early on Nov 30 morning. With six taikonatus in orbit, China has surpassed the US and Russia in having the largest population in space. Carrying three taikonauts, the Shenzhou-15 manned spacecraft launched on Nov 29 night, conducted a fast automated rendezvous and docked with the China Space Station at the Tianhe core module front port at 5:42 am Nov 30. The six taikonauts of the two missions then took a historic group picture to commemorate their space gathering in the Tianhe core module. Next, the two crews will execute the China Space Station’s first direct handover in orbit, and they will live and work together in the space station for about five days. Also marking a first in China’s aerospace history, the space station has achieved a mega combination of six parts – three permanent modules and three spacecraft. The total mass of the combination has come close to 100 tons, which is the largest structure of the China Space Station combination to date, the Global Times learned from the state-owned aerospace giant and space station project contractor the China Aerospace Science and Technology Corp (CASC).
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EU agrees on $60 Russian oil price cap after holdout Poland backs deal

The European Union on Dec 02 agreed on a $60-per-barrel price cap on Russian seaborne crude, after holdout Poland gave its support, paving the way for formal approval over the weekend. Warsaw had resisted the proposed level as it examined an adjustment mechanism to keep the cap below the market price. It had pushed in EU negotiations for the cap to be as low as possible to squeeze revenues to Russia and limit Moscow’s ability to finance its war in Ukraine. Polish Ambassador to the EU Andrzej Sados on Dec 02 told reporters Poland had backed the EU deal, which included a mechanism to keep the oil price cap at least 5% below the market rate. The price cap, an idea of the Group of Seven nations, aims to reduce Russia’s income from selling oil while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Dec. 5. A spokesperson for the Czech Republic, which holds the rotating EU presidency and oversees EU countries’ negotiations, said it had launched the written procedure for all 27 EU countries to formally greenlight the deal, following Poland’s approval. Details of the deal are due to be published in the EU legal journal on Dec 04. European Commission President Ursula von der Leyen said the price cap would significantly reduce Russia’s revenues.
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Russia Quietly Amasses ‘Shadow Fleet’ Of Tankers To Sidestep Western Restrictions

In an effort to dull the effect of international restrictions on its oil sales, Russia has discretely assembled a “shadow fleet” of more than 100 tankers, according to shipping brokers and industry analysts who spoke to the Financial Times. The largely anonymous tanker purchases can be tracked by the big increase in unnamed or new buyers appearing in registries. The vessels are generally 12-15 years old and would be expected to be scrapped in the next few years, said Anoop Singh, head of tanker research at Braemar. “We’ve seen quite a number of sales to unnamed buyers in recent months, and a few weeks after the sale many of these tankers pop up in Russia to take their first load of crude,” Craig Kennedy at Harvard’s Davis Center for Russian and Eurasian Studies told the Times. The report comes as new Ukraine War-inspired Russian oil restrictions are poised to take effect. On Dec 05, a long-planned EU ban on seaborne oil imports from Russia will take effect. In mid-February, the import ban will extend to refined Russian products. This week, the G-7 (Canada, France, Germany, Italy, Japan, the U.K. and the U.S.) and the EU agreed to cap the price of Russian crude oil at $60 a barrel. The cap will be subject to adjustments every two months, starting in mid-January.
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U.S. LNG Is Booming, But Who Supplies The Gas?

This year, the United States became the world’s biggest liquefied natural gas (LNG) exporter as deliveries to energy-starved buyers in Europe and Asia surged. In the current year, five developers have signed over 20 long-term deals to supply more than 30 million metric tons/year of LNG to energy-starved buyers in Europe and Asia. As energy analysts RBN Energy notes, the first wave of LNG export expansion has mostly gone smoothly thanks to fast-rising natural gas supplies in the Lower 48 and a slew of pipeline reversals and expansions that allowed low-cost Marcellus-Utica gas supplies to reach Gulf Coast markets. But with LNG demand already high and set to grow at a frenetic pace, the big question becomes how quickly can the United States ramp up production to meet future demand? RBN notes that the Appalachia was, by far, the biggest contributor to U.S. natural gas growth over the last decade. Unfortunately, environmental groups have repeatedly stopped or slowed down pipeline projects and limited further growth in the Northeast. Either way, it’s going to be a real challenge for the United States to meet those targets because takeaway constraints including limited pipeline capacity are seen as the biggest hurdle to growth of the sector despite the country being home to the world’s largest backlog of near-shovel-ready LNG projects.
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Entire regions saw water extremes in 2021

All regions of the world saw water extremes in 2021 – both floods and droughts – and billions of people had insufficient freshwater, the United Nations said on Nov 29. Large areas of the planet recorded drier than normal conditions in 2021, the UN’s World Meteorological Organization said in its first annual State of Global Water Resources report. The report assesses the effects of changes in the climate, environment and society on the Earth’s freshwater resources – limited supplies that are under growing demand – so they can be managed better. “The impacts of climate change are often felt through water – more intense and frequent droughts, more extreme flooding, more erratic seasonal rainfall and accelerated melting of glaciers – with cascading effects on economies, ecosystems and all aspects of our daily lives,” said WMO head Petteri Taalas. “And yet there is insufficient understanding of changes in the distribution, quantity and quality of freshwater resources.” Some 3.6 billion people face inadequate access to freshwater at least one month per year. That is forecast to rise to more than 5 billion by 2050, the report said. Between 2001 and 2018, 74 percent of all natural disasters were water-related, according to UN studies. In 2021, all regions saw devastating water extremes, the report said.
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Chinese cash-strapped developers get access to refinancing

China’s securities regulator announced on Nov 28 the resumption of mergers and acquisitions (M&As) by real estate developers and refinancing by the listed developers, among newly announced five measures that take effect immediately, in an attempt to invigorate the slumped property sector. The fresh move, adding to a flurry of recent government actions to stabilize the housing market and the economy at large, is meant to let listed developers use the capital market to ease their funding woes, market observers said. It could signal a turn for the better in the housing market and overall economic activity. In a late-night statement, the China Securities Regulatory Commission (CSRC) said that stable and healthy development of the country’s housing sector are closely related to financial market stability and economic growth. The securities regulator vowed to support the implementation of plans to improve premium property developers’ balance sheets, and help the housing market to revive dormant assets, prevent financial risks, and steadying macroeconomic fundamentals. The CSRC outlined five specific measures that apply to the housing market, effective immediately. The announcement was a follow-up to a pro-housing policy address delivered by CSRC Chairman Yi Huiman at the Financial Street Forum 2022 in Beijing last week.
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EU pushes ahead with WTO cases against China over Lithuania coercion and hi-tech licences

The European Union is to push on to the panel stage of two World Trade Organization suits against China, after failing to resolve the issues during bilateral talks. The first case is a high-profile spat with China over alleged economic coercion of Lithuania, whose exporters found themselves frozen from the Chinese market late last year. In the second dispute, the EU claims China is using domestic courts to undermine intellectual property laws, thereby allowing Huawei Technologies, Xiaomi and other telecoms giants to secure cut-price technology licences. “Our preference was to solve these two significant and systemic cases in a consultation process and we have invested a considerable amount of time in doing so. However, this was to no avail. We are therefore left with no choice but to request the establishment of these WTO panels,” said Valdis Dombrovskis, the EU’s Commissioner for Trade. The Lithuania case centres on an alleged unofficial trade embargo following the opening of a controversially named Taiwanese Representative Office in Vilnius. Beijing regards Taiwan as part of its territory, and was infuriated by what it claimed was a breach of its sovereignty. The EU insists that the office is consistent with its own one China policy.
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Chinese yuan playing ‘complementary’ role in interbank settlement, but CIPS won’t rival Swift, says global central bank boss

As the yuan is now the world’s fifth most used currency for payments by value, the Chinese central bank clearing system is playing an important complementary role in the global payment system, according to the boss of the global central bank. However, China’s clearing and settlement service, Cross Border Interbank Payment System (CIPS), is no substitute for the global payment system Swift, Agustin Carstens, general manager of Bank of International Settlements (BIS), told the Post in an exclusive interview on Dec 06. “In this space, it is not probably adequate to think about substitutes,” Carstens said. “It is not a race. Swift covers some forms of payments initiated by different types of intermediaries, while other systems could cover others. The important thing here is the complementarity of the different payment systems. “There are many needs among societies, and we need to let the different solutions flourish.” As part of its effort to promote the internationalisation of the yuan, China’s central bank launched CIPS in 2015. It allows global banks to clear cross-border yuan transactions directly onshore, instead of through clearing banks in offshore yuan hubs. CIPS processed 80 trillion yuan (US$11.44 trillion) in 2021. The yuan now has a 2.13 per cent of the market share in global payments by value as of October, according to Swift.
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US lawmakers ease proposed curbs on government use of Chinese chips amid corporate pushback

US senators have scaled back a proposal that placed new curbs on the use of Chinese-made chips by the US government and its contractors, according to a recent draft seen by Reuters, amid pushback from trade groups like the US Chamber of Commerce. The move is the latest example of industry’s efforts to weaken proposals aimed at crimping China’s burgeoning tech sector, by pointing out how such measures will raise costs. Top Senate Democrat Chuck Schumer and John Cornyn, a prominent Republican China hawk, unveiled a measure in September that would have required US federal agencies and their contractors to stop using chips manufactured at China’s Semiconductor Manufacturing International Corp (SMIC), as well as products made by Chinese memory chip leaders Yangtze Memory Technologies Co (YMTC) and ChangXin Memory Technologies (CXMT). The text of a new version of the measure, dated December 1, no longer forbids contractors from “using” the targeted chips and pushes the compliance deadline back to five years from the immediate or two-year implementation deadlines included in the first version. “This does not clearly prohibit contractors from themselves using covered semiconductor products,” said Robyn Burrows, a lawyer at Blank Rome specialising in federal contracting, when asked to read excerpts of the new draft.
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Germany struggles to get China parts to replenish ammo stockpile

The supply of military aid to Ukraine is depleting Germany’s stockpiles of ammunition — an issue that may be exacerbated by the slowdown of component imports from China. German ammunition makers at a recent defense symposium near Munich flagged that the lead time for orders of cotton linters from China — a key component for propelling charges for both small guns and artillery — has tripled to up to nine months, German-language daily Die Welt reported. While cotton linters are a commodity material produced and traded across the globe, the report cited unnamed industry sources saying that all European ammunition manufacturers rely on China for them. The massive bottlenecks in raw material supply “concern especially ammunition and special steels,” Wolfgang Hellmich, the defense affairs speaker for the ruling Social Democratic Party (SPD) in parliament, told Nikkei Asia, when asked whether there are supply bottlenecks for China-sourced materials for military equipment. On Nov. 28, the German government held an ammunition roundtable with arms-makers, but concrete results were not publicized. “[At the ammunition roundtable], it was discussed how the ammunition bottlenecks can quickly be reduced, and all sides are working at full steam for solutions to prevent serious inventory gaps,” he added. The German defense ministry has not replied to an inquiry for this article as of press time.
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The Twitter Censorship Files

Elon Musk’s release of internal emails relating to Twitter’s 2020 censorship is news by any definition, even if the mainstream media dismiss it. There will be many threads to unspool as more is released, but a couple of points are already worth making. The first is that Mr. Musk would do the country a favor by releasing the documents all at once for everyone to inspect. So far he’s dribbled them out piecemeal through journalist Matt Taibbi’s Twitter feed, which makes it easier for the media to claim they can’t report on documents because they can’t independently confirm them. A second point is a huzzah for Rep. Ro Khanna, the California progressive Democrat, who warned Twitter in 2020 about the free-speech implications and political backlash of censoring the New York Post story about Hunter Biden’s laptop. That was good advice, even if Twitter didn’t take it. A third point is the confirmation of the central role that former spies played in October 2020 in framing the Hunter Biden story in a way that made it easier for Twitter and Facebook to justify their censorship. Recall that former Democratic intelligence officials James Clapper and John Brennan led the spooks in issuing a public statement suggesting that the laptop may have been hacked and its content was Russian disinformation.
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Putin Pushes To Establish A “Natural Gas Union” In Central Asia

Russian President Vladimir Putin has proposed creating a “gas union” with Kazakhstan and Uzbekistan to establish a mechanism to ship natural gas between the three countries and to other nations, including China. A day after Kazakh President Qasym-Zhomart Toqaev said he had talks with Putin in Moscow on the issue, Russian Kremlin spokesman Dmitry Peskov confirmed on November 29 that the proposal was being discussed between the three countries because there was a “need for synchronization” since they all sell natural gas. The first stage of Putin’s proposal envisages “the creation of a coordination mechanism” for the plan, Peskov said. “The issue likely will have to be discussed with a legal entity to establish cooperation between the three nations and to secure the development of infrastructure for outer markets,” Peskov said. Toqaev’s spokesman Ruslan Zheldibai wrote on Facebook on November 29 that the Kazakh and Russian presidents had discussed how “to coordinate joint actions for the transportation of Russian gas through the territories of Kazakhstan and Uzbekistan.” “Presidents Qasym-Zhomart Toqaev and Vladimir Putin said they think it is necessary to hold detailed talks with the participation of experts to find a rational solution to the issue that considers the interests of all involved sides,” Zheldibai wrote. Peskov noted that, since Kazakhstan’s northern regions depend on natural gas transported from Siberia in Russia, it would be economically advantageous to increase Russian gas supplies instead of following through on a Kazakh government plan to build a new pipeline to secure Kazakh gas deliveries to the region.
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Countries split on plastics treaty focus as UN talks close

The first round of negotiations on a global plastics treaty ended on Dec 02 with an agreement to end plastic pollution but a split on whether goals and efforts should be global and mandatory, or voluntary and country-led. More than 2,000 delegates from 160 countries, meeting in Uruguay in the first of a planned five sessions of the Intergovernmental Negotiating Committee (INC), aim to craft the first legally binding agreement on plastic pollution by the end of 2024. The negotiations in the coastal city of Punta del Este pitted a “High Ambition Coalition”, including European Union members, against countries including the United States and Saudi Arabia, which have the world’s top plastic and petrochemical companies. UN Secretary-General Antonio Guterres, saying plastics were “fossil fuels in another form”, urged nations to crack down on pollution and production. “I call on countries to look beyond waste and turn off the tap on plastic,” he said on Twitter. United Nations members agreed in March to create the treaty to deal with the scourge of plastic waste but they differ on major issues, including whether to limit plastic production, phase out types of plastics and harmonize global rules. The High Ambition Coalition of over 40 countries, including EU members, Switzerland, host Uruguay and Ghana, wants the treaty to be based on mandatory global measures, including curbs on production.
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Western airlines need to return to Russian airspace – IATA

Western airlines should resume flights over Russia, because the skies over Europe are becoming increasingly crowded, the head of the International Air Transport Association (IATA) said on Dec 06. “We should be looking to reopen Russian airspace to have it accessible to all airlines to transit through the traditional Siberian overflights, so that Europe can access Asia in the most efficient way possible,” Willie Walsh told a press briefing in Geneva. “If you look at the closure of Ukrainian airspace, Russian airspace and other parts of the world, the amount of traffic that’s flowing through Europe has increased over certain routes and that’s not sustainable,” he added. Russian airspace, spanning 11 time zones and providing the shortest route from Europe to Asia, was closed to Western airlines in response to sanctions imposed shortly after the start of the Ukraine conflict in February. Middle Eastern and Chinese airlines have continued to fly over Russia, but flights from China have been limited due to Beijing’s strict Covid-19 restrictions. However, Walsh expects China to ease their policies over the coming year, which would allow more people to travel. This, in turn, would give Chinese airlines an advantage over European rivals, whose flights are currently plagued by delays as they avoid Russian airspace.
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UK no longer a foreign aid ‘superpower’ – minister

The UK is no longer a “development superpower,” the British minister responsible for overseas aid has told a parliamentary committee. Andrew Mitchell said “draconian” budget cuts to bilateral programs were necessary because funding had been diverted to meet the needs of refugees arriving in Britain from countries like Ukraine and Afghanistan. He made the remarks before members of the UK Parliament’s International Development Committee on Dec 06. Mitchell was appointed minister of state for aid issues in the Foreign Office by Prime Minister Rishi Sunak in October, effectively returning to the same office he held a decade ago. “Let us not beat about the bush. We are not a development superpower at the moment and that is something that is bemoaned around the world,” Mitchell told his fellow lawmakers. He contrasted the scarcity of funding with the resources that were available during premierships of Tony Blair and David Cameron. “If we are going to get that back, we are going to have to make some structural changes in the department,” he added. Mitchell said he had to reduce the budget for bilateral programs by some 30% for the rest of the financial year. This was partially due to the Home Office drawing on his department’s funds to cover the cost of hosting an increasing number of refugees from countries including Syria, Afghanistan and Ukraine.
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Strategic
Ukraine operation could take a long time – Putin

The military operation in Ukraine may go on for a while, Russian President Vladimir Putin said on Dec 07, in a meeting with the Council for Civil Society and Human Rights. Addressing a question about the duration of hostilities that escalated in February, Putin said that achieving all the objectives will take time, but pointed to, what he called, several major gains already won. “Of course, this might be a lengthy process,” Putin said, insisting that the conflict really began in 2014, when the US backed a nationalist coup in Kiev. He contended that Moscow had little choice but to intervene in February, to defend the Donbass republics of Donetsk and Lugansk – which have since voted to join Russia, along with most of Kherson and Zaporozhye regions. “These new territories are a major gain for Russia,” the president said. “Even Peter the Great sought access to the Azov Sea, and it is now an internal sea of the Russian Federation.” “Most importantly, the people who live there showed in a referendum that they want to be in Russia and feel they are part of our world,” Putin said. “They are now with us, millions of them, and that is the greatest outcome.” Putin also said there was “no point” in discussing additional mobilization measures, as the more than 300,000 reservists called up to fill the ranks of the military were quite sufficient.
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US issues denials after Ukraine strikes inside Russia

Secretary of State Antony Blinken has denied the US had anything to do with Ukrainian drone strikes on two airfields deep inside Russia, but vowed to continue supplying Kiev with anything it needs. Defense Secretary Lloyd Austin, meanwhile, sidestepped media reports about the US hobbling HIMARS launchers by saying the Pentagon won’t “prevent” Ukraine from developing long-range capabilities. Austin and Blinken took questions from the press on Dec 06 alongside their Australian counterparts who are visiting Washington, when Dec 05’s attack on two Russian airfields and the Wall Street Journal report about modifications to HIMARS rocket launchers came up. “We have neither encouraged nor enabled the Ukrainians to strike inside of Russia,” Blinken told reporters, adding that what really matters is how Ukraine is coping with “ongoing Russian aggression.” The US is determined to give the Ukrainians “the equipment that they need to defend themselves, to defend their territory, to defend their freedom,” Blinken added. According to the Russian Defense Ministry, two strategic bomber bases in Ryazan and Saratov regions came under attack by drones on Dec 05 morning. Debris from drones shot down by air defenses killed three servicemen and resulted in minor damage to two bombers, Moscow said, but did not disrupt a planned strike on Ukrainian military logistics later in the day.
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US unveils first new bomber since Cold War

The US Air Force unveiled a new strategic stealth bomber on Dec 02, the first in 30 years. With an estimated cost of more than half a billion dollars, the B-21 Raider has yet to make its maiden flight. The Northrop Grumman bomber, which is capable of carrying both conventional and nuclear weapons, was showcased in a ceremony at Air Force Plant 42 in Palmdale, California. The event was attended by high-ranking Pentagon officials, including Secretary of Defense Lloyd Austin. Austin hailed the B-21 Raider as “the embodiment of America’s determination to defend the republic that we all love,” adding: “This is deterrence the American way.” When the contract for the Raider was first announced in 2015, then-Secretary of the Air Force Deborah Lee James claimed that the US needs a new bomber “that would allow us to take on much more complicated threats, like the threats that we fear we would one day face from China, Russia.” The stealth bomber is expected to make its maiden flight in 2023. The US Air Force originally hoped that the aircraft would take to the skies as early as 2019, but was delayed to December 2021, and then to mid-2022. It was initially projected to cost $550 million each, but over the years, the price tag swelled to $692 million due to inflation. In total, the Air Force plans to procure at least 100 of the planes.
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China to possess 1,500 nuclear warheads by 2035: Pentagon report

China’s nuclear arsenal will grow to 1,500 warheads by 2035, triple its current estimated stockpile, the Pentagon said on Nov 29 in its annual report on Beijing’s military developments. The document, called Military and Security Developments Involving the People’s Republic of China, said China already possessed more than 400 warheads. The U.S. Defense Department estimated that China held at least 200 warheads in the same report two years ago. Nov 29’s report predicted the tally to reach 700 in 2027 and 1,500 in 2035, marking the first time the Pentagon has made a projection for 2035. Under the New START nuclear arms treaty signed with Russia, the U.S. is permitted up to 1,550 nuclear warheads on deployed intercontinental ballistic missiles, deployed submarine-launched ballistic missiles and deployed heavy bombers. This means Beijing’s nuclear capability could approach Washington’s deployed warheads in the 2030s, although it is difficult to draw direct comparisons. The New START treaty is now on track to expire 2026 and excludes certain types of nuclear warheads. Washington’s overall nuclear stockpile stood at 3,750 warheads in 2020, according to the most recent data released by the State Department. The Biden administration has urged China to engage in talks on nuclear disarmament, but Beijing has resisted, arguing that it is still behind the U.S. and Russia in terms of nuclear capability.
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US and Australia deepen defence ties, vowing to counter China’s ‘dangerous and coercive actions’

The United States will expand the number of bomber task force and fighter aircraft forces in Australia, add a US army and navy presence, better integrate US-Australian weapons manufacturing capabilities and invite Japan to join “force posture” initiatives, top officials from the two countries said on Dec 06. The officials taking part in Australia-US ministerial consultations in Washington said they shared the vision of an Indo-Pacific region where countries can enjoy security and prosperity, free from China’s heavy-handed economic and military tactics. “Unfortunately, that vision is being challenged today,” said US Defence Secretary Lloyd Austin. “China’s dangerous and coercive actions throughout the Indo-Pacific, including around Taiwan, toward the Pacific Island countries and in the East China and South China seas threaten regional peace and stability.” Austin attended the one-day meeting alongside US Secretary of State Antony Blinken, Australian Foreign Minister Penny Wong, and Australian Deputy Prime Minister and Defence Minister Richard Marles. In the past, companies and research institutions at the cutting edge of defence technology have often viewed their work through a competitive, nationalistic lens. But as threats to global peace and stability have intensified from Taiwan to Ukraine, it has become more crucial to integrate manufacturing and research on artificial intelligence and quantum computing, said Marles, evident in plans to closely bind Australian and American capabilities.
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Japan aims to boost five-year defence spending by 50 per cent, to US$318 billion

Japan’s Prime Minister Fumio Kishida on Dec 05 set a new target for military spending over the next five years to 43 trillion yen (US$318 billion), or 1.5 times the current level, as the country seeks defence build-up including the use of pre-emptive strike. Defence Minister Yasukazu Hamada said Kishida told him and Finance Minister Shunichi Suzuki to work on a budget plan to increase Japan’s 2023-2027 military spending by more than 50 per cent from 27.5 trillion yen. The planned increase is “to firmly secure the necessities to pursue substantial reinforcement” of Japan’s defence, Hamada said. Kishida’s government is currently finalising a revision of its national security strategy and mid- to long-term defence policies, which would allow the use of pre-emptive strikes in a major shift to Japan’s self-defence-only post-war principle. Critics say pre-emptive strikes could violate Japan’s pacifist constitution. The government says a “strike-back” capability is only for use in case of an imminent enemy attack. The three key documents and the budget are expected in late December. Japan has steadily stepped up its international defence role and military spending over the past decade. It aims to double its military budget in the next five to 10 years to about 2 per cent of GDP, citing a Nato standard, as threats from North Korea and China’s territorial assertiveness increase.
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Germany: 25 arrested on suspicion of planning armed coup, overthrowing government

Thousands of police carried out a series of raids across much of Germany on Dec 07 against suspected far-right extremists who allegedly sought to overthrow the state in an armed coup. Federal prosecutors said some 3,000 officers conducted searches at 130 sites in 11 of Germany’s 16 states against adherents of the so-called Reich Citizens movement. Some members of the grouping reject Germany’s post-war constitution and have called for the overthrow of the government. Justice Minister Marco Buschmann described the raids as an “anti-terrorism operation,” adding that the suspects may have planned an armed attack on institutions of the state. Prosecutors said 22 German citizens were detained on suspicion of “membership in a terrorist organisation.” Three other people, including a Russian citizen, are suspected of supporting the organisation, they said. Weekly Der Spiegel reported that locations searched include the barracks of Germany’s Special Forces unit KSK in the southwestern town of Calw. The unit has in the past been scrutinised over alleged far-right involvement by some soldiers. An active soldier in the Bundeswehr’s Special Forces Command (KSK) and several Bundeswehr reservists are suspects in the case, a spokesperson for the Military Counter-Intelligence Service (MAD) said.
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US Space Force to track North Korean missiles

The United States Space Force is working to create an early warning system for North Korean missile launches, a top commander has revealed, hoping to step up surveillance following a record number of weapons tests by Pyongyang this year. Addressing a webinar held by the Washington-based Mitchell Institute for Aerospace Studies on Nov 29, US Space Command head General James Dickinson outlined the service’s plans in the Indo-Pacific, where it set up its first-ever component command unit last week. “We are looking at how we integrate a sensor architecture that gives us as much warning as possible in terms of any type of missile activity out of North Korea,” he said, noting that Washington would share information with regional partners and allies and seek ways to “incorporate commercial sensors” into the new warning system. Though the Space Force only established its first operational unit in the Indo-Pacific just days ago, Dickinson observed that the branch already maintained a “coordination relationship” with the broader military, and would continue to develop those ties. Operating under INDOPACOM, the American command responsible for East Asia and the Indian subcontinent, the new Space Force unit appears largely focused on China. With the latest remarks from Dickinson, however, Pyongyang also appears to be a priority for the new unit.
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China Operating Illegal Police Stations Worldwide

China has set up at least 54 overseas police stations in 30 countries, including in the United States (New York), Canada, Spain, Italy, France, the Netherlands, the United Kingdom, Hungary, Portugal, the Czech Republic, Brazil, Argentina and Nigeria, according to a recent report from Safeguard Defenders, a human rights NGO. The police stations are part of China’s campaign to “persuade” Chinese citizens suspected of criminal acts – particularly telecommunications fraud, but also political “crimes” such as political dissent – to return to China to face criminal prosecution. China not only threatens the Chinese citizens themselves but also members of their families who have stayed behind in China. Such threats have been continuing for years, as FBI Director Christopher Wray pointed out in 2020, when he mentioned a case from the US in which a Chinese government “emissary” visited a target in the US and told him that he could choose between returning to China or committing suicide. China’s overseas police stations purport merely to have administrative or consular functions, but function as means of threatening Chinese abroad to return to China, thereby skipping the necessary legal requirements under international law. Crucially, the police stations operate without the consent and knowledge of the host countries, such as in the Netherlands, where one of the police stations operates out of a plain ground-floor apartment in Rotterdam belonging to a small Chinese handyman business.
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Iran morality police status unclear after ‘closure’ comment

An Iranian lawmaker said Dec 04 that Iran’s government is ”paying attention to the people’s real demands,” state media reported, a day after a top official suggested that the country’s morality police whose conduct helped trigger months of protests has been shut down. The role of the morality police, which enforces veiling laws, came under scrutiny after a detainee, 22-year-old Mahsa Amini, died in its custody in mid-September. Amini had been held for allegedly violating the Islamic Republic’s strict dress codes. Her death unleashed a wave of unrest that has grown into calls for the downfall of Iran’s clerical rulers. Iran’s chief prosecutor Mohamed Jafar Montazeri said on Dec 03 the morality police ”had been closed,” the semi-official news agency ISNA reported. The agency did not provide details, and state media hasn’t reported such a purported decision. In a report carried by ISNA on Dec 05, lawmaker Nezamoddin Mousavi signaled a less confrontational approach toward the protests. ”Both the administration and parliament insisted that paying attention to the people’s demand that is mainly economic is the best way for achieving stability and confronting the riots,” he said, following a closed meeting with several senior Iranian officials, including President Ebrahim Raisi. Mousavi did not address the reported closure of the morality police.
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ASEAN paralysis over Myanmar

The ASEAN Summit in Phnom Penh last weekend once again showed the group’s paralysis in dealing with Myanmar, one of its 10 members, which has been suppressing its people. After disinviting the Myanmar military from the summit, the nine leaders came out with a statement reaffirming their commitment to see through the implementation of the five-point consensus reached with the junta leader in Jakarta in April 2021. The Myanmar issue has been holding back ASEAN’s entire progress, including the group’s move to becoming a community and in addressing many pressing issues in the economy, public health and common security. Although Myanmar did not attend last weekend’s summit, it dominated discussions, including when world leaders met at the East Asia Summit, held back-to-back with the ASEAN summit. Now that Indonesia is taking over the ASEAN chair, we should expect more from the group. We can forgive outgoing chair Cambodia and its predecessor Brunei in 2020, but as the largest member Indonesia has more clout and resources to make a difference in Myanmar. In the absence of any mechanism for expelling members, ASEAN should suspend Myanmar’s membership and bar the junta from taking part in all ASEAN meetings. ASEAN should give seats to representatives of Myanmar’s opposition government, either as observers or guests, at some of its meetings.
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Iran says U.S. still sending messages for nuclear talks’ resumption

The Iranian Foreign Ministry spokesman said on Nov 28 the United States is still sending messages for the resumption of the talks on the revival of a 2015 nuclear agreement. “Although the U.S. officials have displayed reluctance to continue the nuclear talks and claimed that negotiations were not on their agenda, they are still sending messages” for the resumption of the diplomatic process to revive the agreement, Iranian Students’ News Agency quoted Nasser Kanaani as saying at a weekly press conference. Iran maintains that the diplomatic process is the best approach to safeguard all sides’ interests in the talks on the nuclear deal’s revival, he noted. “We express neither optimism nor pessimism and will remain realistic in this regard,” he said, adding if the other side remains active and have the necessary political determination for reaching a nuclear agreement, it will receive a positive response from Tehran. In case of the other side’s inaction, Iran will pursue an “independent” approach based on its own decisions and policies, he added. According to Kanaani, messages are being exchanged between Iran and other sides in the negotiations, including the U.S. government, through mediators, such as the European Union foreign policy chief Josep Borrell or foreign ministers from friendly states who are in contact with both Tehran and Washington.
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U.S. signals support for Pakistan against resurgent terror threats

The U.S. has signaled a commitment to helping Pakistan counter a resurgence of militant violence, adding veteran Pakistani jihadi leaders to its list of global terrorists and vowing to take action against groups sheltered across the border in Taliban-ruled Afghanistan. The State Department Dec 01 slapped the terrorist designation on the deputy head of the Tehreek-e-Taliban Pakistan (TTP), an outlawed Pakistani jihadi group, and three senior leaders of al-Qaida in the Indian Subcontinent (AQIS), the terrorist outfit’s regional branch. The State Department’s statement also said the U.S. is “committed to using its full set of counterterrorism tools to counter the threat posed by terrorist groups operating in Afghanistan,” including AQIS and the TTP, to keep militants from using Afghanistan as “a platform for international terrorism.” The U.S. announcement came days after the TTP in late November called off a monthslong cease-fire with Islamabad and ordered its commanders to conduct attacks across the country. Since then, the TTP has claimed responsibility for a suicide attack on a police truck in Balochistan province’s city of Quetta on Nov. 30, which killed four people and wounded a dozen others, amid a spate of other attacks targeted at law enforcement. The TTP’s decision to rip up the cease-fire was a major blow to the Pakistani government, which can ill-afford further instability as it wrestles with an economic crisis that has raised fears of a debt default and intense political pressure from ousted Prime Minister Imran Khan.
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Chinese, Russian air forces hold 2nd joint strategic patrol of the year with 1st warplane exchange visits

Chinese and Russian militaries conducted a joint aerial strategic patrol in the Asia-Pacific region on Nov 30, the first time Chinese aircraft have landed in Russia and Russian aircraft have landed in China in such a joint patrol, and the first time the two countries have organized joint aerial patrols twice in a year. Analysts said it reflects a high level of increasing military cooperation and mutual trust that contributes to peace and stability in the region and the world. According to the annual military cooperation plan between the Chinese and Russian militaries, the two countries’ air forces organized and carried out a regular joint aerial strategic patrol over the Sea of Japan, the East China Sea and the West Pacific on Nov 30, reads a statement released by China’s Ministry of National Defense on the day. In the flight that lasted about eight hours, the Chinese People’s Liberation Army (PLA) Air Force sent H-6K strategic bombers, and the Russian Aerospace Forces sent Tu-95MS strategic missile carriers, escorted by Russian Su-30 SM and Su-35S fighter jets, the Russian Defense Ministry said in a statement on Nov 30. For the first time in the course of joint patrols, Russian aircraft landed at an airfield in China, and Chinese aircraft landed on the territory of Russia, according to the Russian statement, which also said that the Chinese and Russian crews acted in accordance with the provisions of international law without violating the airspace of foreign states.
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Russia deploys defense missile system on Kuril island near Japan

Russia’s defense ministry has said it has deployed mobile coastal defense missile systems on a northern Kuril island–part of a strategically located chain of islands that stretch between Japan and the Russian Kamchatka Peninsula. Japan lays claim to the Russian-held southern Kuril islands that Tokyo calls the Northern Territories, a territorial row that dates back to the end of World War Two when Soviet troops seized them from Japan. The Russian Bastion missile systems, which have missiles with a flight range of up to 500 kilometers, were deployed on the island of Paramushir in the northern portion of the Kuril Islands, the Russian defense ministry said on Dec 05. “Coastal servicemen of the Pacific Fleet will keep a round-the-clock watch to control the adjacent water area and strait zones,” it said. The ministry said that a military camp was set up on Paramushir with conditions allowing for year-round service, accommodation, recreation and food for personnel. This deployment comes a year after Russia set up the Bastion systems on the island of Matua, in the central part of the Kuril ridge, the ministry said in a statement. The Washington-based think tank Center for Strategic and International Studies said in a September report that overshadowed by the invasion of Ukraine, Moscow’s militarization of the Kuril Islands “has flown largely under the radar.”
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Kazakhstan, Russia seek to strengthen cooperation

Russian President Vladimir Putin and his Kazakh counterpart Kassym-Jomart Tokayev signed a cooperation document on Nov 28 as the two countries mark three decades of diplomatic ties in 2022. The Declaration on the 30th Anniversary of Diplomatic Relations between Russia and Kazakhstan contains 37 articles and stipulates efforts to deepen bilateral cooperation in the fields of politics, economy, defense, culture, education, health care, youth and sports. Before inking the document, Putin and Tokayev took part via video link in the 18th Russia-Kazakhstan Inter-regional Cooperation Forum held in the Russian city of Orenburg. “It is the first visit after Mr Tokayev’s reelection as president of Kazakhstan. In this sense, it has a symbolic meaning. It underlines the special nature of our relations,” Putin said at the meeting. “For Kazakhstan, Russia has been and remains our main strategic partner, a country with which we have deep ties in a wide range of sectors,” Tokayev replied.
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Texas challenges Biden administration’s border policy

The US Supreme Court heard arguments on Nov 29 in a case brought by border state Texas challenging the federal government’s right to decide which undocumented migrants should be targeted for deportation. Defending the Biden’s administration’s policy, Solicitor General Elizabeth Prelogar said the federal government has to prioritize its efforts because it does not have the resources to pursue the 11 million undocumented “noncitizens” in the country. “This is not about reducing enforcement of the immigration laws, it’s about prioritizing limited resources to say go after Person A instead of Person B,” Prelogar said. After more than two hours of arguments, the nine justices on the conservative-majority court did not appear to fall clearly on one side or the other of the case, which also raises thorny questions of the legality of state challenges. “It means that states can challenge the federal government on any policy with which they disagree,” Prelogar said. “Federal courts should not be transformed into open forums for each and every policy dispute between the states and the national government.” Texas filed suit after the Department of Homeland Security, in a September 2021 memo, instructed US Immigration and Customs Enforcement (ICE) to concentrate expulsion efforts on persons who “pose a threat to national security, public safety, and border security.”
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Medical
Multiple cities ease requirements for COVID-19 testing, as residents start to stockpile self-test kits

At least 10 major Chinese cities have announced the ending of requirements for the checking of 48-hour valid COVID-19 test results for riding public transport. Some cities have also ended testing requirements for entering public venues as many localities continued to optimize their epidemic responses over the weekend. Cities adjusting policies include Chengdu, Tianjin, Dalian, Shijiazhuang and Shenzhen. Shenzhen, the technology and manufacturing hub in South China’s Guangdong Province, issued a statement early Saturday, confirming that residents will no longer need to provide nucleic acid test certificates when entering public places such as pharmacies, parks, and outdoor tourist attractions, as well as taking public transports, but will still need to scan a venue code to check in, and show their green health code. Residents will still need to show nucleic acid test results when visiting farmer’s markets. The megacity Guangzhou has also lifted a number of restrictions, including ending test result requirements for pharmacies. Other cities such as Chengdu announced adjustments, in which nucleic acid test results are no longer needed when taking public transport. Meanwhile, the Beijing government said that service operators of buses and subways shall not refuse passengers without a 48-hour negative result, starting Dec 12. The Guangzhou Market Supervision and Administration Bureau stated that since the adjustment and optimization of the epidemic prevention and control measures on November 30, there has been a phenomenon of citizens rushing to buy medicines in Guangzhou.
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Global Developments and Analysis: Weekly Monitor, 21 November – 29 November, 2022

Economic
Global Long-Term LNG Contracts Are Sold Out Until 2026

The global long-term LNG contracts before 2026 are sold out, top importer Japan says, amid heated competition for the fuel as Europe seeks to replace Russian pipeline gas supply. The estimate of sold-out LNG deals emerged from a survey of Japanese companies conducted by the local trade ministry and cited by Bloomberg. High spot LNG prices have priced out many Asian buyers this year as Europe has been bidding for supply and has become the primary destination of spot LNG supply out of the United States. At the same time, market volatility and uncertainties, and concerns about energy security, have prompted a growing number of buyers to seek long-term contracts. The race for LNG supply could give rise to a second wave of U.S. LNG projects, but new supply will take time to develop, Kateryna Filippenko, Principal Analyst, Global Gas Supply, at Wood Mackenzie, said earlier this year. But much of this new LNG supply, including from projects that have taken final investment decisions (FIDs) in previous years, is likely to come only after 2026. Until around 2026, “Europe will have to compete with Asia for the marginal LNG molecule to satisfy demand – just as it is right now,” Filippenko noted. “Competition between Europe and Asia for limited LNG will be intense until a new supply wave arrives after 2026. Prices will inevitably remain elevated until then.” Click here to read…

Russia now fourth largest forex reserve holder

Russia has risen to fourth place among the world’s largest economies in terms of foreign exchange reserves, RIA Novosti calculations published on Nov 26 show. In the first nine months of the year, Russia’s holdings, including those frozen by the West due to Ukraine-related sanctions, rose to $540 billion, Central Bank data shows. This allowed Russia to displace India, which had occupied fourth place since last summer. India’s holdings as of the end of September amounted to $532 billion. The two countries have been competing with each other on this indicator since 2015. China retained its perennial leadership in terms of international reserves, with a staggering $3.193 trillion in assets at the end of September this year. Second place was held by Japan with $1.238 trillion, and Switzerland came in third with $892 billion in assets. According to the report, an interesting trend was seen in the lower half of the top ten, in which emerging economies outpaced their developed-market counterparts. Hong Kong was displaced by Saudi Arabia as the sixth largest holder, Brazil moved up to ninth place, pushing Singapore down to tenth. South Korea dropped to number seven. Germany and the US retained the 11th and 12th spots from last year respectively, with France moving up to 13th, followed by Italy. Mexico moved up three spots to number 15. Thailand, the UK, Israel, Poland, and the Czech Republic rounded out the top 20. Click here to read…

Putin sets priorities for Russian defence industry

Russian defence giant Rostec plays a key role in ensuring the country’s “technological sovereignty,” but needs to take advantage of real combat experience in countering Western weapons in Ukraine, President Vladimir Putin said on Nov 25. Rostec has been responsible for the development, production, and export of high-tech products, not only for the military but for civilian use as well, Putin noted at a reception celebrating the conglomerate’s 15th anniversary. “The experience that we have gained in the course of conducting the special operation [in Ukraine] and countering modern Western models of military equipment is very good and needs to be used to improve the quality, reliability, and combat characteristics of some types of our domestically produced weapons,” the president explained. Putin said the “number one” task right now is to do everything to fully deliver on the needs of the military, in particular “every company and platoon deployed in the special military operation.” Heightened military production should also provide an impetus for related civilian industries, he said, while internal competition between development bureaus should pave the way to making the best models of equipment that has already shown its value in combat. The 2007 decision to establish a “powerful industrial flagship” turned out to be fully justified, Putin said. Rostec currently consists of some 700 subsidiaries, which employ over 450,000 people. Click here to read…

US eases Venezuela oil embargo

The US Treasury Department has granted a license to multinational energy corporation Chevron to export Venezuelan oil to the US, citing a breakthrough in talks between the opposition and the government in Caracas, which Washington still refuses to recognize. According to the Treasury’s statement on Nov 26, Chevron Corporation was authorized to “resume limited natural resource extraction operations,” as long as Venezuela’s government does not receive “any profits from the oil sales by Chevron.” Under the policy, the extracted oil can only be exported to the US and the profits can only be directed to repaying the debts owed to Chevron, which has joint ventures with state-run oil company Petroleos de Venezuela S.A. (PDVSA). The newly-granted license specifically prohibits the “payment of any taxes or royalties to the Government of Venezuela,” or payment of “any dividends, including a dividend in kind” to any entity owned or controlled by PDVSA. “Other Venezuela-related sanctions and restrictions imposed by the United States remain in place,” the statement added, emphasizing that the move does not indicate any change to the longstanding US policy towards Venezuela. It remains unclear how much oil Chevron will be allowed to extract and export to the US under these conditions, and if the move will have any impact on global oil prices. Click here to read…

Fearing Sabotage, Europe Patrols Pipelines With Mine Hunters and Unmanned Subs

The Italian navy mine hunter ITS Numana was sailing recently above a pipeline carrying natural gas from North Africa to Europe when its sonar detected a metal object close to the line. “There was an obvious risk,” said Lt. Gianluigi Barberisi, the vessel’s commander. So the ship lowered a robot 650 feet below to take a closer look. It was a rusty table. Until recently, the Italian navy didn’t spend much time inspecting underwater pipelines. That changed on Sept. 26, when explosions ripped through the Nord Stream natural-gas pipelines in the Baltic Sea in an apparent act of sabotage. Since then, protecting the pipelines, energy grids and natural-gas terminals that keep Europe’s lights on and homes heated has become a national-security priority across the continent. After Russia invaded Ukraine, Moscow gradually throttled gas exports to Europe, exposing the perils of depending on Russian oil and gas. The blasts at the Nord Stream pipelines, which carried gas from Russia to Germany, revealed another European weakness: the vulnerability of its infrastructure to physical attacks.While no European government has named a suspect in the blasts, some European officials said they assume that Russia was responsible. Russia has denied having anything to do with explosions. Protecting Europe’s energy infrastructure is a gargantuan task. There are more than 6,000 miles of gas pipelines that cross Norwegian waters and the Mediterranean Sea, and more than 1,000 offshore oil-and-gas installations in European waters. Click here to read…

China petrochemicals sector likely to miss 2030 peak carbon target, but all is not lost, report says

China’s petrochemical sector may reach peak carbon emissions only by 2035 – five years later than the national target – a Peking University report has found. However, a low emissions push could help the sector achieve peak carbon as early as 2025, and produce only half of the carbon emissions compared to the baseline scenario by 2060, the report said. Petrochemicals are used in millions of everyday products, from plastics, detergents, rubbers and fertilisers, to packaging, clothing and insulating materials. The sector is a key economic pillar and accounts for about 4 per cent of China’s total carbon dioxide emissions. Moreover, unlike other high energy-consuming sectors such as steel and cement where emissions are expected to fall in the coming years, those for petrochemicals are likely to increase over the next two decades due to rising demand. The sector, therefore, plays a key role in China’s energy transition drive. However, while China’s goal is peak carbon by 2030, current emission trends as well as related policy indicate petrochemicals will achieve this only in 2035, according to a report by the Institute of Energy at Peking University. This is the baseline scenario, the report released last week said. China has not set a peak carbon timetable for the sector. But a joint plan issued by three central government agencies in August required carbon-intensive industries – which includes petrochemicals – to reach peak emissions by 2030. Click here to read…

As South Korea aims to surpass China in military exports, will sales competition with US rise?

