Economic
Global Trade Returns Faster Than Expected
Global trade is rebounding much more quickly this year than it did after the 2008 financial crisis, lifting parts of the world economy and defying predictions the pandemic could send globalization into permanent retreat. When the new coronavirus hit earlier this year, international trade in goods suffered the biggest year-over-year drop since the Great Depression. Economists warned of rising protectionism, and some companies said they would reassess overseas supply chains that were vulnerable to unexpected shocks.Trade remains below pre-pandemic levels. Still, it has snapped back robustly—and had recovered about half of this year’s historic loss by June, according to calculations by the Kiel Institute for the World Economy, a German think tank. The recovery isn’t being felt evenly everywhere, and trade still faces fierce headwinds, including possible coronavirus resurgence this fall. Click here to read...
Where Trump and Biden Stand on Big Tech
Powerful technology companies are expected to face increased scrutiny no matter who wins the Nov. 3 election, but President Trump and challenger Joe Biden differ on some of the problems posed by Big Tech and how to solve them. In a second term, Mr. Trump and his appointees likely would maintain—and possibly accelerate—the broad-scale regulatory scrutiny of technology companies that marked his first term. That effort has included allegations of anticonservative bias online, antitrust investigations of internet giants such as Alphabet Inc.’s Google and Facebook Inc., and actions against Chinese-owned apps such as TikTok and WeChat. Mr. Biden, the Democratic nominee, has also been critical of Big Tech’s market power. He and running mate Sen. Kamala Harris (D., Calif.) say they would support stricter antitrust oversight and online privacy rules. But the Biden camp has emphasized forcing social-media companies to better police their sites against false information and taking government action to help workers under threat from innovations such as self-driving carsClick here to read...
US woos Taiwan and its chipmakers in step toward trade pact
As tensions between the U.S. and China escalate, Washington has stepped up economic dialogue with Taiwan with an eye on the island's extensive semiconductor industry. Keith Krach, undersecretary of state for economic growth, energy, and the environment, met on 18 Sept with several senior Taiwanese officials, including Premier Su Tseng-chang and Economic Minister Wang Mei-hua. The Taiwanese side apparently communicated strong interest in signing a free trade agreement with the U.S. When meeting with the Taiwanese officials, Krach focused largely on measures designed to curb Chinese economic clout. He talked about how Washington and Taipei can work together to create new supply chains to curb their economic dependence on mainland China, as well as about Taiwan's semiconductor industry and the need for tighter restrictions on investments from the mainland. Washington's overtures to Taiwan are fuelled in part by strong U.S. interest in the island's chipmakers, which account for roughly 70% of the world's semiconductors produced on a contract basis. Click here to read...
COVID-19 spurs digital shift for companies in Asia
Even before the outbreak, Japan had been struggling with a shortage of information technology experts, partly due to low wages in the industry. According to a report by Japan's economy ministry, in 2018 nearly 90% of Japanese companies were facing a shortage of the IT workers needed to foster a digital transformation. NEC, for example, announced in July plans to increase the number of employees with advanced technology skills to 5,000 from around 3,000 at present as more clients seek strategic advice on digital technology in the wake of the pandemic.Meanwhile, rival Fujitsu this fiscal year began offering around 9,000 free online courses to 80,000 employees in Japan to improve their grasp of AI and programming. Japan's JFE steel aims to train around 350 data scientists by the end of fiscal 2020 to reduce errors on its production lines. Click here to read...
Japan's economy ministry sidelined under Suga
Japan's Ministry of Economy, Trade and Industry, a dominant force in policymaking under Shinzo Abe, is set to see its influence diminished under new Prime Minister Yoshihide Suga. Suga's appointments on 16 Sept to top posts in the prime minister's office included the replacement of Takaya Imai, a former economy ministry bureaucrat, with an official hailing from outside Japan's political nerve center. Hiroto Izumi, who has supported Suga for many years, was reappointed as a special adviser to the prime minister and will be entrusted with general policy coordination. Imai’s removal represents a deliberate pivot by Suga away from what he sees as an obstacle to much-needed reform. Last year's basic policy on economic and fiscal management included a call to boost the national average minimum wage to 1,000 yen ($9.40) an hour "at an early stage." As chief cabinet secretary, Suga said raising the minimum wage was "extremely important" and advocated a 5% hike. But the economy ministry opposed such a move. Click here to read...