The US$17 billion worth of South Korean arms sales this year has already more than doubled the full-year record set last year, and insiders expect industry growth to continue against the backdrop of the Ukraine war and regional tensions.But while Seoul’s goal for the country to eventually become one of the world’s top four arms exporters could see it surpass China – which currently holds the fourth position – analysts say that competition between them in the sector is unlikely, because their target markets fundamentally differ. The main impetus behind the rapid growth in Korean arms sales, which totalled US$7.5 billion in 2021, was Poland – Ukraine’s neighbour – which made more than US$10 billion worth of purchases in the first 10 months of this year. Those figures dwarf the annual average of US$2 billion to US$3 billion that South Korea made from arms sales from 2011-20. “Korea was able to grab an opportunity when it arose, as Poland had an urgent need to procure armaments after the Ukrainian war. Not only are there only a few countries that can produce armaments on such short notice, but also – for those advanced countries in Europe that have such capabilities – their priorities lie in protecting their own countries,” said Kim Mi-jung, a defence industry researcher at the Korea Institute for Industrial Economics and Trade. Click here to read…

China to push for stability of manufacturing sector

Ministry of Industry and Information Technology (MIIT), along with two other ministries, jointly issued a notice on Nov 21, aiming to consolidate industrial production, to be bolstered with a spate of new supportive measures. The notice, in line with measures unveiled on the heels of the tone-setting 20th National Congress of the Communist Party of China (CPC), shows that Chinese policymakers are seizing the “window of opportunity” to maintain the world’s second-largest economy to grow within a reasonable range this year, observers said. The notice meted out 17 measures to shore up development of major industries, varied enterprises and different regions in China. The boost will be broad-based with a particular focus on manufacturing, which indicates the policymakers want to consolidate the upward growing trend of the economy, and plan more stimulus measures to create new growth points, Cong Yi, dean of the School of Marxism at Tianjin University of Finance and Economics, told the Global Times on Nov 21. And, to stabilize exports, the notice vows to solidify the whole foreign trade chain, and guide localities to establish a service guarantee system for leading foreign trade enterprises and help them to solve problems in a timely manner. The circular also called for more support to shore up transportation of new-energy vehicles and electric batteries through the China-Europe Railway Express. Click here to read…

Pakistan winter gas crunch threatens to chill economy, stoke unrest

Pakistan is hurtling toward a harsh winter, with citizens and industries bracing for a severe shortage of natural gas as dwindling forex reserves and sanctions on Russia and Iran limit its options. The problem threatens to stoke further unrest in a country already rocked by political turmoil. On Nov 20, protesters blocked the Quetta-Karachi highway near Mastung, in the south-western province of Balochistan, over the suspension of gas supplies. Last week, demonstrators also blocked main roads inside Quetta, as the cold season begins to set in. Concerns about winter energy are hardly confined to the South Asian nation. As the raging war in Ukraine upsets markets and supply chains, governments from Japan and South Korea to Europe are wary of tight supplies in the months ahead. Neighbouring Bangladesh is also suffering from energy woes as it grapples with its own economic troubles. Still, Pakistan’s position appears especially precarious given the other pressures buffeting the country, compounded by creaky infrastructure that is leaking gas the nation cannot afford to waste. Taimur Fahad Khan, research associate with the Center for Strategic Perspectives at the Institute of Strategic Studies Islamabad, said the gas crisis is another bombshell for the Pakistani public and economy. He said the gas shortage “will exacerbate the energy insecurity in the country and result in further destabilization of Pakistan, which is already facing economic turmoil and suffering from political instability.” Click here to read…

U.S. bans sale of Huawei, ZTE gear, citing national security risk

The Biden administration has banned approvals of new telecommunications equipment from China’s Huawei Technologies and ZTE because they pose “an unacceptable risk” to U.S. national security. The U.S. Federal Communications Commission said on Nov 25 it had adopted the final rules, which also bar the sale or import of equipment made by China’s surveillance equipment maker Dahua Technology, video surveillance company Hangzhou Hikvision Digital Technology and telecoms company Hytera Communications. The move represents Washington’s latest crackdown on the Chinese tech giants amid fears that Beijing could use Chinese tech companies to spy on Americans. “These new rules are an important part of our ongoing actions to protect the American people from national security threats involving telecommunications,” FCC Chairwoman Jessica Rosenworcel said in a statement. Huawei declined to comment. ZTE, Dahua, Hikvision and Hytera did not immediately respond to requests for comment. Rosenworcel circulated the proposed measure, which effectively bars the companies from selling new equipment in the United States, to the other three commissioners for final approval last month. The FCC said in June 2021 it was considering banning all equipment authorizations for all companies on the covered list. That came after a March 2021 designation of five Chinese companies on the so-called “covered list” as posing a threat to national security under a 2019 law aimed at protecting U.S. communications networks: Huawei, ZTE, Hytera Communications Corp Hikvision and Dahua. Click here to read…

China widens market share in EVs, dozen other high-tech fields

Chinese companies have captured more global market share in 13 high-technology products and services, from electric vehicles to smartphones, Nikkei research shows, underscoring China’s outsized presence in global supply chains. Out of 28 high-tech categories reviewed by Nikkei, China widened its share in 13 in 2021. Chinese companies lost market share in six categories and did not make the top five in the remaining nine. The Biden administration’s recent toughening of export controls on advanced semiconductors shows the high level of tensions between the U.S. and China in technologies seen as crucial to national and economic security. The risk of a Taiwan crisis in the near future has added to the sense of urgency on securing Asian supply chains. But the Nikkei research shows realigning them is no easy task. In the EV supply chain, Chinese battery leader Contemporary Amperex Technology, known as CATL, is the world’s top battery supplier, holding a 38.6% share last year. Its position has grown by more than 12 points since 2020. When combined with peer BYD, the two companies held a combined share of 46%. BYD rose to become the fourth-largest EV manufacturer last year, climbing past the Renault, Nissan Motor and Mitsubishi Motors alliance. BYD has harnessed the strength of making batteries in-house to keep down its EV prices. Click here to read…

Globalized Supply Chain Brings More-Turbulent Food Prices

For decades, globalization has increased the variety and reduced the cost of food. Now the pandemic, war in Ukraine and other global disruptions have shown how that complex supply chain can also result in more turbulent prices. Food-price inflation hit multi-decade highs this year in the U.S. and elsewhere, outpacing overall consumer prices. While food inflation has cooled in recent weeks, food prices globally are still 25% higher than before Covid-19 struck in early 2020, according to the United Nations Food Price Index. Among the factors pushing up prices, food-industry executives and economists say, have been manufacturing and transport disruptions stemming from the pandemic and the impact of the war in Ukraine on energy and grain prices. While those issues may recede, and some suppliers say they will try to source from closer to home, analysts expect price swings to be more frequent. The way markets typically function is that when demand rises, prices rise, and that motivates producers to increase supply. WSJ’s Dion Rabouin explains why the age-old economics equation about supply and demand isn’t working right now. Illustration: David Fang Food and drink, like many manufactured goods from cars to iPhones, often include components from around the world. Click here to read…

Global economic growth to slow to 2.2 pct in 2023: OECD

Global gross domestic product (GDP) growth is projected to slide from 3.1 percent this year to 2.2 percent in 2023, the Organization for Economic Co-operation and Development (OECD) said in its latest Economic Outlook on Nov 22. The 2022 figure is around half the pace recorded in 2021 during the rebound from the pandemic, and the growth rate projected for 2023 is well below that foreseen prior to the outbreak of the Russia-Ukraine conflict.”Asia will be the main engine of growth in 2023 and 2024, whereas Europe, North America and South America will see very low growth,” it said.The major emerging markets in Asia are projected by the OECD to account for close to three-quarters of global GDP growth in 2023, while the economies in the United States and Europe are expected to slow down. “Held back by high energy and food prices, weak confidence, continuing supply bottlenecks and the initial impact of tighter monetary policy, annual growth in the euro area in 2023 is projected to be 0.5 percent,” the organization said. The United States economy would only grow by 0.5 percent in 2023, compared with 1.8 percent in 2022. The energy markets remain among the significant downside risks. Click here to read…

Strategic
Anti-Covid lockdown protests flare across China after deadly Urumqi fire

Protests against China’s relentless pandemic controls broke out in Shanghai and other big cities as well as university campuses over the weekend, in a major test for the leadership of strongman Xi Jinping and his zero-Covid policy. Open defiance is rare in China, especially directed at the central government and the ruling Communist Party. The unusual display of frustration and public anger in many parts of the country came a month after Xi secured a rule-breaking third term at the party’s national congress, making him China’s most powerful leader since Deng Xiaoping. The protests were largely sparked by a deadly residential fire in Urumqi, capital of the Xinjiang region, on Nov 24, which killed 10 and injured nine. The tragedy prompted widespread fury on the internet as many believed Covid restrictions prevented the victims from fleeing, claims that local officials rejected. The next day, hundreds of angry residents took to Urumqi’s streets demanding an end to the lockdown that has barred 4 million residents from leaving their homes for 100 days. Authorities in Xinjiang announced on Nov 26 that coronavirus restrictions would be lifted “in phases” but the assurances failed to stop protests spreading to the country’s most affluent cities and among young students, underlining the growing public impatience and grievances nearly three years into the pandemic. Click here to read…

Taiwan elections: DPP’s Tsai resigns as party chief after KMT wins big

Taiwan’s Kuomintang swept to a landslide victory in Nov 26’s local elections, results that observers said would aid the main opposition party in the presidential poll due in a little more than a year. President Tsai Ing-wen, who is also the head of the ruling Democratic Progressive Party, resigned with immediate effect as the DPP chief to take responsibility for the electoral setback. “We humbly accept the election results … and admit that we failed to move the voters and work hard to meet the expectations of the public,” Tsai said, who will continue to serve as Taiwan’s president. “On behalf of the DPP, I thank those who support and encourage us … and resign immediately as chair of the party,” she said as she led party officials to offer a bow to supporters. Results showed the KMT took four of the six key municipalities – Taipei, New Taipei City, and Taoyuan in the north and Taichung in central Taiwan. The KMT had set its sights on both Taipei and Taoyuan, saying wins there would be major victories. The DPP has retained control of only two municipalities: its traditional strongholds of Tainan and Kaohsiung. The new mayor of the capital will be Wayne Chiang Wan-an, a descendant of Chiang Kai-shek, presenting a setback for Tsai in the final two years of her second term. Click here to read…

Red line over Taiwan question reiterated in talks between Chinese, US defence chiefs

The defence chiefs of China and the US met face to face for the first time in Cambodia on Nov 22 since US House Speaker Nancy Pelosi’s provocative visit to Taiwan Island in early August, which was responded with large-scale military exercises around the island by the Chinese People’s Liberation Army (PLA). Chinese State Councillor and Defense Minister General Wei Fenghe drew the red line of the Taiwan question to US Secretary of Defense Lloyd Austin once again after Chinese President Xi Jinping had done so to US President Joe Biden at the G20 summit in Bali, Indonesia, last week. Aside from urging the US to honour the commitments made by Biden so that the China-US relations can resume healthy, stable development, the talks released a positive signal that would hopefully lower the risk of an unpredictable military confrontation and put the two countries’ worsening military relations back on track, analysts said. Wei, who is attending the ninth ASEAN Defense Ministers’ Meeting-Plus in Cambodia, held talks with Austin here on Nov 22 at the latter’s request. The talks were a practical measure to implement the important consensus reached during the meeting of the two countries’ top leaders, and were of very important significance to promote China-US military ties to return to the right track of healthy, stable development, said Senior Colonel Tan Kefei, a spokesperson at China’s Ministry of National Defense, at a press briefing in Cambodia after Wei and Austin’s talks. Click here to read…

Analysis: Xi no longer described as ‘people’s leader’ in China

One month after the Chinese Communist Party’s 20th national congress, Chinese state media have stopped calling President Xi Jinping “the people’s leader.” None of the newly published material on Chinese government websites contain the phrase.It is a surprising development, considering that the phrase was repeatedly used in the lead up to, and during, the national congress. A senior official at the Central Policy Research Office, a party organ, called Xi “people’s leader” at a news conference. Chinese media used the term every day during the gathering. Even a song titled “people’s leader” was sung. A source hinted that there has been an implicit agreement to refrain from promoting the phrase from here on. When this development is taken into account, the recently concluded week of diplomacy in Indonesia and Thailand perhaps takes on a new meaning. After all, in China, diplomacy is but an extension of domestic politics. The term “leader” or “lingxiu” was used by Foreign Minister Wang Yi, now a member of the powerful Politburo, when he wrapped up the achievements of the trip. “The international community once again appreciates the outstanding demeanour and world-mindedness of President Xi Jinping as the leader of a major party and a major country, and has witnessed a remarkable, faithful, loved and respected China,” he said. Wang’s use of Xi being the “leader of a major country” is a far cry from “the people’s leader,” which is reminiscent of founding father Mao Zedong. Click here to read…

Canada unveils new Indo-Pacific strategy, with eye on ‘disruptive’ China

Canada launched its long-awaited Indo-Pacific strategy on Nov 27, outlining C$2.3 billion (US$1.7 billion) in spending to boost military and cybersecurity in the region and vowed to deal with a “disruptive” China while working with it on climate change and trade issues. The plan detailed in a 26-page document said Canada will tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies. Canada is seeking to deepen ties with a fast-growing Indo-Pacific region of 40 countries accounting for almost C$50 trillion in economic activity. But the focus is on China, which is mentioned more than 50 times, at a moment when bilateral ties are frosty. Four cabinet ministers at a news conference in Vancouver took turns detailing the new plan, saying the strategy was crucial for Canada’s national security and climate as well as its economic goals. “We will engage in diplomacy because we think diplomacy is a strength, at the same time we’ll be firm and that’s why we have now a very transparent plan to engage with China,” Foreign Minister Melanie Joly said. Click here to read…

Japan eyes 10-year horizon for defence procurement

Japanese policymakers will consider extending the country’s defence procurement plan to 10 years from five to better increase readiness for such threats as a Taiwan crisis. Japan is updating three documents next month that govern defence policy: the National Security Strategy, the National Defense Program Guidelines and the Medium Term Defense Program. The first two cover a period of around 10 years. The Medium Term Defense Program lays out procurement and spending in five-year increments, based on security challenges identified in the National Defense Program Guidelines. Aligning the time spans of all three documents would lead to greater consistency in policy, proponents say. Improving transparency to the public in defence planning is important for gaining understanding, a government expert panel said in recommendations to Japanese Prime Minister Fumio Kishida on Tuesday. Kishida has vowed to “fundamentally reinforce Japan’s defence capabilities within the next five years,” making higher defense spending a political issue.The 10-year period covered by the next procurement plan holds an increased risk of conflict, analysts say. The U.S. National Security Strategy, published in October, warned the next decade will be “decisive” in countering challenges posed by China and Russia. Many in Washington predict a crisis in the Taiwan Strait within the next 10 years. Click here to read…

Expert proposes integrated development around Himalayas to tackle regional risks at 1st Conference on World Geography

A Chinese expert proposed a new solution of integrated development via strengthening border trade exchanges and cross-border coordination in the region of the Himalayas to tackle the multi-dimensional geopolitical security risks and further promote building a regional community of shared future, at a key conference in Shanghai. The proposal was made at the First Conference on World Geography, with the theme of “Geography and Our Common Future,” which was held during the weekend in Shanghai. Although fraught with geopolitical risks, the Himalayas region has a long history of interpersonal exchanges involving religion, ethnic groups and military. Chen Fahu, academician from the Chinese Academy of Sciences and president of the Geographical Society of China, proposed at the conference to promote integrated development around the Himalayas by strengthening border trade exchanges and cross-border coordination. In his keynote lecture entitled “Geo-security Issues Around the Himalayas,” Chen linked the significance of the Qinghai-Xizang (Tibet) Plateau where the Himalayas is situated with national security. According to Chen, the Qinghai-Xizang (Tibet) Plateau plays an important role in safeguarding China’s national security, a reserve base of strategic resources, a barrier for water safety and ecological security, as well as an important cultural area for China. Click here to read…

Iraq condemns Iranian attacks on Iraq’s Kurdistan region

Iraq on Nov 21 strongly condemned Iran’s cross-border bombardments on Iranian Kurdish opposition parties’ positions in the semi-autonomous region of Kurdistan in northern Iraq. “The repeated attacks carried out by Iranian and Turkish forces with missiles and drones on the Kurdistan region are a violation of Iraq’s sovereignty and an act that contravenes international covenants and laws that regulate relations between countries,” the Iraqi Ministry of Foreign Affairs said in a statement. The lands of Iraq “are not a base or a corridor to harm any of the neighbouring countries,” the ministry statement reaffirmed the Iraqi government’s stance. “Iraq is also not an arena for conflicts and settling scores for external parties,” the statement added. Earlier in the day, a Kurdish security source told Xinhua that one person was killed and at least seven others wounded when Iranian forces used ballistic missiles and drones to attack the opposition militants’ bases in Sulaymaniyah Province and Erbil Province in the Iraqi Kurdistan region. A statement by the Kurdistan Regional Government (KRG) condemned “in the strongest terms” the Iranian attacks on the Kurdish region. “Iran’s repeated violations of the sovereignty of Iraq and its Kurdistan region are inexcusable and a serious infringement of international law and neighbourly relations,” the KRG statement said. Click here to read…

Iraq says Saudi-Iranian talks transfer from security to diplomatic track

The Iraqi Ministry of Foreign Affairs said Nov 23 that the negotiations between Saudi Arabia and Iran have moved from the security to the diplomatic track and the talks previously held in Iraq will continue. The ministry’s spokesman Ahmed al-Sahaf told the official Iraqi News Agency (INA) that it’s important to resolve differing points of view and outstanding issues between the two sides in a way that meets “the interests of each party and interests at the regional level.” “We are coordinating between the two sides for the possibility of achieving other rounds of dialogue,” the spokesman was quoted by INA as saying. Saudi Arabia cut diplomatic ties with Iran in early 2016 in protest against the attacks on Saudi diplomatic missions in Iran following the Saudi execution of a Shiite cleric. Previously, Baghdad hosted five rounds of direct talks that aimed at normalizing relations between the two regional powers. Click here to read…

Turkey pushes high-level normalization with Egypt

Turkey wants to proceed with the normalization process with Egypt through high-level talks, Turkish President Recep Tayyip Erdogan said Nov 21, a day after his first meeting with his Egyptian counterpart Abdel-Fattah al-Sisi in Qatar. “A step has been taken here to start such a process, and we have had talks,” Erdogan told reporters on his homebound flight from Qatar, according to semi official Anadolu Agency. “We want to move a process that started with our ministers to a good point later, hopefully with high-level meetings,” he said. The Turkish president revealed that a message he had conveyed to Sisi was that Turkey cherished the past “unity” between the two peoples and would love to “start it again.” Erdogan noted that what Ankara expects from Cairo was to “establish peace together against those who take a stand against” Turkey and Egypt in the Mediterranean. Erdogan and Sisi shook hands during their brief encounter in Qatar’s capital Doha on the sidelines of the World Cup opening ceremony on Nov 20, shows a photo attached to an Egyptian presidency statement released on Nov 21. “The two sides underscored the profound historical bonds the two countries and their peoples share, As agreed, the encounter would mark the beginning of developing bilateral relations,” a presidential spokesperson was quoted by the statement as saying. Click here to read…

Türkiye calls on U.S. to “cease support” for YPG

Turkish Defense Minister Hulusi Akar on Nov 22 urged other countries, particularly the United States, to cease any support for the Kurdish People’s Protection Units (YPG) in northern Syria. “We tell all our interlocutors, especially the U.S., that the PKK (Kurdistan Workers’ Party) equals the YPG. We insistently demand the cessation of all support to the terrorists,” Akar told the Turkish parliament. Ties between the two NATO allies have long been strained due to U.S. military support to the YPG, which cooperated with Washington in operations against the Islamic State. Akar emphasized that Türkiye’s recent aerial operations into northern Syria and northern Iraq were in line with international law, respected sovereign rights and territorial integrity of its neighbouring countries, and targeted only the “terrorists.” Türkiye carried out an aerial operation on Nov 20 against the YPG in northern Syria and the PKK in northern Iraq. The “Operation Claw-Sword” was “the largest, most comprehensive and most effective aerial operation” of Türkiye, the minister said. The aerial strikes were launched after a bomb explosion in a busy street of Türkiye’s largest city Istanbul on Nov. 13, in which at least six people were killed and another 81 injured. Click here to read…

Pakistan nominates next army chief as incumbent blasts Imran Khan

Pakistani Prime Minister Shehbaz Sharif on Nov 24 nominated Lt. Gen. Syed Asim Munir as the next chief of army staff, shortly after the outgoing top general delivered a dramatic speech in which he took a parting jab at ousted leader Imran Khan. Munir is the most senior general among the top six who were considered for promotion to what many consider the most powerful post in the land. According to protocol, Sharif will send his recommendation to President Arif Alvi, who would issue the official notification of the appointment. The selection, if it goes through, would end months of speculation about the impending retirement of the incumbent army chief, Gen. Qamar JavedBajwa, and the candidates to succeed him. The infantryman Munir brings a background in military intelligence as well as experience serving in Saudi Arabia, and is famous for being able to recite virtually the entire Quran. Munir is set to take charge after Bajwa’s scheduled retirement Nov 29. The announcement of his selection came the day after Bajwa gave a farewell address at the army’s General Headquarters in Rawalpindi, in which he rejected former Prime Minister Khan’s unsubstantiated accusations that his government was brought down in April by a U.S.-backed conspiracy, with army involvement. Click here to read…

Heaviest Fighting in Years Breaks Out in Congo as Rivals Seek Control of Minerals

Long-simmering ethnic tensions in the eastern Democratic Republic of Congo—fed at times by its neighbours—have erupted into the most intense clashes in a decade as warring militias fight for control of the region and its mineral riches. In recent days, the M23 rebel group has advanced to within 12 miles of the city of Goma, pushing United Nations-backed Congolese government forces from several surrounding towns. More than two million people are suffering shortages of food and fuel as a result of the fighting. The M23 group, estimated to have 2,000 men under arms and backed by neighbouring Rwanda and Uganda, is seeking greater influence in a country that is home to the world’s largest deposits of tantalum, used in smartphones and personal computers. The advance raises the prospect that M23 and its foreign allies could dominate a region that also produces tin, gold and coltan, and exacerbate a humanitarian situation in a country that already hosts more displaced people than any other in Africa. M23 says it is fighting to defend Congolese Tutsis, Rwanda’s dominant ethnic group, against ethnic Hutu militias. Its rise has helped transform Rwanda, which produces little tantalum, into the world’s second-largest exporter of the rare blue-grey metal, because it controls informal supply chains that funnel the Congolese-mined mineral across the border, researchers and U.N. investigators say. Click here to read…

Israeli Far-Right Leader Ben-Gvir to Take Important Security Role in New Government

Benjamin Netanyahu’s Likud party signed a coalition deal with Itamar Ben-Gvir’s Jewish Power party that gives the latter control of the police ministry and a seat in the security cabinet. Mr. Netanyahu was tasked with forming Israel’s next government after his right-wing and religious bloc won 64 seats in the 120-member Parliament in elections this month. Nov 25’s agreement doesn’t account for a full new government but marks a step toward that end, and the potential establishment of Israel’s most right-wing administration. “We took a big step tonight toward a full coalition agreement, toward forming a fully, fully right-wing government,” Mr. Ben-Gvir said in a statement issued by Likud and his far-right faction, Jewish Power. Mr. Netanyahu remains in negotiations with other parties. The appointment of Mr. Ben-Gvir, who was convicted in 2007 of incitement to racism and belonging to a terrorist organization, as minister of Israel’s internal security could strain relations with Western allies and exacerbate tensions with Palestinians. Two explosions near bus stops in Jerusalem early Nov 23 killed at least one person and injured 26 others, the first bombing in the city since 2016. Violence this year helped propel Mr. Ben-Gvir into office. Click here to read…

U.S. VP Harris visits Philippine island on edge of contested South China Sea

U.S. Vice President Kamala Harris on Nov 22 visits the Philippine island of Palawan in the South China Sea, part of a three-day trip to an Asian ally that is central to America’s bid to counter China’s increasingly assertive stance in the region. Beijing claims almost all the South China Sea, which is believed to contain massive oil and gas deposits and through which billions of dollars in trade passes each year. Harris pledged on Nov 21 the United States would defend the Philippines if it came under attack in the waterway, reaffirming Washington’s “unwavering” commitment to its former colony. Her comments followed a meeting with President Ferdinand Marcos Jr., who welcomed Harris for the first time at the Philippine presidential palace. Marcos said the two nations’ strong ties had become even more important, given what he called “upheavals” in the region. Harris’ visit to the Philippines, the highest-level trip to the Philippines by a Biden administration official, is seen as part of Washington’s effort to revive ties with Manila, which moved closer to China under former President Rodrigo Duterte. “We stand with you in defence of international rules and norms as it relates to the South China Sea,” Harris told Marcos. Click here to read…

Putin expresses regret over Donbass

The Donbass republics should probably have rejoined Russia sooner, Russian President Vladimir Putin said at a meeting with the mothers of troops involved in the military operation in Ukraine on Nov 25. In such a case, fewer lives might have been lost, the president stressed. “There might not have been so many casualties among civilians, there would not be so many children killed,” the Russian leader suggested. He maintained, however, that back in 2014, Russia did not have a full understanding of the situation in Donbass or of the true sentiments of the locals. “[We] believed that we might still be able to reach an agreement and … reunify Donetsk and Lugansk with Ukraine within … the Minsk Agreements,” Putin noted, adding that Russia was “genuinely working towards that.” Commenting on the matter further, the president blamed the 2014 coup in Kiev for the subsequent crisis in Donbass and the conflict between Russia and Ukraine. “If not for the coup d’état in Ukraine in 2014, none [of this] would have happened,” he said. Brokered by Germany and France, the Minsk Agreements were first signed in 2014 in the wake of the ousting of then-President Viktor Yanukovich, which plunged Ukraine into a conflict between the post-coup government in Kiev and the Donetsk and Lugansk regions. Having subsequently become the respective people’s republics, the territories declared their independence from Ukraine the same year. Click here to read…

Russian MOD reveals details of latest strikes against Ukraine

Moscow undermined Ukraine’s ability to move weapons and soldiers to the frontline by conducting long-range, high-precision strikes on Nov 23 against command centers and energy infrastructure, the Russian Defense Ministry has said. “The goal of the strikes has been accomplished. All designated targets have been hit,” Defense Ministry spokesman Lieutenant General Igor Konashenkov told reporters during his daily briefing. He added that the actions of his country’s aircraft, warships and ground troops had “disrupted the deployment of Ukrainian reinforcements, foreign weapons, military hardware and munitions to the combat areas by rail.” Konashenkov insisted that Russian troops did not target Kiev. “All of the destruction reported by the Kiev authorities was caused by the falling missiles that were [fired] from foreign-made and Ukrainian air defence systems stationed in the residential areas of the Ukrainian capital,” he said. The statement came after Ukrainian President Vladimir Zelensky accused Russia of having deliberately killed civilians. Kremlin spokesman Dmitry Peskov rejected this claim on Nov 24, maintaining that Moscow only hits military-related targets. Click here to read…

Health
Chinese cities break from COVID easing edict as cases smash record

Cities across China are ignoring a government edict to ease COVID-19 restrictions as they struggle to contain a surge in infections, which smashed a daily case record Nov 24. Beijing this month announced it would relax a controversial zero-COVID strategy, but the rapid spread of highly infectious variants is putting local governments between a rock and a hard place as they scramble to balance those top-down orders against their own efforts to bring down cases while keeping their economies afloat. “So far … the central government’s attempt to minimize economic disruption and improve COVID containment has achieved neither goal, with outbreaks getting more widespread and more cities having to deploy restrictions to get them under control,” Ernan Cui, an analyst at Beijing-based research firm Gavekal Dragonomics, said in a report. The challenges were highlighted on Nov 24 as China recorded 31,444 daily infections, surging past a previous pandemic peak set in April when the financial capital, Shanghai, was plunged into a gruelling two-month lockdown. The National Health Commission’s latest playbook called on local governments to avoid full lockdowns — previously a centrepiece of China’s efforts to contain the virus — and also make it easier for residents to travel across provinces. But local authorities are not following suit as they battle spiking case rates — ramping up COVID control costs that are stretching their budgets. Click here to read…

Avian flu outbreak wipes out 50.54 mln U.S. birds, a record

Avian flu has wiped out 50.54 million birds in the United States this year, making it the country’s deadliest outbreak in history, U.S. Department of Agriculture data showed on Nov 24. The deaths of chickens, turkeys and other birds represent the worst U.S. animal-health disaster to date, topping the previous record of 50.5 million birds that died in an avian-flu outbreak in 2015. Birds often die after becoming infected. Entire flocks, which can top a million birds at egg-laying chicken farms, are also culled to control the spread of the disease after a bird tests positive. Losses of poultry flocks sent prices for eggs and turkey meat to record highs, worsening economic pain for consumers facing red-hot inflation and making Nov 24’s Thanksgiving celebrations more expensive in the United States. Europe and Britain are also suffering their worst avian-flu crises, and some British supermarkets rationed customers’ egg purchases after the outbreak disrupted supplies. The U.S. outbreak, which began in February, infected flocks of poultry and non-poultry birds across 46 states, USDA data show. Wild birds like ducks transmit the virus, known as highly pathogenic avian influenza (HPAI), through their faeces, feathers or direct contact with poultry. “Wild birds continue to spread HPAI throughout the country as they migrate, so preventing contact between domestic flocks and wild birds is critical to protecting U.S. poultry,” said Rosemary Sifford, the USDA’s chief veterinary officer. Click here to read…

Global Developments and Analysis: Weekly Monitor, 14 November – 20 November, 2022

Economic
World population hits 8 billion

The United Nations (UN) on Nov 11 called for solidarity in advancing sustainable development as the world’s population hit 8 billion. The UN said in a press release that the 8-billion-mark is “a clarion call” for ­humanity to meet its shared ­responsibility to protect people and the planet, starting with the most vulnerable ones. “Unless we bridge the yawning chasm between the global haves and have-nots, we are setting ourselves up for an 8-billion-strong world filled with tensions and mistrust, crisis and conflict,” UN Secretary-General Antonio Guterres said. While the world’s population is expected to grow to around 10.4 billion in the 2080s, the overall rate of growth is slowing down. The world is more demographically diverse than ever before, with countries facing starkly different population trends ranging from growth to decline. Today, two-thirds of the global population live in a low fertility context, where the lifetime fertility is below 2.1 births per woman. At the same time, population growth has become increasingly concentrated among the world’s poorest countries, most of which are in ­sub-Saharan Africa. Against this backdrop, the global community must ensure that all countries are equipped to provide a good quality of life for their populations and can lift up and empower their most marginalized people, according to the release. Click here to read…

Explainer | 4 weaknesses in China’s economy, from local government finances to poor regulation

Deteriorating local government finances, weak banks and inadequate regulation are among the main risks facing China’s economy, according to senior officials and regulators who have recently published candid assessments following the agenda-setting 20th party congress. Vice-Premier Liu He, central bank governor Yi Gang, Minister of Finance Liu Kun and banking and insurance regulator chairman Guo Shuqing have all reflected on the dangers facing the state-dominated financial system, though they have not outlined specific improvements. None of the officials have made it onto the list of the Central Committee of the Chinese Communist Party – the party’s top decision-making body – unveiled at the 20th party congress, a sign that they may step down from their roles next year. Their views carry weight nonetheless and come amid growing concern about Beijing’s policy direction. Liu He, the top economic adviser to President Xi Jinping, has said China’s economy is facing “triple pressure” from shrinking demand, a supply shock, and weakening expectations. But he has also stressed China would not engage in “flood-like” stimulus, and that the policy focus should be on avoiding economic volatility while aiming for “reasonable” growth. Weakening local government finances have been a growing concern as China’s zero-Covid policy has ramped up fiscal costs, while the slump in the property market has put a dent in local governments’ revenue. Click here to read…

Officials elaborate on new development opportunities in China for foreign businesses

Senior Chinese officials on Nov 15 elaborated on new opportunities for foreign businesses in China’s new development pattern and high-quality development. Speaking to over 200 representatives from foreign businesses attending a meeting, online or in person, Zhao Chenxin, deputy director of the National Development and Reform Commission, stressed the openness of the new pattern of development that features positive interplay between domestic and international economic flows. While fully stimulating and unleashing the potential of its domestic demand, China will in the meantime deepen international economic and trade cooperation and deeply involve itself in the global industrial division of labour and cooperation, Zhao said. In the face of global volatility, China’s new development will offer new opportunities to the world, Zhao said. While one of China’s objectives and tasks for the next five years is to make new strides in reform and opening-up, Vice Minister of Commerce Sheng Qiuping called on foreign firms to actively seize three opportunities in the period. Sheng cited opportunities in the building of a unified national market, in the institutional opening-up and improved business environment, and in deepened international cooperation. Click here to read…

Top US-China panel urges halt to normal trade relations if no WTO compliance

Congress should suspend normal trade relations with China if Washington determines Beijing has not complied with the World Trade Organization market access agreement it signed decades ago, the US government’s top advisory panel on China policy said on Nov 15. In a sweeping annual report comprising 39 recommendations and covering nearly every aspect of the bilateral relationship, the US-China Economic and Security Review Commission also called on US lawmakers to study the feasibility of blockading Chinese energy imports in the event of a military conflict involving Beijing, particularly those transiting the Strait of Malacca. And in the latest sign of Washington’s growing alarm that Chinese leader Xi Jinping may attempt to invade Taiwan, the panel urged Congress to put more manpower into preparing for economic punishment and military resistance against Beijing if it were to attack the self-governed island. “Xi’s personal and strategic ambitions for his and China’s place in history are clearer than they’ve ever been before,” said Alex Wong, the commission’s chairman, on Nov 15. “And so is the need for the United States to take resolute steps to preserve and defend our interests and ideals in response.” The 785-page report comes as tensions between Washington and Beijing flare at their highest level in years, and it reflects the enormous distrust in Washington towards Beijing on essentially every aspect of the relationship – from trade policy to human rights to its sabre-rattling towards Taiwan. Click here to read…

COP27: UN climate summit applauds historic ‘loss and damage’ fund, but disappointed emissions deal

For the first time the nations of the world decided to help pay for the damage that climate change has done to poor countries, but they finished marathon climate talks on Nov 20 with a deal that does more to address the impacts of the burning of fossil fuels than actually fight climate change’s cause. The decision establishes a fund for what negotiators call loss and damage. It is a big win for poorer nations which have long called for cash – sometimes viewed as reparations – because they are often the victims of climate worsened floods, droughts, heatwaves, famines and storms despite having contributed little to the pollution that heats up the globe. The agreement struck in this Egyptian Red Sea resort city is a victory for developing nations that have for decades fought for some form of compensation for the “loss and damage” they’re suffering due to floods, droughts, famine, heatwaves and storms worsened by climate change despite emitting a small fraction of heat-trapping carbon pollution. Early on Nov 20 morning, delegates approved the compensation fund but had not dealt with the contentious issues of an overall temperature goal, emissions cutting and the desire to target all fossil fuels for phase down. Click here to read…

Dutch minister says can’t blindly follow US diktat on China chip export curbs

The United States shouldn’t expect the Netherlands to unquestionably adopt its approach to China export restrictions, a senior Dutch official warned, signalling a potential obstacle to the Biden administration’s trade fight. “The Netherlands will not copy the American measures one-to-one,” Dutch Foreign Trade Minister Liesje Schreinemacher said in an interview with newspaper NRC published on Nov 18. “We make our own assessment – and we do this in consultation with partner countries such as Japan and the US.” The comments marked the first time Dutch officials have publicly outlined their stance on the issue. The Biden administration is pushing for a multilateral agreement to impose restrictions on China, aiming to keep advanced chip technologies away from the country – and its military. Schreinemacher’s statement highlighted the significant challenges the US is facing in persuading allies to join its campaign. While the Netherlands and Japan share many of the US’s security concerns, the two countries also see China as a major market that they would like to maintain access to. The Netherlands are key to the struggle because the country’s ASML Holding NV is one of a handful of companies that dominate the market for semiconductor-manufacturing equipment. Its peers include Applied Materials Inc., Lam Research Corp. and KLA Corp. in the US, and Tokyo Electron Ltd. in Japan. Click here to read…

China open to role in Bangladesh river project under India’s nose

A billion-dollar project to restore and manage a crucial river in Bangladesh is back on the table, with China showing a willingness to fund the endeavour, though even the Chinese ambassador has hinted at potential concerns over how regional rival India might react. The project centers on the Teesta River, which originates in the eastern Himalayas and flows through the Indian states of Sikkim and West Bengal before entering Bangladesh. The waterway has long been a source of friction between India and Bangladesh: Dam construction in India means farmers in northern Bangladesh lack water in the dry season and face inundation in the wet season. In 2011, the leaders of India and Bangladesh agreed to direct their officials to pursue a deal for sharing water from the Teesta during dry seasons on a “fair and equitable basis.” But a final agreement has been elusive, and this September, after Prime Minister Sheikh Hasina visited India, farmers were left disappointed over the lack of progress. Hasina only came away with a nonbinding pact on sharing water from the Kushiyara River, considered less important than the Teesta. According to a study by the Asia Foundation, nearly 21 million Bangladeshis directly or indirectly depend on the Teesta River for their livelihoods. Click here to read…