China announces regulations for 'unreliable entity' list
China's Ministry of Commerce on Sept 19 issued regulations for its "unreliable entity" list, aimed at foreign companies it says endanger its national sovereignty, security, or development interests. Companies that end up on the list could be banned from importing or exporting from China and may be barred from investing in the country. Other measures include imposing fines, entry restrictions on employees into China and revoking their work or residence permits. The announcement of the new regulations comes after the U.S. said it would ban Chinese-owned TikTok and WeChat from U.S. app stores on Sunday, and bar such apps from assessing essential internet services in the U.S. based on national security and data privacy concerns. Click here to read...
FinCEN Files: Deutsche Bank tops list of suspicious transactions
Germany's largest bank Deutsche Bank is no stranger to scandals. But the leaked FinCEN files suggest the bank was aware it was facilitating suspicious transactions amounting to over $1 trillion dollars, including for a period after it had promised to clean up its act. The FinCEN files are a huge cache of secret reports detailing suspicious financial activity, filed by banks to the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department (USTD). BuzzFeed News obtained the files and shared them with the International Consortium of Investigative Journalists (ICIJ). Over the past 16 months, 400 journalists from 88 countries have been investigating the documents. Deutsche Bank accounts for 62% of all Suspicious Activities Reports (SARs) filed to FinCEN in the leaked documents. Click here to read...
ByteDance adamant it will retain majority ownership of TikTok in US
ByteDance said on Sept 21 that it would maintain majority ownership and control of TikTok Global, contradicting statements by Donald Trump, Oracle and Walmart, after it agreed a deal with the companies to continue operating in the US. The US commerce department also said it would delay an order to Apple and Google to remove the app from their US app stores to September 27, giving the companies time to finalise their agreement. Oracle, the US technology group, and Walmart, the world’s biggest bricks-and-mortar retailer, said in a joint statement at the weekend that TikTok Global would be “majority owned by American investors”. However, while their stake combined with the equity held by longstanding US investors in ByteDance might mean American investors would be the biggest financial beneficiaries, direct majority ownership and control of the business is set to remain with the Chinese company. In a statement released on Jinri Toutiao, ByteDance’s Chinese social media platform, the company said TikTok Global would be a “100 per cent” fully owned subsidiary.
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LG Chem to spin off world’s largest electric car battery business
LG Chem plans to spin off its lucrative electric vehicle battery business, the world’s largest, to fund an expansion of its facilities through a potential initial public offering as it benefits from a surge in orders. The South Korean company, which supplies US carmakers Tesla and GM, is boosting its capacity to meet growing orders for EV batteries driven by tighter environmental regulations in Europe and China. While the coronavirus pandemic has dented demand for EVs, LG Chem has Won150tn ($125bn) — or about five years’ worth — of orders on its books. The battery business — due to be hived off in December — will be wholly-owned by LG Chem, but the Asian country’s biggest petrochemical company said it would consider a stock market listing for the new business. LG Chem forecasts that the battery business will generate more than Won 30tn of annual sales by 2024, from about Won13tn estimated for 2020. It overtook China’s CATL to become the industry leader this year, controlling about a quarter of the global market.
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Palantir listing may shine light on secretive Big Data firm
Perhaps the most secretive firm to emerge from Silicon Valley, Palantir Technologies is set for a stock market debut this month that may shed light on the Big Data firm specializing in law enforcement and national security. Palantir platform has been used in the controversial practice of “predictive policing” to help law enforcement, detect medical insurance fraud and fight the coronavirus pandemic. While Palantir’s data practices and algorithms are secret, the company claims it follows a road map which is, if anything, more ethical than its tech sector rivals. It moved its headquarters to Denver this year, partly in an effort to set itself apart from its Silicon Valley rivals. Palantir is opting for a direct listing, expected on Sept. 29. This will not raise capital but will allow shares to be traded on the New York Stock Exchange.