Indonesia bags pledges for $71bn from G-20 presidency: Jokowi

Indonesia is on a roll. Chairing the Group of 20 major economies this year has propelled it into the global spotlight. The G-20 summit in Bali this week has generally been considered a success, and certainly given a boost to Indonesia’s global standing. The bonus for Southeast Asia’s largest economy is billions of dollars in new investment and funding pledges to support its goal of becoming a low-carbon industrial powerhouse. There is at least $20 billion in financial commitments under the Just Energy Transition Partnership from developed nations. Big names like Amazon, Hyundai Motor and Chinese battery giant Contemporary Amperex Technology (CATL) have also made major investment announcements. Indonesian President Joko “Jokowi” Widodo sat down for an exclusive interview with Nikkei Asia on Nov 17 in the aftermath of the Bali gathering. Apart from sharing his inside story on the “fierce” debates over Ukraine during the G-20 meetings, the president talked about funding pledges, support for his new capital city project, Indonesia’s newly-announced 2036 Olympic bid and its chairing of the Association of Southeast Asian Nations (ASEAN) next year. There are a total of 140 projects and programs worth around $71.4 billion. Nearly all of the money is aimed at developing the green economy energy transition. Click here to read…

Artemis puts US in the lead to mine the Moon

NASA has just launched its first rocket in the Artemis program, which will, among other things, take scientific experiments to produce metal on the Moon. In recent years, a number of businesses and organizations have ramped up efforts to establish technologies on the Moon. But doing work in space is expensive. Sending just one kilogram of material to the Moon can cost US$1.2 million. What if we could save money by using the resources that are already there? This process is called in-situ resource utilization, and it’s exactly what astro-metallurgy researchers are trying to achieve. Why the Moon? The Moon has amazing potential for future space exploration. Its gravity is only one-sixth as strong as Earth’s, which makes it much easier to fly things from the Moon to Earth’s orbit than to fly them direct from Earth. And in an industry where every kilogram costs a fortune, the ability to save money is extremely attractive. Although people have been looking at making oxygen and rocket fuel in space for decades, the Artemis program marks the first time we have solid plans to make and use metal in space. What’s out there? There are two main geological regions on the Moon, both of which you can see on a clear night. The dark areas are called the maria and have a higher concentration of iron and titanium. The light areas are called the highlands (or terrae) and have more aluminium. Click here to read…

South Korea, Saudi to boost ties on energy, defence; $30 billion in deals signed

South Korean and Saudi Arabian leaders pledged stronger ties on Nov 17 in the fields of energy, defence industry and building projects, as the oil-rich kingdom signed investment agreements worth $30 billion with South Korean companies. South Korean President Yoon Suk-yeol told Saudi Arabia’s Crown Prince Mohammed bin Salman he hoped the two nations can expand cooperation, calling the Middle Eastern country a key partner for its economy and energy security. Yoon held talks in Seoul with Prince Mohammed, who arrived on Nov 17 from Bali, Indonesia, where he had participated in a conference of the Group of 20 (G20) major economies. Yoon hoped to see South Korean companies’ participation in projects such as the NEOM smart city project in Saudi Arabia and further cooperation in defence industry and future energy such as hydrogen, his office said in a statement. Prince Mohammed noted the role of South Korean businesses over the years in the development of Saudi Arabia’s national infrastructure and wanted to see stronger cooperation with South Korea based on the trust built between the two countries. “In particular, he said he would like to drastically strengthen cooperation with South Korea in the areas of defence industry, infrastructure and construction,” Yoon’s office said. Earlier, South Korea’s industry ministry said companies including Samsung C&T Corp and POSCO Holdings Inc had signed over 20 agreements with Saudi counterparts in fields such as energy cooperation, railways, chemicals, pharmaceuticals and gaming. Click here to read…

China signs 27-year gas deal with Qatar Energy to secure supply

Qatar Energy has signed a 27-year deal to supply China’s Sinopec with liquefied natural gas (LNG) in the longest such agreement to date, as volatility drives buyers to seek long-term supplies. Since Russia’s invasion of Ukraine in February, competition for LNG has become intense, with Europe, in particular, needing vast amounts to help replace Russian pipeline gas that used to make up almost 40 percent of the continent’s imports. European companies looking to buy LNG needed to look at how Asian buyers were approaching their own negotiations and were willing to lock into long-term deals, Qatar Energy chief Saad al-Kaabi told the Reuters news agency shortly before signing the Sinopec deal. “Today is an important milestone for the first sales and purchase agreement (SPA) for North Field East project, it is 4 million tonnes for 27 years to Sinopec of China,” al-Kaabi said. “It signifies long-term deals are here and important for both seller and buyer,” he said in an interview in Doha, adding that the deal was the LNG sector’s largest single sales and purchase agreement on record. The North Field is part of the world’s biggest gas field that Qatar shares with Iran, which calls its share South Pars. Nov 21’s deal, confirmed by Sinopec, is the first supply deal to be announced for NFE. Click here to read…

Chinese Refiners Seek Government Help To Keep Russian Oil Flowing

Chinese state refiners have sought help from the country’s government to secure the continued flow of Russian crude oil after EU sanctions on the commodity enter into effect next month, according to unnamed sources cited by Bloomberg. The sanctions—part of an EU embargo on Russian crude—are coordinated with the G7 price cap on Russian oil exports, and involve a ban on the financing, shipping, and insurance of Russian oil cargoes to any country that does not comply with the cap, which has yet to be set.According to the Bloomberg report, some of the solutions on the table include higher volumes of pipeline oil coming from Russia into China, the establishment of a designated bank to handle the payments, and ship-to-ship transfers, which are commonly used in the transportation of sanctioned Iranian oil. Meanwhile, India is also preparing for the EU Russian oil embargo: it has increased its intake of Russian crude, importing 900,000 bpd in October, according to Indian media. The amount was the highest on record and represented 22 percent of India’s total oil imports for that month. According to Bloomberg sources, the Chinese authorities have not yet settled on a solution to the embargo-related challenges to continued supplies of Russian oil. Click here to read…

OPEC cuts oil demand growth forecast again as economic challenges mount

OPEC on Nov 14 cut its forecast for 2022 global oil demand growth for a fifth time since April and also trimmed next year’s figure, citing mounting economic challenges including high inflation and increases to interest rates. Oil demand in 2022 will rise by 2.55 million barrels per day (bpd), or 2.6 percent, the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report, down 100,000 bpd from the previous forecast. “The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter of 2022,” OPEC said in the report. “Downside risks include high inflation, monetary tightening by major central banks, high sovereign debt levels in many regions, tightening labour markets and persisting supply chain constraints.” This report is the last before OPEC and its allies, together known as OPEC+, meet on Dec. 4 to set policy. The group, which recently cut production targets, will remain cautious, Saudi Arabia’s energy minister was quoted as saying last week. For October, with oil prices weakening on recession fears, the group made a 100,000 bpd cut to the OPEC+ production target, with an even bigger reduction starting in November. Click here to read…

Germany completes first LNG import terminal

German authorities have inaugurated the first of five planned floating terminals, intended to receive liquefied natural gas (LNG) at the North Sea port of Wilhelmshaven. The country is scrambling to secure energy supplies as it tries to move away from Russian pipeline gas. Germany is reportedly short about 50 billion cubic meters of gas in yearly deliveries as a result of the reduction of imports from Russia. The nation’s previous attempts to diversify gas supplies have contributed to the current energy crunch. EU sanctions pressure, technical problems, as well as the sabotage of the Nord Stream pipelines, have further exacerbated the problem. The facility is expected to become functional around the turn of the year, along with a second floating terminal at the Brunsbuettel North Sea port, according to Economy Minister Robert Habeck, who boasted that the project had been completed in just 200 days. The Wilhelmshaven floating storage and regasification unit (FSRU), for utility Uniper, will be moored at an expanded pier and will have the capacity to regasify LNG arriving on tankers. Habeck added that another three FSRUs would be deployed in the coming months – one in Stade on the Elbe River near Hamburg, and two in Lubmin on the Baltic Sea. Another one in Wilhelmshaven will be added in the fourth quarter of 2023. Click here to read…

At least two million Ukrainians will migrate in winter – WHO

This winter may be a “life-threatening” experience for “millions” of Ukrainians, Hans Kluge, the World Health Organization (WHO) regional director for Europe, has warned. Up to three million Ukrainians are expected to migrate “in search of warmth and safety,” Kluge said on Nov 21 during a press conference in Kiev. “We expect 2–3 million more people to leave their homes in search of warmth and safety. They will face unique health challenges, including respiratory infections such as Covid-19, pneumonia and influenza, and the serious risk of diphtheria and measles in under-vaccinated populations,” Kluge stated. Those who remain at home will likely be forced to opt for “alternative heating methods,” the official said, warning that doing things “like burning charcoal or wood, or using generators fuelled by diesel, or electric heaters” carry health risks as well. They include “exposure to toxic substances that are harmful for children, older people and those with respiratory and cardiovascular conditions, as well as accidental burns and injuries,” he said. The ongoing conflict is also taking a heavy toll on the mental health of Ukrainians, according to Kluge. Some 10 million of them are already “at risk of mental disorders such as acute stress, anxiety, depression, substance use and post-traumatic stress disorder, or PTSD,” the official said. Click here to read…

Strategic
Highlights of Xi-Biden meeting ahead of G20 summit in Indonesia

Chinese President Xi Jinping and his U.S. counterpart, Joe Biden, had a candid and in-depth exchange of views here on Nov 14 on issues of strategic importance in China-U.S. relations and on major global and regional issues. The following are some of the highlights of their first in-person meeting since Biden became president of the United States. PUT CHINA-U.S. TIES BACK ON TRACK. President Xi pointed out the current state of China-U.S. relations is not in the fundamental interests of the two countries and peoples, and is not what the international community expects. China and the United States need to have a sense of responsibility for history, for the world and for the people, explore the right way to get along with each other in the new era, put the relationship on the right course, and bring it back to the track of healthy and stable growth to the benefit of the two countries and the world as a whole. OPEN, TRANSPARENT DOMESTIC, FOREIGN POLICIES. Xi pointed out that the domestic and foreign policies of the CPC and the Chinese government are open and transparent, with clearly stated and transparent strategic intentions and great continuity and stability. Click here to read…

China’s defence minister tipped to lead talks with US military, but sanctions on likely successor may pose early challenge

China is expected to send the outgoing defence minister Wei Fenghe to represent it in the first talks with the United States military since Nancy Pelosi’s trip to Taiwan earlier this year prompted Beijing to freeze dialogue with the Americans. One major issue China wants to resolve in the talks with Wei’s US counterpart Lloyd Austin is the sanctions imposed in 2018 on Wei’s probable successor, Li Shangfu. Li, a general who was promoted to the Central Military Commission last month, is in line to succeed Wei in March next year. However, Li was sanctioned over China’s purchase of Russian Su-35 combat jets and S-400 air defence missile systems when he was director of China’s Equipment Development Department. The two countries are expected to resume talks, including on military matters, following the meeting between presidents Joe Biden and Xi Jinping on the Indonesian island of Bali on Nov 14. Afterwards Biden told a news briefing that Austin and national security adviser Jake Sullivan would “be engaging with their counterparts from China”. Beijing suspended dialogues on defence, climate change and cooperation on fighting the international drug trade after the US House speaker’s visit to Taiwan in August, which China regarded as a major breach of its sovereigntyClick here to read…

Top US House Republican Kevin McCarthy vows a hard line on China

The US House of Representatives may form a new panel focused solely on Beijing in the Republican-controlled Congress that begins in January, the Republican Party’s top House lawmaker said on Nov 20. “When I become speaker, I’m going to have a select committee on China,” California representative Kevin McCarthy, the House Republican leader, said in an interview on Fox News. He vowed to “no longer allow the administration to sit back and let China do what they are doing to America”. The comments were the latest sign of the added pressure from Congress that US President Joe Biden will face to take a hard line on Beijing beginning in January, when the new class of lawmakers is sworn in. Nearly two weeks after the US midterm elections, Republicans have so far narrowly clinched control of the House for the upcoming Congress by one seat, but the final size of their majority remains unclear with five races still too close to call. Democrats retained control of the Senate. McCarthy is vying to become the next Speaker of the House, and to do so, he would need 218 votes from House lawmakers – one more than half of the chamber’s 435 representatives. It is currently unclear if McCarthy will have sufficient support among Republicans to claim the Speaker’s gavel. In an internal party vote last week, Republican House lawmakers voted 188-31 to make him their party’s nominee for Speaker, according to Reuters. Click here to read…

Xi announces 3rd Belt & Road forum to be held in 2023, calls on Asia-Pacific to up cooperation to new height

Addressing the APEC Economic Leaders’ Meeting in Bangkok, Thailand on Nov 18, Chinese President Xi Jinping commended economic cooperation in the Asia-Pacific over the past several decades that has led to an “Asia-Pacific miracle,” and called for the joint building of an Asia-Pacific community with a shared future and taking Asia-Pacific cooperation to a new height. He also announced that Beijing is to consider holding the third Belt and Road Forum for International Cooperation next year to give a new boost to development and prosperity in Asia-Pacific and the wider world. The Chinese president’s remarks at the first in-person APEC economic leaders’ meeting in four years offered a vigorous rebuttal to increasing attempts by certain economies and other forces to actively instigate tension within the region and seriously undermine regional cooperation. They also provided much-needed relief for regional economies that are becoming increasingly uneasy over growing tensions, Asia-Pacific business representatives and analysts noted. At the APEC Economic Leaders’ Meeting and other related events in Bangkok, many attendees also drew a stark contrast between China’s growing leadership role and the US’ diminishing presence. Click here to read…

West African countries mull standby force to suppress region’s insurgencies

Seven member states of the Accra Initiative, a West African security cooperation initiative, are considering setting up a standby military force to deal with armed insurgencies within the region, a Ghanaian minister said Nov 20. Albert Kan Dapaah, the Ghanaian National Security Minister, disclosed this at a press briefing to throw more light on steps so far to protect the territorial integrity of member states and the sub-region in general. “We are seriously considering establishing a standby force, but the form it would take is still under consideration,” Dapaah disclosed. “The respective chiefs of defence staff from our member states have been holding discussions on the details of the standby force, and once we are ready, we would inform the general public on the form it would take,” he said. He disclosed that porous borders in the sub-region and ungoverned spaces in the various countries were some of the key attractions to the armed insurgents and the jihadist groups.”One of our key considerations is ensuring that there are not many ungoverned territories in our member countries. We will also make it difficult for the jihadists to radicalize youth in border communities,” said Dapaah. Click here to read…

Iran rejects draft resolution calling for cooperation with IAEA

The Iranian nuclear chief said on Nov 16 the draft of an anti-Tehran resolution prepared for adoption at the ongoing meeting of the International Atomic Energy Agency (IAEA) Board of Directors “lacks validity” and is “rejected” by Iran. President of the Atomic Energy Organization of Iran (AEOI) Mohammad Eslami made the remarks to reporters on the sidelines of a cabinet meeting, in reaction to Nov 16’s meeting of the IAEA Board of Directors and a potential resolution to be adopted during the session against Tehran, according to Iran’s official news agency IRNA. On Nov 15, diplomats revealed that the United States, Britain, France and Germany had submitted a resolution to the IAEA calling on Iran to cooperate fully with the UN nuclear watchdog, according to media reports. Eslami said Iran has an “approved, written and announced” nuclear program and will continue its activities within its framework, noting that AEOI has responded to every allegation made by the IAEA. He added that if relevant parties had the necessary goodwill and sought to continue the negotiations on the revival of a 2015 nuclear deal, they would not have presented the draft of an anti-Tehran resolution. IAEA director general Rafael Grossi has said on several occasions that Iran failed to cooperate with the watchdog after uranium traces were identified at three “undeclared” sites in the country. Click here to read…

Malaysia election 2022: tight race indicates hung parliament for first time ever

Malaysia’s political parties must each present the name of a lawmaker it thinks has the majority support in the lower house of parliament, the palace said on Nov 20 after no coalition secured a majority in Nov 19’s general election. The parties must submit names before 2pm (0600 GMT) on Nov 21, the palace said in a statement, adding that the king’s decision on the new government and appointment of the premier will be final, in line with the constitution. The ruler has the discretion to name the premier whom he believes commands the majority support of lawmakers. The country’s rival blocs are seeking support from others to build a majority alliance to form a government. The king can appoint as prime minister a lawmaker he believes will command a majority in parliament. The country is facing a hung parliament for the first time in its history. Long-time opposition leader Anwar Ibrahim’s coalition won the most seats in Nov 19’s general election, results from the Election Commission showed. The biggest surprise came from former premier Muhyiddin Yassin who led his Perikatan Nasional bloc to a strong showing, pulling support from the incumbent government’s traditional strongholds. Click here to read…

Philippines to accelerate U.S. defence deal on base access

The Philippines on Nov 15 said it will speed up the implementation of a defence agreement that allows U.S. troops to rotate for extended periods and access local military bases. Manila is also in talks with Washington regarding additional sites to be covered under the Enhanced Defense Cooperation Agreement, including areas near Taiwan and the disputed South China Sea. “The Department is committed to accelerate the implementation of the EDCA by concluding infrastructure enhancement and repair projects, developing new infrastructure projects at existing EDCA locations, and exploring new locations that will build a more credible mutual defence posture,” the Department of National Defense said in a statement. It added that $66.5 million has been earmarked to implement EDCA projects in agreed locations starting next year, including runway repairs and construction of warehouses for training as well as for humanitarian and disaster response. Signed in 2014, amid increased tensions in the South China Sea, EDCA was aimed at advancing the 1951 Mutual Defense Treaty between the U.S. and the Philippines through increased interoperability between both countries’ militaries. But its implementation faced delays under former President Rodrigo Duterte, who forged closer ties with China. Duterte was critical of the EDCA and once threatened to terminate the 1998 Visiting Forces Agreement, which facilitates the entry of U.S. troops into the PhilippinesClick here to read…

Voting begins in Nepal amid economic, political stability concerns

The election pits the ruling alliance of the Nepali Congress party, led by Prime Minister Sher Bahadur Deuba and some former Maoist rebels, against the Nepal Communist Unified Marxist Leninist (UML) party. There are no pre-election polls, but political analysts expect the ruling alliance to retain power. Polls close at 5 p.m. (1115 GMT), the Election Commission said. It could take up to two weeks to declare final results. “We need political stability for faster growth of the economy and a government that can guarantee security to investors,” said another voter, Prakash Thapa, 25. About 18 million people are eligible to vote for the 275-member parliament and the 550 members of seven provincial assemblies through a mix of first-past-the-post and proportional representation systems. The government has declared a holiday for Nov 20, which is a working day in Nepal. Political stability has proven elusive for the poor nation, wedged between China and India, discouraging many investors. Nepal has had 10 governments since the abolition of a 239-year-old monarchy in 2008. Political parties have promised to bring down prices, create jobs and boost the economy at nationwide rallies. Click here to read…

N. Korea unveils Kim’s daughter at missile launch site

North Korea has unveiled the little-known daughter of its leader Kim Jong Un at a missile launch site, attracting keen attention on a fourth-generation member of the dynastic family Nov 19 that Kim had observed the launch of its new type of intercontinental ballistic missile with his wife Ri Sol Ju, their “beloved daughter” and other officials the previous day. Kim said the launch of the Hwasong-17 missile — the North’s longest-range, nuclear-capable missile — proved he has a reliable weapon to contain U.S.-led military threats. The main Rodong Sinmun newspaper also released a slew of photos of Kim watching a soaring missile from a distance with his daughter. Other photos showed her with her hair pulled back, wearing a white coat and a pair of red shoes as she walked in hand-in-hand with her father by a huge missile atop a launch truck. It’s the first time for North Korea’s state media to mention the daughter or publicize her photos. KCNA didn’t provide further details about her like her name and age.Much of Kim’s private life is still unknown. But South Korean media reported Kim married Ri, a former singer, in 2009, and that the couple have three children who were born in 2010, 2013 and 2017. Click here to read…

Kishida, Xi agree on closer communication over security

Prime Minister Fumio Kishida appeared satisfied after his meeting with Chinese President Xi Jinping on Nov. 17, the first face-to-face talks between the leaders of the two nations in three years. “This was a good start for creating a constructive and stable Japan-China relationship as well as for pushing along dialogue,” Kishida said after the 45-minute meeting. Although Kishida raised a number of Japanese concerns, including Chinese military action near the disputed Senkaku Islands of Okinawa Prefecture, the two leaders agreed to seek closer communication regarding national security issues not only between themselves but at various levels among the two nations. Kishida told reporters that a “frank discussion” was held on not only problem areas between the two nations but also on possible cooperation in the economic sphere and on climate change. The novel coronavirus pandemic created a huge roadblock for bilateral meetings over the past three years. In the meantime, the intensifying friction between China and the United States led to an escalation of military activity by Beijing, especially in relation to Taiwan. Japanese government officials were hoping that Kishida’s meeting with Xi would serve as a catalyst for rebooting the bilateral relationship. “By showing the prime minister meeting with Xi, Xi’s associates and other officials in China, where he has intensified his hold on power, will likely act through their interpretation of what he wants,” a high-ranking Foreign Ministry official said. Click here to read…

Albanese-Xi meeting no panacea but a solid first step

There were smiles all around as the Australian and Chinese leaders met formally for the first time in more than six years. The meeting was brief, just 32 minutes, but Prime Minister Anthony Albanese led afterward with the message that it “was a positive and constructive discussion.” President Xi Jinping said in his opening remarks that the difficulties in the bilateral relationship were not what the Chinese side wanted to see. Yet beyond conciliatory words and photo opportunities, the Australian public is being hit with contrasting takes on what the meeting means for relations with our most important trading partner and the “big guy” in the regional room. On one hand, it’s been described as a “landmark” and “historic” event – a “huge reset” of Australia-China ties. What’s conjured up are images of wine and rock lobster flowing freely through Chinese customs once again, and the detained Australians Yang Hengjun and Cheng Lei stepping off the prime ministerial jet alongside Albanese when it lands in Sydney later this week. Others, however, are keen to moderate expectations. Treasurer Jim Chalmers warned earlier this week that “I don’t think anybody pretends that some of the issues that China has raised, certainly some of the issues that we have raised, will be solved overnight.” The reality is that Canberra and Beijing’s assessments of their respective interests remain far from aligned. Click here to read…

Washington reveals details of high-profile US-Russia talks

The recent unannounced meeting of top Russian and US spies in Ankara was meant to maintain dialogue between two powers, US National Security Council spokesman John Kirby told US media on Nov 15. Speaking to Bloomberg, Kirby was asked to comment on the talks in Türkiye’s capital, which involved Sergey Naryshkin, director of Russia’s Foreign Intelligence Service (SVR), and CIA Director Bill Burns. “This was really about keeping the channels of communication with Russia open on issues that affect both our security’s futures,” the official said, adding that Burns’ sit-down with Naryshkin was “all about routine channels of communication” that Washington has with Moscow at various levels. Kirby noted that in recent weeks US Secretary of Defense Lloyd Austin and the Chairman of the Joint Chiefs of Staff Mark Milley spoke with their respective Russian counterparts. By doing so, the US is “making sure that… there won’t be any miscalculations,” the official said. At the same time, Kirby didn’t say whether the parties discussed US citizens that are currently in Russian custody, noting that he was not present at the meeting. “The main purpose was to talk about issues around strategic stability,” he said. Previously, the White House said that the Ankara talks didn’t have anything to do with the Ukraine conflict and revolved around nuclear weapons and US citizens that had been detained in Russia. Click here to read…

Top US general warns of reality on the ground in Ukraine

Ukraine’s chances of a near-term military victory over Russia are not high, top US general Mark Milley has cautioned. He noted that despite Kiev’s recent advances on the battlefield and the capture of the city of Kherson, Moscow still has a significant combat presence in the country. Speaking at a news conference at the Pentagon on Nov 16, Milley stated that “the probability of a Ukrainian military victory defined as kicking the Russians out of all of Ukraine to include what they define or what the claim is Crimea, the probability of that happening anytime soon is not high, militarily.” The general noted, however, that there was a possibility of a “political solution” that would see Russia withdraw from territories Ukraine claims as its own, adding that Russia “is on its back” right now and that Ukraine needs to negotiate from a “position of strength.” Milley also reiterated Washington’s support for Kiev and vowed to continue for as long as it takes – a statement that was echoed by US Defense Secretary Lloyd Austin, who also took part in the press conference. Russia, meanwhile, says it will continue its military operation until all the goals are met. Moscow says it ordered its forces to enter the country in late February in order to protect the Donetsk and Lugansk People’s Republics, which had been under constant attack from Kiev’s forces since 2014 when a coup overthrew the nation’s elected government. Click here to read…

Russia not seeking a ‘change of power’ in Kiev – Kremlin

Russia is not seeking to depose the current Ukrainian government, Kremlin spokesperson Dmitry Peskov has revealed. He has also expressed confidence that Moscow will achieve its goals in the country, without specifying what they are. When asked by Russian journalists on Nov 21 whether the Kremlin sees regime change in Kiev as one of its military campaign’s objectives, Peskov replied “No, the president has already spoken about that.” The official went on to stress that Russia was determined to achieve its goals in Ukraine, which can be done “by various methods and in various formats.” He also assured reporters that it was not a question of ‘if’ but ‘when’. Earlier, in an interview to AIF newspaper, Vice Speaker of Russia’s Federation Council, Konstantin Kosachev, theorized that relations between Moscow and Kiev could only normalize after a change of leadership in Ukraine. He claimed that the current government in Kiev lacked flexibility and was bound by its previous actions and ideology. Russia sent troops into Ukraine on February 24, citing Kiev’s failure to implement the Minsk agreements, designed to give the regions of Donetsk and Lugansk special status within the Ukrainian state. The protocols, brokered by Germany and France, were first signed in 2014. Former Ukrainian president Pyotr Poroshenko has since admitted that Kiev’s main goal was to use the ceasefire to buy time and “create powerful armed forces.” Click here to read…

Health
COVID-19 pandemic leads to surge in superbug infections, EU agency says

Infections from some antibiotic-resistant pathogens known as superbugs have more than doubled in health care facilities in Europe, an EU agency said on Nov 17, providing further evidence of the wider impact of the COVID-19 pandemic. The European Center for Disease Prevention and Control (ECDC) report said reported cases of two highly drug-resistant pathogens increased in 2020, the first year of the pandemic, then sharply jumped in 2021. The surge stemmed from outbreaks in intensive care units of hospitals and in EU countries where antimicrobial-resistant infections were already widespread, ECDC official Dominique Monnet told a news conference. Data showed that in Europe in 2021, reported cases of the Acinetobacter bacteria group more than doubled compared with pre-pandemic annual numbers. Cases of another bacteria, Klebsiella pneumoniae, which is resistant to last-resort antibiotics, jumped by 31 percent in 2020 and by 20 percent in 2021. The report did not include data on how many people died from the infections in 2020 and 2021. Experts say it can be challenging to definitively attribute the cause of death when patients were hospitalized for COVID-19, for example.Some scientists link the rise in hospital-acquired superbug infections during the pandemic to wider antibiotic prescriptions to treat COVID-19 and other bacterial infections during long hospital staysClick here to read…

28 Chinese provinces adopt optimized measures to COVID-19 response; six cities cancel mass testing: report

A total of 28 provinces, including South China’s Guangdong Province which is hit hardest in the latest COVID-19 flare-up, announced adoption of newly optimized measures to COVID-19 response in the past five days. Moreover, six cities, including Shanghai and Sanya scrapped mass nucleic acid testing, in an effort to implement the new measures, media reported. Shandong Province in East China even cancelled the requirement for any entries into the province to hold 48-hour valid nucleic acid test, only requiring the test to be done on arrival and the arrivals to conduct three tests in five days, China Times reported on Nov 16. Guangdong which recorded thousands of cases on a daily basis also adopted the new measures. City of Shantou in Guangzhou, capital of Guangdong announced on Nov 16 no longer check 72-hour valid test result in some public places. Shantou recorded one new COVID-19 case on Nov 16. Officials in Guangzhou, also the hardest-hit city in the province, said on Nov 16 to optimize nucleic acid test according to the new measures, and focus test resources on the most severe Haizhu district and other high-risk areas. Those changes were made after China last week released 20 optimized measures, including shortened quarantine periods for international arrivals and cancelation of circuit breakers for inbound flights. Click here to read…

Global Developments and Analysis: Weekly Monitor, 07 November – 13 November, 2022

Economic
China’s economic tsar sends rare public message, warnings to future policymakers

Fresh calls by China’s economic tsar – including for continued supply-side reform and closer economic connections with the rest of the world – are not only a testament to his own legacy, they may also serve to muffle expectations for a quick and impactful stimulus. Vice-Premier Liu He’s comments came as the market has been anticipating expansionary measures in the first year of President Xi Jinping’s third term, with a shift away from the current preoccupation with debt curbing, financial de-risking, and the removal of obsolete industrial capacity. His assessment serves both as a reflection of his 10 years in the economic policymaking arena, and as a rare public message to future economic policymakers – potentially Li Qiang and He Lifeng. Liu’s words, in an article published by party mouthpiece People’s Daily on Nov 04, run contrary to a time when excessive government spending on ineffective projects resulted in a massive accumulation of dangerous debt. And they appear as a warning against an overemphasis on self-sufficiency and isolationism. “The factors restricting our country’s economic development mainly lie in the supply side, as manifested in the existence of bottlenecks, blocked points and vulnerable areas, and the current supply structure cannot adapt to the changes in the demand,” Liu wrote. Click here to read…

China’s OFDI grows 16.3% in 2021, ranking 3rd globally for 10 consecutive years: report

China’s outbound foreign direct investment (OFDI) grew 16.3 percent year-on-year to reach $178.8 billion last year, ranking the third in the world for 10 consecutive years. Of the sum, investment going to countries along the Belt and Road Initiative (BRI) reached $24.15 billion in 2021, hitting a new record, according to a report jointly issued by China’s Ministry of Commerce, National Bureau of Statistic and the State Administration of Foreign Exchange on Nov 07. The report, titled 2021 China’s OFDI Statistical Communiqué, showed that the accumulated volume of China’s OFDI reached $2.79 trillion as of the end of 2021, ranking third globally. Also, the amount of China’s OFDI basically equaled FDI inflow last year. The numbers underscore China’s role as a major source of global investment. A key takeout from the report is that China’s investment in BRI countries continue expanding despite global uncertainties and coronavirus flare-ups. According to the report, as of the end of 2021, China has set up over 11,000 companies in countries along the BRI, accounting for 25 percent of the foreign enterprises that Chinese companies set up abroad. Direct investments in countries were $24.15 billion last year, accounting for 13.5 percent of China’s total OFDI, while accumulated OFDI volume in countries reach $213.84 billion, making up 7.7 percent of the total.Click here to read…

China Eases Zero-Covid Rules as Economic Toll and Frustrations Mount

China eased pandemic controls on Nov 11, as the country’s leaders seek to lessen the pain of a stringent zero-Covid policy that has exacted a heavy economic toll and stoked rising public resentment. The newly appointed Politburo Standing Committee of the nation’s top leaders, in one of its first major decisions, set out new rules to “optimize and adjust” the policy to minimize its impact on economic growth and people’s lives, as well as further open the country’s borders to foreign visitors, according to a release Nov 11 by the National Health Commission. The new guidance shortened the mandatory quarantine time for inbound travelers and for those identified as close contacts, but notably didn’t declare an end to policies intended to completely vanquish Covid, insisting that the country “firmly stick to the dynamic zero-Covid policy.” Even so, the changes fueled a surge of Chinese and Hong Kong stocks, which were also boosted by signs of easing U.S. inflation. Hong Kong’s benchmark Hang Seng Index jumped 7.7% in its biggest single-day rally since March, taking its increase so far this month to around 18%. The Shanghai Composite closed 1.7% higher on Nov 11, while China’s CSI 300 gauge of the largest mainland-listed stocks rose 2.8%. U.S. listed China stocks also gained.Click here to read…

China plans to rescue property firms in strongest sign yet that policymakers are easing a years-long clampdown on sector

China has unveiled its most sweeping rescue package to bail out a real estate market mired in a record slowdown and deepening liquidity crunch, according to people familiar with the matter. The People’s Bank of China and the China Banking and Insurance Regulatory Commission on Nov 11 jointly issued a notice to financial institutions laying out plans to ensure the “stable and healthy development” of the property sector, said the people, asking not to be identified as the matter is private. Unlike previous piecemeal steps, the latest notice includes 16 measures that range from addressing the liquidity crisis faced by developers to loosening down-payment requirements for homebuyers, the people said. As part of the rescue plan, developers’ outstanding bank loans and trust borrowings due within the next six months can be extended for a year, while repayment on their bonds can also be extended or swapped through negotiations, the people added. The move is the strongest sign yet that Chinese policymakers are easing a years-long clampdown on the property sector, one of the biggest drags on the world’s second-largest economy along with the nation’s dogged Zero-Covid policies. Authorities also issued a sweeping set of measures to recalibrate their pandemic response on Nov 11, publicly outlining a 20-point playbook for officials aimed at reducing the economic and social impact of containing the coronavirus.Click here to read…

Air show seeks to position China as global competitor

China is displaying its latest generation fighter jets and civilian aircraft this week as it looks to carve a larger role for itself in the global arms trade and compete with Boeing and Airbus. China is currently the world’s fourth-largest arms exporter and an expanding domestic industry has allowed itself to cut off former dependence on Russia. With heavy state backing, it now competes to sell drones, warplanes and missile defense systems, as well as its staple Cold War-era ground weapons and ammunition. Military aircraft on display starting Nov 08 include the J-20 stealth fighter and YU-20 aerial tanker. The air show in the southern city of Zhuhai comes as Russia’s war on Ukraine has reduced stocks to the point that the United States has accused North Korea of supplying Soviet-era ammunition such as artillery shells to replenish Russian stockpiles. Between 2017 and 2021, China made up 4.6% of total global arms exports, placing it fourth behind the U.S., Russia and France, according to the Stockholm International Peace Research Institute. The bulk of its exports went to Pakistan, a long-time ally that shares a mutual rival in the other regional giant, India. Click here to read…

Bangladesh, IMF Reach Deal on $4.5 Billion Aid Package

Bangladesh has reached a preliminary agreement for a $4.5 billion assistance package with the International Monetary Fund as it seeks to cushion its economy from the impact of the war in Ukraine and risks posed by climate change. The emergence of Bangladesh’s export-oriented garment manufacturing industry helped turbocharge economic growth and propel average incomes—and several indicators of human well-being—above those of South Asian neighbors India and Pakistan. But high inflation, a plunging local currency and recession concerns in the U.S. and Europe—its main export markets—have placed one of the world’s fastest-growing economies of the past decade under mounting financial pressure. “Bangladesh’s robust economic recovery from the pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of the current-account deficit, rapid decline of foreign exchange reserves, rising inflation and slowing growth,” said the IMF’s mission chief to Bangladesh, Rahul Anand, at the conclusion of a two-week visit to the country on Nov 09. Since July, Bangladesh authorities have rationed electricity amid a heat wave and natural-gas shortage after shutting down all 10 of its diesel power plants as Russia’s invasion of Ukraine drove up the cost of imported fuel. Rising fuel prices and soaring living costs have sparked sporadic protests, ahead of general elections to be held by the end of next year and affected the all-important apparel industry.Click here to read…

U.S., Taiwan Kick Off Talks to Deepen Trade, Economic Ties

The U.S. and Taiwan began two days of face-to-face meetings in New York on Nov 08 aimed at strengthening trade and economic ties at a time of ramped-up tensions between Washington and Beijing. The meetings, which were disclosed earlier this year, are expected to cover areas including agriculture and digital trade. While the pact won’t be concluded at least until next year, Taiwanese officials have said that they hoped to deliver an “early harvest” in some areas in the coming months. China, which sees Taiwan as part of its territory, has condemned the trade initiative, saying the talks send a wrong signal that implies Taiwanese sovereignty. “China is always against any country negotiating economic and trade agreements of sovereign implication or official nature with China’s Taiwan region,” Chinese Embassy spokesman Liu Pengyu said. “We urge the U.S. not to repeat its wrongdoing.” This week’s meetings come as the U.S. and Chinese governments are working to arrange a meeting between President Biden and Chinese leader Xi Jinping on the sidelines of the Group of 20 summit of major economies in Indonesia in mid-November. Tensions are high between the two countries, with the White House continuing tariffs on Chinese imports approved by the Trump administration.Click here to read…

Toyota joins 7 other Japan companies to make next-generation chips

A group of eight leading Japanese companies including Toyota Motor and Sony Group will team up with the government to launch a new entity to develop and make next-generation semiconductors, Nikkei has learned, aiming to establish manufacturing processes by the late 2020s. With competition for next-generation semiconductor technology intensifying around the world, the new company will provide a platform for collaboration with U.S. companies, as well as governments. Toyota supplier Denso, NTT, chipmaker Kioxia Holdings, NEC and SoftBank are among the companies expected to invest in the project, each pouring in about 1 billion yen ($6.8 million). Tetsuro Higashi, former president of chip equipment maker Tokyo Electron, led the establishment of the new company. MUFG Bank will also participate, and the new firm will solicit further investment and cooperation from other companies. The Japanese government will support the project through subsidies and other means. The industry minister on Nov 11 announced a strategy for domestic production of advanced chips through the new firm set up by the eight leading Japanese companies, pledging to provide 70 billion yen ($494 million) in subsidies. Named Rapidus, from Latin meaning “rapid,” the new company aims to develop the next generation of logic semiconductors used in computing, known as “beyond 2-nanometer technology,” and to build a production line by the end of this decade. Click here to read…

Harvests fall in Asia and Africa as fertilizer prices soar on Ukraine war

Harvests have fallen in some parts of Asia and Africa as rising prices have made fertilizers inaccessible to farmers in developing nations, raising fears of an exacerbated food shortage. Sanctions imposed on Russia and Belarus in the wake of Moscow’s invasion Ukraine have undercut supplies of potassium chloride, a key fertilizer compound. Inorganic fertilizers require nitrogen, phosphoric acid and potassium as raw materials. Russia and Belarus together account for 40% of the global exports of potassium chloride. As a result, prices of fertilizer raw materials are 60% to 70% higher in 2022 than last year, the World Bank said in October. As the supplies decline, deep-pocketed developed countries are rushing to secure fertilizers and raw materials. The U.S. announced $500 million in subsidies for fertilizer makers in September. The subsidies are double the amount of a similar program announced in March, just after Russia invaded Ukraine. The Biden administration looks to create a national supply chain for inorganic fertilizers. Japan now imports raw materials for fertilizer mainly from Morocco and Canada, switching away from Russia and China. To ensure stable supplies of fertilizer, countries “need to shift to domestic production and diversify the supply chain” of raw materials, said Yasufumi Miwa, an agriculture expert at the Japan Research Institute.Click here to read…

Global food import bill to jump to record $1.9 trillion: FAO

The world food import bill is expected to surpass $1.9 trillion in 2022, a 10 percent increase compared with last year’s record level, the United Nations Food and Agriculture Organization (FAO) has said. The figure, released in a report (PDF) on Nov 11, marks “an all-time high” due to the depreciating values of currencies against the US dollar – the main currency of exchange on international markets – as well as Russia’s ongoing war in Ukraine. “The bulk of the increase in the [global food import] bill is accounted for by high-income countries, due mostly to higher world prices, while volumes are also expected to rise,” the report said. Consequences will be more dramatic for economically vulnerable countries, it added. “For instance, the aggregate food import bill for the group of low-income countries is expected to remain almost unchanged even though it is predicted to shrink by 10 percent in volume terms, pointing to a growing accessibility issue for these countries,” the FAO said. Sub-Saharan Africa, already hard-hit by malnutrition, is expected to spend $4.8bn more on food imports, despite a decrease in volumes. “These are alarming signs from a food security perspective,” FAO said. Russia and Ukraine together accounted for 30 percent of the world wheat trade and 78 percent of sunflower oil exports before Russia launched a full-scale invasion of its neighbour on February 24.Click here to read…

Soaring methane emissions raise stakes for Asia at COP27

One of the great disappointments overshadowing the COP27 climate change conference is how little has been achieved since COP26. Bold promises made last year in Glasgow for a renewed agenda on tackling global warming have been drowned out by Russia’s invasion of Ukraine. Nowhere is this more apparent than in the case of methane, or CH4. The most powerful greenhouse gas conservatively accounts for 17% to 20% of greenhouse emissions and is 80 times more potent than carbon dioxide in trapping heat over its first 20 years in the atmosphere. “I cannot overemphasize the urgency of targeting methane emissions,” said Juergen Voegele, the World Bank’s vice president for sustainable development, at the Global Methane, Climate and Clean Air Forum in September. Methane has mysteriously played second fiddle to CO2 in the ensemble of noxious gases that continue to drive up Earth’s temperature, which is set to rise almost 3 C by century’s end based on current trends. With the U.S. and the European Union taking the lead at COP26, over 100 countries managed to sign a nonbinding Global Methane Pledge to reduce methane emissions 30% by 2030 relative to 2020 levels. But methane was not mentioned in the COP26 summary of negotiable objectives and was not one of the four action items for defusing the “ticking doomsday device” cited by then-British Prime Minister Boris Johnson: “coal, cars, cash and trees.”
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Russia finds way around shortage of Western imports