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Strategic
Saudi Royal Family Divides Over Potential Embrace of Israel
Saudi Arabia’s monarch, King Salman bin Abdulaziz, has been at odds with his son, Crown Prince Mohammed bin Salman, over embracing the Jewish state. The king is a long time supporter of the Arab boycott of Israel and the Palestinians’ demand for an independent state. The prince wants to move past what he sees as an intractable conflict to join with Israel in business and align against Iran. Normalizing relations between Saudi Arabia and Israel before any deal for Palestinian statehood would be a seismic shift in the Middle East, upending a decades-old pan-Arab position. The Trump administration has pressed to bring together Saudi Arabia and Israel, its top regional allies and Iran’s main rivals. Such an arrangement would allow for greater intelligence sharing and ease Israel’s isolation as Washington reduces its military presence in parts of the Middle East. Click here to read...
China Flies Warplanes Near Taiwan as Senior U.S. Diplomat Visits
Beijing flew military aircraft close to Taiwan on a day that a senior American diplomat met with Taiwan’s president as part of a series of recent U.S. moves to improve ties with the self-ruled island. The State Department said earlier this week Mr. Keith Krach’s trip was to attend a memorial service honouring former President Lee Teng-hui, who died in July. Hours before the meeting, Taiwan’s Defense Ministry said it scrambled jet fighters after at least 18 Chinese aircraft crossed the so-called median line in the Taiwan Strait that roughly marks the halfway point between the island and mainland China. The Wall Street Journal and other news outlets reported this week that the Trump administration is poised to sell billions of dollars in weapons to Taiwan to ratchet up political and military pressure against China. The U.S. has already sold about $15 billion in arms to Taiwan, surpassing roughly $14 billion over the course of the Obama administration.
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US urges allies to spend 2% of GDP on defense, citing China threat
Washington is urging its allies to increase military spending to at least 2% of their gross domestic product to counter China, putting pressure on Japan to take a more assertive military role in the region. "To our allies and partners around the world ... we urge you to increase your defense spending to at least 2% of GDP, and to make the needed investments to improve your capabilities and capacity, just as we are doing with our armed forces," to achieve their shared goals, U.S. Defense Secretary Mark Esper said on 16 Sept at a Rand Corp. event.Esper cited "Beijing's aggression and disregard of its commitments in the South and East China Seas," among its "attempts to reshape and undermine the international order that has benefited nations large and small." Japan has approved fiscal 2020 defense spending of 5.31 trillion yen ($50.5 billion), a record high but still just 0.9% of its GDP. Click here to read...
China's wolf warrior overreach draws comparison to Imperial Japan
Two Chinese scholars have warned in recent publications that it is, and that Beijing should learn a lesson from Japan's mistakes in the run-up to the Pearl Harbour attack in 1941. It has triggered a huge debate within the country. One of the scholars is Yuan Nansheng, a former diplomat. "Confronting multiple countries at the same time is more than a diplomatic disaster," Yuan wrote in an article this month. Yuan pointed to history. Through its surprise attack on Pearl Harbour, Japan antagonized the U.S., the U.K., France, Australia, China and even the Soviet Union, all at once, Yuan wrote. The second article was by Xiao Gongqin, a leading scholar of neo-authoritarianism in China. Xiao dials back to the summer of 1940. Despite protesting Japan's aggression into China, the U.S. maintained economic relations with Tokyo, supplying scrap iron and oil in large quantities, he writes. Later, as war drew closer, the U.S. imposed a total embargo on exports of scrap iron and oil to Japan, in what was known as the ABCD encirclement.
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Japan, US, Australia and India plan Quad meeting for October
The foreign ministers of Japan, the United States, Australia, and India may meet in Tokyo in October, government sources said Saturday, adding that Japanese Prime Minister Yoshihide Suga could hold talks with U.S. Secretary of State Mike Pompeo on the sidelines. The talks with Pompeo would be the first opportunity for Suga to hold a face-to-face meeting with the U.S. state secretary since succeeding Shinzo Abe as leader.Pompeo, Japanese Foreign Minister Toshimitsu Motegi and their Australian and Indian counterparts Marise Payne and Subrahmanyam Jaishankar, respectively, will gather at a time when China is working to grow its regional clout, the sources said. The four countries last held a quadripartite meeting of foreign ministers in September last year in New York around the time of the U.N. General Assembly.