The volume of parallel imports to Russia may exceed $15 billion in value terms by the end of the year, First Deputy Head of Russia’s Federal Customs Service Ruslan Davydov told reporters on Nov 10. Parallel imports allow deliveries of products that are in demand on the Russian market through third countries without the permission of the trademark holders. For example, Russian vendors are permitted to buy iPhones from Turkey instead of directly from the supplier. “The data as of the end of October is $12.6 billion in parallel imports and 1.6 million tons … A cautious forecast by the end of the year is more than $15 billion and more than 2 million tons,” Davydov said. The Russian government legalized parallel imports back in March to meet the demand for foreign goods after many international brands started halting business in Russia amid Western sanctions. The measure involves the import of original goods, but through alternative supply channels. The list of goods for parallel imports is approved by Russia’s Trade Ministry and can be amended when the need for a new product arises. However, a brand can be added to the parallel imports list only if its owner’s company left the Russian market, stopped deliveries or halted production in Russia.Click here to read…

Chinese car brands conducting major expansion in Russia – report

Chinese car dealerships have been opening in Russia at a record pace, RIA Novosti reported this week, citing analysis by Otkrytiye Auto. Since the beginning of the year, the number has increased by almost 300 to 936, according to the report. “Russian auto retailers have never seen such a rapid growth in the number of car dealers from Greater China, which happened this fall,” Otkrytiye Auto experts said, noting that 185 showrooms had opened from July to November. The leading brand among the new dealerships was Exeed with 48. A total of 47 new franchises of the new Omoda brand also opened, while Chery is now the leading Chinese brand with 167 dealerships in Russia. Geely also increased its number of car dealerships by a third in just 10 months, with 44 new openings, bringing the company’s total number of dealerships in Russia to 133. The number of FAW and Changan dealerships has also increased. “Among other China brands that did not make it into the top 10, we should mention, are new brands Voyah and Skywell, which have already opened three new stores this fall, as well as GAC, with one new sales outlet,” the report said. The popularity of Chinese automobiles in Russia has been rising amid the exodus of European, American, and Japanese brands. Click here to read…

EU threatens to retaliate over Washington’s green initiative

The European Union on Nov 07 accused the United States of breaking World Trade Organisation (WTO) rules with its flagship green technology legislation, promising to take retaliatory measures. The warning highlights concern over Washington’s so-called Inflation Reduction Act, which provides for vast spending on green energy initiatives and includes subsidies and tax credits for American producers and consumers. Brussels says those benefits for American electric vehicle makers would put EU manufacturers at an unfair disadvantage in the lucrative US domestic market. It demands that the US give EU companies the same treatment as other trading partners, including Canada and Mexico. According to the Financial Times, Brussels wants changes to nine of the provisions in the legislation, which restrict subsidies and tax credits to products made in the US, or companies operating there. The incentives affect manufacturing and investment in products including solar panels, wind turbines and clean hydrogen. Meanwhile, EU Internal Market Commissioner Thierry Breton has threatened to take “retaliatory measures” against the US, calling the subsidies “contrary to World Trade Organization rules.” If Washington doesn’t take into account the views of its EU partners, the bloc could “go to the WTO” and make its arguments there, Breton told TV station BFM Business on Nov 07.Click here to read…

Softbank returns to profit as investments rebound

Japanese technology investor Softbank Group Corp. reported on Nov 11 a 3 trillion yen ($21 billion) profit for the July-September quarter, a sharp reversal from its loss a year ago. After its 398 billion yen loss a year earlier, quarterly sales rose to 1.6 trillion yen ($11 billion) from 1.5 trillion yen, it said. Tokyo-based Softbank Group tends to have fluctuating and complex financial results because it invests in an array of companies, and their stock prices have shifted lately, depending on various global factors. Among the factors boosting its bottom line were profits from prepaid contracts using Alibaba shares, reduction of interest-bearing debt and investment gains, Softbank said. The settling of prepaid shares in e-commerce giant Alibaba alone brought in more than 4 trillion yen ($28 billion). Softbank invests in hundreds of companies, including mobile carrier Softbank, web services provider Yahoo and vehicle-for-hire company Didi. It also is involved in the Vision Fund that includes other global investors. While its holdings in Alibaba worked as a plus for its bottom line, its Vision Fund investments hurt, according to Softbank. Vision Fund One recorded gains on some investments such as Uber Technologies but had losses on others including Door Dash. Vision Fund Two racked up losses because of the share price decline of WeWork, Softbank said in a statement.Click here to read…

Strategic
President Biden, Xi Jinping to Spell Out Priorities During Bali Meeting

When President Biden meets Chinese President Xi Jinping for highly anticipated talks Nov 14, the two sides will seek to dial down tensions that have run high for months and establish a better understanding of each other’s priorities over the coming years, U.S. and Chinese officials said. Both sides said the meeting is unlikely to yield major policy breakthroughs. But Mr. Biden’s advisers said they hope it will help improve communication and set expectations on significant issues between the two powers, including their differences over Taiwan, China’s relations with Russia and recent missile tests by North Korea. It will be the leaders’ first in-person meeting since Mr. Biden became president, though the two had extensive interactions when they served as vice presidents of their respective countries. The talks will take place in Bali, Indonesia, where they are both attending a summit of the Group of 20 major economies. “I know him well. He knows me,” President Biden said Sunday. “We just got to figure out where the red lines are.” Relations between the U.S. and China have been particularly tense since an August visit to Taiwan by House Speaker Nancy Pelosi. Beijing saw that visit as evidence of Washington’s support to Taiwan in resisting the Communist Party’s goal of eventual unification. The subject of Taiwan is likely to come up during Nov 14’s meeting, as will the war in Ukraine.Click here to read…

China poised to cut economic reform commitment from lawmaking

China is poised to remove calls for economic reform and opening up from upcoming legislation, a draft shows, replacing them with a reference to President Xi Jinping’s signature ideology in a move seen pushing market-friendly policies lower on the agenda. Under the draft amendment released to the public, the revised “legislation law” would no longer call for legislation to be made “in compliance with the basic principles laid down in the Constitution” or for economic development to be taken as a “central task.” Language that calls for adhering to reform and opening up is deleted. The law would instead call for the creation of a new legal framework that adheres to “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” according to the draft, which is expected to pass as early as this year. China watchers say that the proposed changes could stall economic reforms. Xi emphasized national security and social stability in October at the Communist Party congress, where he secured a rare third term as party leader. He made fewer references to China’s reform and opening up — a program spearheaded by Deng Xiaoping that brought the country into the global economy in the late 1970s and ’80s — and instead unveiled his own vision for “Chinese modernization.” Much of the legislation currently being deliberated by the National People’s Congress, China’s parliament, is on themes related to national security and social stability. Click here to read…

Israeli President Hands Mandate to Benjamin Netanyahu to Form Government

Israeli President Isaac Herzog on Nov 13 handed a mandate to Benjamin Netanyahu to form a new government as negotiations over a governing coalition gained momentum. Mr. Netanyahu, Israel’s longest-serving prime minister until he was ousted from power a year and a half ago, prevailed in this month’s election, the country’s fifth in under four years. In consultations with Mr. Herzog last week, Mr. Netanyahu secured the recommendation of 64 lawmakers from his right-wing and religious bloc, giving him a clear majority in the 120-seat Parliament, or Knesset. Mr. Netanyahu has promised to form a purely right-wing coalition including ultranationalist and religious parties. Starting Nov 13, Mr. Netanyahu will have up to six weeks to establish a new government and try to entice more lawmakers to join. He is already in negotiations with the parties that make up his bloc over assigning key ministerial posts and a policy platform. Lawmakers from his party say a new government could be established as early as this week or next. Speaking alongside Mr. Herzog, Mr. Netanyahu said he would focus on issues that most Israelis support, such pursuing peace with Arab countries, cutting back on business regulation, fighting Iran’s efforts to obtain nuclear weapons, keeping Jerusalem the country’s united capital and maintaining the Jewish character of Israel.Click here to read…

Frustrated Republicans Try to Explain Lack of Midterm ‘Red Wave’

Weaker-than-expected results in the midterm elections for Republicans set off a wave of second-guessing of the party’s approach in a campaign seen as a prime opportunity to pick off dozens of seats from weakened Democrats. The GOP still appeared on track to win the majority in the House, though with a much smaller margin than many election analysts and party officials had predicted, amid concerns over inflation and crime under Democratic control of Washington. In the Senate, the margin will likely be tight, and could once again come down to a Georgia runoff as it did in 2020, puncturing party hopes of winning a comfortable majority. The uncertainty over the result contrasts with the party’s giddy optimism of a possible “red wave” headed into Election Day—and brought to the surface simmering fears and disagreements, particularly over the makeup of the GOP’s lineup. “As it turns out, candidates and campaigns matter,” said Kevin McLaughlin, an ally of Senate Minority Leader Mitch McConnell (R., Ky.) and a former executive director of the National Republican Senatorial Committee. Mr. McConnell had aired concerns over some candidates earlier in the cycle, taking public a fight with former President Donald Trump and Sen. Rick Scott (R., Fla.), the head of the Republicans’ Senate campaign arm. Click here to read…

ASEAN talks lay bare deep divisions on South China Sea, Ukraine

Southeast Asian leaders on Nov 13 concluded their annual summit, after three days of intense talks on everything from the crisis in Myanmar to the Ukraine war and tensions in the South China Sea. The 10-member Association of Southeast Asian Nations held the marathon meetings in Cambodia’s capital, Phnom Penh, where discussions with bigger powers including China, the U.S. and Russia highlighted deep divisions on critical security issues. “We must maintain ASEAN unity regardless of circumstances for the best interests of the whole region,” Cambodian Prime Minister Hun Sen, this year’s rotating ASEAN chair, said as he handed over the chairmanship to Indonesian President Joko Widodo. Shortly before the proceedings wrapped up, U.S. President Joe Biden, Chinese Premier Li Keqiang and Japanese Prime Minister Fumio Kishida participated in the East Asia Summit, which brought together leaders from ASEAN as well as eight dialogue partners — South Korea, Australia, India and Russia also among them. The anticipated East Asia Summit statement was not immediately released, amid reports that the U.S. and Russia disagreed on the language. Still, an initial draft seen by Nikkei Asia and remarks by various leaders over the three days offered a window on participants’ mindset — and a preview of a closely watched bilateral meeting between Biden and Chinese President Xi Jinping, set to take place in Bali on Nov 14.Click here to read…

Japan, South Korea hold 1st summit in years with eye on Pyongyang

Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol on Nov 13 held the first official summit between the two countries in nearly three years, in the wake of North Korea’s recent spate of missile tests. In a meeting that lasted around 45 minutes, at the tail end of three days of international summitry in the Cambodian capital, Kishida and Yoon reaffirmed that they would keep working closely to address the threat from Pyongyang’s weapons. Speaking to reporters after the meeting, Kishida said the two leaders confirmed they would work together “to realize a free and open Indo-Pacific,” in addition to tackling the North Korean issue. The neighboring countries are both longtime security allies of the U.S., but their ties are often embroiled in various disputes over historical issues stemming from Japan’s colonial rule of the Korean Peninsula until the end of World War II. Tokyo and Seoul last had a formal meeting in December 2019, though Kishida and Yoon did have an “informal” conversation at the United Nations General Assembly in September. Relations sank to their lowest point in years under Yoon’s predecessor, Moon Jae-in, after South Korea’s Supreme Court in 2018 ordered two major Japanese companies to pay damages over wartime labor. The companies have refused to comply, as Japan contends that all claims stemming from colonial rule were settled under a bilateral agreement in 1965.Click here to read…

Putin won’t address G20 summit – Kremlin

Russian President Vladimir Putin will not join the upcoming G20 summit via video link or send a pre-recorded message, Kremlin spokesperson Dmitry Peskov has announced. The official also revealed that Putin had earlier personally made the decision not to attend the meeting because of the “need to stay” in Russia. When asked by journalists on Nov 11 whether the Russian head of state would extend his greetings to the leaders gathering in Indonesia’s Bali virtually, Peskov said: “No, [this is] not planned.” He also confirmed that Putin will not participate in the Asia-Pacific Economic Cooperation summit that kicks off in Thailand’s capital, Bangkok, Nov 19. Commenting on the reasons why the Russian president will not be traveling to the G20 gathering, the Kremlin spokesperson clarified that Putin had personally made the decision “[which is] connected with his schedule” and the “need to stay in the Russian Federation.” On Nov 10, Peskov had told reporters that the Russian head of state would not attend the meeting of world leaders in Bali in person. The Russian delegation will be headed by Foreign Minister Sergey Lavrov instead, he added. Despite having come under pressure by the US and several other nations to block Putin from attending the summit, Jakarta did issue an invitation to the Russian president.Click here to read…

China debuts latest air defense missiles, laser at Airshow China 2022

China unveiled several of its latest air defense missile and laser systems at the Airshow China 2022 held in Zhuhai, South China’s Guangdong Province from Nov 08 to Nov 13, in a move experts said showed that China is building a world-class comprehensive air defense system that can safeguard the country’s sky from potential attacks. Despite having been exhibited to the general public in the past, the HQ-9B surface-to-air missile weapon system of the Chinese People’s Liberation Army (PLA) Air Force on display at the Airshow China featured for the first time a new type of missile in addition to the previously known one. Eight of this new type of missile can be carried by the same transporter erector launcher that can carry four of the previously known type, as the new missile is about the same length but obviously thinner than the old one. The new, smaller missiles are likely to be a part of the HQ-9B, and likely to have a shorter range than the old and larger missiles. The smaller size allows a single transporter erector launcher to carry more of them, Wei Dongxu, a Chinese military expert, told the Global Times at the airshow site.Click here to read…

Japan devises hypersonic plan – media

Japan is planning to redesign some of its existing surface-to-air missiles to intercept hypersonic weapons, Kyodo News reported on Nov 07, suggesting the move is part of a broader strategy to enhance Tokyo’s “counterattack capabilities” over the next decade. The military is hoping to complete upgrades to its Type-03 medium-range missile and put the new model into mass production by 2029, according to the outlet, which cited an unnamed “source familiar with the matter.” The redesign is part of an effort to improve Japan’s “comprehensive air and missile defense,” and will reportedly be outlined in a revised National Security Strategy set to be released before the end of the year, the source added. Designed and produced by Mitsubishi, the Type-03 SAM platform entered service in the Japan Ground Self-Defense Force (JFSDF) in 2003, and currently has an operational range of around 50km (31 miles). However, given that hypersonic munitions travel at more than five times the speed of sound and fly along irregular trajectories, the Type-03 and similar air defense systems have difficulty tracking and neutralizing such weapons. The source told Kyodo that the Type-03 will be “improved to predict the flight path of hypersonic weapons and track them as well as to detect them by radar,” but added that it remains unclear whether such upgrades will be enough to counter the new tech. Click here to read…

Iran has developed hypersonic weapon – top commander

Iran has developed a ballistic missile capable of flying at hypersonic speeds, a senior military officer told journalists on Nov 10. The weapon system is designed to destroy enemy anti-missile defenses and can maneuver both inside and outside of the atmosphere, indicating its relatively long range. The news came from Amir Ali Hajizadeh, the commander of the Aerospace Force of the Islamic Revolutionary Guard Corps (IRGC). He spoke to journalists on the sidelines of a commemorative event dedicated to his predecessor, Hassan Tehrani Moghadam, who is credited with launching Iran’s long-range ballistic missile program. Hajizadeh stressed that the technology to intercept hypersonic missiles was unlikely to be developed for decades but offered no further details about the purported new weapon system. Hypersonic weapons come in various designs but are all capable of withstanding extreme conditions of flying through the atmosphere at speeds exceeding five times the speed of sound. Only a handful of nations, such as Russia, China, and the US, have the advanced technology necessary to build such weapons. Iran invested heavily in developing missile capabilities since its decade-long war with Iraq in the 1980s. Tehran says its arsenal of weapons is a deterrent against possible aggression by the US or its regional allies, including Israel and Saudi Arabia. Click here to read…

China willing to contribute to climate damage compensation

China would be willing to contribute to a mechanism for compensating poorer countries for losses and damage caused by climate change, its climate envoy Xie Zhenhua has said. Speaking at the COP27 environmental conference in Egypt on Nov 09, Xie said China had no obligation to participate but stressed his solidarity with those calling for more action from wealthy nations on the issue and outlined the damage China had suffered from climate-linked weather extremes. China is designated by the World Trade Organization as a developing country, despite having the world’s second-largest economy. Last month, United States special climate envoy John Kerry told reporters that China should contribute its own funds to loss and damage, “especially if they think they’re going to continue to go on to the next 30 years with increasing their emissions,” Politico reported. Xie noted that Kerry, “his friend for 25 years”, had not raised this issue with him during informal talks at COP27 this week. He added that China already contributed billions of yuan (hundreds of millions of dollars) to developing countries to help with their mitigation efforts. After US House Speaker Nancy Pelosi’s visit to Taiwan this August, China said it would halt all dialogue with the US on climate, despite unveiling a pact with the US at COP26 in Glasgow last year to cooperate on climate change.Click here to read…

Putin, Raisi discuss deepening ties between Russia and Iran

Russian President Vladimir Putin and his Iranian counterpart, President Ebrahim Raisi, have discussed deepening political, trade and economic cooperation in a phone call on Nov 12, their governments said in separate statements. The two leaders “touched upon some pressing bilateral issues with a focus on how to build up cooperation in the political, trade and economic areas, including in the field of transport and logistics”, the Kremlin said. “They agreed that the corresponding Russian and Iranian institutions will increase contact,” the statement added. The Iranian Presidency said Raisi welcomed “Russia’s desire to strengthen economic cooperation with the Islamic Republic”, especially the development of transport lines in the Eurasian region. “This transit route will become an attractive route for the economy and trade in the world,” Raisi was quoted as saying. The statement added that Putin had expressed sympathy for the government and the people of Iran for the attack on a Shia religious shrine in the southern Iranian city of Shiraz, which killed 15 people and injured 40 others. The call comes on the heels of a meeting between senior Russian security official Nikolai Patrushev and Iran’s top security official Ali Shamkhani in Tehran on Nov 09, in which they discussed the situation in Ukraine and measures to combat what they called “Western interference” in their internal affairs, according to Russian state media.Click here to read…

Russia says withdrawing troops from strategic Kherson, but Ukraine doubts full pull-out

Moscow ordered troops to withdraw from near the strategic southern Ukrainian city of Kherson in a major setback as a top US general estimated Russia has suffered more than 100,000 killed or wounded since invading its neighbour in February. Defence Minister Sergei Shoigu on Nov 09 announced Russian forces would retreat from the west bank of the Dnipro River near Kherson in what could be a turning point in the war. Ukraine reacted with caution to the announcement, saying some Russian forces were still in Kherson and additional Russian manpower was being sent to the region. “They are moving out but not as much as would be taking place if it was a full pull-out or regrouping,” Oleksiy Arestovych, adviser to President Volodymyr Zelensky, said in a video posted online on Nov 09 night. Russian forces were destroying bridges as they left and mining roads, Arestovych said. “And for the moment, we don’t know their intentions – will they engage in fighting with us and will they try to hold the city of Kherson? They are moving very slowly,” he said. Kherson city was the only regional capital Russia captured after the invasion, and it has been the focus of a Ukrainian counteroffensive. The city controls both the only land route to the Crimea peninsula that Russia annexed in 2014, and the mouth of the Dnipro, the river that bisects Ukraine. Russian-installed officials have been evacuating tens of thousands of civilians in recent weeks.Click here to read…

What China’s new military leadership line-up says about Xi’s plans for Taiwan

While the world’s attention was focused on the appointment of Xi Jinping for an unprecedented third term at last month’s 20th National Congress of the Communist Party of China, Xi quietly appointed a new line-up of military leaders. These six members – who will sit on the Central Military Commission (CMC), China’s top military body – will shape China’s military and security policy for the next five years, if not longer. Their appointment also signals that Xi is more serious about Taiwan. Personal relationships have long proved beneficial to upward mobility in Chinese politics, so it comes as no surprise that ties to Xi influenced the new CMC leadership. But two other interrelated traits seemed equally important, and potentially worrisome for the international community: operational experience in China’s Eastern Theatre Command (ETC), which oversees Taiwan military planning, and combat experience. In other words, Taiwan – and the operational imperatives for a military contingency – appear to have been prominently on Xi’s mind in choosing his next slate of military leaders. While this might not necessarily translate to increased tension and confrontation across the Taiwan Strait, it does underscore a military-focused approach to the Taiwan problem. The CMC is China’s highest military operational and decision-making body. The body is led by Xi, its chairman, two vice-chairman and four other members who together form the nucleus of China’s military operations.Click here to read…

Tehran threatens Baku over trans-Caspian cooperation

Continuing tectonic changes in macro-regional Asian geopolitics have been launched by the combination of Azerbaijan’s victory in the Second Karabakh War two years ago and Russia’s approaching defeat in its war of aggression in Ukraine. Those changes reach far beyond the South Caucasus and Eastern European geopolitical theaters. They range, indeed, from Southwest Asia (including Iran and Syria) to Central Asia. To understand these changes and their implications, it is useful to begin by summarizing how the Russian war against Ukraine has changed the international dynamics around Syria and Israel. From there, the relation to the South Caucasus region will become clear, and from there, to the Caspian Sea region and Central Asia. Russia has in recent months moved more directly and forthrightly toward overt military and strategic cooperation with Iran. That is because its losses in the Ukraine theater have obliged it to redeploy its forces away from Syria (as well as the South Caucasus) to Ukraine. Russia’s understanding with Israel had been that the latter had relative liberty to counteract Iranian and Iranian-backed forces in Syria, so long as Israel did not interfere with Russian interests in the broader region. Now, however, with the weakening of the Russian military in the Greater Levant region, Israel is more free to counteract Iran’s interests in Lebanon and no longer needs Russia’s “permission” to defend its strategic interests in the Greater Levant.Click here to read…

Medical
Cholera’s return to Lebanon after 3 decades exposes clean water crisis

In just one month, the outbreak has spread throughout the country of 6 million, infecting nearly 2,000 people and killing 17, according to the latest Health Ministry data. Lebanon had been cholera-free since 1993, but its public services are suffering under a brutal economic crisis now in its fourth year. Cholera, a diarrheal disease spread by ingestion of food or water tainted with human feces, can kill within hours if untreated, with children most at risk. El Hamed, whose son needed resuscitation when he was admitted to Al-Rassi Governmental Hospital in Akkar district last week, said she was praying he would recover – and dreading going home to the same dire situation. “We will have to return to drinking the same infectious water that brought us here,” the 34-year-old Syrian told reporters as she waited at the hospital for doctors to update her on her son’s condition. The UN children’s agency UNICEF says cash-strapped refugees and Lebanese families are being forced to rely on contaminated water sources due to inadequate piped supplies and the rising cost of private alternatives. Access to sufficient supplies of clean tap water has become patchy as distribution systems fail – partly due to widespread power cuts that bring pumping stations and purification plants to a standstill, according to UNICEF. Click here to read…

China’s southern metropolis Guangzhou records 12,000 infections since Nov amid ‘severest epidemic in 3 years’

China’s southern metropolis Guangzhou has been suffering its “most complicated and severe” COVID-19 epidemic in three years, with the number of newly infected cases surging since November to exceed 12,000. According to data released Nov 10 by the Guangzhou Health Commission, the city on Nov 09 found 2,555 local infections, among which 125 were confirmed cases and 2,430 were asymptomatic patients, lifting the total number since November to 12,846. Among the 2,555 cases, 2,444 were found in one district – Haizhu, accounting for over 95 percent of the daily cases in the city. In response to the surge in infections, most schools except those in three districts – Nansha, Conghua and Zengcheng – were requested to close on Nov 10 and conduct online courses. Colleges and universities as well as senior students in senior high schools have been put under closed-loop management. Airports in Guangzhou saw widespread flight cancellations on Nov 09 and Nov 10. The source of some sporadic positive cases was not clear, and the risk of community transmission was high, the local health commission said at Nov 10’s press conference. Also, the epidemic situation in Liwan district showed sporadic distribution and local cross infections, according to the health authority.Click here to read…

Global Developments and Analysis: Weekly Monitor, 31 October- 06 November, 2022

Economic
China trade: ‘turning point’ as export growth suffers first drop in over 2 years on weak demand, zero-Covid

Momentum from China’s coronavirus-triggered exports boom is expected to weaken further in the coming months after shipments in October fell for the first in more than two years amid dwindling external demand and further fallout from the zero-Covid policy.Exports fell considerably short of expectations of continued growth and contracted by 0.3 per cent last month from a year earlier to US$298.37 billion, compared with 5.7 per cent expansion in September, according to data released by China Customs on Nov 07.“This marks a turning point for export growth, as the minus 0.3 per cent reading is the first negative print since May 2020,” said Nomura economists led by Lu Ting. “Although China’s exports may benefit from a weak [yuan] and [producer price index] deflation, those benefits could be more than offset by a global slowdown.” Export growth will, according to Nomura, slip further to around minus 4 per cent year-on-year in the last two months of the year.“As strong export growth has been the single-largest [gross domestic product] growth driver in China since spring 2020, the contraction of exports will inevitably weigh on growth, employment and investment, while it may also prompt Beijing to reconsider its zero-Covid strategy and property curbs,” Nomura added.“Nevertheless, we continue to expect no major policy changes on zero-Covid strategy and the property sector at least until March 2023.” Click here to read…

President Xi pledges to further open China’s markets, offering ‘big opportunities’ to the world ahead of trade fare

China’s president has pledged to open the country’s markets further as he reaffirmed his commitment to globalisation ahead of the world’s largest import trade fair, in Shanghai.“We have been offering big opportunities for the world economy by opening up China’s huge market,” Xi said in a televised speech to kick off the fifth edition of the China International Import Expo (CIIE), the government’s tentpole annual event for promoting a consumption-led economic development model. “The opening [of markets] will brighten the future of economic development globally.”Xi’s speech, his first at an international event since he secured an unprecedented third term as leader of the world’s second-largest economy, underscored his government’s commitment to global trade amid a slowing domestic economy battered by strict Covid-19 virus controls and tensions with the US.The transaction value stayed virtually flat for the next two years, according to figures provided by the organisers, as deal-making took a hit from a slowing economy and stringent measures to contain the Covid-19 pandemic. The event has weathered the storm of mainland China’s stringent border restrictions well because many exhibitors are multinational firms whose local staff can represent them on site. Click here to read…

China’s companies rewrite rules to declare Communist Party ties

China’s Communist Party congress underlined fears that President Xi Jinping is extending his grip over business and the economy — but Chinese companies were already starting to bow to Beijing’s wishes by enshrining the role of the party in their businesses.An analysis by Nikkei Asia has found that as of Nov 04, more than two-thirds of the mainland-listed companies whose shares can be traded by international investors in Hong Kong — 1,029 of 1,526 companies — have articles of association that formalize the role of in-house Communist Party cells. Most have been rewritten during the Xi era.Nikkei Asia has also identified at least 153 of those 1,029 companies as having references to Xi in their articles of association, which in effect are a company’s constitution. Such changes reflect the substantial pressure that the party and government have started to exert during Xi’s period as China’s leader to reinforce the role of the party cells, including by amending articles of association.”It’s clear that there’s kind of a change in trend on this over the last few years,” said Andrew Batson, lead analyst at Gavekal Dragonomics, a China-focused investment research organization based in Beijing. Maccura Biotechnology, a manufacturer of in vitro diagnostic products, is among the latest to spell out the party’s role. Click here to read…

COP27 Summit Begins as Economy, Ukraine War Overshadow Climate Concerns

Last year’s United Nations climate conference in Glasgow was full of disagreements, but it may be a high-water mark for international cooperation on the issue. This year, an energy crunch underscored the challenges of a transition to clean energy from fossil fuels. Climate concerns are being overshadowed by the war in Ukraine and related energy shortages; governments are worried about an economic downturn and some key alliances have broken down. Taking place in the Egyptian seaside resort of Sharm El Sheikh, the conference known as COP27 is the 27th U.N. climate gathering and the successor to last year’s big event in Glasgow, Scotland. The meeting in Egypt will be smaller and less ambitious. Egypt, which is leading the event, says the focus should be on implementing earlier promises. Weighing on every part of the conference is Russia’s invasion of Ukraine, which upended global energy markets and increased the use of fossil fuels, including coal. It also made the case for energy security, which for many countries means renewables. The U.S., Europe and China added policies and raised spending to address climate change. “The bottom line is there has been really little progress since COP26,” said Climate Analytics Chief Executive Bill Hare at a conference in SeptemberClick here to read…

Past eight years eight hottest on record, UN report warns

The past eight years are on track to be the hottest ever recorded, a United Nations report has found, as UN chief Antonio Guterres warned that the planet was sending “a distress signal”. The UN’s weather and climate body released its annual state of the global climate report on Nov 06 with another warning that the target to limit temperature increases to 1.5C (2.7F) was “barely within reach”.The acceleration of heat waves, glacier melts and torrential rains has led to a rise in natural disasters, the World Meteorological Organization said as the UN’s COP27 climate summit opened in the Red Sea resort town of Sharm el-Sheikh, Egypt. “As COP27 gets under way, our planet is sending a distress signal,” said Guterres, who described the report as “a chronicle of climate chaos”. Representatives from nearly 200 states gathered in Egypt will discuss how to keep the rise in temperatures to 1.5C, as recommended by the Intergovernmental Panel on Climate Change (IPCC), a goal some scientists say is now unattainable. Earth has warmed more than 1.1C since the late 19th century with roughly half of that increase occurring in the past 30 years, the report showed. This year is on track to be the fifth or sixth warmest ever recorded despite the impact since 2020 of La Nina, a periodic and naturally occurring phenomenon in the Pacific that cools the atmosphere. Click here to read…

NRA to extend maximum life of nuclear reactors beyond 60 years in Japan

The Secretariat of the Nuclear Regulation Authority on Nov. 2 proposed extending the maximum operating life of nuclear reactors beyond the current 60 years through additional safety inspections. The NRA, the government’s nuclear power industry watchdog, is expected to reflect the change in a draft revision of the Nuclear Reactor Regulation Law by the end of the year. Although allowing aging reactors to continue running has already drawn public criticism, NRA Chairman Shinsuke Yamanaka said at a Nov. 2 news conference that the new proposal “is a regulation much stricter than the current one.” He noted that the reactors will have to undergo more safety checks to continue operating. Under current rules introduced after the 2011 Fukushima nuclear disaster, the operating life of a nuclear reactor is 40 years, in principle. But reactors and their vessels that pass the NRA’s degradation inspections before reaching the 40-year mark can operate for an additional 20 years. The extension is allowed only once, so reactors at 60 years old must be decommissioned. Under the new proposal, reactors in operation for 30 years must undergo inspections for signs of degradation. If they pass the tests, they can run for 10 more years. Every decade, these reactors will have to undergo the degradation safety tests to continue operating. They could stay in operation beyond the current 60-year limit under this arrangement. Click here to read…

France to restart nuclear reactors – energy ministry

Six of the 12 nuclear reactors in France that were found to have corrosion issues in May have been repaired and will be restarted soon, French Energy Minister Agnès Pannier-Runacher has revealed. She told France Inter radio on Nov 02 that, at the moment, there was “no reason” to believe that energy operator EDF would not be able to meet the schedule for restarting all shutdown reactors before winter. Earlier, media reports stated that EDF had hired about 100 American welders from Westinghouse in order to repair the power units on time.France generates roughly 70% of its electricity from a nuclear fleet of 56 reactors, all operated by EDF. However, many of them have been closed down for maintenance, some due to corrosion-related issues. Currently, only 31 units are reportedly operating. EDF has pledged to restart all shutdown reactors before winter to avoid power shortages in the country.However, since October 6, there have been strikes among EDF employees involved in repair work at 19 reactors, delaying maintenance by several weeks. Last month, the French national electricity grid operator RTE warned that it would not rule out the risk of blackouts this winter due to prolonged strikes halting the repair. Click here to read…

US becomes EU’s second-largest gas supplier

The US has become the EU’s second-largest gas supplier due to increased LNG deliveries amid the drop in supply from Russia, deputy head of the European Commission Valdis Dombrovskis said on Nov 03 at an economic conference in Latvia. “We have managed to completely rebuild the structure of our suppliers. Norway is now the largest supplier of natural gas, followed by the US, which supplies us with liquefied natural gas,” he said, as cited by the TASS news agency. Prior to this year, Russia was the bloc’s largest gas supplier, covering roughly 40% of the region’s needs. However, following the start of Moscow’s military operation in Ukraine and the ensuing Western sanctions, Russian supplies are down to just 9% of the EU’s imports.The US became the EU’s third largest supplier last year, overtaking Algeria. In 2022, American LNG shipments were ramped up further and now account for nearly half of the bloc’s total LNG purchases.Some, however, criticize Washington for taking advantage of the energy crisis in the region, as its LNG deliveries cost up to four times more than the Russian gas supplies it used to rely on. Click here to read…

Russian shelling causes power blackouts across Ukraine

Ukraine’s state electricity operator has announced blackouts in the capital, Kyiv, and seven other regions of the country in the aftermath of Russia’s devastating strikes on energy infrastructure.The move comes as Russian forces continue to pound Ukrainian cities and villages with missiles and drones, inflicting damage on power plants and water supplies, in a grinding war that is nearing its nine-month mark. Ukrenergo, the sole operator of Ukraine’s high-voltage transmission lines, initially said in an online statement on Nov 05 that scheduled blackouts will take place in the capital and the greater Kyiv region, as well as several regions around it – Chernihiv, Cherkasy, Zhytomyr, Sumy, Poltava and Kharkiv.Later in the day, however, the company released an update saying that scheduled outages for a specific number of hours are not enough and instead there will be emergency outages, which could last indefinitely.Ukraine has been grappling with power outages and disruption of water supplies since Russia started unleashing barrages of missile and drone attacks on the country’s energy infrastructure last month.The attacks came after Moscow suffered a series of battlefield defeats in north-eastern Ukraine and an explosion on the Kerch Bridge, which links occupied Crimea to mainland Russia. The region was illegally annexed by Russia in 2014. Click here to read…

Canada kicks Chinese firms out of rare minerals sector

The Canadian government has ordered three Chinese firms to divest from its critical minerals companies on grounds of national security. The move comes days after Ottawa introduced tougher rules on foreign investment in the mining sector.According to media reports on Nov 02, the three Chinese firms are Sinomine Rare Metals Resources, Chengze Lithium International, and Zangge Mining Investment. Canada’s Industry Minister, Francois-Philippe Champagne said in a statement that the government ordered the divestiture after “rigorous scrutiny” of foreign firms by the national security and intelligence community. “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad,” Champagne said. Last week, Ottawa said it must build a resilient critical minerals supply chain with like-minded partners, as it outlined rules meant to protect the sector from foreign state-owned companies. According to Champagne, “The federal government is determined to work with Canadian businesses to attract foreign direct investments from partners that share our interests and values.” Canada has large deposits of critical minerals like nickel and cobalt, demand for which is expected to expand significantly in the coming decades.Earlier this year, Canada, the US, the UK, and several other countries set up a new partnership to secure critical minerals’ supply amid rising demand. Click here to read…

Japan to maintain stake in Russia’s Sakhalin 1 oil project

Japanese stakeholders in the Sakhalin 1 oil and gas project in eastern Russia decided Nov 04 to retain their stake in the undertaking by joining a new Russian operator recently established under a decree, as the project remains a vital source of energy for resource-poor Japan, sources close to the matter said.Japan’s government and companies including major trading houses Itochu and Marubeni have invested in the project through Tokyo-based Sakhalin Oil and Gas Development Co. If the Russian side approves the company plan decided at Friday’s shareholders meeting, Japan will be able to keep its stake in the project. The move comes amid international sanctions on Russia over its invasion of Ukraine. Sakhalin Oil and Gas Development holds a 30% stake in the project, which started producing crude oil on the island of Sakhalin north of Japan in 2005. Under the decree signed by President Vladimir Putin, foreign business partners had one month from the launch of the new operator in October to decide whether to invest in the new company. The government has indicated Japan, which is highly dependent on energy imports, will maintain its stakes in the Sakhalin 1 and 2 energy projects, despite imposing economic sanctions on Russia over its invasion of Ukraine. Click here to read…

U.S. calls out Japan and Netherlands over China chip curbs

U.S. President Joe Biden appears ready to pressure Japan and the Netherlands even more to join efforts to block the flow of advanced chip technology to China, where it could be used to develop cutting-edge weapons.”I think you will see Japan and Netherlands follow our lead,” U.S. Commerce Secretary Gina Raimondo said on CNBC Nov 03. While no specifics were mentioned, this appears to be the first time that a high-ranking U.S. official has named specific countries when speaking about cooperation on the export curbs. Since October, the Biden administration has, in effect, banned trade with China in advanced semiconductor technology, manufacturing equipment and related human resources. The rules include measures that would prohibit foreign companies from exporting semiconductors that incorporate U.S. technology. U.S. companies are strong in software used in chips as well as in the design software employed to make advanced semiconductors. South Korean and Taiwanese companies handle many products that use such U.S. technology, which is already subject to certain regulations. Japan and the Netherlands are the subject of U.S. attention because of their strength in semiconductor manufacturing equipment, which so far has not been subject to U.S. regulations. Companies in both countries are believed to be able to build products that do not rely on U.S. technology. Three companies dominate the global market for chipmaking equipment — American company Applied Materials is the largest, followed by ASML of the Netherlands and Japan’s Tokyo Electron. Click here to read…

Türkiye becoming one of Russia’s top trade partners

Trade between Moscow and Ankara has been expanding rapidly, with the volume of goods supplied to Russia hitting a monthly record of $1.1 billion in September. According to the RBC business daily, citing data from the Turkish Institute of Statistics, that’s 2.3 times more than in the same month in 2021 when Turkish exports to Russia amounted to $504 million. Data shows that in 2021, Türkiye ranked 11th among the countries supplying goods to Russia, ahead of the US, France, Japan, Poland, and Italy. This summer it broke into the top five exporters. September’s jump has placed Türkiye on par with Germany in terms of exports to Russia, RBC reports. During May-August Eurostat finds that German exports to Russia averaged around $1.2 billion per month and $1.14 billion in September, which is slightly less than that of Türkiye. However, if Türkiye overtakes Berlin it will become the third largest exporter of goods to Russia, after China and Belarus, the report says. Chinese exports to Russia in September amounted to about $8 billion, while the latest available data for Belarussian exports is that of June – at over $2 billion. Türkiye and Germany are followed by Kazakhstan, whose exports to Russia amounted to $881 million in August (up 23% versus July). Click here to read…

Iran’s embattled currency plunges to historic lows amid protests

Iran’s embattled national currency has hit a new all-time low amid ongoing protests and a lack of progress in efforts to restore the country’s 2015 nuclear deal with world powers. The rate of the United States dollar for the first time broke past the 350,000 mark against the Iranian rial in the open market at the start of the working week on Nov 05. The rial continued its decline, falling to about 362,000 per dollar later in the day. The Iranian government still maintains a drastically lower artificial rate of 42,000 rials for the dollar as its official figure, even after a subsidy reform plan earlier this year that eliminated the use of this rate for imports of a number of essential goods. The greenback changed hands at a rate of about 300,000 rials at the beginning of September, but the Iranian currency has been on a declining trajectory ever since nuclear talks once more stalled and protests erupted across the country in mid-September after the death of a young woman in police custody. When the nuclear deal was signed in 2015, the Iranian rial fetched more than 10 times the amount of dollars it does today. The Central Bank of Iran (CBI) said on Nov 03 it would pump more foreign currency into an official market it operates for importers and exporters, and to answer, “the real demands of the people”. Click here to read…

South Korea ‘battery alliance’ aims to supercharge rechargeable industry, but can it catch China?