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US envoy says Russia must agree to arms control deal with no NATO scaleback, or else it’s ‘happy to modernize nukes without START’
The US has made Russia an offer it hopes she won’trefuse- accept a new arms control deal including no limits on NATO weapons in Europe, or deal with a modernized American nuclear arsenal on its doorstep. Following the US’ unilateral withdrawal from the Intermediate-Range Nuclear Forces (INF) treaty last year, the 2011 New START treaty remains the only arms control deal in force between Moscow and Washington. However, it’s due to expire in February, and negotiations to replace it remain deadlocked.Now the US says it wants to extend New START by less than five years, and only by a memorandum of intent, rather than a binding treaty, according to Marshall Billingslea, US special presidential envoy for arms control, who spoke with the Russian daily Kommersant on 20 Sept. However, when it comes to hammering out a new deal, Washington has some demands. The first of these demands is that China be made a party to the deal. Russia has no opposition to this in theory, but insists that if China be rolled in, so too should Britain and France. Click here to read...
US carrier transits Strait of Hormuz amid tensions with Iran
The USS Nimitz aircraft carrier safely transited on Sept 18 through the Strait of Hormuz, the world's most important chokepoint for oil shipments, the U.S. Navy said, as tensions with Iran continue to simmer. In a "scheduled" manoeuvre, the U.S. sent the carrier and several other warships through the strait, the narrow mouth of the Persian Gulf, according to the U.S. Navy's Bahrain-based 5th fleet. The Nimitz, America's oldest carrier in active service, carries some 5,000 sailors and Marines. The Nimitz's arrival in the Mideast saw Iran conduct a live-fire drill targeting a mock up aircraft carrier resembling it, underscoring the lingering threat of military conflict between the countries.The Nimitz strike group "is at the peak of readiness," said Rear Adm. Jim Kirk, its commander. The Nimitz, whose homeport is Bremerton, Washington, has patrolled the Arabian Sea since late July.
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Flooding affects more than 1 million across East Africa
Flooding has affected well over a million people across East Africa, another calamity threatening food security on top of a historic locust outbreak and the coronavirus pandemic. The Nile River has hit its highest levels in a half-century under heavy seasonal rainfall, and large parts of Sudan, Ethiopia and South Sudan have been swamped amid worries about climate change. As warnings of a new famine grow in South Sudan, the United Nations says flooding there has affected at least a half-million people, many in areas of Jonglei state that saw eruptions of deadly inter-communal violence this year. People who fled the fighting now cling to precarious positions, some piling mud barriers around their homes. "They are exposed to malaria, waterborne diseases and snakebites as floodwaters overwhelm their homes and farms," the medical charity Doctors Without Borders says.
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Iran dismisses US efforts for UN sanctions as currency drops
Iran's president dismissed U.S. efforts to restore all U.N. sanctions on the country as mounting economic pressure from Washington pushed the local currency down to its lowest level ever on Sept 20. Iran's currency dropped to 272,500 to the U.S. dollar at money exchange shops across Tehran. The Rial has lost more than 30% of its value to the dollar since June as sweeping U.S. sanctions on Iran continue to crush its ability to sell oil globally. Iran's currency was at 32,000 rials to the dollar at the time of Tehran's 2015 nuclear deal with world powers, which was signed by the Obama administration but which the Trump administration pulled the U.S. out of. As the currency plummeted, Iran's President Hassan Rouhani slammed the Trump administration's declaration Saturday that all U.N. sanctions against Iran have been reimposed because Tehran is not complying with the nuclear deal.
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North Korea may conduct underwater-launched missile test
North Korea may soon conduct its first underwater-launched ballistic missile test in about a year, a top South Korean military official said Sept 16, amid long-stalled nuclear talks between the North and the United States. In written remarks to lawmakers ahead of a confirmation hearing, Won In-choul, the nominee for chairman of South Korea's Joint Chiefs of Staff, said North Korea has been repairing recent typhoon damage at its northeastern Sinpo shipyard, a place where it builds submarines. Shortly after the repairs are complete, there is a chance it will carry out a submarine-launched ballistic missile test, Won said. He said South Korea's military is keeping a close watch on developments there, according to a copy of his remarks provided by a lawmaker, Kang Dae-sik. In recent years, North Korea has been pushing hard to acquire the ability to launch missiles from submarines in what experts say is a worrying development because such weapons are difficult to detect before launch.
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Plaque symbolizing Thai democracy removed in less than a day
A plaque symbolizing Thailand's transition to democracy has been removed less than 24 hours after it was installed by anti-government demonstrators in a historic royal field. The weekend demonstrations were the largest this year by protesters who vowed to press on with calls for new elections and reform of the monarchy. The plaque had been installed at Sanam Luang on Sept 20 to replace one mysteriously ripped out and stolen three years ago. On Sept 21 morning, journalists who went to Sanam Luang saw hardened cement in place of the plaque. Sanam Luang is a designated royal site, which until the last few years was open to all. It is near the Grand Palace. On Sept 20, a group of activists had drilled a hole in front of a makeshift stage and, after Buddhist rituals, laid a round brass plaque in cement to commemorate the 1932 revolution that changed Thailand from an absolute monarchy to a constitutional monarchy. Click here to read...
Pakistan: Opposition parties protest against role of army in Pakistan's politics
Opposition parties of Pakistan rallied against the ruling party and Prime Minister Imran Khan on Sept 20, at a day-long multi-party meeting. The parties called for Khan's resignation and a nationwide protest movement to unseat the PM. The alliance of the opposition parties, called the Pakistan Democratic Movement (PDM), plans a wave of rallies and protests, starting next month. The opposition parties are primarily protesting against the role of the army in Pakistan's politics and demanding for a new law of accountability. Nawaz Sharif, the former PM of Pakistan and current leader of the Pakistan Muslim League Nawaz (PML-N), addressed the meeting through video, stating that the army has gone from a "state within a state" to a "state above the state." Sharif's audio was reportedly muted on some TV channels when he named army generals for their involvement in politics and embezzlement. “We want elected leaders to run the affairs of the country, to manage the economy and to decide on the foreign policy,” he said. The former PM claimed that the military had rigged elections to elect Imran Khan.
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Trump, Suga discuss 'free and open Indo-Pacific'
U.S. President Donald Trump on Sept 20 spoke to Japan's new prime minister, Yoshihide Suga, to congratulate him on taking office and to discuss a "free and open Indo-Pacific" region, which is increasingly dominated by China." The two leaders discussed the importance of pursuing our shared vision of a free and open Indo-Pacific, continuing to strengthen the United States-Japan Alliance, and working together to strengthen the global economy," the White House said in a statement. China is locked in disputes with neighbours including Japan and Vietnam over islands in the South China Sea. Beijing's expanding military presence in the region has worried several of its neighbours, and Washington has vowed to stand up against its territorial claims. Japan's parliament elected Suga, 71, as the country's first new leader in nearly eight years on Sept 16. He said he would seek continued strong ties with Washington and stable relations with China and Russia. Click here to read...
Taiwan ties of Japan’s new defence minister Nobuo Kishi spark reaction from China
Japanese Prime Minister Yoshihide Suga’s decision on Sept 16 to appoint his predecessor’s brother as defence minister sparked an immediate reaction from China over his Taiwan ties. Nobuo Kishi, 61, is the younger sibling of former leader Shinzo Abe, although he was adopted by his maternal uncle as a baby and carries his surname. Kishi is known for his close ties to the self-ruled island of Taiwan, having represented the ruling Liberal Democratic Party (LDP) over the years in engagements with current Taiwan President Tsai Ing-wen and other Taiwanese leaders. In July, he was among a group of lawmakers who accompanied former Japanese prime minister Yoshiro Mori to Taiwan to mourn the death of its ex-president, Lee Teng-hui. They also had a meeting with Tsai. Click here to read...