South Korea has unveiled an ambitious strategy to drastically narrow the gap between itself and China in the realm of rechargeable batteries. Key components of the plan, announced on Nov 01, include launching a “battery alliance” between South Korea’s public and private sectors, while providing various policy measures to consolidate a US$35 billion domestic investment in the industry by 2030. The Ministry of Trade, Industry and Energy, which announced the “Rechargeable Battery Industry Innovation Strategy”, said in a statement that it intends for South Korea to increase its global market share of rechargeable batteries from its current 25 per cent to 40 per cent by 2030. If realised, South Korea could make significant gains on current industry leader China, which the strategy says takes up 56.4 per cent of the global market share. The Korean government considers rechargeable batteries among the key industries that the country’s future economic growth will rely on.The new strategy has three main goals: securing a stable supply chain in response to global trade regulations and mineral-supply risks; achieving cutting-edge original technology; and cultivating a solid domestic rechargeable-battery ecosystem. Click here to read…

Strategic
Analysis: China’s elders defend party charter from Xi onslaught

Contrary to popular belief, the Chinese Communist Party’s recently closed national congress may not have been a one-sided victory for General Secretary Xi Jinping. True, he won a clean sweep when it came to personnel appointments. But in other aspects, he did not win everything he wanted. A quiet resistance seems to have begun five months earlier, when retired party elders were told by current party leadership to refrain from discussing general policies of the Party Central Committee in an open manner and not to spread negative remarks leading up to the national congress. The notice was conveyed on May 15 by Ding Xuexiang, the then-director of the party’s General Office, who is now a member of the top decision-making body, the Politburo Standing Committee. It backfired. The culmination of the resistance surfaced on Oct. 26, four days after the national congress ended. That day, the full text of the party’s revised constitution adopted at the quinquennial event was made public. The amendment does not include a phrase about “establishing” Xi’s core position in the party nor one about “establishing” the guiding role of Xi’s eponymous ideology. This stood in contrast to the heavy spotlight on what Beijing is calling the “two establishes” during the congress. Many officials had emphasized the significance of establishing the two aspects. A banner calling for the two clauses was displayed on the streets of Beijing. Even a resolution adopted during the national congress includes it. Click here to read…

Xi tells Scholz China and Germany should work together during ‘times of turmoil’

Chinese President Xi Jinping touted the need for greater cooperation between China and Germany amid “times of change and turmoil” in his first meeting with German Chancellor Olaf Scholz, with talks expected to touch on Russia’s war on Ukraine, climate change and developing economic ties. Scholtz’s visit on Nov 04 is the first by a leader of a G7 nation to China in three years and will test the waters of relations between Beijing and the West after years of mounting tensions, analysts say. During their first face-to-face meeting since Scholz took office, held in the Great Hall of the People, Xi said that as large nations with influence, China and Germany should work together all the more during “times of change and turmoil” for the sake of world peace, according to state broadcaster CCTV. Scholz told Xi that it was good both leaders were meeting in person during tense times, with Russia’s invasion of Ukraine creating problems for the rules-based global order, according to a Reuters reporter accompanying Scholz’s delegation. Scholz also said that the two will discuss issues related to Europe-China relations, the fight against climate change and global hunger, and how to develop China-Germany economic ties, as well as topics where both countries’ perspective is different. Click here to read…

Ukraine grain export deal resumes days after Russia suspends involvement

Russia has said it would resume its participation in a deal freeing up grain exports from Ukraine, reversing a decision that world leaders warned would increase hunger globally. Russia, whose forces invaded Ukraine on Feb. 24, announced the reversal on Nov 02 after Turkey and the United Nations helped keep Ukrainian grain flowing for several days without a Russian role in inspections. The defence ministry justified the resumption by saying it had received guarantees from Ukraine that it would not use the Black Sea grain corridor for military operations against Russia.”The Russian Federation considers that the guarantees received at the moment appear sufficient, and resumes the implementation of the agreement,” the ministry said in a statement.Ukrainian President Volodymyr Zelenskiy said it was important to stand up to “crazy Russian aggression that destabilises international trade”.”After eight months of Russia’s so-called special operation, the Kremlin is demanding security guarantees from Ukraine,” Zelenskiy said in his nightly video address.”This is truly a remarkable statement. It shows just what a failure the Russian aggression has been and just how strong we all are when we maintain our unity.” The grain deal, originally reached three months ago, had helped alleviate a global food crisis by lifting a de facto Russian blockade on Ukraine, one of the world’s biggest grain suppliers.Click here to read…

U.S. Plans to Send B-52 Bombers to Australia in Effort to Counter China

The U.S. is laying the groundwork for further deployment of long-range B-52 bombers in strategic northern Australia, drawing criticism from China, which warns the move could spark an arms race in the region. A new, U.S.-funded aircraft-parking apron at an Australian air force base near the town of Katherine will be able to accommodate up to six B-52 aircraft, a spokesperson for Australia’s defense department said. The upgrade could also be used by other aircraft and will enhance Australia’s capacity to train with other allies, the spokesperson said. Basing the long-range bombers in northern Australia would allow the U.S. to project more power over the disputed South China Sea and deter Chinese activities there, some military experts said. Northern Australia already hosts U.S. Marines for part of the year and has become a key training ground for U.S. and allied forces, including aircraft. “The U.S.-Australia alliance is a cornerstone of U.S. foreign and security policy,” U.S. Defense Department Spokesman Lt. Col. Martin Meiners said. Both nations are “committed to evolving the alliance to effectively respond to the strategic environment.”Last week, the Biden administration cast China as the greatest danger to American security in a new defense strategy, and called for renewed efforts to build the military capabilities needed to deter Beijing. Click here to read…

The Pacific’s Missing F-15 Fighters

The Pentagon is pulling F-15 fighter jets from Okinawa after decades on the Japanese island, and the news has received too little attention. American air power is spread thin across the world, and the U.S. is in a precarious position even as it needs to put more hardware in the Pacific to deter China. “Starting in November, the Department of Defense will commence a phased withdrawal of F-15 C/D aircraft forward-deployed to Kadena Air Base over the next two years,” the Air Force said on Oct. 28 after the news had leaked. The Air Force F-15Cs and Ds are 38 years old on average, and no doubt they’re costly to maintain and keep airborne. Lt. Gen. David Deptula, a retired F-15 pilot, tells us these are the last active duty F-15C/D pilots in the Air Force, another limiting factor. Yet the F-15s are departing strategic real estate in the Western Pacific’s first island chain with no permanent replacement. The U.S. will “temporarily” deploy “newer and more advanced aircraft” on rotation, the Air Force says. The announcement promises a steady presence but says the Pentagon has “not made a decision on the long-term solution.” The Air Force initially planned to buy 750 F-22s, but former Defense Secretary Bob Gates shut down the production line at 187 jets. The services aren’t buying enough F-35s to pick up the load. Click here to read…

US carrier strike group heading for Europe – media

A US carrier strike group, led by new supercarrier USS Gerald Ford, is expected to anchor near Portsmouth in southern England in mid-November, the UK Defense Journal reported on Oct 30. The exact date of the flotilla’s arrival, which includes seven other warships, has not been announced publicly, the outlet noted. Releasing such data now “might not be the best idea from a security point of view,” it added. Some of the American vessels will dock at the Royal Navy’s Portsmouth naval base, while the USS Gerald Ford will have to anchor outside, at the roadstead in the Spithead area, due to its size, according to the outlet. The 333-meter carrier reportedly hosts some 90 planes and helicopters, including fifth-generation F-35C fighter-bombers. The USS Gerald Ford, commissioned by the US Navy in 2017, is the first ship of the similarly named Ford class, and is the largest aircraft carrier in the world. It began its maiden ‘service-retained’ deployment on October 4, departing from Norfolk, Virginia. The vessel visited its first international port on Friday, arriving in Halifax, Canada. According to the US Navy, the USS Gerald Ford has been conducting multinational maritime exercises in the Atlantic Ocean with such NATO allies as Canada, Spain, Denmark, the Netherlands and Germany.If reports of the US flotilla heading to British shores are confirmed, it will become the second American carrier strike group in European waters. Click here to read…

Iran protests about more than women’s rights

A month and a half has passed since nationwide protests started in Iran over the death of 22-year-old Mahsa Amini, after she was arrested by the country’s morality police for violating the hijab law requiring women to cover their hair in public. The protests spread from the capital, Tehran, to many cities in the country and are ongoing. Analysts say the public outcry is no longer just about women’s freedom. “Women’s freedom is clearly at the center of the protests, but decades of repression, economic misery, government corruption and mismanagement — all amplified by sanctions — have helped create the circumstances that have led to the current situation,” said Trita Parsi, executive vice president of Washington-based think tank the Quincy Institute for Responsible Statecraft. Iran’s workers are like a patient living only with 10% of their heart capacity, the chairman of the Wage Committee of the Center of Islamic Labour Councils in Iran, said recently. The International Monetary Fund predicts 40% inflation this year in Iran, roughly the same as last year. Many attending the protests are not against the Islamic Republic but are asking for reforms that can raise living standards. On Kish Island in the Persian Gulf, the protests center around living conditions more than the hijab. Click here to read…

White House explains Biden’s regime change comment

US President Joe Biden’s comments about freeing Iran were not meant as a statement of policy but an expression of solidarity with anti-government protesters, White House National Security Council spokesman John Kirby told reporters on Nov 04. Biden’s off-the-cuff remark at a Democrat fundraiser in California the evening before has already drawn condemnations from Tehran. “Don’t worry, we’re going to free Iran. They’re going to free themselves pretty soon,” Biden told those attending a party fundraiser at Mira Costa College near San Diego on Nov 03.He was “expressing our solidarity with the protesters,” Kirby told the White House press corps the following day, adding that any change of government in Tehran “has to be up to the people of Iran.”Asked if Biden’s comments reflected Washington’s assessment that the Iranian government is near collapse, Kirby said “We have no indication of that.” Speaking on Nov 04, Iranian President Ebrahim Raisi addressed Biden’s remarks by referring to the 1979 Islamic revolution in Tehran, which overthrew the pro-US monarchy “I’m telling Biden that Iran was freed 43 years ago,” said Raisi. Tehran has accused the US and its allies of instigating a wave of anti-government protests that started in mid-September, ostensibly over the death of a young woman in police custody. Click here to read…

North Korea fires 23 missiles; one lands near South for 1st time

North Korea fired at least 23 missiles into the sea on Nov 02, including one that landed less than 60 km (40 miles) off South Korea’s coast, which the South’s President Yoon Suk-yeol described as “territorial encroachment”.It was the first time a ballistic missile had landed near the South’s waters since the peninsula was divided in 1945, and the most missiles fired by the North in a single day. South Korea issued rare air raid warnings and launched its own missiles in response. The missile landed outside South Korea’s territorial waters, but south of the Northern Limit Line (NLL), a disputed inter-Korean maritime border. South Korean warplanes fired three air-to-ground missiles into the sea north across the NLL in response, the South’s military said. An official said the weapons used included an AGM-84H/K SLAM-ER, which is a U.S.-made “stand-off” precision attack weapon that can fly for up to 270 km (170 miles) with a 360-kg (800-lb) warhead. The South’s launches came after Yoon’s office vowed a “swift and firm response”.”President Yoon Suk-yeol noted North Korea’s provocation today was an effective act of territorial encroachment by a missile intruding the NLL for the first time since (the two Koreas’) division,” his office said in a statement. Click here to read…

Chinese spacecraft releases mystery object in orbit – US

A Chinese reusable rocket orbiting Earth has released another object into orbit, according to the US Space Force, which detected the unknown craft on Oct 31. According to the Orbital Focus website, the second object is probably traveling less than 200 meters from its parent.With little official information to go on, US experts believe the new object is related to a project funded by the Natural Science Foundation of China. Specifically, the paired craft may be involved in the development of an orbital segment on a fully reusable two-stage-to-orbit space transport system. The system’s suborbital component performed a second flight in September. Space watchers have hypothesized that the object may be a small satellite designed to monitor the larger craft, a service module, or the result of a test to see if the larger craft could successfully deploy satellite payloads. The “reusable experimental spacecraft” was launched August 4 from Jiuquan in the Gobi Desert, propelled by one of China’s Long March 2F rockets, and has been in orbit for three months. It is possible the object was released some time ago and only became visible when the spacecraft shifted its orbit slightly two weeks ago. Beijing has been characteristically silent on the nature and details of the mission, and it is not clear when the spacecraft will land or where. It is being developed by the China Academy of Launch Vehicle Technology. Click here to read…

Ransomware hackers hit Aussie defense communications platform

Hackers have targeted a communications platform used by Australian military personnel and defense staff with a ransomware attack, authorities said on Oct 31, as the country battles a recent spike in cyber-attacks across businesses. The ForceNet service, one of the external providers that the defense department contracts to run one of its websites, has come under attack but so far no data have been compromised, Assistant Minister for Defense Matt Thistlethwaite said.”I want to stress that this isn’t an attack or a breach on defense [technology] systems and entities,” Thistlethwaite told ABC Radio. “At this stage, there is no evidence that the data set has been breached, that’s the data that this company holds on behalf of defense.”But some private information such as dates of birth and enlistment details of military personnel may have been stolen, the Australian Broadcasting Corp reported, citing an unidentified source with knowledge of the investigation. Thistlethwaite said the government will view the incident “very seriously” and all defense personnel have been notified, with suggestions to consider changing their passwords. A Defense department spokesperson told Reuters in an emailed statement the department was examining the contents of the impacted data set and what personal information it contained. Click here to read…

Pakistan’s Imran Khan survives assassination bid as protests flare

Pakistan’s former Prime Minister Imran Khan survived an assassination attempt on Nov 03 after being shot in the leg while leading a protest march in Wazirabad, in the country’s Punjab province. The attack has triggered violent demonstrations across the country by the 70-year-old Khan’s supporters, some against military and government officials.Eight others, including two senior leaders of Khan’s Pakistan’s Tehreek-e-Insaaf (Movement for Justice, or PTI) party, were also injured, and one party worker was killed. The accused gunman, identified as Naveed Mohammad Bashir, was taken into custody by police after he was overpowered by a bystander. In a video confession to police leaked to the media, Bashir said he was inspired to kill Khan because he was “misleading” the country. However, Khan’s party has rejected the possibility of this being a lone wolf attack by a solitary gunman. Khan’s allies in the Punjab provincial government are investigating the possibility of more than one attacker and PTI leaders have alleged that Khan was targeted by automatic gunfire and not just the handgun used by Bashir. Khan’s physician and former Health Minister Dr. Faisal Sultan confirmed Khan’s injuries were not life threatening, but he had multiple bullet and shrapnel fragments in his right leg, with damage to his tibia. Click here to read…

Opium cultivation soaring since Taliban takeover – UN

Opium cultivation in Afghanistan, the largest grower in the world, has boomed since the Taliban assumed power in August 2021, the United Nations Office on Drugs and Crime (UNODC) revealed on Nov 01. Land under opium poppy cultivation in the country, rose 32% over the previous year to 233,000 hectares, according to the UN agency’s latest report. After a ban on opium cultivation and other narcotics was put in place in April, opium prices “soared,” the UNODC stated. As a result, the 2022 opium harvest, which was largely exempt from the Taliban’s decree due to there being a two-month grace period, became “the most profitable for farmers since 2017.” According to the report, “the income made by farmers from opium sales more than tripled” from $425 million last year to $1.4 billion in 2022. The latest figure represents 29% of the 2021 value of the country’s agricultural sector. The agency notes, however, that the higher profit has not necessarily increased the purchasing power of farmers – surging inflation has pushed the price of food up by about 35%. According to the UNODC, since the beginning of the Taliban’s rule, opiate trafficking from Afghanistan, which supplies some 80% of global opiate consumption, has been ongoing without interruption. Click here to read…

Analysis: Can Ethiopia iron out issues after AU peace deal?

On Nov 02, representatives of the Ethiopian federal and Tigrayan regional administrations signed a landmark ceasefire agreement to end a two-year civil war that has led to the death of thousands across the northern Ethiopian region – and displaced millions while hurting the economy. Coming on the eve of the war’s two-year mark, the breakthrough is the result of face-to-face negotiations mediated by an African Union (AU) delegation in Pretoria, South Africa for 10 days. “Today is the beginning of a new dawn for Ethiopia,” said former Nigerian President Olusegun Obasanjo, the AU’s lead envoy overseeing the talks, moments after Ethiopia’s lead negotiator Redwan Hussein and Tigrayan counterpart Getachew Reda signed and shook hands. Ethiopian Prime Minister Abiy Ahmed hailed the deal as a victory for Ethiopia and thanked the AU for spearheading the initiative.However, a day after its signing, local Tigrayan media reported that an Ethiopian drone attack had caused civilian casualties in the southern Tigrayan town of Maychew, which would be in violation of Article 3 of the agreement, raising doubts about Ethiopia’s willingness to commit to the terms. As per a joint statement published shortly after the signing ceremony, the warring parties had agreed to a cessation of all hostilities. Click here to read…

Arab League says Palestinian cause central, glosses over Israel

Arab leaders have closed their first summit meeting in two years by reiterating the centrality of the Palestinian cause, albeit avoiding to address their own splits over normalising ties with Israel. The final declaration that brought an end to the two days of the Arab League summit in Algiers on Nov 02 highlighted the bloc’s continued support for Palestinian statehood, the protection of sites in Jerusalem against Israeli violations and condemnation of Israel’s use of violence and its blockade of Gaza. The 22 member states, however, fell short of taking an open stance against Palestine’s occupying power. Al Jazeera’s Zeina Khodr, reporting from Algiers, said the Arab League had purposefully issued a “carefully crafted” communique.“This is a regional organisation that is deeply divided and polarised, so they were very careful with the words that they used,” Khodr said. “We heard leaders express support for the Palestinians and their right to statehood, but no condemnation of Israel.” The Arab League was created in 1945 to promote unity, but in recent years, it has been marred by increasing divisions. For decades, the group has been committed to establishing Palestine as an independent state, but its response has been fractured by issues including Iran’s influence, the civil war in Syria and the decision by some to normalise ties with Israel. Since the last Arab League summit in 2019, the United Arab Emirates, Bahrain, Morocco and Sudan have agreed to normalise diplomatic relations with Israel. Click here to read…

Health
World’s biggest iPhone assembly plant under quarantine

The Chinese authorities have ordered that a key industrial area in the city of Zhengzhou be quarantined. The decision throws a wrench into the works for Apple, as this will affect an iPhone assembly plant which is crucial for the rollout of the new 14 series. The Zhengzhou Airport Economy Zone (ZAEZ) was placed under “static lockdown” on Nov 02 for at least a week, according to a statement released by the local government. This means that all non-essential business and travel has been suspended in the district. People were ordered to work from home if possible, unless they join the volunteer forces for Covid-19 prevention. The move comes on the back of a reported exodus of workers from a plant in ZAEZ run by Foxconn Technology Group, which assembles iPhone devices. A video shared on Chinese social media last week shows people leaving the facility on foot because public transportation in the city was restricted over Covid-19 concerns. The factory employs around 300,000 workers. The walkout was apparently caused by an outbreak of the disease on the premises and fears of a full lockdown. Foxconn promised on Oct 30 to provide transportation for those who want to leave, as well as sanitary work conditions and daily PCR tests for those who wish to stay. Click here to read…

Uganda extends 3-week lockdown as Ebola outbreak spreads

Uganda on Nov 05 extended a 3-week lockdown on two districts at the center of an Ebola outbreak which has claimed over 50 lives, curbing travel and closing public places. Since the outbreak was declared in the central district of Mubende on September 20, the disease has spread across the East African nation, including the capital Kampala. Fifty-one deaths reported have been reported as of Nov 05, according to Ugandan authorities. The strain now circulating in Uganda is known as the Sudan Ebola virus, for which there is currently no vaccine, although there are several candidate vaccines heading towards clinical trials.The World Health Organization on Nov 02 said Uganda had registered over 150 confirmed and probable cases, including 64 fatalities.President Yoweri Museveni imposed a 21-day lockdown on Mubende and neighbouring Kassanda on October 15 but has said that nationwide curbs were not needed. On Nov 05, Health Minister Ruth Jane Aceng told reporters that “the lockdown of Mubende and Kassanda districts … will be extended for another 21 days. “These include a dusk-to-dawn curfew, a ban on personal travel and the closure of markets, bars and churches. Ebola is spread through bodily fluids, with common symptoms being fever, vomiting, bleeding and diarrhoea. WHO on Nov 02 warned that there was a high risk of Ebola spreading further and called on neighbouring countries to boost their preparedness. Click here to read…

Global Developments and Analysis: Weekly Monitor, 24 October- 30 October, 2022

Economic
Fed Meeting to Focus on Interest Rates’ Coming Path

Wall Street analysts will be focused Nov 2 on what Federal Reserve Chairman Jerome Powell says about whether the central bank might slow down interest-rate rises at its next policy meeting in December. Fed officials have already indicated that they are likely to raise their benchmark federal-funds rate by 0.75 percentage point this week to a range between 3.75% and 4%. That would mark their fourth consecutive increase of that size as they seek to reduce inflation by slowing the economy. Some of the officials recently began signalling their desire to start reducing the size of increases after this week and to potentially stop lifting rates early next year so they can see the effects of their moves. Those officials and several private-sector economists have warned of growing risks that the Fed will raise rates too much and cause an unnecessarily sharp slowdown. Until June, the Fed hadn’t raised interest rates by 0.75 point, or 75 basis points, since 1994. Fed officials widely supported the supersize rate increases this summer because they were playing catch-up. Inflation has been running close to 40-year highs, but interest rates were pinned near zero until March. Debate over how much more to raise rates could intensify as they reach levels more likely to restrain spending, hiring and investment. Click here to read…

Yuan becomes 5th most traded currency, helped by sanctioned Russia

China’s yuan has jumped to fifth place in currency transactions, new data shows, as the country’s economic expansion increases trade and sanctions-hit Russia turns to the Chinese market. The yuan’s average daily turnover in April came to $526 billion — up 85% from the same month of 2019, according to data published by the Bank for International Settlements. The Chinese currency accounted for 7% of overall transactions, up 2.7 percentage points. The sum of percentage shares totals 200% because two currencies are involved in each transaction. The yuan trailed only the dollar, the euro, the yen and the pound. The yuan, which ranked No. 8 in terms of share in April 2019, surpassed the currencies of Australia, Canada and Switzerland in the new ranking. The BIS releases data on over-the-counter foreign exchange turnover every three years based on reports from central banks around the world. China’s growing transactions with Russia are believed to be behind the shift. Russia accounted for 3.58% of offshore yuan payments in September — the fourth-highest figure — according to SWIFT, the global payments messaging system. Russia was not even in the top 15 through March. But after climbing to 12th place with 0.62% in April, it rose rapidly and sat in No. 3 in July and August. Click here to read…

Russia to Suffer Worst Slowdown of Any Major Economy

Russia is set for the deepest recession of any large economy this year, according to new forecasts from its central bank—and economists forecast a gloomy future as the windfall from high energy prices fades, sanctions tighten and the country struggles to replace Europe as the main buyer of its oil and gas. The Russian economy is suffering from the impact of sanctions and the withdrawal of Western businesses in the wake of the invasion of Ukraine in February. While Russia has benefited from soaring energy prices this year, economists expect revenue to fall sharply as the global economy slows and the West finds substitutes for Russian energy. The central bank’s forecast of a drop in gross domestic product of between 3% and 3.5% this year is less than it had expected soon after the start of the conflict. “The decline in GDP will be less significant than anticipated,” said Bank of Russia head Elvira Nabiullina. However, the expected contraction would likely be the largest recorded by a member of the Group of 20 largest economies. Immediately after the invasion, the bank expected the economy to contract between 8% and 10% this year, and by as much as 3% next year. It now expects GDP to contract between 1% and 4% next year. Click here to read…

BOJ defies global tightening trend, sticks to ultra-low rates

The Bank of Japan kept ultra-low interest rates on Oct 28 and maintained its dovish guidance, cementing its status as an outlier among global central banks tightening monetary policy, as recession fears dampen prospects for a solid recovery. The central bank also announced plans to increase the frequency of its bond buying next month, doubling down on efforts to defend its ultra-loose monetary policy. BOJ Governor Haruhiko Kuroda said Japan was making some progress toward achieving his 2% inflation target, as rising prices heighten the chance more firms will increase wages next year. But he said the central bank was nowhere near raising interest rates, with inflation likely to fall short of its 2% target for years to come. “We expect wages to gradually rise reflecting recent inflation,” Kuroda told a news conference. “For now, we don’t expect inflation to stably and sustainably achieve 2% inflation next fiscal year.” As widely expected, the BOJ left unchanged its -0.1% target for short-term interest rates and a pledge to guide the 10-year bond yield around 0% under its yield curve control (YCC) policy. The central bank also maintained its dovish guidance projecting that short- and long-term rates will remain at “present or lower levels.” Click here to read…

Egypt’s pound at record low after $3bn IMF deal announcement

Egypt’s pound slid about 14.5 percent to a record low against the United States dollar after authorities announced a $3bn International Monetary Fund (IMF) deal with a commitment to a “durably flexible exchange rate regime”. The central bank also raised interest rates by 200 basis points in an out-of-cycle meeting, saying it aimed to anchor inflation expectations and contain demand-side pressures. Egypt had been in talks with the IMF for a new loan since March after its economic woes deepened due to the war in Ukraine. The fund has long been urging Egypt to allow greater exchange rate flexibility. In a statement on Oct 27 confirming a staff-level agreement on a $3bn, 46-month Extended Fund Facility, the IMF said a flexible exchange rate regime should be “a cornerstone policy for rebuilding and safeguarding Egypt’s external resilience over the long term”. It said the deal was expected to catalyse a large, multi-year financing package, including about $5bn in the fiscal year ending June 2023, reflecting “broad international and regional support for Egypt”. Egypt’s central bank said it was intent on intensifying economic reforms and had “moved to a durably flexible exchange rate regime, leaving the forces of supply and demand to determine the value of the EGP against other foreign currencies”. Click here to read…

Record volumes of Russian energy headed to China – Bloomberg

Russia exported a record amount of liquefied natural gas (LNG) and steelmaking coal to China in September, Bloomberg reported on Oct 25 citing Chinese customs data. According to the report, Russia’s coking coal exports to its trading partner last month surged to 2.5 million tons from around 900,000 tons in September last year and 1.9 million tons in August. Overall coal imports, including thermal and coking coal, jumped 20% to nearly 7 million tons year-on-year. LNG deliveries surged by a third from a year ago to 819,000 tons. It is unclear how much Russian gas China has imported via pipelines, which is the main route for its delivery, as Beijing hasn’t reported on those flows since the start of the year. China’s imports of Russian oil dropped to 7.5 million tons last month from 8.3 million tons in August but were still higher than last year’s 6.1 million tons. Total purchases of Russian energy, including oil products, also dropped slightly to $7.5 billion last month from $8.4 billion in August. They were still significantly higher than last year’s $4.7 billion. China’s overall purchases of energy products from Russia topped $51 billion in the seven months since the start of Russia’s military operation in Ukraine. During the same period in 2021, China’s energy purchases from Russia amounted to $30 billion. Click here to read…

Israel begins Karish gas production ahead of Lebanon deal

Israel has begun gas production at Karish, an offshore field at the heart of a maritime border agreement expected to be signed soon with Lebanon. The London-based hydrocarbon company Energean said that the first gas had been delivered, after Israel gave permission on Oct 25 for the production to begin. “We have delivered a landmark project that brings competition to the Israeli gas market, enhances security of energy supply in the East Med region and brings affordable and clean energy that will displace coal-fired power generation, making a material impact to the environment,” said Mathios Rigas, Chief Executive Officer of Energean in regulatory filing. Israel and Lebanon agreed earlier this month to set a maritime border for the first time and establish a mechanism for both countries to explore offshore gas fields. That is despite the two neighbours having technically been at war for decades, although the last active conflict was in 2006. The US-brokered deal is expected to be finalised on Oct 27 during a ceremony in the Lebanese town of Naqoura, with delegations from Israel and Lebanon signing the deal in separate rooms. Under its terms, Israel retains full rights to develop the Karish field while Lebanon retains full rights in nearby Qana. Click here to read…

Russia suggests alternative to Suez Canal

The North-South corridor could become a safe substitute for the Suez Canal, Russia’s Deputy Prime Minister Andrey Belousov said on Oct 28, adding that he expects the volume of Russian cargo via this route to double by 2030. Speaking at the Eurasian Economic Forum, he noted that the International North South Transport Corridor (INSTC) and other alternative routes are gaining importance due to “global shifts of world markets” to China, South-East Asia and the Persian Gulf. Existing transport infrastructure which has been historically focused on the “East-West horizon ceases to meet global trends,” according to the Deputy Premier, while the “North-South route may become a real competitor to the Suez Canal.” The route is currently the only deep-sea trade artery which connects Europe and Asia, and such “monopolarity” poses risks to the global economy, the official said. He recalled an incident in 2021 when a container ship became stuck in the Suez Canal, triggering knock-on effects on global trade. The INSTC is a 7,200-kilometer multi-mode transit system that connects ship, rail, and road routes for moving cargo between India, Iran, Azerbaijan, Russia, Central Asia, and Europe. Experts say the route could cut costs by about 50% and save up to 20 days of travel time. In an effort to build up new logistics chains and make the route viable, Russia has proposed establishing an international operator for the North-South corridor along with Iran and Azerbaijan, the minister said. Click here to read…

EU issues plans, aiming for ‘zero pollution’ in air and water by 2050

The European Union (EU) detailed plans on Oct 26 to bring air and water pollution down to zero by 2050, proposing tougher rules and compensation for those affected by poor air quality. The points set out by the European Commission bolster its push transitioning toward a greener future for the 27-nation bloc – a core pledge by commission chief Ursula von der Leyen. “The longer we wait to reduce this pollution, the higher the costs to society. By 2050, we want our environment to be free of harmful pollutants,” her vice president, Frans Timmermans, said. “Our proposals to further reduce ­water and air pollution are a crucial piece of that puzzle.” The plan calls for a revision of EU legislation, the Ambient Air Quality Directives and the Urban Wastewater Treatment Directive. They would introduce regular reviews, more than halve the annual limit for fine-particle pollution in the air, and make wastewater treatment more effective by, for instance, recovering more nutrients from it for recycling use. A “polluter pays” principle would be applied to toxic micro-pollutants in ­water – 92 percent of which the commission said comes from pharmaceuticals and cosmetics. A key proposal is the compensation for those who have suffered where EU air quality norms have been violated. Click here to read…

China-backed AIIB warns against panic building fossil fuel power plants

The China-backed Asian Infrastructure Investment Bank (AIIB) has warned governments against building new fossil fuel power stations out of panic during the current global energy crisis, saying such moves could result in decades of environmental harm. There is now a real risk that worried governments rush to open or reopen coal and other heavily polluting power stations to bolster their energy supplies, Jang Ping Thia, one of the AIIB’s lead economists, warned. “We should avoid making serious mistakes in this panic,” he said. “Don’t let a one-year crisis lock you in for the next 25-30 years.” Beijing-headquartered AIIB’s annual infrastructure finance report, published on Oct 26, lays out its stance for what is shaping up to be a difficult United Nations Climate Change COP 27 summit in Egypt next month. It called for heavily-polluting state-owned firms to be rapidly turned into green energy “leaders”, putting special focus on China, India and Indonesia, noting that a global net-zero transition would not succeed without their cooperation. AIIB President Jin Liqun also gave a clear nod to what is likely to be the key point of tension in Egypt – that while richer countries have produced most of the CO2 and other greenhouse gases, it will be the world’s poorest countries that bear the brunt of climate change. Click here to read…

Saudi announces establishment of 5 investment firms on 2nd day of Future Investment Initiative conference

Saudi Arabia’s Public Investment Fund (PIF) has established five regional investment companies to invest in Bahrain, Iraq, Jordan, Oman and Sudan, according to a PIF press release published on Oct 26. The five companies, together with the Saudi Egyptian Investment Company established in August, aim to invest up to 90 billion Saudi Riyals (24 billion U.S. dollars) in various key sectors including infrastructure, real estate development, mining, healthcare, financial services, food and agriculture, manufacturing, telecoms, and technology. The announcement, made by Saudi Arabian Crown Prince Mohammed bin Salman Al Saud, comes on the second day of the 6th edition of the Future Investment Initiative (FII) conference held in Riyadh, the capital of Saudi Arabia, with the participation of leading investors, innovators and world leaders. The second day of the event also witnessed Saudi Aramco’s announcement of the launch of a 1.5-billion-U.S. dollar sustainability fund that invests in technology to support a stable and inclusive energy transition. Managed by Aramco Ventures, the venture capital arm of Aramco, the fund aims to meet the world’s growing energy demand with lower greenhouse gas emissions. Initial focus areas will include carbon capture and storage, greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels. Click here to read…

China launches 3rd and final space station component

China on Oct 31 launched the third and final module to complete its permanent space station, realizing a more than decade-long endeavor to maintain a constant crewed presence in orbit. Mengtian was blasted into space at 3:39 p.m. (0739 GMT) Oct 31from the Wenchang Satellite Launch Center on the southern island province of Hainan. A large crowd of amateur photographers, space enthusiasts and assorted lookers-on watched the lift-off from an adjoining beach. Many waved Chinese flags and wore T-shirts emblazoned with the characters for China, reflecting the deep national pride invested in the space program and the technological progress it represents. Mengtian, or “Celestial Dream,” joins Wentian as the second laboratory module for the station, collectively known as Tiangong, or “Celestial Palace.” Both are connected to the Tianhe core module where the crew lives and works. Like its predecessors, Mengtian was launched aboard a Long March-5B Y4 carrier rocket–a member of China’s most powerful family of launch vehicles–from the coastal Wenchang space base on the tropical island province of Hainan. Mengtian was due to spend 13 hours in flight before reaching Tiangong which is populated by a crew of two male and one female astronauts, according to the China Manned Space Agency. Click here to read…

U.S. midterms: Tech sector braces for further China decoupling

With the U.S. midterm elections less than 10 days away, tech industry is holding its collective breath for a new group of elected officials to provide much-needed relief to the sector, as it is facing growing pressure from supply chain constraints, the economic downturn and U.S.-China tensions that refuse to abate this year. While the elections for the House of Representatives and Senate, along with state and local officials, are typically focused on domestic issues such as abortion rights and gun control, tech leaders across the globe are closely watching the Nov. 8 vote for its implications on the industry at home and abroad. Democrats and Republicans appear to be split more than ever, but the parties have recently found common ground on China. House and Senate candidates across both aisles are campaigning on tough China policies. Many campaign messages from incumbents tout the CHIPS and Science Act, which was designed to help the U.S. compete with China in technology and was signed into law in August with bipartisan support, as well as the most strict chip export ban on China announced in October. The rarely seen unity comes down to a simple fact, American public opinion of China is at a historic low. A September survey by Pew Research Center found 82% of U.S. respondents expressed an “unfavorable” view of China, a record high up from 79% in 2020. Click here to read…

Pakistan, China aim to jump-start Belt and Road plans in key talks

Pakistan and China sought to revive Belt and Road projects in the South Asian country at an annual huddle, held virtually on Oct 27. In the run-up to the talks, cash-strapped Islamabad appeared to have accepted a Chinese demand to increase the cost of a railway, as it seeks to secure more financing. This was the 11th meeting of the Joint Cooperation Committee, the key forum for making decisions on the China-Pakistan Economic Corridor (CPEC), a $50 billion Pakistan component of the Belt and Road. Zhao Shiren, the Chinese consul general in Lahore, told local media earlier this month that work on the CPEC is expected to speed up after the JCC meeting. The center of attention now is Main Line 1, or ML-1, a project that will upgrade 1,733 kilometers of railway track between Karachi and Peshawar. This is the largest CPEC project in terms of cost, and it had been awaiting a final decision for the past five years. “Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic,” an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. Click here to read…

Germany backs China’s Cosco shipping on Hamburg port bid despite national security warnings

The German government has backed a controversial deal allowing Chinese state-owned shipping giant Cosco to buy a stake in a terminal at its busiest port, despite multiple federal ministries warning that it would be a national security risk. Chancellor Olaf Scholz’s cabinet on Oct 26 gave the green light to a compromise whereby Cosco would buy a stake “below 25 per cent” of Tollerort container terminal, owned by Hamburger Hafen und Logistik AG (HHLA). The Chinese company wanted a 35 per cent stake, a purchase that would have automatically gone through at the end of October had the cabinet not struck a deal. At this reduced stake, Cosco will have no voting rights at the port, the economic ministry said. The port saga has become a huge story in Germany, and has exposed deep divisions on federal China policy among the three-way coalition which came to power last year. Chancellor Scholz, a Social Democrat and the former mayor of Hamburg, has largely followed predecessor Angela Merkel’s policy of maintaining strong trading ties with China, even as European Union officials warned that Berlin was set to repeat the mistakes of the past, in reference to its reliance on Russian energy. The Greens and Free Democrats (FDP), the two junior coalition partners, advocate a tougher policy towards China and opposed the deal, which officials have said leaves Germany more vulnerable to “blackmail” and economic coercion by China. Click here to read…

Strategic
Ukrainian military logistics degraded – Moscow

Ukraine’s military has suffered a serious degradation of capabilities due to the recent strikes by Moscow’s forces, the Russian Defense Ministry stated on Nov 01. “Transportation of manpower and material towards the frontlines via railroads has been hampered to a large degree. Production at Ukrainian military industrial facilities has also been disrupted,” the statement said, describing the results of the long-range missile barrage launched on Oct 31. Meanwhile, Russian Defense Minister Sergey Shoigu reported that precision strikes were continuing on key targets, which was affecting Ukraine’s military potential. Speaking during a working meeting on Nov 01, the minister also said that over the last two weeks Russian forces had destroyed 74 tanks, 235 other armored vehicles, two HIMARS multiple rocket launchers and 268 armed cars. The Ukrainian Air Force reported detecting 50 missiles launched on Oct 31 from Russian aircraft and claimed have to have intercepted 44 of them. Prime Minister Denis Shmigal said Russia had hit 18 targets, mostly related to the energy sector, in ten regions of the country. Ukraine’s railroad monopoly confirmed that some of its lines had suffered from a blackout and that it had to roll out backup diesel locomotives in response. Russia shifted its military tactics in Ukraine last month and began launching attacks against energy infrastructure. Click here to read…

China Nods to Even Tighter Ties With Russia in Xi Jinping’s Third Term

China’s top diplomat signalled that Chinese leader Xi Jinping, fresh from extending his power for a norm-breaking third term, intends to double-down on his tight relationship with Russia’s Vladimir Putin—driving an even deeper wedge between the two authoritarian rulers and the West. In a Oct 27 phone call with Russian counterpart Sergei Lavrov, Chinese Foreign Minister Wang Yi said Beijing wants to deepen its relationship with Moscow “at all levels,” according to a readout published by China’s Ministry of Foreign Affairs late that night. China firmly supports the efforts of Mr. Putin “to unite and lead the Russian people in overcoming difficulties” and “further establish Russia’s status as a major power on the international stage,” Mr. Wang said. Mr. Lavrov congratulated Mr. Xi on his “utter success” at a recently concluded Communist Party congress in Beijing, according to the Chinese readout. In addition to securing his third term, Mr. Xi used the congress to stack the party’s top leadership with his allies and protégés, paving the way for him to rule China essentially unchallenged. Though Beijing and Moscow aren’t formal diplomatic allies, the Chinese leader has been Mr. Putin’s most powerful supporter. The two spoke at a regional summit in Uzbekistan in September, in the first face-to-face meeting between the leaders since the start of the Ukraine war and Mr. Xi’s first trip abroad since Covid-19 began spreading significantly in the Chinese city of Wuhan in early 2020.Click here to read…

Israelis vote in fifth parliamentary election in less than four years

Israel is holding a parliamentary election on Nov 01, its fifth in less than four years, as parties hope to finally break government gridlock and end a prolonged political crisis. According to final polls, released four days before the vote, the bloc of opposition parties led by former Prime Minister Benjamin Netanyahu is expected to win 60 seats in the Knesset, the country’s parliament, one short of a majority. His main rival, Prime Minister Yair Lapid, and the coalition he leads, is projected to win 56 seats. Turnout hit 15.9% by 10am local time, Central Elections Committee head Orly Ades said, the highest since 1981, according to the Times of Israel. Netanyahu, the country’s longest-serving prime minister, who governed in the 1990s and later from 2009 to 2021, was ousted from power last year. A new government was formed under a multiparty deal spearheaded by Lapid’s Yesh-Atid party and Naftali Bennett’s Yamina. The cabinet included members from a wide spectrum of political ideologies, with Bennett and Lapid leading as alternating PMs. The work of the broad coalition, however, became quickly marred by frequent infighting and revolts by individual MPs. In a major blow to unity, the parliament failed in June to approve the extension of regulations applied to Israeli settlers in the West Bank. Lapid and Bennett announced the dissolution of the Knesset the same month and called for a new election.Click here to read…

Lula defeats Bolsonaro in Brazilian election

Former president Luiz Inacio Lula da Silva clinched victory over his right-wing rival Jair Bolsonaro in a tightly contested second round of the Brazilian election on Oct 30. The country’s election authority announced Lula’s narrow win with 50.9% of the vote to Bolsonaro’s 49.1%. “This isn’t a victory of mine or the Workers’ Party… It’s the victory of a democratic movement that formed above political parties, personal interests and ideologies so that democracy came out victorious,” Lula told a cheering crowd of supporters in Sao Paulo on Oct 30 night. The president-elect acknowledged that following such a tight race a challenge to his future mandate will be “immense,” and stressed that “it is necessary to rebuild the very soul of this country, recover generosity, solidarity, and respect for differences and love for others.” Lula, who is set to take office on 1 January 2023, promised to be a president for all 215 million Brazilians, not just those who voted for him. “There are not two Brazils. We are one country, one people – a great nation.” Bolsonaro has yet to publicly concede defeat. The incumbent repeatedly warned during his campaign that he would contest the results if he were to lose by a narrow margin, calling into question the reliability of Brazil’s electronic voting system. Click here to read…

U.S. says China resisting nuclear talks after Xi vows to boost deterrent

Despite the lesson of the Cuban missile crisis 60 years ago, China has shown no interest in discussing steps to reduce the risk posed by nuclear weapons, senior U.S. officials said on Nov 01, after Chinese leader Xi Jinping signalled last month that Beijing would strengthen its strategic deterrent. The Pentagon says China is undergoing a major expansion of its nuclear forces and is moving toward having 1,000 nuclear warheads by 2030. But Beijing has long resisted arms control talks with Washington, arguing that the United States already has a much larger arsenal. Alexandra Bell, deputy assistant secretary of state for arms control, verification and compliance, told an Atlantic Council that despite U.S. efforts, Washington and Beijing still had not begun engagement on the issue. “As a first step, we’d really like to have a conversation with them about each other’s doctrines, about crisis communication, crisis management,” Bell said, noting that Washington has had such talks with Russia for decades. “We’re not in that space with Beijing yet. So, there’s work to be done to begin the conversation, we think bilaterally,” Bell said. U.S. National Security Advisor Jake Sullivan said last year after a call between Xi and President Joe Biden that the two had agreed to “look to begin to carry forward discussion on strategic stability.” Click here to read…

U.S. vows full military defense of allies against North Korea

The United States will make full use of its military capabilities, “including nuclear, conventional and missile defense,” to defend its allies Japan and South Korea, U.S. Deputy Secretary of State Wendy Sherman said Oct 25 as she warned North Korea against escalating its provocations. Sherman said North Korea’s repeated firings of ballistic missiles and artillery in recent weeks were provocative military actions. North Korea has described them as practice runs for the use of tactical nuclear weapons. “This is deeply irresponsible, dangerous, and destabilizing,” Sherman said in talks in Tokyo with South Korean First Vice Foreign Minister Cho Hyungdong. The two officials met ahead of a three-way meeting with their Japanese counterpart on Oct 26. It will be second in-person meeting of the three officials since conservative South Korean President Yoon Suk Yeol took office in May, signaling an improvement in difficult ties between Japan and South Korea. A year ago, Japanese and South Korean vice ministers declined to participate in a joint news conference after three-way talks in Washington, leaving Sherman to make a solo media appearance. Sherman said North Korea needs to understand that the U.S. commitment to the security of South Korea and Japan is “ironclad.” “And we will use the full range of U.S. defense capabilities to defend our allies, including nuclear, conventional and missile defense capabilities,” she said. Click here to read…

Myanmar warns any ASEAN pressures would create ‘negative implications’

Myanmar’s military government warned on Oct 27 that any pressure from its Southeast Asian neighbors to put a time frame on a peace plan would create “negative implications.” The ruling junta, which seized power from an elected government last year, was reacting to a meeting earlier on Oct 27 of foreign ministers from the Association of Southeast Asian Nations (ASEAN) member countries in Jakarta to discuss easing the intensifying crisis. ASEAN remains committed to a peace plan agreed with Myanmar’s military rulers, its chair Cambodia said on Oct 27, even as some countries raised concerns over the failure to implement the plan agreed with the junta 18 months ago. No Myanmar representatives were present at the special meeting of the group’s foreign ministers to discuss the stalled peace plan. Myanmar’s generals have been barred from high-level ASEAN meetings since last year, after the army ousted Nobel laureate Aung San Suu Kyi’s elected government in a February 2021 coup, detaining her and thousands of activists and launching a deadly crackdown that has given rise to armed resistance movements. The junta has done little to honor its commitments to the so-called five-point peace “consensus” which includes an immediately halting violence, starting dialogue, allowing an ASEAN chair envoy to facilitate mediation and allowing ASEAN to provide humanitarian assistance. The head of the junta has blamed the lack of progress on instability in the country and the COVID-19 pandemic. Click here to read…

China’s Global Security Initiative: Xi’s wedge in the U.S.-led order

Chinese President Xi Jinping’s nearly two-hour speech to more than 2,000 delegates at this year’s Communist Party congress was filled with familiar refrains. Written into his work report for the first time, however, was the Global Security Initiative (GSI), signaling an important theme in his precedent-breaking third term. “An ancient Chinese philosopher observed that ‘all living things may grow side by side without harming one another, and different roads may run in parallel without interfering with one another,'” Xi said in his work report. “Only when all countries pursue the cause of common good, live in harmony and engage in cooperation for mutual benefit will there be sustained prosperity and guaranteed security.” It is “in this spirit,” according to Xi, that China has launched the GSI. But what is it? As with China’s other lofty global programs — the Belt and Road Initiative for building infrastructure and the Global Development Initiative for helping emerging nations confront poverty and other challenges — the nascent GSI is heavy on verbiage and light on concrete details. When he announced it at the Boao Forum for Asia in April, Xi said the GSI would provide a framework of principles for global affairs and diplomacy that could make the world a safer place. Click here to read…

Japan to establish Self-Defense Forces ‘joint command’ in 2024

Japan is moving to set up a new joint command and a new commanding officer position to oversee its three Self-Defense Force units and better coordinate with the U.S. military in emergencies, Nikkei has learned. The restructuring could take place as soon as 2024 as the nation remains vigilant for any potential crisis in the Taiwan Strait. The officer will oversee the operations of the Ground, Maritime, and Air Self-Defense Forces, and closely communicate with his U.S. counterpart. To that end, the government must first amend the Self-Defense Forces Act. The plan will be included in three security-related documents to be revised at the end of the year. Once the amendments are made, a rapid-response system will be established by 2027, when some experts fear China could potentially consider invading Taiwan. Currently, the Joint Staff Office of the SDF commands all three forces and is overseen by the chief of staff, the sole person in charge of communication with the prime minister and U.S. military. But the chief of staff has additional duties, especially in regard to ensuring orders are carried out. This reorganization is meant to ease the chief of staff’s workload by creating a new command position under him, with this officer overseeing the operations of all three forces. The officer will also coordinate moves between the SDF and U.S. forces in emergencies. Click here to read…

German Chancellor Scholz will visit Beijing on Nov. 4

German Chancellor Olaf Scholz will press China to open up its markets and will raise human rights concerns next week in what will be the first visit by a European Union leader to China since the start of the COVID-19 pandemic, Berlin said on Oct 28. Scholz will visit on Nov. 4 at a time of growing concern in the West about China’s trade practices and human rights record, as well as anxiety over Germany’s reliance on the world’s second-largest economy. The visit also comes amid a festering row within Scholz’s three-way coalition over whether to approve Chinese investment in a terminal at Hamburg, Germany’s largest port, which Scholz is pushing through despite the security concerns of his ministers. The German government’s spokesperson told a briefing on Oct 28 that Berlin’s view of Beijing had changed but it was against “decoupling” from the Chinese economy and wanted Beijing to show reciprocity in trade relations. Germany would discuss “autocratic” tendencies in China and human rights, “but also a whole range of other questions, about reciprocity, as in the opening of Chinese markets for European and other companies,” the spokesperson said. The German government wanted to meet nongovernmental organizations during the visit but it was not clear if that will be possible, the spokesperson added. Click here to read…

Leaders head to Algeria for first Arab League summit in two years

The first Arab League summit since the outbreak of the COVID-19 pandemic is set to begin in Algeria, but political divisions continue to rankle among the regional organisation’s members. Arab states are split over issues ranging from support for the Palestinian cause, the regional roles of Iran and Turkey and the rehabilitation of Syria’s President Bashar al-Assad, while Algeria’s own bitter feud with Morocco continues to fester. In Algeria, largely absent from Arab affairs for several years following the 2019 mass protests that led to the ousting of President Abdelaziz Bouteflika, the meeting has been portrayed as a mark of its return to front-line diplomacy. “The summit shows that Algeria is back in international affairs after years of isolation due to Bouteflika’s illness, the protest movement, COVID-19 and the financial crisis,” a former Algerian government minister and the ambassador said. Last month Algiers convened Palestinian factions in an effort to end years of internal discord, and President Abdelmadjid Tebboune has in recent months hosted the leaders of France and Italy. However, Algeria failed earlier this year to persuade other Arab states to end Syria’s suspension from membership of the League imposed in late 2011 over al-Assad’s crackdown on protesters as an uprising spilled into civil war. Damascus said in September it would not attend to avoid “causing dispute”. Click here to read…

Israel’s Benny Gantz relaunches defence ties with Turkey

Israeli Defence Minister Benny Gantz has heralded a new era in security ties with Turkey as the two countries seek to mend a relationship that had been broken for a decade. Gantz spoke on Oct 27 during a one-day trip to the powerful NATO member and two months after Israel and Turkey renewed their diplomatic ties. “For over a decade, there were no formal security ties,” Gantz said after meetings with Turkish President Recep Tayyip Erdogan and Defence Minister Hulusi Akar in Ankara. “Today we’re changing that in a responsible and gradual process that serves Israel’s interests.” In 1949, Turkey became the first Muslim-majority nation to recognise Israel. But bilateral relations began to fray in 2008 after an Israeli military operation in Gaza. Ties then froze in 2010 after the deaths of 10 civilians following an Israeli raid on the Turkish Mavi Marmara ship, part of a flotilla trying to breach an Israeli blockade and carry aid to Gaza. A brief reconciliation lasted from 2016 until 2018 when Turkey withdrew its ambassador and expelled Israel’s over the killing of Palestinians during a conflict with Gaza. Relations began to thaw after the departure of former Israeli Prime Minister Benjamin Netanyahu. Israeli President Isaac Herzog paid a state visit to Turkey in March, followed by Prime Minister Yair Lapid in June. Lapid was foreign minister at the time. Click here to read…

China-Vietnam ties: Beijing reassured by Hanoi’s vow to reject all military alliances, analysts say

Morale in Beijing, which is weary of American influence in Taiwan and the South China Sea, will be boosted by Vietnam’s refusal to host foreign bases on its soil, analysts said as Vietnamese Communist Party chief Nguyen Phu Trong concluded his four-day visit to China. During his meeting with Chinese President Xi Jinping, Trong said ties with China were the “top priority” of Vietnam’s foreign policy. He said his government sought to work with Beijing to maintain peace and stability and avoid maritime conflicts “affecting the overall development of relations between the two countries”. According to the account of the meeting released by the Chinese side, Trong told Xi that Vietnam would not allow any overseas military base to be established in the country, and nor would it join forces with any country against another. Statements released by Vietnam did not include those remarks but said Trong had told Xi that upgrading ties with China was Vietnam’s top priority. In a meeting with Chinese Premier Li Keqiang on Nov 01, Trong said Vietnam would stick to the one-China policy. According to Song Zhongping, a former People’s Liberation Army instructor and analyst, the South China Sea – which is also claimed by regional states, including Brunei, Indonesia, Malaysia and the Philippines – is an “unavoidable issue” that the socialist neighbours will have to confront eventually. Click here to read…

Medical
WHO issues warning on tuberculosis

The number of people infected with tuberculosis (TB) has increased globally for the first time in nearly two decades, according to the World Health Organization (WHO). The watchdog recorded a 4.5% year-on-year increase in 2021, with some experts claiming little attention is being paid to the dire situation since the disease mostly affects poorer regions. In its report published on Oct 27, the WHO revealed that a total of 10.6 million people were diagnosed with tuberculosis last year, with 1.6 million more succumbing to the disease. The latter figure rose for the second consecutive year. The UN health agency clarified that the Covid-19 pandemic had contributed to the spike in TB-related deaths as lockdowns prevented many patients from getting a diagnosis or receiving treatment. Commenting on the report’s findings, Dr. Lucica Ditiu, the executive director of the Stop TB Partnership, lamented that “despite this shockingly upward trend of TB mortality and infection rates, funding for fighting TB decreased in 2020 and 2021 from an already pathetically low level.” Speaking to Britain’s The Guardian newspaper, she questioned whether the lack of resources was down to the fact that the infection “affects mainly poor people from poorer countries, and it is more comfortable to simply neglect them.” The WHO also reported a decline in global funding for essential tuberculosis services from $6 billion in 2019 to $5.4 billion in 2021. Click here to read…

Cholera spreading ‘rapidly’ across Lebanon: WHO

A deadly cholera outbreak is spreading “rapidly” across Lebanon, the World Health Organization (WHO) warned on Oct 31. Lebanon’s first cholera outbreak in decades began in early October after the virulent disease spread from neighboring Syria. “The situation in Lebanon is fragile as the country already struggles to fight other crises, compounded by prolonged political and economic deterioration,” said Abdinasir Abubakar, the WHO representative in Lebanon. Since October 5, more than 1,400 suspected cases have been reported in Lebanon, including 381 confirmed cases and 17 deaths, the WHO said in a statement. While the outbreak was initially confined to the impoverished north, it has “rapidly spread” across Lebanon, it ­added. The WHO said it has helped the country secure 600,000 vaccine doses, and efforts to secure more are “ongoing given the rapid spread of the outbreak.” Cholera is generally contracted from contaminated food or water, and causes diarrhoea and vomiting. It can also spread in residential areas that lack proper sewerage networks or mains drinking water. The outbreak in Lebanon came on the heels of a recent wave in Syria, where more than a decade of war has damaged nearly two-thirds of water treatment plants, half of pumping stations and one-third of water towers, according to the United Nations. The Euphrates River, which has been contaminated by sewage, is believed to be the source of Syria’s first major cholera outbreak since 2009. Click here to read…

Global Developments and Analysis: Weekly Monitor,17 October- 23 October

Economic
China ADRs tumble as Xi’s new team sparks worries over economy’s path

US-listed shares of Chinese companies slumped on Oct 24 after President Xi Jinping’s new leadership team sparked investor concerns that ideology-driven policies would be prioritised at the cost of private sector growth. Ecommerce giants Alibaba, JD.com as well as internet behemoth Baidu crashed between 14 per cent and 17 per cent, even as the benchmark S&P 500 edged higher. The iShares MSCI China ETF tanked 10 per cent, tracking its steepest one-day drop ever. “The concern is that the Chinese government is continuing to move to a more socialist economic model under Xi which may require Chinese companies to place ever more focus on social goals rather than profitability,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon. “By consolidating power, Xi is likely to face little opposition to this form of nationalization of corporate interests.” Earlier in the day, Hong Kong stocks slumped 6.4 per cent to 13-year lows and China’s blue-chip shares slid 2.9 per cent as investor worries over the direction of the world’s second largest economy overshadowed upbeat third-quarter growth data. Xi secured a precedent-breaking third leadership term on Oct 23 and introduced the new Politburo Standing Committee stacked with loyalists. Click here to read…

Yuan falls to lowest since 2008 global crisis, despite state bank support

China’s yuan fell on Oct 21 to its weakest level against the dollar since the global financial crisis of 2008, despite attempts by major state-owned banks to stabilise the market. Sources told Reuters that state banks sold dollars in the onshore foreign exchange market to prevent the spot price from weakening past the 7.25 per dollar level. State banks usually trade on behalf of the central bank in China’s foreign exchange market, but they can also trade for their own purposes or execute orders for corporate clients. Still, the onshore yuan finished the domestic trading session down 0.46 per cent on the day at 7.2494 per dollar, the weakest such close since Jan. 14, 2008. For the week, it looked set to fall 0.78 per cent as the surging dollar continued to batter emerging market currencies, taking its depreciation so far this year to 12.3 per cent. Traders said yuan weakness may persist, reflecting broad dollar strength as Federal Reserve officials show no signs of backing down from their hawkish rhetoric on rate hikes, while Chinese policymakers try to support the sputtering economy. Meanwhile, Chinese authorities continued to set firmer-than-expected yuan guidance in a bid to keep the currency stable during the politically sensitive Communist Party Congress, market participants added. Click here to read…

Xi promotes ‘aerospace clique’ to counter U.S. as a defence power

As Chinese President Xi Jinping prepares to secure an unprecedented third term in power, he has placed more than 10 former officials from state-owned companies linked to defence into key party and state positions as part of a national effort to challenge the U.S. in the military and aerospace arenas. In his report at the start of the Communist Party’s national congress, Xi pledged to “boost the overall performance” of China’s high-tech “innovation system,” eyeing Beijing’s policy of military-civil fusion combining technical advances from the private sector with defence technology. Russia’s invasion of Ukraine and China’s sabre-rattling over Taiwan have heightened tensions between Beijing and Washington. In that context, the party is using its “whole nation system,” a term from the central planning era to describe tapping all of the country’s sectors, to mobilize development of space and weapons programs. While serving as party leader during the past decade, Xi has promoted people who worked at state-owned military contractors overseen by the State Administration of Science, Technology and Industry for National Defense. Members of this “aerospace clique” — executives at defence industry groups involved in space development — have been especially favoured in climbing the career ladder. These enterprises have worked in tandem with the People’s Liberation Army. Click here to read…

China makes it easier for firms to borrow from overseas as yuan drops

China’s central bank and foreign exchange regulator on Oct 25 raised the cross-border macro prudential adjustment ratio for corporates and financial institutions, making it easier for domestic firms to raise funds from overseas markets. The People’s Bank of China (PBOC) said in a statement it raised a parameter on cross-border corporate financing under its macro-prudential assessments to 1.25 from 1. Oct 25’s move will “increase the sources of cross-border funds for enterprises and financial institutions, and guide them to optimise the asset-liability structure,” the PBOC said in the statement posted on its website. The move, which reverses a previous adjustment in 2021 to tighten overseas financing, comes at a time the Chinese yuan faces renewed depreciation pressure. Allowing more capital inflows could alleviate such downside pressure. The yuan has lost 13 per cent against a buoyant dollar so far and looks set for the biggest annual drop since 1994, when China unified market and official rates. Click here to read…

China tackling decoupling with FDI promotion push

China’s government will implement a series of measures to attract foreign companies to invest in high-end manufacturing in mainland China, a counter to US-led efforts to persuade firms and allied nations to “decouple” from China and its supply chains. The National Development and Reform Commission (NDRC), the Ministry of Commerce, the Ministry of Industry and Information Technology (MIIT) and three other ministries on Oct 25 suggested that foreign companies should be provided with sufficient land resources and a level playing field to develop their mainland businesses. The call came as new Chinese leadership was formed after the week-long 20th National Congress of the Communist Party of China (CPC) ended Oct 22. The call was also made ahead of a global financial summit set to be held in Hong Kong on November 2. The Hong Kong Monetary Authority (HKMA) said more than 200 international bankers and business leaders would attend the summit and that they would be exempted from some Covid rules during the three-day health monitoring period after their arrival. Meanwhile, Ned Price, a spokesman of the United States Department of State, said on Oct 24 the US would not change its stance toward China after CPC General Secretary Xi Jinping was given a third term.Bloomberg reported that US officials are now trying to set up a meeting between US President Joe Biden and Xi. Click here to read…

As intervention threat grows, Japan says confronting FX speculators ‘strictly’

Japanese Finance Minister Shunichi Suzuki said on Oct 21 that authorities were dealing with currency speculators “strictly”, as an extended sell-off of the yen kept markets on heightened alert for further dollar-selling intervention by Tokyo. “We are confronting speculators strictly,” Suzuki told a regular news conference, when asked whether the Japanese yen was under attack by speculators. “It’s inappropriate for me to comment on such a question under the current circumstances.” Suzuki was speaking as the dollar strengthened to 150.22 yen, the highest since Aug 1990, earlier Oct 21, after breaking the key psychological level of 150 on Oct 20. The dollar has surged around 30 per cent against the yen this year, despite Japan spending up to a record 2.8 trillion yen (US$19.7 billion) intervening in the foreign exchange market in September to support its currency for the first time since 1998. Suzuki underscored the importance of maintaining trust in Japan’s finances, after Britain was plunged into financial crisis in the wake of a violent market reaction to plans for huge unfunded tax cuts, forcing its premier to resign after just six weeks in office. “It’s not that Japan’s finances are undergoing a major shift in phase leading to the current yen weakening,” Suzuki said. “We must adhere to fiscal discipline.” Click here to read…

US nuclear industry has a Russia problem – Reuters

US companies may fail to launch next generation nuclear power plants with new Small Modular Reactors (SMR) without supplies of Russian uranium, Reuters reported on Oct 20. The advanced reactors, according to developers, are three times more efficient than conventional versions, they consume less fuel and are crucial for the country’s agenda to meet net-zero emissions. SMRs need High-Assay Low-Enriched Uranium (HALEU), which is enriched to levels of up to 20%, compared to about 5% for the uranium that powers most nuclear plants. The only company which currently sells this type of uranium commercially is Tenex – a subsidiary of Russian state-owned nuclear energy major Rosatom. While the company has not been subject to Western sanctions, being an important part of the global nuclear fuel supply chain, US firms X-energy and Terra Power that have state contracts to develop advanced reactors, are reluctant to buy Russian uranium. “We understand the need for urgent action to incentivize the establishment of a sustainable, market-driven supply of HALEU,” a spokesperson from the US Department of Energy told Reuters. It is not clear who can replace Russian HALEU which is needed to fuel nine out of ten of the advanced reactors funded by Washington.Click here to read…

UAE to invest in Russian tech – official

The United Arab Emirates is keen to invest in Russian high-tech companies and to host their representative offices, Deputy Economy Minister Abdullah Ahmad Al Saleh said on Oct 21. Speaking at the Made in Russia forum, he noted that Russian tech companies which he had visited had demonstrated a high level of development. “They have offered a number of inventions and new technologies that we would like to invest in, and we would also like to have their headquarters in our country,” he said, adding that it’s important to promote start-ups. Al Saleh has called for mutual cooperation between the two countries in such areas as space, medicine and green energy, in particular highlighting Russia’s experience in space technology. He also outlined further plans to develop joint projects, saying that “we are working in the fields of renewable energy, [projects] related to green economy, and also developing business in medical and pharmaceutical sectors. There are also plans to establish cooperation in telemedicine.” Despite its close ties to the US, the UAE has been cautious in its criticism of Russia, and unlike the US and the EU, has not imposed strong restrictions against the country. Last week, Russia’s President Vladimir Putin met with his UAE counterpart Mohammed bin Zayed Al Nahyan, in St. Petersburg. The leaders expressed Moscow and Abu Dhabi’s willingness to develop cooperation on all levels. Click here to read…

Discontent Rises in Europe as Economic War with Russia Pushes Up Cost of Living

A wave of protests triggered by rocketing living costs and a looming recession is sweeping across Europe, testing the resolve of governments that have so far maintained unity in their costly economic war with Russia. The public backlash against high prices for electricity and heating as temperatures begin to fall is also fuelling tensions between European capitals over richer nations’ larger relief packages, which poorer neighbours say are distorting the market and compounding the crisis. On Oct 20, thousands of people took to the streets across France to demand higher wages. Striking teachers, railway and health workers staged marches in dozens of cities, including Paris, snarling traffic and disrupting public transport. In Belgium, the Czech Republic, Hungary and Germany, tens of thousands have marched in recent weeks, demanding pay rises to offset inflation, more state support, and government intervention in the energy market and, in some instances, an end to sanctions against Russia. Despite measures to support households and businesses totalling 264 billion Euros, equivalent to $266 billion, according to Brussels-based think tank Bruegel—by far the largest such package in Europe—Germany has seen weekly protest rallies since the end of the summer, many of them concentrated in the country’s former communist east. Click here to read…

EU Commission proposes tougher pollution rules

The European Union’s executive arm sought on Oct 26 to toughen up pollution restrictions to ensure that harmful pollutants are eliminated by 2050 to potentially save the lives of hundreds of thousands of people. The European Commission’s proposals center on air, waste and water pollution, and need the backing of the EU parliament and member states before they can be made mandatory. That is likely to take many months. Air pollution is the biggest threat to the bloc’s 450 million citizens. The proposals include the doubling of limits to permissible fine air particles by 2030. Such particles are make up a significant part of air pollution overall, which the EU says is killing nearly 300,000 people a year. Because effective enforcement of pollution rules has so far proven difficult, the proposals will empower ailing citizens to seek legal redress with better compensation rights and collective action to seek damages. On just air pollution, the Commission estimates that as much as 121 billion euros could be saved by 2030 if the rules are adopted. ”The cost of inaction is far greater than the cost of prevention,” said Environment Commissioner Virginijus Sinkevicius. Russia’s war in Ukraine is affecting all EU plans and environmental protection is no exception given that Moscow’s energy squeeze on EU nations has already forced many nations to revive policies centredon fossil fuel use. Click here to read…

Biden’s IPEF trade pact lacks core policy: CSIS head

The Biden administration’s lack of a coherent trade policy will hamper Washington’s efforts to place a greater focus on the Indo-Pacific, John Hamre, CEO of the Center for Strategic and International Studies, said on Oct 21. “Where I fault the Biden Administration is on their weak policy concerning trade,” the head of the Washington-based think tank told the CSIS/Nikkei Symposium in Tokyo via video. Hamre said the Indo-Pacific Economic Framework that Washington launched in place of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership lacks content. “The core is missing,” he said, pointing out that Asian partners want increased market access and more trade opportunities, which the IPEF has not addressed in detail. “Foreign policy in Asia is trade policy. And with no trade policy, America can’t be a full partner in building the new Asia.” Hamre, a deputy defence secretary in the Bill Clinton administration, talked of two fundamental policy decisions by former U.S. presidents — one by Barack Obama and one by Donald Trump — that have led to “remarkable consistency” in American security policy and have set the foundation for President Joe Biden’s approach to Asia. On Obama’s pivot to Asia, Hamre said, “For the first time in American history, we said that Asia, not Europe, was our highest priority.” Click here to read…

How the Diesel Crisis Became an Inflationary Time Bomb

According to the EIA, the US now has just 25 days of diesel supply, the lowest since 2008; and while inventories are record low, the four-week rolling average of distillates supplied – a proxy for demand – rose to its highest seasonal level since 2007. The reasons for the collapse in inventories and the price surge are four-fold. First, local diesel demand has recovered quicker than gasoline and jet-fuel from the impact of the pandemic, draining stocks. Second, foreign demand is also strong, with American diesel exports running at unusually high level. Third, and according to many, most important of all, the US also has lower refining capacity than before, reducing its capacity to make fuels. Fourth is Russia’s invasion of Ukraine. The US was importing a significant amount of Russian fuel oil before the war, which its Gulf of Mexico-based refiners turned into diesel. The trade ended after the White House sanctioned Russian petroleum exports. Some relief is on the way. At least two vessels carrying around 1 million barrels of diesel are due to arrive in New York after being diverted from their original destinations in Europe. Delta’s Trainer refinery in Pennsylvania is also returning from seasonal maintenance, which will increase regional diesel production. The bottom line, as the Bloomberg energy strategist notes, is that “the timing of today’s diesel crisis couldn’t be worse.” That’s because the EU, which relies still on Russian diesel exports, will ban imports from February onward (assuming it survives the winter). Click here to read…

U.S. Economy Grew 2.6% in Third Quarter, GDP Report Shows

The U.S. economy grew in the third quarter but showed signs of a broad slowdown as consumer and business spending faltered under high inflation and rising interest rates. Gross domestic product—a measure of goods and services produced across the nation—grew at a 2.6% annual rate in the third quarter after declining in the first half of the year, the Commerce Department said Oct 27. Trade contributed the most to the third quarter’s turnaround as the U.S. exported more oil and natural gas with the war in Ukraine disrupting supplies in Europe. Consumer spending, the economy’s main engine, grew but at a slower pace than in the prior quarter. Businesses slashed spending on buildings, however, and residential investment fell at a 26.4% annual rate, the department said. Stocks were mixed after the GDP release and earnings announcements. Treasury yields fell. Economic uncertainty is growing and many economists are worried about the possibility of a recession in the coming 12 months. They expect the Federal Reserve’s efforts to combat high inflation by raising interest rates will further weigh on the economy. “The overall state of the economy is deteriorating and a lot of it is just the weight of elevated inflation and higher interest rates,” said Richard F. Moody, chief economist at Regions Financial Corp.“Click here to read…

Iran to export 40 gas turbines to Russia

Iran has signed a contract with Russia to export 40 home-grown gas turbines to the country, Shana News Agency affiliated to the Iranian oil ministry reported on Oct 23. Iran is now capable of meeting 85 percent of its domestic needs for gas equipment and facilities, and its gas production has doubled despite the severe US sanctions, Shana quoted Reza Noshadi, head of Iran Gas Engineering and Development Company, as saying. Iran and Russia have in recent years expanded their cooperation in different areas. In July, the two countries signed a memorandum of understanding, according to which Russia is expected to invest about $40 billion in Iran’s petroleum industry, Shana reported. In late July, Governor of the Central Bank of Iran Ali Salehabadi announced that the Tehran Stock Exchange had launched the rial-ruble trading, official news agency IRNA reported. About a month later, he said Tehran and Moscow will expand the use of national currencies in transactions to other areas of bilateral trade, semi-official Fars News Agency reported. In late August, Russian Foreign Minister Sergei Lavrov said Russia and Iran are finalizing a comprehensive document on their cooperation. “We are satisfied with the way our bilateral relations are developing. They are reaching a new qualitative level, which will be fixed in a large agreement between the two countries,” Lavrov said at a joint briefing following his meeting with his Iranian counterpart Hossein Amir-Abdollahian in Moscow. Click here to read…

Myanmar Joins North Korea and Iran on Global Illicit Finance Blacklist

A global financial watchdog added Myanmar to its list of countries where businesses and financial institutions are at high risk of exposure to money laundering and terrorist financing, potentially accelerating the country’s economic isolation that was triggered by a military coup last year. The Financial Action Task Force, a Paris-based intergovernmental body whose 39 members include almost all of the world’s major financial centers including the U.S., China and a number of European nations, said on Friday that Myanmar failed to address a large number of deficiencies in its anti-money-laundering and terrorist financing systems. As a result, it said the Southeast Asian country was added to what is informally known as the FATF blacklist. The list consists of just two other nations, Iran and North Korea, which the FATF says have “significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation.” While the designation doesn’t automatically trigger sanctions, FATF urges member countries to scale up due diligence measures that can make it harder for businesses and banks to work in Myanmar. Rights groups say the junta has killed more than 2,300 people and arrested over 15,000 since seizing power on Feb. 1, 2021. Click here to read…

Strategic
Team Xi: China’s new leadership line up

Xi Jinping has unveiled a line up of loyalists in his new inner circle after he secured a third term as China’s leader. The members of the Communist Party’s Politburo Standing Committee were introduced by Xi in ranking order on Oct 23, offering clues about the country’s next premier and other key posts. They are Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang, and Li Xi. Li, 63, was elevated from Shanghai party chief — a position that has almost always meant a promotion to the standing committee. He will succeed Li Keqiang as premier next March. According to his official bio, Li started off as a technical worker at just 17 years of age. He later studied at various institutions and obtained an EMBA from the Hong Kong Polytechnic University in 2005. Li’s career path overlapped with Xi’s in the eastern coastal province of Zhejiang, when Li was a city party boss and later a secretary-general in the provincial party committee directly under Xi. He spent his entire career in Zhejiang before Xi promoted him to head Jiangsu Province in 2016. Li’s career advanced despite criticism for his handling of Shanghai’s chaotic two-month COVID-19 lockdown earlier this year. Zhao Leji, 65, will serve a second term on the committee and will likely head the NPC. Click here to read…

Misreading Xi and the rise of Li

The professional China commentariat and its echo chamber in the Western media were blindsided by the appointment of Shanghai party head Li Qiang as the country’s premier, the number two position to Xi Jinping. Li is a tech-savvy supporter of high-tech entrepreneurship who believes that China’s future lies in the digital economy. Xi, the Western press insisted with near unanimity, had reverted to Maoism. Li is the Shanghai party chief. Few if any previous Shanghai leaders have failed to advance to the Standing Committee, Xi included. That his advance to the number two position nonetheless came as a surprise to most Western analysts merely proves how much so many have misread Xi in particular and Chinese governance in general. Li studied business administration and holds an MBA degree from Hong Kong Polytechnic University, a top-tier Asian business and technology school funded by Hong Kong tycoon Li Ka-shing. He has supported technological entrepreneurship as the leading edge of China’s development. Among other things, Li was one of Jack Ma’s most visible supporters in the China Communist Party leadership. He brought Elon Musk’s Tesla to Shanghai. His appointment affirms the leadership’s support for private-led high-tech industry. Li was chosen for his track record of economic and financial innovation in the Shanghai Free Trade Zone, for bringing in major foreign investment (up by 32% in 2021 despite Covid) and for the policy papers on economic development he wrote for Xi as his assistant in Zhejiang. Click here to read…

Analysts seize on Xi’s mention of strong ‘strategic deterrence’ as sign of China’s nuclear build-up

China is expected to boost its nuclear arsenal after pledges to improve strategic deterrence appeared in its key Communist Party congress report for the first time. “We will establish a strong system of strategic deterrence,” President Xi Jinping said at the opening of the 20th party congress on Oct 16. In his work report, which lays out the country’s development path for the next five years and beyond, Xi called for an increase in the proportion of “new-domain forces with new combat capabilities”. He also called for accelerated development of unmanned, intelligent combat capabilities, promotion of coordinated development and application of the network information system. There was no mention of the concept of strategic deterrence in Xi’s last party congress report in 2017 or in his historical resolution last year, but the country’s 14th five-year plan report released last year emphasised the need to “build a high-standard strategic deterrence”. Analysts said it indicated China would improve its nuclear deterrence capability amid its rivalry with another nuclear power, the US. Song Zhongping, a former People’s Liberation Army instructor, said the statement meant China would “strengthen its development of strategic nuclear forces” to safeguard its national security. Song said the PLA must strengthen its “nuclear triad” forces – its combination of ground-based intercontinental ballistic missiles (ICBMs), submarine-launched missiles and air-launched weapons – as well as its second-nuclear strike capability to respond to a nuclear attack. Click here to read…

Taiwan braces for tougher mainland China forces, defence minister says after Central Military Commission overhaul

Taiwan will have to deal with a tougher and more modernised People’s Liberation Army following the reshuffle of top military leadership in mainland China, the island’s defence minister said on Oct 24. Not only were members of Beijing’s newly appointed Central Military Commission younger than previous commissions, but some of them were more familiar with Taiwan and had a tech background and combat experience, Chiu Kuo-cheng said. “It means the [PLA] will adopt a tougher strategy in dealing with Taiwan in the future,” Chiu said. He made the comments in response to lawmakers’ queries in a legislature meeting in Taipei on how the mainland’s new CMC would affect combat strategies towards the self-ruled island. The Chinese Communist Party reshuffled its top military leadership on Oct 23, a day after the closing session of its 20th party congress, signalling that the PLA would become more focused on Taiwan in the next five years and beyond. General He Weidong, 65, who has a wealth of command experience in China’s eastern military districts, was made the CMC’s second-ranked vice-chairman. Except for CMC Chairman President Xi Jinping, 69, and General Zhang Youxia 72, who was promoted to first-ranked vice-chairman, the remaining five commission members are aged between 58 and 67 – younger than members of previous commissions, Chiu said. Click here to read…

US-Taiwan arms production plan seeks to deter China

Taiwan and the US plan to jointly manufacture weapons to firm up Taipei’s defences against a possible China invasion, a move that could spike already high and rising tensions around the self-governing island. Last week, Nikkei reported that initial discussions have commenced on joint US-Taiwan weapons production, an arrangement that would see US defence companies provide technology and know-how to Taiwan or alternatively assemble weapons in the US using Taiwan-made parts. The negotiations, however, are expected to extend well into 2023 on various issues. Although Taiwan has not to date co-produced US weapons, its Hsiung Feng II and III anti-ship missiles are made with US technology including state-of-the-art US-made gyroscopes for precision targeting. Previous US administrations were thought to be cautious about military and dual-use technology transfers to Taiwan due to the risk of classified information leaking to China. When asked to confirm details of the proposed joint weapons production with Taiwan, US State Department principal deputy spokesperson Vedant Patel said that the US is looking into all possible means to ensure rapid transfer of armaments to Taiwan. China’s rising bellicosity towards Taiwan, high demand for US weapons in the Ukraine war and spiralling costs of US weapons may have driven the Biden administration to consider co-production to accelerate arms transfers to the self-governing island, as it often takes as long as a decade between US government approval of arms sales and final delivery. Click here to read…

Germany, France Divided Over Energy Crisis and China

Geopolitical tensions, from Europe’s energy crisis to relations with China, are driving a wedge between Germany and France, straining ties between countries that have anchored the European Union’s economy and security for decades. The rift was apparent in the decision to scale back a summit Oct 26 between German Chancellor Olaf Scholz and French President Emmanuel Macron. The two leaders were initially expected to meet in Fontainebleau, south of Paris, with their cabinet members in tow. That customary display of Franco-German unity was abruptly rescheduled for January, however, setting the stage for Mr. Scholz to travel to Paris on Oct 26 for a more modest working lunch with Mr. Macron inside the Elysée Palace. A French official said the leaders discussed the overall state of the Franco-German relationship as well as their stances on energy, defence and Mr. Scholz’s plans to visit China next month with a delegation of business leaders. Mr. Scholz’s China trip has become a source of frustration for European leaders who fear Beijing aims to pit Germany against its neighbours. The last time Chinese President Xi Jinping visited Paris in 2019, Mr. Macron invited then-Chancellor Angela Merkel and former European Commission President Jean-Claude Juncker to join the talks, maintaining a united diplomatic front. Click here to read…

Germany forced to slash rearmament plans – Handelsblatt

Germany is “massively” reducing its rearmament plans as high inflation and a strong dollar have made the equipment too expensive to buy for the country, unnamed political and defence industry representatives have told Handelsblatt newspaper. Many projects, especially those for the navy and air force, would likely have to be cancelled, the outlet reported on Oct 21. The fate of a third batch of K130 corvettes is now hanging in the balance, along with new Eurofighter jets for electronic warfare, frigates, and self-propelled howitzers, which were to be ordered to replace equipment sent by Berlin to Ukraine, the sources claimed. The number of units in a second batch of Puma infantry fighting vehicles, the cost of which was estimated at €304 million ($299.8 million) earlier this year, is also being reduced on a weekly basis, an unnamed politician from the ruling ‘traffic light’ coalition told the paper. “Since many projects run for five to seven years, inflation in this dimension creates a serious financial problem,” one of the sources explained. The economic situation has been fraught in Europe as the burden of the Covid-19 pandemic was further aggravated by the fallout from sanctions imposed by the EU on Moscow over its military operation in Ukraine, and the subsequent reduction in the supply of Russian energy to the bloc. Click here to read…

Russia, NATO hold nuclear drills as Ukraine villages pounded

NATO and Russia’s military alike staged planned annual nuclear exercises Oct 26 as the Russian president repeated the unfounded claim that Ukraine plans to set off a radioactive “dirty bomb.” On the battlefront, Russian forces pounded more than 40 Ukrainian villages over the past day. Russian President Vladimir Putin remotely monitored the drills of his strategic nuclear forces, which involved multiple practice launches of ballistic and cruise missiles in a show of force. Russian Defense Minister Sergei Shoigu reported to Putin that the exercise simulated a “massive nuclear strike” retaliating for a nuclear attack on Russia. The Biden administration said Russia provided advance notice of the annual drills. NATO is carrying out its own long-planned annual nuclear exercises in north-western Europe. Without providing any evidence, in remarks carried by Russian TV, Putin said Ukraine plans to “use a so-called ‘dirty bomb’ as a provocation” and contended the United States was using Ukraine as a “battering ram” against Russia and its regional allies, turning the country into a “testing ground for military-biological experiments.” It was the first time Putin himself made the unsubstantiated dirty bomb allegation, which his officials have been repeating since last week. Click here to read…

What are dirty bombs?