Germany offered €1bn for gas terminals in exchange for US lifting NS2 sanctions
Germany offered to spend up to €1bn to subsidise the construction of two liquid natural gas terminals capable of receiving US gas exports in exchange for Washington dropping its opposition to the Nord Stream 2 gas pipeline. The proposal — formulated last month by German finance minister Olaf Scholz in a letter to US Treasury secretary Steven Mnuchin — shows the great lengths to which Berlin was willing to go in order to support the project before the poisoning of Alexei Navalny. Berlin sees Nord Stream 2, which is designed to bring natural gas directly from Russia to Germany through the Baltic Sea, as a cornerstone of its energy policy as it exits nuclear and coal power. But since Mr Navalny’s poisoning, Angela Merkel’s government has come under pressure to pull the plug on it.
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Medical
Russia Strikes Deals to Sell Its Coronavirus Vaccine Internationally
Russia has struck preliminary agreements to sell its Covid-19 vaccine to more than 10 countries in Asia, South America and the Middle East, a development that could give Moscow valuable economic and political leverage internationally. Russian officials say they have secured preliminary deals for the vaccine to be delivered to countries such as Brazil, Mexico, Saudi Arabia, and India. In addition, Russia says it is in various stages of talks with roughly 10 other countries to buy the vaccine. All told, it has received requests or expressions of interest in the vaccine for a total of 1.2 billion doses. The vaccines will be manufactured abroad and distributed world-wide from there as soon as November. The shot will require local regulatory approval before being distributed, officials say. Click here to read...
As Coronavirus Rebounds, Europe Rejects New Lockdowns
As a second wave of coronavirus infections gathers momentum across Europe, the Continent’s governments are determined to avoid large-scale lockdowns and instead seek less disruptive ways to live with the new disease. Authorities are enacting tailored, localized measures to combat outbreaks, while exhorting citizens to protect themselves and others by behaving prudently. Herman Goosens, a physician and microbiologist at the University of Antwerp who coordinates a European Union scientific advisory panel, said that earlier this year the debate in Europe was dominated by public-health experts such as himself, who provided scientific advice that led to lockdowns without considering the broader societal and economic effects. Mr. Goosens said he is now advising policy makers to shift their messaging and ask people not to rely on government measures but to take personal responsibility to curb the disease by adhering to social distancing, wearing masks, avoiding crowded spaces and staying away from people at greater risk.
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‘People are still suffering’: Commission chief calls for ‘European Health Union’
President of the European Commission Ursula von der Leyen says the coronavirus pandemic has underlined the need for closer cooperation, promising a global summit to share the lessons learned from the crisis. “The people of Europe are still suffering,” she said in her first annual State of the EU address on Wednesday. “For me, it is crystal clear – we need to build a stronger European Health Union.” The EU states need to strengthen their crisis preparedness and management of cross-border health threats, von der Leyen said. She told members of the European Parliament that her commission would work to reinforce the European Medicines Agency and European Center for Disease Prevention and Control. Von der Leyen announced the creation of a new agency for biomedical advanced research and development, dubbed BARDA. The EU also plans to convene a global health summit next year together with the Italian G20 presidency.
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1 in 7 coronavirus cases are healthcare workers, WHO head says, urging nations to provide better safety standards for medics
World Health Organization (WHO) chief Tedros Adhanom Ghebreyesus stressed that today "more than ever," countries must boost the safety of doctors and nurses, as many of them become infected while treating Covid-19 patients." Globally, around 14 percent of Covid-19 cases reported to the WHO are among health workers, and in some countries it's as much as 35 percent, although data is limited and it's hard to know whether health workers are infected in their workplaces or communities," the WHO chief told reporters on World Patient Safety Day. Ghebreyesus said that doctors and nurses treating patients not only risk getting infected themselves but are also "exposed to stress, burnout, stigma, discrimination and even violence." The WHO head urged all countries and hospitals around the world to commit to maintaining a safe workplace and environment for healthcare staff.
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