Dirty bombs are conventional explosive weapons containing radioactive material, the kind that might be used for ordinary medical radiotherapy, in food conservation or in industry. A dirty bomb is “not a nuclear bomb,” said Wolfgang Richter, a retired officer and expert on security at the German Institute for International and Security Affairs, or SWP. “This means there are no nuclear chain reactions, which unleash tremendous explosive force,” he added. Nuclear weapons generate deadly heat and waves of pressure as well as extremely dangerous radiation, which spreads over vast areas through wind and rain. Dirty bombs don’t do most of that. In fact, dirty bombs are most dangerous during their initial explosion, Richter said. However in the long run, the radiation emitted can prove hazardous or even lethal, depending on the dosage. The size of the detonation and strength of radiation determines how much territory may be contaminated and even perhaps rendered temporarily uninhabitable. A terrorist weapon? Dirty bombs are not new. Until now, many considered them to be a weapon that mostly terrorists might deploy. In 2003, police seized illegal deliveries of radioactive caesium and strontium in Tbilisi and Bangkok. Both substances could have been used to build dirty car bombs. Click here to read…

Ukraine updates: US warns Russia over satellites threats

Washington has warned Moscow against shooting down US satellites after Russian threats that it might target them. “I would just say that any attack on US infrastructure will be met with a response and will be met with a response appropriate to the threat that’s posed to our infrastructure,” US National Security Council communications director John Kirby said Oct 27. A senior Russian Foreign Ministry official had earlier said that commercial satellites from the United States and its allies could become legitimate targets for Russia if they were involved in the war in Ukraine. “Quasi-civilian infrastructure may be a legitimate target for a retaliatory strike,” Konstantin Vorontsov, deputy director of the foreign ministry’s department for non-proliferation and arms control, was quoted as saying by TASS. “We are talking about the involvement of components of civilian space infrastructure, including commercial, by the United States and its allies in armed conflicts,” Vorontsov was quoted as saying at the United Nations. Vorontsov did not mention any specific satellite companies, though billionaire Elon Musk said earlier this month that his rocket company SpaceX would continue to fund its Starlink internet service in Ukraine, citing the need for “good deeds.” Musk said last week that SpaceX’s Starlink services have not received any funding from the US Department of Defense. Starlink terminals are used in Ukraine by both the military and civilian population. Click here to read…

Kremlin responds to US troop deployment on Ukrainian border

The US troop deployment in Romania increases risks for Russia’s security, and will prompt Moscow to take countermeasures, Kremlin spokesman, Dmitry Peskov said on Oct 26. He was referring to the US Army’s 101st Airborne Division, which is currently stationed in Romania on the border with Ukraine. Speaking to reporters, Peskov noted that “the closer American troops are to our borders, the greater danger we are in.” He went on to say that Moscow factors in such a military presence when developing its security framework. Peskov reiterated that such a deployment on Russia’s doorstep “does not contribute to predictability and stability.” Last week, speaking to CBS News, commanders of the 101st Airborne Division said that they would not hesitate to enter Ukraine should a direct conflict break out between Russia and NATO. In total, around 4,700 American soldiers from 101st Airborne have been sent to Europe. While in Romania, the division, which has been nicknamed “Screaming Eagles,” is holding live-fire ground and air assault exercises with their NATO counterparts. According to its commanders, the division is the closest US unit to the fighting in Ukraine, and it is actively monitoring the Russian military while organizing drills to “replicate exactly what’s going on” there. NATO has repeatedly stated that it is not a party to the conflict and will not send its troops into Ukraine.Click here to read…

Deal reached on moving U.S. military port within Okinawa

After a nearly half-century impasse, an agreement was reached on the location and shape of a facility that will take over the functions of the U.S. forces’ Naha military port. The central government, the Okinawa prefectural government, the Naha city government and the Urasoe city government agreed on Oct. 25 that the relocation site would cover around 49 hectares on reclaimed land in a sea area off the west coast of Urasoe. Full-scale construction work is expected to start soon. The Okinawa prefectural government estimates it will take at least 17 years to complete the new facility. The Naha military port covers about 56 hectares at a site in Naha that is regarded as an “entrance” to Okinawa Prefecture. Two years after Okinawa Prefecture was reverted to Japanese control, Tokyo and Washington agreed in 1974 that the Naha military port would be returned to Japan. But one condition of the deal was the relocation of the Naha port’s functions. Finding a locale willing to accept the new military site proved difficult over the following decades. In 2013, Japan and the United States agreed that the port in the prefectural capital would be returned to Japan “in or after fiscal 2028.” The Oct. 25 agreement by the four parties was reached at an online meeting of the “council on the relocation” of the Naha military port. Only the opening part of the meeting was shown to the general public. Click here to read…

China rejects Japan’s so-called exclusive economic zone in waters east of Taiwan

China’s Foreign Ministry spokesperson Wang Wenbin said on Oct 26 that China does not recognize Japan’s so-called exclusive economic zone and its exercise of jurisdiction in waters east of China’s Taiwan region. Wang made the remarks at a regular press briefing when answering a query concerning a stand-off between Japan’s coastguards and a Taiwan’s research ship operating in relevant waters, which the Japanese side claimed as its exclusive economic zone. Wang said the waters are just over 60 nautical miles from the island of Taiwan, and Chinese scientific research institutions, including those from China’s Taiwan region, have the right to carry out scientific exploration activities in the area. Foreign countries should not interfere. China and Japan have not yet carried out maritime delimitation in waters east of Taiwan, and China does not accept the notion of a so-called Japanese exclusive economic zone or its so-called exercise of jurisdiction in the relevant waters. China has lodged representations with Japan, urging the Japanese side not to interfere with the scientific exploration activities of Chinese ships, including those from Taiwan region, in the relevant waters, Wang added. Click here to read…

With unrest in West Bank, US and Israeli presidents focus on Iran

Talks at the White House between United States President Joe Biden and Israeli President Isaac Herzog have focused on Iran, the Israeli government said on Oct 26, as its military engaged in a crackdown on Palestinian groups in the occupied West Bank. In remarks to reporters before the meeting in Washington, DC, the two leaders did not mention Palestinians despite mounting tensions and violence, especially in the West Bank city of Nablus, where six Palestinians were killed this week. Instead, Herzog invoked the crackdown on anti-government protests in Iran as he sat next to Biden in the Oval Office. “This is an example of Iran crushing their own citizens while moving forward towards nuclear weapons and supplying lethal weapons that is killing innocent citizens in Ukraine,” Herzog said. “I think the Iranian challenge will be a major challenge to be discussed.” In a statement describing the talks, the White House said later on Oct 26 that Biden “emphasized the importance of taking steps to deescalate the security situation in the West Bank”. After the meeting, the Israeli president said in a statement that the two leaders discussed “mainly the issue of Iran’s pursuit of nuclear weapons”. While Tehran denies pursuing a nuclear weapon, Israel has continued to oppose diplomatic efforts between the US and Iran to revive the 2015 nuclear deal that saw Iran scale back its nuclear programme in exchange for international sanctions relief. Click here to read…

Sunak to be UK’s next PM, set to face challenges in leading UK out of economic mess

Rishi Sunak will become the UK’s next prime minister as he won the race on Oct 24 to replace Liz Truss as Conservative Party leader, and after former leader Boris Johnson pulled out of the race on Oct 23. Chinese experts hold a cautious attitude on the future after Britain’s former finance minister is set to become the next UK prime minister, especially on whether he will be able to lead the country out of its economic mess. Though Sunak is believed to hold a more pragmatic view compared to his predecessor, it’s unlikely that he will be able to fix the country’s structural problems overnight, some experts said. Unlike Truss and Johnson, Sunak, with a background in finance and economy, is expected to make it a priority to handle domestic issues in a stable manner, which means that he may avoid the aggressive rhetoric that Truss adopted, and there won’t be any significant shift in his upcoming policies in dealing with either Russia or China, according to some experts. However, facing a highly divided party, Sunak needs to first stabilize his governance as his legitimacy could be challenged again, leading to another shift in power. Sunak has become the new Conservative leader and will be prime minister after Penny Mordaunt followed Boris Johnson in withdrawing from the running, minutes before the party was due to announce how many MPs had backed each candidate, the Guardian reported. Click here to read…

US ‘in hurry’ to reach nuke agreement: Iranian FM

Iranian Foreign Minister on Oct 22 said his country has received a US message expressing American hastiness to reach the nuclear deal with Iran, official IRNA news agency reported. “Three days ago, we received a message from the United States, and told them that the [International Atomic Energy] Agency [IAEA]’s accusations against Iran’s nuclear program should be resolved” before any agreement, said Hossein Amir-Abdollahian in the Armenian capital of Yerevan. Asked about US officials’ comments about the nuclear negotiations being off the US agenda, he said, “Americans are contradictory in their words and behaviour, as they are in a hurry to reach the agreement in their [recent] message.” While the US continues to exchange messages with Iran, they “are seeking to exert political and psychological pressure [on Iran] and want to gain concessions in the negotiations,” he said. “We do not give any concessions to the American side, and we move within the framework of logic and the framework of an agreement that respects the red lines of the Islamic Republic of Iran, but at the same time we never leave the negotiating table.” Click here to read…

Health
TB passes COVID-19 as top infectious killer

Following gargantuan global efforts against COVID-19, tuberculosis (TB) is once again the world’s biggest infectious killer, a top expert has told AFP, lamenting the lack of focus on rooting out TB. Mel Spigelman, president of the nonprofit TB Alliance, hailed the swift and dramatic progress to rein in the ­COVID-19 pandemic, with a vast array of safe and effective vaccines, tests and treatments developed in the space of two years. “But the juxtaposition with TB is pretty stark,” he said in an interview. TB, once called consumption, was the world’s biggest infectious killer before the arrival of COVID-19, with 1.5 million people dying from the disease each year. With global COVID-19 deaths steadily declining, “TB has regained the dubious distinction,” Spigelman said. The TB Alliance, a nonprofit working to develop and deliver faster-acting and affordable drugs against the disease, especially in poorer countries, points out that based on the annual death rate, TB kills 4,109 people a day. That compares to 1,449 people a day dying due to ­COVID-19, calculated from the 40,578 deaths reported in the past 28 days on the Johns Hopkins University dashboard. But unlike COVID-19, there appears to be little, and even waning, interest in taking on TB. Click here to read…

Japan set to be short of 1 million medical, welfare workers in 2040

Japan is set to face a shortage of around 1 million medical and welfare service workers in 2040, when the country’s elderly population is expected to almost peak. The government offered this dire warning in its Annual Health, Labour and Welfare Report 2022, presented to a Cabinet meeting on Sept. 16. Securing a sufficient number of workers is “one of the most important agenda items facing social security services,” the report said. In the meantime, frontline workers in social security services are pressing for improved working conditions.Officials projected the shortfall in numbers based on anticipated economic growth and demographic changes in Japan. They concluded that demands on medical or nursing care services will grow further from 2025, the year the baby boomers will become 75 or older. They estimated that in 2040, when second-generation baby boomers will be 65 or older, medical and welfare services will require 10.7 million workers. By that time, only 9.74 million workers are expected to be available, leaving a shortfall of 960,000 people, the report warned. A total of 8.91 million people worked in medical or welfare services as of 2021, a 1.9-fold increase over the course of approximately 20 years, according to statistics. However, as the number of working age people–those between 20 and 64–will fall significantly in coming years, it will be impossible to secure the necessary workforce, officials say. Click here to read…

Global Developments and Analysis: Weekly Monitor, 10 October- 16 October

Economic
China’s Economic Data Gets Harder to Find as Growth Slows

The world is eager for clues about the health of China’s economy as the country endures its worst prolonged slowdown in years. But getting a clear picture has only grown more difficult, as data becomes harder to obtain and unflattering analysis vanishes. On Oct 18, China’s National Bureau of Statistics abruptly cancelled the release of quarterly gross domestic product data just hours before it was set to be published, without providing a reason or setting a new date. Days earlier, the country’s customs agency simply didn’t release monthly official trade data, offering no explanation. The moves, which economists said had no obvious precedent in China, came as China holds a Communist Party congress where leader Xi Jinping is expected to secure a third term. They were only the most glaring examples of what many investors and scholars say reflects increasing sensitivities around economic data and commentary that have made analysis of the world’s second-largest economy more difficult. In the past year, China’s official statistics bureau and private research firms have retracted or removed more data from public access, while reports by economists and market analysts—particularly those with a more bearish outlook—have been retracted or expunged. Some prominent analysts who have questioned economic policy have had their social-media accounts suspended. Click here to read…

Global finance leaders single out China as barrier to faster debt relief

Western countries this week ratcheted up their criticism of China, the world’s largest bilateral creditor, as the main obstacle to moving ahead with debt restructuring agreements for the growing number of countries unable to service their debts. U.S. Treasury Secretary Janet Yellen said on Oct 14 that high inflation, tightening monetary policies, currency pressures and capital outflows were increasing debt burdens in many developing countries, and more progress was urgently needed. She said she discussed those issues during a dinner with African finance ministers and in many other sessions. The Group of Seven rich nations also met African finance ministers, who worry that the focus on the war in Ukraine is draining resources and attention from their pressing concerns. “Everyone agrees Russia should stop its war on Ukraine, and that would address the most significant problems that Africa faces,” Yellen told reporters at the International Monetary Fund and World Bank annual meetings in Washington. But she said a more effective debt restructuring process was also needed, and China had a big role to play. “Really, the barrier to making greater progress is one important creditor country, namely China,” she said. “So there has been much discussion of what we can do to bring China to the table and to foster a more effective solution.” Click here to read…

G7 fails to reach intervention deal to ease pain of soaring dollar

Japan and other countries facing the fallout from a soaring US dollar found little comfort from last week’s meetings of global finance officials, with no sign that joint intervention along the lines of the 1985 “Plaza Accord” was on the horizon. With a strong push from Japan, finance leaders of the Group of Seven advanced economies included a phrase in a statement on Oct 12 saying they will closely monitor “recent volatility” in markets. But the warning, as well as Japanese Finance Minister Shunichi Suzuki’s threat of another yen-buying intervention, failed to prevent the currency from sliding to fresh 32-year lows against the dollar as the week came to a close. While Suzuki may have found allies grumbling over the fallout from the US central bank’s aggressive interest rate hike path, he conceded that no plan for a coordinated intervention was in the works. “Many countries saw the need for vigilance to the spill-over effect of global monetary tightening, and mentioned currency moves in that context. But there wasn’t any discussion on what coordinated steps could be taken,” Suzuki said in a news conference on Oct 13 after attending separate meetings of the G7 and G20 finance leaders in Washington. US Treasury Secretary Janet Yellen made clear that Washington had no appetite for concerted action, saying the dollar’s overall strength was a “natural result of different paces of monetary tightening in the United States and other countries.” Click here to read…

Inflation Expands Beyond Supply-Chain Struggles to Service Sector

Inflation started in goods affected by supply-chain issues. It isn’t ending that way. While costs to transport goods have declined and supply-chain snarls are easing, prices are now rising briskly in services. Core service prices, which exclude energy, jumped 0.8% in September from August, the Labour Department reported Oct 13, driven by shelter, medical care and car insurance. Core goods prices, which exclude food and energy, were flat. For the 12 months ended September, core service prices were up 6.7%, the fastest since 1982. They are now rising faster than core goods prices, which rose 6.6% the same month, down from a peak of 12.3% in February. Services made up 74% of the 12-month increase in the core consumer-price index in September, the most in 18 months, according to investment bank UBS. That is up from around 50% earlier this year. In the separate price index of personal-consumption expenditures, which the Fed prefers, prices declined in both July and August for goods while rising in services. Some economists are concerned that the broadening of inflation to the service sector is making it more difficult for the Federal Reserve to lower inflation to its 2% target over the long run. Click here to read…

Rosneft gets into oil shipping ahead of EU embargo

Russian oil major Rosneft is expanding its tanker chartering business in a bid to simplify oil delivery to customers ahead of the EU sanctions, which include a ban on insuring Russian oil shipments, Reuters reported on Oct 18, citing people familiar with the matter. Prior to sanctions, Rosneft was using the free-on-board (FOB) scheme in oil sales, offering the crude at port, while the buyer had to charter tankers, pay freight, insurance, and delivery costs. Previously, the company had long-term contracts with major trading groups that covered most of the operational costs. But with the EU ban on insuring tankers carrying Russian oil coming into force on December 5, customers are asking Rosneft to ensure delivery to the final destination and cover insurance and freight expenses. Russia still sells substantial volumes of crude to the EU, but once the embargo comes into effect, it will have to redirect 25% of its oil exports to new markets. Data from Refinitiv Eikon shows that seaborne exports of Russian Urals crude to Asia have already jumped six-fold in January-September compared to the same period in 2021. India increased its oil purchases by 13.5 times year-on-year in the first eight months of this year. China, meanwhile, became the biggest importer of Russian oil between May and July 2022. Click here to read…

US Treasury Secretary reveals Russian oil price cap target

Setting a price ceiling for Russian oil at about $60 per barrel is expected to reduce Moscow’s energy revenues while still ensuring profitable production, according to US Treasury Secretary Janet Yellen. “So, certainly a price in that range would be sufficient to feel that Russia could profitably produce and sell oil,” she told an event at the International Monetary Fund and World Bank meetings in Washington, adding that Russia’s cost of production was “low.” Yellen stressed that Moscow has been willing to produce and sell oil in the $60 range over the past five to seven years. Russian Urals crude has traded at around $75 a barrel in recent months, or a $17 discount to benchmark Brent futures. “The objective is to protect the world from the consequences of a global spike in oil prices,” the top official said in relation to the price cap. She added that Washington and its allies are still discussing where to set the price for a capping mechanism. Washington’s efforts to set a price cap on Russian oil to deprive Moscow of energy revenue gained support from the G7 countries. But large importers like India and China, along with many developing countries, did not join them. Click here to read…

Tehran proposes new energy plan

Tehran says it wants to establish an energy consortium and a joint investment fund to boost cooperation within the Eurasian Economic Union (EEU), Iranian deputy oil minister, Ahmed Asadzadeh said on Oct 13. “It is necessary to create a joint investment fund to strengthen cooperation in the energy sector in Eurasia. We can also establish a joint energy consortium with the participation of both public and private companies,” he said in a speech at Russian Energy Week.The EEU, which brings together Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, has good prospects in the energy sector, according to the Iranian official, but it lacks infrastructure. He cited weak rail links as a hurdle for future development. Asadzadeh also explained that the North-South International Transport Corridor could cut costs by about 50% and save time. Currently, the main overland route for cargo from Iran to Russia passes through Azerbaijan. This is part of the so-called International North-South Transport Corridor, a 7,200-kilometer-long multi-mode transit system that connects ship, rail, and road routes for moving cargo between India, Iran, Azerbaijan, Central Asia, Russia and the rest of Europe. Though the corridor existed back in Soviet times, developing it further has taken on a new importance as Western sanctions have forced Russia to shift its trade routes more towards Asia and the Middle East. Click here to read…

Putin offers Türkiye deal on EU gas supplies

Russian President Vladimir Putin has proposed building a major gas hub in Türkiye to handle supplies previously directed through the Nord Steam pipelines. The plan was put forward during a meeting with his Turkish counterpart Recep Tayyip Erdogan in Kazakhstan on Oct 13. The hub could also become a platform for determining gas prices, avoiding the politicization of this issue, Putin said. “In the course of the work of this hub, which we could create together, of course, it would also be a platform not only for supplies, but also for determining the price, because this is a very important issue – the issue of pricing,” Putin told Erdogan. He called the current cost of gas “sky-high,” adding that “we could easily regulate [them] at a normal market level, without any political overtones”. The proposal comes as Russia looks to redirect supplies away from the Nord Stream gas pipelines, damaged in explosions last month. The president noted that Russia supplies gas to Türkiye at full scale, adding that Ankara has become the most reliable partner for the transit of Russian energy resources to Europe. Putin first suggested the creation of a gas hub in Türkiye on Oct 12 during his address at the Russia Energy Week conference. Click here to read…

China To Stop Reselling LNG To Europe

Chinese state-owned energy giants have been recently told by authorities to stop reselling liquefied natural gas (LNG) cargoes to gas-starved Europe, in what could be a blow to the European hopes of continuous high inflows of LNG as the winter approaches. The National Development and Reform Commission (NDRC), China’s top planning body, has told the country’s state-held LNG importers, including Sinopec, Petro China, and CNOOC, that they should stop reselling LNG cargoes and keep them to ensure Chinese gas supply this winter, sources familiar with the development told Bloomberg on Oct 17. In recent months, Chinese LNG importers have been selling their excess inventories to Europe and reaping big profits from the sales because of lackluster demand in China. Chinese domestic demand has been hit by incessant snap city-wide Covid lockdowns and a slowdown in economic growth. So Chinese sales of LNG have been a relief to the European market so far this year. But as China now moves to cater to its own energy security this winter, Europe’s LNG supply could dwindle just ahead of the winter heating season. Gas prices in Europe have dropped from record highs and hit on Oct 17 the lowest level in three months after the EU is reportedly looking to introduce measures to limit the market volatility of the benchmark European natural gas prices at the Dutch TTF hub. Click here to read…

Biden to release 15 million barrels from US oil reserves: Official

President Joe Biden will announce on Oct 19 he’s putting the final 15 million barrels on the market from a record release of US strategic oil reserves, with more releases possible if energy prices spike, a senior US official said. The new tranche of oil from the Strategic Petroleum Reserve will be “completing the 180 million barrel release authorised in the spring”, in response to price hikes linked to Russia’s invasion of Ukraine, a senior US official said on Oct 18. The order, which Biden will announce in a speech, means the president will be “making clear that the administration is prepared to undertake significant additional … sales this winter if they are needed due to Russian or other actions disrupting global markets,” the official added. The decision to make the biggest ever dip into the emergency oil reserves – usually kept for responding to situations such as hurricane-related shutdowns at oil refineries – was Biden’s gambit to calm energy markets and shield the world’s biggest economy from Ukraine war shocks. Major energy exporter Russia was hit with US and European sanctions soon after it invaded Ukraine in February, causing turmoil on markets. In addition, the Kremlin has threatened to use its leverage over energy supplies as an economic weapon against the West, which supports Ukraine’s fight to repel the invasion. Click here to read…

Chip Maker TSMC Weighs Expansion in Japan to Reduce Geopolitical Risk

Taiwan Semiconductor Manufacturing Co. is considering expanding its production capacity in Japan, people familiar with the matter said, in what would be a move by the world’s largest contract chip maker to reduce geopolitical risk. The Japanese government has signaled that it would like TSMC to expand in the country beyond a factory already under construction, but no decision has been made yet and TSMC is studying the feasibility, these people said.The Taiwanese company, which makes chips for a host of major electronics products including those of Apple Inc., is building its first chip-manufacturing plant in Japan, located on the southern island of Kyushu. The multibillion-dollar plant is subsidized by the Japanese government. The semiconductor industry has been in upheaval since last year when widespread chip shortages snarled auto making and other industries. At the same time, the U.S. and allies such as Japan have grown concerned about the rise of the Chinese semiconductor industry and the concentration of chip making in Taiwan, a self-governing island that Beijing claims as part of its territory. TSMC’s factory under construction in Japan is part of the response to these issues, boosting production capacity in a U.S. ally. The plant is set to focus on less-advanced chips commonly used in autos and components like sensors, and it is scheduled to ship products in late 2024. Click here to read…

Automakers need more time to meet US minerals requirements for EVs: Execs

US legislators need to give automakers operating in the United States more time to achieve the required sourcing levels of battery minerals used in electric vehicles to qualify for federal tax incentives, several industry executives said on Oct 19. The Inflation Reduction Act, as currently written, requires automakers to have 50 per cent of critical minerals used in EV batteries come from North America or US allies by 2024, rising to 80 per cent by the end of 2026. Volkswagen Americas Chief Executive Pablo Di Si said the industry cannot move that fast.”All of us source from different parts of the world and changing these long-term contracts, you don’t do that from one day to the next. We have 10, 15, 20-year commitments,” Di Si said at the Reuters Events auto conference in Detroit. US lawmakers need to create a more phased-in process that goes out to 2030 instead, he and Hyundai Motor Co Chief Operating Officer Jose Munoz said at the Reuters event. “When we saw the IRA, we were not happy,” Munoz said in a separate interview, referring to the new law. “We believe it’s unfair,” he added, pointing out that none of the South Korean automaker’s EVs qualify for the credit. Click here to read…

China carves path to Indian Ocean with Myanmar rail network

When the West cut off aid to Myanmar after the military took control in 2021, China rushed to fill the vacuum under its Belt and Road infrastructure-building initiative. But growing concern over China’s so-called debt trap diplomacy threatens the progress of a jewel of the initiative, the China-Myanmar Economic Corridor. Part of the project appears to be full-steam ahead after a rail network section that connects western China to Myanmar begun operating in recent months. For Beijing, the development is seen as crucial because it has the potential to open up a vital route to the Indian Ocean. In June, freight trucks carrying 60 containers’ worth of electronics, auto parts and other goods arrived in Mandalay, Myanmar’s second-largest city. The freight had originally left Chongqing, China, on a train in late May before being placed on trucks in the Yunnan Province city of Lincang and taken over the border in Myanmar’s Shan State. The new route was made possible by a railway link between the western Chinese cities of Lincang and Dali, which began operating in December 2020. It will “shorten the transportation distance and time” and optimize international shipments from inland China to the Middle East and Europe, China’s Communist Party-affiliated Global Times reported. Click here to read…

In skeptical Australia, Singapore PM says China ‘good’ for CPTPP

Singapore’s Prime Minister Lee Hsien Loong on Oct 18 said China’s participation in a major trans-Pacific free trade agreement would be “good” for the bloc, reiterating the city-state’s positive stance even as other players appear more skeptical — including Australia, where Lee was visiting.”I think it’s good if China is able to join the CPTPP,” Lee said during a joint news conference with Australian Prime Minister Anthony Albanese in Canberra, referring to the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership, to which China applied in September 2021. Just last week, Australian Trade Minister Don Farrell told Nikkei Asia that he did not believe there was “any prospect that China could join,” suggesting Beijing would first need to show it is willing to abide by fair trade rules. Lee acknowledged that joining the CPTPP requires a consensus among all existing members. As this year’s chair of the CPTPP committee, he said Singapore was “canvassing views.” China would “of course have to meet the requirements fully, of the conditions and obligations,” he added. “But I think that’s something which is possible and can be negotiated,” Lee said. In his first official visit to Australia since Albanese took office in May, Lee’s comments highlighted the differences within the CPTPP over China’s possible involvement. Click here to read…

Global cost of cybercrime may reach 10.5 trillion USD by 2025: Interpol official

Incidents of cybercrime and online child abuse are significantly underreported, and the global cost of cybercrime is expected to reach 10.5 trillion U.S. dollars by 2025, said Interpol Secretary General Jurgen Stock in the Indian capital on Oct 17. Addressing media ahead of Interpol’s 90th General Assembly, which begins in New Delhi on Oct 18, Stock said that organized crime networks were making billions of dollars, and the fact that less than 1 percent of global illicit financial flows were intercepted and recovered should be of greater concern to everyone. The four-day Interpol event would see the participation of delegations from 195 Interpol members comprising ministers, police chiefs, heads of national central bureaus and senior police officers. The General Assembly is Interpol’s supreme governing body and meets once a year to make key decisions related to its functioning. The secretary general further said that Interpol had developed its global stop-payment mechanism, the Anti-Money Laundering Rapid Response Protocol, which in the past 10 months alone had helped members recover more than 60 million U.S. dollars in criminal proceeds from cyber-enabled fraud. “Our Global Crime Trend Report also highlighted the massive increase in online child sexual exploitation and abuse, figures which are only set to increase” Stock said. Click here to read…

Strategic
Transcript: President Xi Jinping’s report to China’s 2022 party congress

The following is the full text of Chinese President Xi Jinping’s report to 20th National Congress of the Communist Party of China Oct. 16. The text was provided to reporters covering the event. Follow Nikkei Asia’s in-depth coverage of Chinese politics here. “Hold High the Great Banner of Socialism with Chinese Characteristics and Strive in Unity to Build a Modern Socialist Country in All Respects”. “Comrades, On behalf of the 19th Central Committee of the Communist Party of China (CPC), I will now deliver a report to the 20th National Congress. The 20th National Congress of the Communist Party of China is a meeting of great importance. It takes place at a critical time as the entire Party and the Chinese people of all ethnic groups embark on a new journey to build China into a modern socialist country in all respects and advance toward the Second Centenary Goal. The theme of this Congress is holding high the great banner of socialism with Chinese characteristics, fully implementing the Thought on Socialism with Chinese Characteristics for a New Era, carrying forward the great founding spirit of the Party, staying confident and building strength, upholding fundamental principles and breaking new ground, forging ahead with enterprise and fortitude, and striving in unity to build a modern socialist country in all respects and advance the great rejuvenation of the Chinese nation on all fronts. Click here to read…

(CPC Congress) CPC expounds on main objectives, tasks for next 5 years

The Communist Party of China (CPC) unveiled the main objectives and tasks for the next five years in a report submitted to the 20th CPC National Congress, which opened on Oct 16. The main objectives and tasks for this period are as follows: — Make breakthroughs in promoting high-quality economic development; achieve greater self-reliance and strength in science and technology; make major progress in creating a new pattern of development and building a modernized economy;– Make new strides in reform and opening up; make further progress in modernizing China’s system and capacity for governance; further improve the socialist market economy; put in place new systems for a higher-standard open economy; — Further enhance the institutions, standards, and procedures of whole-process people’s democracy; improve the system of socialist rule of law with Chinese characteristics; — Enrich the intellectual and cultural lives of our people; enhance the cohesion of the Chinese nation and the appeal of Chinese culture; — Ensure personal income grows basically in step with economic growth and pay rises in tandem with increases in productivity; ensure much more equitable access to basic public services; develop a better multi-tiered social security system. Click here to read…

Russia has changed its tactics in Ukraine – senior official

About 30% of Ukraine’s energy infrastructure has been damaged after two consecutive days of Russian missile attacks, the country’s Energy Minister German Galushchenko has told CNN. Moscow called the strikes on Oct 10 and Oct 11 a response to Ukrainian “terrorist attacks” on Russian soil. The top Ukrainian official said on Oct 11 that his country for the “first time from the beginning of the war” experienced large-scale Russian attacks on infrastructure, according to the US news channel.He assessed that Europe suffered, too, by proxy, because Kiev had to suspend the export of electricity. Ukraine “helps European countries to save on Russian gas and coal” and wants to “reconnect quickly from the other sources,” Galushchenko stated. The minister claimed that the Ukrainian energy system remained stable but urged other nations to expedite sending to Kiev air defense systems, to protect its infrastructure from further attacks. “We send this message to our partners: we need to protect the sky,” he was quoted as saying. The Russian military launched dozens of missiles on targets in Ukraine, which included its key infrastructure sites. Moscow called the military action retaliation for a number of sabotage plots targeting crucial Russian facilities, including the Kursk nuclear power plant, the TurkStream gas pipeline and the Crimean Bridge.Click here to read…

‘Troubled marriage’: Oil spat unlikely to break US-Saudi ties

Despite growing anger in Washington and US President Joe Biden’s threat that Saudi Arabia will face “consequences” over oil production cuts, analysts say a fundamental change in relations between the United States and the Gulf kingdom is unlikely. The furore over a recently announced oil output reduction is the latest display of tensions between the two allies, whose ties have endured a series of setbacks in recent years. “I don’t think we’re likely to see a divorce proceeding from this sort of troubled marriage,” said AnnelleSheline, a research fellow at the Quincy Institute for Responsible Statecraft, a US-based think tank. “But I do imagine that we may continue to see more discontent from both the Americans and the Saudis, and just this question of ‘Why do we continue to take this from this country that calls itself our partner?’” Riyadh has faced a firestorm of criticism in Washington after OPEC+ – which brings together OPEC and other oil producers, namely Russia – announced the output cuts this month. The move will likely push up petrol prices for US consumers ahead of crucial midterm elections next month, and key Democratic Party lawmakers have called for fundamentally reassessing the US-Saudi partnership and for going so far as to end security cooperation with the kingdom. Click here to read…

Russia, Iran defiant amid UN pressure over Ukraine drones

Russia has warned the United Nations against investigating its use of drones in Ukraine, amid accusations the weapons came from Iran and were used in violation of UN arms restrictions on the Middle Eastern country.The United States, France and the United Kingdom called a closed-door Security Council meeting on the drones after an attack on Kyiv on Oct 17 that killed at least five people, and caused widespread damage to power stations and other civilian infrastructure. Ukraine says its military has shot down more than 220 Iranian drones, formally known as uncrewed aerial vehicles (UAV), in little more than a month and has invited UN Secretary-General Antonio Guterres to Ukraine to inspect some of the wreckage it has collected. Speaking after the Security Council meeting on Oct 19, Russia’s Deputy UN Ambassador Dmitry Polyanskiy insisted the weapons had been made in Russia and condemned “baseless accusations and conspiracy theories”. He called on Guterres and his staff to “abstain from engaging in any illegitimate investigation. Otherwise, we will have to reassess our collaboration with them, which is hardly in anyone’s interests,” he told reporters. The US and European Union say they have evidence that Iran supplied Russia with Shahed-136s, low-cost drones that explode on landing. Click here to read…

Russia Ramps Up Security Measures at Home and in Ukraine

Russian President Vladimir Putin implemented a range of tighter security measures across the country and declared martial law in parts of Ukraine recently claimed by Moscow, as the Kremlin grapples with a faltering military campaign abroad and fallout from an unpopular troop mobilization at home. A decree signed by Mr. Putin on Oct 19 gives local governments in each of the country’s regions varying degrees of new authority to address security concerns. Measures are aimed at maintaining public order, boosting industrial production in support of the military campaign and protecting critical infrastructure, Mr. Putin said in a televised address to his security council. The implementation of martial law, which goes into effect on Oct 20, grants Moscow-backed officials in the partially occupied territories of Donetsk, Luhansk, Zaporizhzhia and Kherson a number of powers. These include curfews, detention for up to 30 days of anyone, restrictions on freedom of movement, forced resettlement and the internment of citizens from any country deemed to be waging war against Russia, according to the text of the law published on the government’s official legal information website. Increased security measures have also been introduced in Crimea, which Moscow annexed in 2014. Click here to read…

‘We want respect’: Putin’s authority tested in Central Asia

Sensing that Russia has been weakened by its war in Ukraine, some of its closest allies in Central Asia are displaying a newly assertive streak. The region’s five former Soviet republics are increasingly standing up to Moscow, aware of their new-found leverage as Russia looks to their markets and trade routes in a bid to circumvent Western sanctions. The new dynamic was strikingly illustrated when Russian President Vladimir Putin ran into a seven-minute tirade from the leader of Tajikistan, one of the region’s smallest and poorest countries, at a summit in Kazakhstan last week. “We want respect. Nothing else. Respect,” said Emomali Rakhmon, Tajikistan’s president since 1994, complaining that Moscow’s attitude had not improved since the Soviet era. Putin listened uncomfortably. A video of the embittered speech surfaced at the weekend and was not part of the official coverage of the Oct 14 summit, during which he urged his southern neighbours to build new logistics chains after Western sanctions over Ukraine disrupted much of Russia’s trade. Data shows Central Asian nations, including Tajikistan, have already sharply increased foreign trade turnover, likely by re-exporting goods to Russia which it could not buy directly because of sanctions and the exodus of foreign businesses. Click here to read…

South Korea pushes nuke-sharing talks with US – media

South Korea is pushing the US for the creation of a nuclear weapons-sharing scheme, newspaper Chosun Ilbo has claimed. According to the outlet, Seoul would like to see American aircraft carriers or nuclear-powered submarines stationed near the Korean Peninsula. The news comes hard on the heels of massive ballistic missile tests conducted by North Korea in recent weeks that simulated nuclear strikes. In its report published on Oct 13, the Korean daily quoted an unnamed high-ranking government official in Seoul as saying “If North Korea pushes ahead with a seventh nuclear test, we will face a whole new level of threat.” With that in mind, South Korea is allegedly discussing with the US “ways to radically strengthen” Washington’s “extended deterrence.” The article named the rotational deployment of an American aircraft carrier group equipped with nuclear weapons or nuclear-powered submarines near the Korean Peninsula as the option advocated by Seoul. “What’s being discussed is a [South] Korean-style nuclear sharing scheme that could avoid triggering protests from neighbouring countries and a regional nuclear arms buildup,” an anonymous security official is quoted as saying. According to Chosun Ilbo, both the White House and US State Department have refused to comment on the allegations. Click here to read…

UK wants China to stop hiring its ex-military pilots – media

The UK’s Ministry of Defence (MoD) is reportedly alarmed by China’s alleged hiring of some 30 veteran British military pilots to teach trainees in the People’s Liberation Army. The practice is legal and was first noticed by the British government in 2019, when a handful of such cases were identified, an unnamed official explained, according to several Western news outlets, including the BBC, Sky News and the New York Times. According to media reports, the MoD considers the situation grave enough to issue a formal “threat alert” to warn serving and former pilots about the Chinese recruitment drive. “We are taking decisive steps to stop Chinese recruitment schemes,” an MoD spokesperson said as quoted by the press. The statement reminded that military personnel were “subject to the Official Secrets Act” and stated that the ministry was “reviewing the use of confidentiality contracts and non-disclosure agreements” to deal with such issues. According to the primary source, which was described as a “Western official” or an official in the British MoD by reporters, China pays the pilots $270,000 a year. Pilots familiar with US-made F-35 fighter jets have not been recruited, the source claimed. But those who flew older models, such as the Typhoon, Harrier, Jaguar and Tornado, as well as military helicopters, including Wildcat and Merlin, are now working for China, the official added. Click here to read…

Taiwan clarifies ‘first strike’ definition

Taiwan has vowed to shoot down Beijing’s planes and drones that breach its airspace, saying it will consider such flyovers as a “first strike” and respond in force if aircraft ignore warnings to turn back. Speaking to lawmakers on Oct 13, Defense Minister Chiu Kuo-cheng was asked to elaborate on the “first strike” designation, as officials previously said “countermeasures” would be taken against aircraft incursions but did not specify any particular response. Chiu said the military would first lock onto incoming drones or planes and issue a warning, and then launch a “defensive counterattack” if the aircraft remained in airspace claimed by Taiwan. Pressed on whether that would mean Beijing and Taipei “going to war,” the defence chief answered “Yes, in which case the situation would be very serious,” adding “This is why the military has been exercising self-restraint and does not pull the trigger recklessly.” Chiu first discussed the update to the island’s security policy during a legislative session last week, explaining that while a “first strike” was previously defined as artillery or missile attacks, Chinese drone flights over Taiwanese airspace have increased in frequency and caused “a lot of trouble” in recent months, prompting the change. Click here to read…

Iraqi parliament elects Abdul Latif Rashid as new president

Lawmakers in Iraq have elected Kurdish politician Abdul Latif Rashid as the country’s new president, paving the way for the formation of a new government and ending a year of deadlock, even as rockets landed near the parliament building. Rashid replaced fellow Iraqi Kurd Barham Saleh as head of state after the two-round vote in parliament on Oct 13, winning more than 160 votes against 99 for Saleh, an assembly official said. Saleh reportedly walked out of the parliament building as the votes were tallied. Shia politician Mohammed Shia al-Sudani was quickly named prime minister-designate, assuming the task of reconciling feuding Shia factions and forming a government after a year of deadlock. Al-Sudani replaces caretaker Prime Minister Mustafa al-Kadhemi. In Iraq’s power-sharing system, the presidency is reserved for Kurdish groups to nominate while the premiership falls under Shia blocs. The speaker of parliament is a Sunni. Reporting from Baghdad, Al Jazeera’s Mahmoud Abdelwahed said the election of Rashid signals that “this chapter of rivalry has been concluded in the Iraqi parliament,” while noting that forming a government could still be an uphill battle. “It remains to be seen what reactions could unfold in the streets given the fact that this has not been easy,” Abdelwahed said.Click here to read…

While Kim Jong Un Shows World ‘Fire and Fury,’ He Projects Different Message at Home

To the outside world, North Korea’s recent missile activity is familiar: a flight over Japan, claims of weapons advances and threats to rivals in Washington, Seoul and Tokyo. But inside the rogue nation, these events are being portrayed much differently than they were in the past. North Korean leader Kim Jong Un hasn’t shown up to many of the launches this year after skipping all of them in 2021. News of many recent tests has been published on the inside pages of the Rodong Sinmun, Pyongyang’s main state-run newspaper. Some don’t get written up at all. In the past, state media reported on virtually every missile test. When Mr. Kim attended, the launches were often featured on the front page and on national broadcasts. Unlike the North’s string of major provocations five years ago, when former President Donald Trump threatened to respond with “fire and fury,” Mr. Kim and the country’s media have put more focus on farming, as a national food shortage worsens due to Covid-19 border lockdowns, as well as bad weather and supply-chain problems. The shift was apparent earlier this month, as North Korea celebrated the founding anniversary of its ruling Workers’ Party. Mr. Kim, breaking with convention, didn’t organize a military parade or oversee mass celebrations in downtown Pyongyang. Instead, he inspected a new farm built on grounds that used to be a military airfield and missile-launch site. Wearing a trench coat and a black hat, the 38-year-old dictator squatted among rows of vegetables inside one of the facility’s 800 greenhouses. Click here to read…

Japan, Australia to seek security agreement when premiers meet this week: Report

Japan and Australia seek to reach a new security agreement with particular regard to China’s maritime expansion when the two countries’ prime ministers meet in Perth on Oct 22, Japan’s Nikkei business daily reported on Oct 18. The two US allies have been fortifying security ties as a counterbalance to China’s growing military strength. In May, Japan’s Fumio Kishida and Australia’s Anthony Albanese agreed to work toward a new bilateral declaration on security cooperation. Coordination in defence and economic security for realising a free and open Indo-Pacific region will likely go into the declaration, the Nikkei reported, without citing sources. An official at Japan’s Ministry of Foreign Affairs told Reuters that it was too early to comment on what will be achieved at the meeting. The Australian prime minister’s office did not immediately respond to a request for comment. The countries’ previous joint declaration on security cooperation, agreed by then-prime ministers Shinzo Abe and John Howard in 2007, stipulates cooperation in such areas as counter-terrorism and North Korea’s missile and nuclear weapons programmes. Kishida and Albanese are also set to confirm cooperation in energy and natural resources, the Nikkei reported. Australia is Japan’s biggest supplier of liquefied natural gas. Click here to read…

Kishida orders investigation into Unification Church activities

In a rare move, Prime Minister Fumio Kishida on Oct. 17 instructed the education minister to investigate the Unification Church, a religious organization under heavy public criticism over its donation-collection methods. “The prime minister told me to start (the investigation) to address the issue,” Keiko Nagaoka, the education minister, said. “We are ready to begin right away.” Well, not quite. The investigation will be conducted based on the Religious Corporations Law, which grants government authorities the “right to question” such corporations. The investigation into the church will be the first using this right. At the Lower House’s Budget Committee session later on Oct. 17, Nagaoka said that her ministry wants to clarify in advance how it will proceed with the right to question the church. The ministry will set up a panel of experts on religion, legal matters and religious corporations to gain feedback on the matter. She said the ministry on Oct. 25 will begin studying how to approach the right to question and start procedures to investigate after gaining approval from the Religious Corporations Council, an advisory panel to the education minister. “We think it is necessary to make a response as quickly as possible,” Nagaoka told the Diet session. “We will take steps so that we can exercise (the right to question) at the earliest possible time by the end of this year.” Click here to read…

Stealthiest U.S. submarine makes rare appearance in Arabian Sea

Once submerged, a nuclear-powered ballistic missile submarine typically remains under water for 70 days. Virtually undetectable, the Ohio-class SSBN is the stealthiest submarine in the U.S. Navy fleet. Unlike the Los Angeles-class or Virginia-class nuclear-powered fast attack submarines that carry conventional weapons and can make port visits around the world, nuclear-missile equipped SSBNs typically do not make public appearances. In the rare case that they do, it is either in U.S. waters or in the ports of America’s top ally, the U.K. But on Oct 20 morning, Asia time, the U.S. Central Command tweeted that its commander, Gen. Michael Kurilla, had visited the Ohio-class ballistic missile submarine USS West Virginia (SSBN 736) at an undisclosed location in international waters in the Arabian Sea. The unprecedented move in the Indian Ocean region, roughly equidistant from Moscow and Beijing, had analysts contemplating who the signalling was intended for and what the message was. The timing comes as China holds a weeklong national congress of the Chinese Communist Party, where President Xi Jinping is expected to be given an unprecedented third term as leader. At the meeting, Xi described the unification of Taiwan with mainland China as “a historic mission” of the party and threatened to use force, if necessary, to achieve it. Click here to read…

Iran opposes deployment of foreign forces to Caucasus region: FM

Iran is opposed to the deployment of foreign forces to the Caucasus region, the Iranian Foreign Ministry’s website reported on Oct 16. Iran supports the sovereignty and territorial integrity of the countries including Azerbaijan and Armenia, and this approach is the permanent policy of Iran, Iranian Foreign Minister Hossein Amir-Abdollahian said in a telephone conversation with his Azerbaijani counterpart Jeyhun Bayramov on Oct 15. “The presence of foreign forces in the Caucasus is a common concern of the regional countries,” he said, stressing “Iran’s opposition to the deployment of any foreign forces in the region.” For his part, Bayramov expressed his opposition to the presence of foreign forces in the region. Click here to read…

Health
No way out in sight for China’s zero-COVID strategy

For almost three years, China has been implementing one of the strictest pandemic control policies in the world, shutting down borders, imposing lockdowns across the country and conducting mass-scale COVID-19 tests to try and contain the spread of coronavirus. Millions of Chinese residents have been wondering whether authorities may begin to ease these stringent measures, but the latest signal from the Chinese leader has dashed that hope. On Oct 16, Chinese President Xi Jinping lauded the success of the zero-COVID strategy, arguing that the policy has saved lives while saying China has launched an “all-out people’s war to stop the spread of the virus.” His message comes amid reinforced calls from Chinese state media for Beijing to persist with its COVID-19 policies. Experts largely agree that China seems to have no plan to end the zero-COVID strategy anytime soon, nor is it prepared to pivot away from the strategy. “China lacks effective vaccines and treatment options, has a dangerously low vaccination rate for older populations, and a highly stressed health care system,” said Xi Chen, an associate professor of health policy and economics at the Yale School of Public Health. Chen told DW that with the huge immunity gap, ending the zero-COVID policy would lead to an “imminent public health crisis” in China, possibly resulting in a large volume of hospitalizations and deaths in a short period of time. Click here to read…

Cholera vaccine shortages force WHO to reduce advised dosage

The World Health Organization (WHO) said on Oct 19 it will temporarily shift to a one-dose strategy from the standard two-dose vaccination regimen for cholera due to vaccine shortages and rising outbreaks worldwide. “The pivot in strategy will allow for the doses to be used in more countries, at a time of unprecedented rise in cholera outbreaks worldwide,” WHO said in a statement on Wednesday. The statement highlighted that 29 countries had reported cholera cases in 2022, with Haiti, Syria and Malawi fighting large outbreaks of the deadly disease. Currently, Haiti has confirmed at least 32 cases and 18 deaths from cholera. “The global trend is moving towards more numerous, more widespread and more severe outbreaks, due to floods, droughts, conflict, population movements and other factors that limit access to clean water and raise the risk of cholera outbreaks,” the statement highlighted. Is one dose enough? Cholera is an acute diarrheal infection caused by bacteria found in contaminated water. The disease affects millions worldwide every year. In the previous five years, fewer than 20 nations had reported such outbreaks in total. Click here to read…

Global Developments and Analysis: Weekly Monitor, 03 October- 09 October

Economic
World’s Emergency-Lending Capacity Is Getting Stretched as Crises Deepen

Rapidly rising interest rates are squeezing the flow of private capital to the world’s poorest countries. The problem is that the preferred alternatives—the International Monetary Fund and World Bank—are getting quickly committed. Lending by the pair has reached a record as they help poor and emerging countries cope with the pandemic, soaring energy and food costs and the fallout from Russia’s invasion of Ukraine. Government officials gathering in Washington for the two institutions’ annual meetings this week, while trying to support countries in trouble, are being asked to ensure they have enough capacity to respond to future emergencies. The IMF has committed $258 billion to 93 countries since the onset of the pandemic, and an additional $90 billion to 16 countries since Russia’s invasion of Ukraine. Not all committed funds have been lent out. At the end of September, the IMF had a record $135 billion of loans outstanding, up 45% from 2019, and more than double the amount in 2017. “At the moment, there is no big emerging-market crisis and they have the capacity, but they are going to be very stretched if we head into more turbulent waters,” said Kenneth Rogoff, a Harvard economics professor and a former chief economist for the IMF. Click here to read…

Roundup: Experts warn hunger, food insecurity rising in Africa

Hunger, food insecurity, and malnutrition are on the rise in Africa with the latest data showing that one in five people in Africa is facing hunger, African Union (AU) and United Nations officials have said. This came at the high-level food and nutrition conference held Oct 10 at the AU headquarters in Addis Ababa, the capital of Ethiopia, with the call to act with urgency to the current food insecurity and nutrition crisis unfolding across the continent. “Africa is no doubt facing one of the most alarming food crises in decades,” said Josefa Sacko, AU commissioner of Agriculture, Rural Development, Blue Economy and Sustainable Environment, noting that the COVID-19 pandemic and the ongoing Russia-Ukraine conflict exacerbated the food insecurity and poverty in Africa given that Russia and Ukraine are major players of wheat and sunflower oil to Africa. The commissioner further said the increasing frequency and severity of climate shocks, regional conflicts and the COVID-19 pandemic have also disrupted food production and distribution, driving up the cost of food in the continent. Africa is experiencing the heinous burden of food insecurity with about 278 million of its people suffering from chronic hunger, said Abebe Haile-Gabriel, assistant director-general and Regional Representative for Africa of the Food and Agriculture Organization (FAO) of the United Nations, citing the latest report co-authored by the FAO. Click here to read…

WTO Sees Sharp Slowdown in Global Trade, Pointing to Possible Recession

World trade in goods is projected to slow sharply next year under the weight of high energy prices, rising interest rates and war-related disruptions, raising the risk of a global recession, according to a new forecast. Total exports and imports of goods are likely to grow by just 1% in 2023, the World Trade Organization said on Oct 05. That would be down from its previous forecast of 3.4% and its forecast of 3.5% for this year. The WTO also lowered its forecast for global economic growth in 2023 to 2.3% from earlier expectations of 3.3%, and warned of an even sharper slowdown should central banks raise interest rates too sharply in their efforts to tame high inflation. The report follows multiple signs that global economic growth is weakening. “The global economy faces a multipronged crisis,” Ngozi Okonjo-Iweala, director-general of the WTO, the Geneva-based body responsible for enforcing the rules that govern global trade, told reporters in a news conference. “The picture for 2023 has darkened considerably.” The U.S. trade picture in August reflected the broad slowdown in demand. Exports of goods dropped 0.3% in August from the previous month, the first decline since January, the Commerce Department said Oct 05. Goods imports fell 1.5% during the same period. Click here to read…

US breaks record for EU gas supplies – Reuters

The United States ramped up its supply of liquefied natural gas to Europe in September, Reuters reported this week, citing tracking data by Refinitiv Eikon. However, exports were below average overall for the first eight months of 2022 due to an outage at a major LNG terminal. US LNG production has been lagging behind full capacity since a fire in June brought it to a halt at the Freeport terminal, which is the second-largest liquefaction facility in the United States, accounting for a fifth of all US LNG exports prior to the incident. Meanwhile, demand and prices for LNG are rising as energy-starved European buyers seek alternatives to Russian gas. For the first time, Europe has superseded Asia as the biggest destination for US liquefied natural gas. According to previous reports by the US Energy Information Administration, the country sent almost three-quarters of all its liquefied natural gas to Europe in the first four months of 2022. The increase means the US now accounts for nearly half of the bloc’s LNG imports, about twice the share seen in 2021. But experts say that even though US LNG exports helped fill European gas stores ahead of schedule, the bill was 10 times higher than the historical average cost of filling up tanks for winter. Click here to read…

Chevron Faces Tough Job Restarting Venezuela’s Damaged Oil Fields

As the Biden administration looks at relaxing sanctions to allow Chevron Corp. to pump oil in Venezuela again, the company is preparing to navigate myriad challenges in the country that could limit its ability to increase production quickly. Chevron will have to manage everything from fuel shortages to accident-prone oil infrastructure to security and corruption risks that could hamper its efforts to revitalize the country’s gutted oil industry. Some analysts said Venezuela’s oil production could increase by about 400,000 barrels a day in a matter of months to a year. That isn’t nearly enough to offset up to 2 million barrels of daily production the Organization of the Petroleum Exporting Countries and its Russia-led allies said they would cut Oct 05. Venezuela is likely to hit a ceiling eventually of about 1 million barrels a day in the medium term, still well below production levels before the U.S. sanctions, said Fernando Ferreira, an analyst at Rapidan Energy. “To get above that level would be challenging,” Mr. Ferreira said. “They’ll have to do a lot of refurbishing of the oil infrastructure, and that would require a lot of investment.” Click here to read…

Israel, Lebanon Reach Rare Deal for Gas Extraction and Export to Europe

Israel and Lebanon have agreed to a U.S.-brokered deal demarcating a disputed maritime border, officials from both sides said Oct 11, easing recent tensions between the longtime foes and opening the way for Israel to export gas to Europe. The accord, which has been in the works for a decade, marks a rare instance of economic cooperation between the two countries, which have fought two major wars and don’t have diplomatic relations. Once signed, the agreement would allow Israel to quickly follow through on its commitment to sell gas to the European Union, which is searching for new energy sources following Russia’s invasion of Ukraine and subsequent sanctions on Moscow. “This is a historic achievement that will strengthen Israel’s security, bring billions into Israel’s economy and ensure stability on the northern border,” Israeli Prime Minister Yair Lapid said. “The final version of the offer satisfies Lebanon, meets its demands, and preserves its rights to its natural wealth,” Lebanese President Michel Aoun said separately. The leaders of both countries said they would still need approval from their governments before formally signing the deal, possibly later this month. Click here to read…

China’s rapid LNG expansions power its push to maintain energy security in the face of crises

China is ramping up construction of liquefied natural gas (LNG) infrastructure – including receiving terminals and storage facilities – as the country secures more long-term buying contracts for the fuel amid growing concerns over energy security. “China is among the countries with a long list of LNG terminals under construction,” said Anne-Sophie Corbeau, a researcher with the Centre on Global Energy Policy at Columbia University. While some are being constructed from scratch, many existing terminals are undergoing expansions, she added. Late last month, a carrier from Qatar offloaded 210,000 cubic metres of LNG to a storage tank at the Yancheng Green Energy Port in eastern Jiangsu province, commencing operation of China’s largest LNG reserve base, according to local authorities. The new LNG port is an example of Yancheng thoroughly implementing President Xi Jinping’s energy-security strategy, the Yancheng government said on its website. The strategy, put forth by Xi in 2014, aims to revolutionise China’s energy consumption, supply, technology and systems, while enhancing international energy cooperation. Xi has also repeated warnings on energy security in the past two years, particularly as the country has encountered recurrent power crises. Beijing intends to build 34 coastal LNG-receiving terminals and add 224 billion cubic metres worth of receiving capacity by 2035, more than doubling the country’s current capacity, according to a draft plan issued by the Ministry of Transport in 2019. Click here to read…

Putin orders seizure of Exxon-led Sakhalin 1 oil and gas project

Russian President Vladimir Putin signed a decree on Oct 07 that establishes a new operator for the Exxon Mobil Corp.-led Sakhalin-1 oil and gas project in Russia’s Far East. Putin’s move affecting Exxon’s largest investment in Russia mimics a strategy he used to seize control of other energy properties in the country. The decree gives the Russian government authority to decide whether foreign shareholders can retain stakes in the project. Exxon holds a 30% operator stake in Sakhalin-1, with Russian company Rosneft, India’s ONGC Videsh and Japan’s SODECO as partners. Oil production at the Sakhalin-1 project fell to just 10,000 barrels per day (bpd) in July from 220,000 bpd before Russia invaded Ukraine. Exxon has been trying to exit its Russia operations and transfer its role in Sakhalin-1 to a partner since March, after international sanctions imposed on Moscow. Russia’s government and Exxon have clashed, with the oil producer threatening to take the case to international arbitration. Exxon declined to comment on Oct 07’s decree. Japan’s SODECO was not immediately available to comment, but an official of the industry ministry, which owns a 50% stake in the firm, said it was gathering information and talking with partners. Japan has stopped buying crude from Russia since June. Click here to read…

US and China both face tough struggles as war for chip supremacy intensifies following American export restrictions

Restrictions announced last week on Chinese access to US semiconductor technology raise the stakes significantly in the US-China tech war, but Washington’s bid to regain chip manufacturing primacy and slow China’s military and economic rise faces huge challenges, industry analysts said. The odds are long at best that the US chip industry can again dominate a field it pioneered, catch market leader Taiwan Semiconductor Manufacturing Company (TSMC) – which makes some 90 per cent of the world’s most advanced chips – or match Samsung Semiconductor Global any time soon. “The short answer is no,” said Paul Triolo, senior vice-president with Albright Stonebridge Group and a former electrical engineer in Silicon Valley. “This is really complicated industry. It’s expensive and you’d better put your money where your mouth is.” The United States is trying. In July, Congress passed the US$52.7 billion Chips and Science Act, which provides US$13.7 billion for R&D and US$39 billion for manufacturing subsides, although these amounts pale against those of foreign government’s or the capital spending of leading private competitors. And on Oct 07, the US Commerce Department imposed systematic semiconductor export restrictions on dozens of Chinese companies and research institutions days after the Pentagon expanded its own blacklist. Click here to read…

Decoupling from China not an option for EU firms – Dombrovskis

Decoupling from China is not an option for companies in the European Union, EU trade commissioner Valdis Dombrovskis told an engineering conference in Berlin on Oct 11, as the Ukraine war redefines how the bloc sees its important trade partners. “The EU should continue engaging with China with pragmatism and without naivety. Our trading relationship needs more balance and reciprocity,” he said, calling for more focus on better risk management and diversification instead of pulling away. Besides China, the EU’s relations with its other important trade partner, the United States, have also changed, he said. “The transatlantic relationship has been reinvigorated,” he said, but there are “deep concerns” about the U.S. Inflation Reduction Act and the advantages it affords to U.S. companies. Dombrovskis argued that the green subsidies provided for in the act discriminate against the EU’s automotive, renewables, battery and energy-intensive industries. The $430 billion climate, health and tax bill was signed into law in August and has also prompted South Korea to raise concerns about tax credits for electric vehicle purchases. “I will be raising these issues with my American counterparts when I travel to Washington tomorrow,” he said. German Chancellor Olaf Scholz, speaking at the same conference, said Germany will discuss the act with Washington. Click here to read…

China issues $850.2 bln in local govt bonds in Jan-Aug to boost national economy

China issued a total of 390.9 billion yuan ($54.93 billion) worth of local government bonds in August, with the total amount from January to August in 2022 reaching 6.05 trillion yuan ($850.2 billion), statistics from the Ministry of Finance (MOF) revealed on Oct 08. Among the 390.9 billion yuan in August, general bonds made up 176 billion yuan and special bonds stood at 214.9 billion yuan. In the first eight months, the issuance of general bonds totaled 1.76 trillion yuan and that of special bonds totaled 4.29 trillion yuan. Local government bonds are usually used to finance local public works, including transport, communications, housing, and other sectors. Special bonds are a significant financial source for local infrastructure construction. As of September 21, a total of 11 provinces and cities across the country have made public their plans to issue local government bonds in the fourth quarter or October, with a total of 234.3 billion yuan in special bonds to be issued, media outlet yicai.com reported on Oct 07. As the nation’s economy faces challenges from the COVID-19 pandemic and weakened overseas demands, the central government aims to increase the issuance of local government bonds to stimulate economic growth while gradually transferring the momentum of the stimulus to local governments for greater dynamism, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Oct 08. Click here to read…

China gives clearest sign yet it will stick with zero-Covid strategy

For the second day in a row, Communist Party mouthpiece People’s Daily urged China to stick with its zero-Covid strategy, dampening hopes that controls would ease after a pivotal political meeting this month. The commentary is the clearest sign yet that the party is determined to continue with the stringent zero-Covid approach after its twice-a-decade national congress, which starts Oct 16. On Oct 10, the newspaper called for confidence and patience with the zero-Covid strategy, which aims to cut all virus transmission chains. Chinese President Xi Jinping has been portrayed by state media as leading a national pandemic control effort that has resulted in few deaths. He has staked considerable political capital on the purported superiority of China’s handling of the pandemic compared with the West. The public and some investors had hoped for a shift, however slight, from the present measures after the 20th party congress, where Xi is expected to secure a precedent-breaking third term as the party’s top leader. According to Oct 11’s commentary, China’s dynamic zero-Covid approach has balanced pandemic control with economic and social development, allowing China to achieve “extremely low” mortality and “smooth” social and economic functioning. “Dynamic zero is the anti-epidemic strategy with the lowest overall social cost and is the best option for the timely control of epidemics in China at this stage,” it said. Click here to read…

Xi seen giving China’s economic reins to trusted ally in third term

Chinese President Xi Jinping is expected to appoint one of his closest allies as economic czar as he prepares to kick off a third term at the helm of the Communist Party, a move seen further expanding Xi’s involvement in macroeconomic policy and setting back market reforms. He Lifeng, chair of the powerful planning body National Reform and Development Commission, is seen as a likely successor to Vice Premier Liu He, Xi’s current economic policy chief, who is expected to retire after a party congress in mid-October. In China, the general secretary of the ruling Communist Party typically takes charge of political matters, while the premier steers the economy. Xi and Premier Li Keqiang initially followed this template, though Xi has increasingly involved himself in economic policy since around 2016 through Liu, a close ally. Liu is director of the office of the party’s Central Financial and Economic Affairs Commission, the organ responsible for charting China’s general economic goals. He is also a key driver behind financial policy and served as China’s lead negotiator during its trade war with the U.S. China watchers predict Liu’s responsibilities will be passed down to He. The National Reform and Development Commission he oversees has wide-ranging responsibilities including crafting energy policies, supervising industries and approving new infrastructure projects. Click here to read…

Sri Lanka cabinet approves downgrade to ‘low income country’

Sri Lanka’s cabinet has approved a proposal to downgrade the island nation’s economic status to “low income country,” in order to get access to concessional funding from international organizations, the cabinet spokesman said on Oct 11. Sri Lanka’s economy is in a deep slump, shrinking at an annual 8.4% in the June quarter in one of the steepest quarterly declines. Per capita GDP was $3,815 in 2021, which had placed it in the lower-middle economy category, according to the World Bank. The cabinet had decided to downgrade the island to “low income” on the World Bank list, said cabinet spokesman Bandula Gunawardane. “Given the serious financial crisis Sri Lanka is facing representatives of international organizations had informed us that if Sri Lanka was categorized as a low income country access to funding would be easier,” Gunawardane said. The South Asian island of 22 million people is battling its worst economic crisis since independence in 1948, brought about by COVID-19 battering its tourism-reliant economy and slashing remittances from workers overseas, rising oil prices, populist tax cuts and a seven-month ban on the import of chemical fertilizers last year that devastated agriculture. The crisis has led to an acute dollar shortage to pay for imports of food, fuel and medicine, a plunge in the rupee and runaway inflation. Click here to read…

US imports from Russia increase despite sanctions – US Census Bureau

US imports from Russia reached $522.1 million in August, 7.7% more than the July total of $484.8 million, and marking the first monthly increase since April, according to a report released on Oct 05 by the US Census Bureau. The growth comes despite US President Joe Biden’s pledge to deal a “crushing blow” to Moscow through restrictions on commodity trade. According to analysts, Washington continues to benefit from the anti-Russia sanctions. While pressuring the EU to give up supplies from Russia, the US continues to buy hundreds of unsanctioned types of goods. “There is a tacit agreement between the US government and business: we puff our cheeks, and you trade with Russia if it suits you. Their words don’t meet their actions,” Aleksandr Razuvaev, a member of the supervisory council at Moscow’s Guild of Financial Analysts, told Russian state media on Oct 05. Meanwhile, exports of American goods to Russia slumped by 19% to $66.8 million in August from $82.5 million in July. In June, Russia imported goods worth $58 million, down from $77.4 million in May, and $89.1 million in April. The data shows that in total from January to August the US imported goods from Russia worth $12.1 billion, while exports stood at just $1.3 billion. Click here to read…

US: New rules could mean big changes for gig economy

The US government on Oct 11 proposed a rule change that could make it more difficult for companies to classify gig workers as independent contractors. This would mean better benefits and access to minimum wages for the workers. A 45-day public comment period for the rules begins on Oct 13. Millions in the United States are hired for “gig” jobs, especially in the restaurant, construction, and healthcare industries. The change is expected to shake up ride-hailing and delivery-based companies such as Uber, Lyft, DoorDash and others who rely almost entirely on gig workers. What does the proposal include? The suggested changes would require workers to be labeled as employees when they are “economically dependent” on a company, giving them more benefits and legal protections compared to the contractor status. The new rule is expected to come into effect next year. It directs employers to consider six criteria for determining whether a worker is an employee or a contractor. The criteria include the degree of control by the employer, whether the work requires special skills, the degree of permanence of the relationship between worker and employer and the investment a worker makes, such as car payments. Currently, most federal and state labor laws only apply to company employees. These include minimum wage and overtime pay. Click here to read…

Strategic
Massive wave of missile attacks reported across Ukraine

Multiple missile strikes targeted Ukrainian cities, all across the country, on Oct 10 morning, according to local officials and media. The news comes two days after a bomb damaged the strategic Crimean Bridge – which Moscow has labelled a Ukrainian terrorist attack. The office of Valery Zaluzhny, the commander-in-chief of the Ukrainian armed forces, reported they had detected at least 75 missiles and claimed they had intercepted 41. President Vladimir Zelensky confirmed the attacks throughout the country in a video address, saying numerous parts of Ukraine had come under fire, and claimed that Russia was targeting the energy infrastructure. “They want panic and chaos,” he said. Local officials in Lviv, Kharkov, and Odessa also reported that their cities came under fire. In Kiev, damage from the strikes was reported near the headquarters of the Security Service of Ukraine (SBU), which is located in the government area of the capital. City officials halted operations of the metro system, and the stations are now being used as shelters for civilians. With similar accounts coming in from many parts of the country, senior Ukrainian officials have expressed determination to fight Russia. “Our courage will never be destroyed by terrorists’ missiles, even when they hit the heart of our capital,” Defense Minister Aleksey Reznikov tweeted, also claiming that Russia’s future is that of “a globally despised rogue terrorist state.” Click here to read…

Kremlin responds to rumored status change of Ukraine military operation

Moscow has denied rumors that the military operation in Ukraine is being redesignated as a counter-terrorism campaign, following Kiev’s attack on the Crimean Bridge. When asked about the supposed change, Kremlin spokesperson Dmitry Peskov replied: “Currently, no decisions have been made in this regard.” Previously, he said that the decision to designate the Russian campaign in Ukraine as a counter-terrorism operation can only be made by President Vladimir Putin. Peskov also said there have been no decisions on introducing martial law in Russian regions which have been targeted by Ukrainian strikes in recent weeks. Moscow’s campaign in Ukraine is officially designated as a ‘special military operation’. A ‘counter-terrorism operation’ (CTO), however, is a completely different matter in legal terms – it is intended to “uncover and prevent” an act of terrorism, minimize its effectiveness, and ultimately eliminate any threats to the population. A CTO also allows the government to call up more people to take part, including servicemen, the National Guard, police, emergency workers, and others. The spokesperson’s comments come after Putin declared the recent attack on the Crimean Bridge, which connects mainland Russia with the Crimean Peninsula, an act of terrorism carried out by Ukraine’s security services (SBU). Click here to read…

As European leaders meet, questions remain over whether a new political club will actually work

Leaders from 44 European countries – the whole of the continent except Russia and Belarus – met on Oct 06 in Czech capital Prague to attend the inaugural meeting of the European Political Community, a new regional group proposed by French President Emmanuel Macron this May. While eyeing issues from Europe’s security to soaring energy prices and a looming economic recession, analysts said the gathering could be just another “grand show of solidarity,” a talking shop without any actual content. They warned that such a group could develop into a new bloc confrontation with Russia, further worsening Europe’s security situation. The inaugural meeting included all 27 members of the European Union, plus 17 other nations including the UK, Ukraine and Turkey. The only two nations not invited were Russia and its neighboring ally Belarus, according to media reports. In remarks at the opening, Macron said the group’s existence is aimed at “sending a message of unity to all European nations by building a strategic closeness and finding common strategies,” media reported on Oct 06. Despite the rhetoric, critics questioned if any concrete results could be delivered, as no formal policy statements, resolutions or declarations were expected. Click here to read…

Russians fleeing draft strain Kazakhstan’s services, diplomacy

Kazakhstan has become a prime destination for Russian civilians seeking to avoid being drafted into the Ukraine war, but the influx is starting to strain the vast Central Asian country’s services — and potentially its relationship with Moscow. Around 200,000 people fleeing conscription have entered Kazakhstan since Moscow began its partial mobilization on Sept. 21, according to figures announced this week by the Kazakh government, which has so far welcomed them. About 147,000 have either moved on to third countries or returned to Russia, leaving Kazakhstan with 50,000 or so Russians staying for the time being. They are among hundreds of thousands more Russians who have fanned out to numerous destinations, from Mongolia to Finland to Turkey. Kazakhstan is an attractive option for those looking to avoid conscription, considering its long land border with Russia and membership in the Eurasian Economic Union, a regional free trade bloc that allows Russians to enter the country without visas for up to 90 days. They do not even need passports, as they can their use Russian identity cards. The Russian language is still widely spoken across the former Soviet republic, and Russian bank cards and services such as Yandex taxis can be easily accessed. Kazakhstan’s government is talking up potential positives of the inflow of Russians. Last week, President Kassym-Jomart Tokayev commented on the thousands fleeing mobilization, referring to it as a “humanitarian matter.” Click here to read…

US and Russia make headway in nuclear talks – media

Russia and the US have managed to achieve “significant progress” in talks over resuming nuclear inspections within the New START treaty, Russian newspaper Izvestia reported on Oct 06, citing the Foreign Ministry. The sides are also apparently mulling face-to-face negotiations to remedy remaining issues. According to the Russian Foreign Ministry, as quoted by the outlet, Moscow and Washington are looking into reviving mutual inspection of nuclear arsenals. The ministry noted that the US and Russia are negotiating “over relevant channels” on how to return “to the full implementation of the treaty” in the element relating to verification mechanisms. It went on to say that the sides are holding virtual talks within the New START bilateral consultative panel. “At the moment, the possibilities for holding its next session in face-to-face format are being explored,” the ministry added. Russia and the US are also discussing “what organizational and technical problems need to be solved,” it told the outlet, adding that “significant progress” has been made to remedy a number of issues, but some “considerable difficulties remain.” These difficulties are said to include Covid-19-related issues that require “a final settlement.” Another major sticking point, apparently, is the West’s sanctions over the Ukraine conflict Click here to read…

Saudi Arabia Defied U.S. Warnings Ahead of OPEC+ Production Cut

Days before a major oil-production cut by OPEC and its Russia-led allies, U.S. officials called their counterparts in Saudi Arabia and other big Gulf producers with an urgent appeal—delay the decision for another month, according to people familiar with the talks. The answer: a resounding no. U.S. officials warned Saudi leaders that a cut would be viewed as a clear choice by Riyadh to side with Russia in the Ukraine war and that the move would weaken already-waning support in Washington for the kingdom, the people said. Saudi officials dismissed the requests, which they viewed as a political gambit by the Biden administration to avoid bad news ahead of the U.S. midterm elections, on which control of Congress hangs. High gas prices and inflation have been central issues in the campaign. Instead, the people said, the kingdom leaned on its OPEC allies to approve the cut, which is aimed at reducing production by 2 million barrels a day. Adrienne Watson, a National Security Council spokeswoman, rejected Saudi contentions that the Biden administration efforts were driven by political calculations. U.S. officials questioned a Saudi analysis that the price of oil was about to plunge and urged them to wait and see how the market reacted. If the price did collapse, U.S. officials told their Saudi counterparts, OPEC+ could react whenever they needed. Click here to read…

China leads region in military self-sufficiency, with others far behind, report says

China has the highest level of self-sufficiency in weapons production in the Indo-Pacific region, with second-placed Japan not even close, according to a research report released this month. Although full self-reliance in armaments – the capability of a country to design and produce the military goods its armed forces need without foreign technological input – is almost impossible to achieve, countries, especially in Asia, are still seeking more of it, according to the report by the Stockholm International Peace Research Institute. Military commentator Song Zhongping said China’s high level of self-reliance in arms production was the result of historical lessons, and would ensure the supply and repair of equipment in any war. “Globally, apart from China, there are only the US, Russia and France doing well in weapons self-reliance,” he said. “And China might be able to score even higher than the US, which heavily relies on its allies to supply some key weapons parts.” Amid rising Indo-Pacific tensions, the report – “Arms-Production Capabilities in the Indo-Pacific Region: Measuring Self-reliance” – assessed 12 cases in the region, excluding the United States. It concluded that “China dominates the ranking”, with its score more than two and a half times higher than Japan’s. South Korea was third, and India, the world’s second-largest importer of weapons, fourth thanks to its “Make in India” campaign. Click here to read…

Australian defence projects are billions over budget, decades late

Major Australian defence projects with approved budgets totalling more than A$70 billion (US$45 billion) are over budget and cumulatively decades late, the Australian government said on Oct 10, amid China’s plans to increase its influence in the Pacific. At least 28 defence projects are collectively 97 years late, including the A$44 billion anti-submarine frigates programme and purchases of 12 offshore patrol vessel and a digital battlefield command system, Defence Minister Richard Marles said. “All of this has occurred at a time when our strategic circumstances are very complex and extremely challenging,” Marles said during a media briefing. China’s plans to set up presence in the Pacific, including entering a security pact with Solomon Islands, has raised concerns in the United States and Australia, who have for decades seen the region as largely their sphere of influence. The government will set up an independent projects management office within defence to keep a close eye on projects to avoid delays and keep them within budget, Marles said. Separately, at least 18 projects are facing cost overruns of roughly A$6.5 billion, the government said. Cost estimates do not include the upcoming purchase of eight nuclear submarines, under an agreement with the United States and Britain. Click here to read…

Iran protests over woman’s death persist despite crackdown, oil workers strike

Clashes between protesters and security forces persisted across Iran on Oct 11, with social media videos showing tanks being transported to Kurdish areas, which have been a focal point of the crackdown on protests over Mahsa Amini’s death in custody. Protests calling for the fall of the clerical establishment have swept Iran since Amini, a 22-year-old Iranian Kurdish woman, died on Sep 16 while being detained by the morality police in Tehran for “inappropriate attire”. While observers do not believe the unrest, now in its fourth week, is close to toppling the government, the protests mark one of the boldest challenges to the Islamic Republic since the 1979 revolution, with reports of strikes spreading to the vital energy sector. The authorities are waging a deadly crackdown. Videos on social media showed trucks moving dark green tanks to Kurdish areas, raising the stakes in the revolt. Reuters could not verify the video footage. Tensions have been especially high in Kurdish regions, given Amini’s ethnic background. Human rights groups say Iran’s Kurdish minority of more than 10 million has long been oppressed – a charge the Islamic Republic denies. The Hengaw human rights group reported “intense conflict” on Oct 11 between protesters and security forces in three cities in Kurdistan province – Sanandaj, Baneh and Saqez, where Amini was buried last month. Click here to read…

Three ‘cushions’ help Japan, South Korea leaders hold first talks

Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol held their first face-to-face talks on Sept. 21 in New York. The brief meeting, which took place on the sidelines of the U.N. General Assembly, was the first between leaders of the two countries since December 2019, and both sides had carefully prepared for the occasion to avoid backlash at home. The 30-minute talks were described by Tokyo and Seoul as “informal,” indicating their delicate nature, as both leaders must consider voter sentiment in their countries. The two governments are also keenly aware of the need for direct talks between their leaders as they work more closely with the U.S. to counter common threats from China, Russia and North Korea. But the deep distrust of South Korea in Japan, not only in political and bureaucratic circles but also among the public, poses a big hurdle for high-level talks in security and other areas — not to mention bilateral summits. Tokyo and Seoul thus devised a “three-cushion” approach to make their reconciliation efforts more palatable to voters and politicians back home. Under this approach, the two countries are trying to introduce at least one of the following features in their bilateral dealings: the involvement of the U.S., a venue outside Japan and South Korea, and the use of an international framework. Click here to read…

North Korea in final stages of nuclear test preparations: U.N. report

North Korea is in the final stages of preparations for a nuclear weapons test, with activities pointing to excavation of an underground tunnel and testing of triggering devices, a United Nations Security Council panel says in an expert report. North Korea has expanded production capability for nuclear fissile materials at the Yongbyon nuclear testing site, according to the report released on Oct 07. The panel “observed that in March 2022 the country started re-excavation at the entrance to Tunnel 3 … at the Punggye-ri nuclear test site and reconstructed support buildings dismantled in May 2018,” the document says. “Work at the Punggye-ri nuclear test site paves the way for additional nuclear tests for the development of nuclear weapons,” the report says. If conducted, it would mark North Korea’s seventh nuclear test. Pyongyang is stepping up provocations by firing a missile over Japan for the first time in five years while seeking ways to evade international sanctions. The report, which covers activities from January through July, is nonbinding, but it could prompt the Security Council or U.N. member nations to call for tougher sanctions. The panel also accuses North Korea of continuing to import petroleum products in violation of international sanctions. Click here to read…

U.N. rights body rejects Western bid to debate Xinjiang abuses

In a close diplomatic victory for China, the U.N.’s top human rights body on Oct 06 voted down a proposal from Britain, Turkey, the United States and other mostly Western countries to hold a debate on alleged rights abuses against Muslim Uighurs and other ethnic minorities in China’s western Xinjiang region. At the 47-member state Human Rights Council, 17 countries voted in favor, 19 were against, and 11 abstained in a vote to hold a debate on Xinjiang at its next session in March. The vote amounted to a test of political and diplomatic clout between the West and Beijing and would have marked the first time that China’s record on human rights would merit a specific agenda item at the council. The result, prompting a smattering of applause in the chamber, followed days of diplomatic arm-twisting in Geneva and in many national capitals as leading Western countries tried to build momentum on a report from former U.N. human rights chief Michelle Bachelet’s office, released Aug. 31, which found that possible “crimes against humanity” had occurred in Xinjiang. A simple majority of voting countries was required. China locked down “no” votes among its usual allies, plus many African countries and Persian Gulf states Qatar and the United Arab Emirates. Click here to read…

‘If this is not provocation, what is it?’: Taiwan says mainland China sends 4-6 warships every day

The People’s Liberation Army has deployed between four and six warships in waters close to Taiwan every day since August, the island’s defence minister Chiu Kuo-cheng said on Oct 11. Chiu said Beijing’s deployments were in addition to the PLA sending multiple daily warplane sorties to the self-ruled island’s air defence identification zone or across the median line in the Taiwan Strait – a de facto line separating the island and the mainland. Calling the actions proof of provocation from the mainland side, he said the island’s military had tried as much as it could to avoid escalating tensions in the Taiwan Strait. “But even in peacetime, the PLA has dispatched more than 20 warplanes to fly by Taiwan and cross the median line. Each day it has also deployed four to six warships, or more, in waters around us,” Chiu said. It is the first time the island’s military has revealed its count of PLA warships deployed close to the island every day – a move by the mainland that observers said could help its forces launch a sea blockade or attack the island in a potential cross-strait conflict. Chiu’s comments came after Beijing hit out at Taiwanese President Tsai Ing-wen, accusing her of exaggerating PLA threats to the island in a speech on Oct 10 marking the Double Tenth Day – the 111th anniversary of the Republic of China, Taiwan’s official title. Click here to read…

US unveils new Arctic strategy to tackle climate threat, China and Russia’s influence

US President Joe Biden’s administration released a new Arctic strategy on Oct 07 as the strategically and environmentally important region suffers worsening effects from climate change and sees increased international competition. Global warming is melting Arctic ice, opening previously closed areas to navigation and creating new opportunities for countries such as the United States, Russia and China to vie for resources and influence. The situation is further complicated by the invasion of Ukraine by Russia – a major Arctic power – which has increased tensions between Moscow and Washington to a level not seen since the height of the Cold War. “The Arctic – home to more than four million people, extensive natural resources, and unique ecosystems – is undergoing a dramatic transformation,” the strategy says. “Driven by climate change, this transformation will challenge livelihoods in the Arctic, will create new economic opportunities, and could intensify strategic competition among countries.” The strategy features four main pillars: security, climate change and environmental protection, sustainable economic development, and international cooperation. “Our highest priority is to protect the American people and our sovereign territory and rights. We are committed to the security of our treaty allies and to supporting our partners in the region,” the strategy says. Click here to read…

Egyptian, Greek FMs meet for talks after Turkey-Libya gas exploration deal

Foreign ministers of Egypt and Greece held talks in Cairo, Egypt on Oct 09, following a recent oil and gas exploration deal signed between Turkey and the Libyan Government of National Unity. Greek Foreign Minister Nikos Dendias described the deal as a “threat to regional stability,” stressing that achieving stability in Libya and in the eastern Mediterranean region is one of the “strategic goals” for both Greece and Egypt. He urged for holding the Libyan elections to maintain Libya’s stability and territorial integrity, adding “Greece supports the efforts to pave the way for holding the presidential and parliamentary elections in Libya.” “The outgoing unity government in Tripoli doesn’t have the authority to conclude any international agreements or memoranda of understanding,” Egyptian Foreign Minister Sameh Shoukry said, adding the Libyan Government of National Unity came through a ­UN-approved road map by the Libyan Political Dialogue Forum with a specific mission and term to hold the Libyan presidential and parliamentary elections on December 24, 2021, which it failed to do. Libya has been divided into two rival administrations since March, when the eastern-based House of Representatives, or the parliament, appointed ­Fathi Bashagha as prime minister while Tripoli-based Prime Minister Abdul-Hamed Dbeibah refused to step down, saying he would only hand over office to an elected government. Click here to read…

Health
African nation ‘on alert’ over Ebola outbreak

A Nigerian health watchdog has called on the nation to be on alert over an outbreak of Ebola in Uganda. The hemorrhagic viral disease, notorious for its high mortality rate, may spread into the country with air passengers, it warned. “The likelihood of importation to Nigeria is high due to the increased air travel between Nigeria and Uganda, especially through Kenya’s Nairobi airport, a regional transport hub, and other neighboring countries that share a direct border with Uganda,” the statement released by the Nigeria Center for Disease Control (NCDC) said. If imported, it may spread domestically through mass gatherings, political rallies, religious ceremonies or festivals, the organization warned. The national system for detecting Ebola infections is now “in alert mode,” it announced. While the risk posed by the virus is high, Nigeria has the technology, trained medics and testing capacities to “respond effectively in the event of an outbreak,” the NCDC explained, citing the country’s experience in dealing with an outbreak in 2014. The epidemic nearly a decade ago was the biggest on record. The infection spread far from Western Africa, where it is endemic in animals, and reached Europe and the US. The World Health Organization (WHO) reported 28,616 suspected, probable, and confirmed cases and 11,310 deaths in Guinea, Sierra Leone, and Liberia, the three nations most affected. Click here to read…

Highly contagious Omicron variant BA.5.1.7 identified in Chinese mainland for first time

A new Omicron variant that has caused multiple infections in Shaoguan, South China’s Guangdong Province, has been identified as the subvariant BA.5.1.7. It’s the first time the variant has been detected in the Chinese mainland. According to the Shaoguan government, there have been a number of imported COVID-19 cases with multiple sources and multiple chains in the city, leading to successive positive cases in Shaoguan. The latest flare-up in the city has two major transmission chains respectively caused by Omicron variants BA.5.1.7 and BF.7, both of which are highly infectious with fast spreading speed, a statement from the official social media account of the local people’s government said on Oct 09. The subvariant BA.5.1.7 – discovered in more than 100 countries and regions – was detected in the mainland for the first time, said Li Shujian, deputy director of the local disease prevention and control center. The highly contagious BA.5.1.7 caused several infections on the same transmission chain in Shaoguan during a dinner gathering on October 1, according to the local government. The subvariant BA.5 that has dominated coronavirus cases in the US, the UK and other countries and regions is the most easily transmissible COVID variant to date, able to evade previous immunity from COVID infection and vaccination, according to Western media reports. Click here to read…