Economic

High Crude Prices Are Here To Stay

Crude oil has been on a decline over the past few weeks as growing worry about a looming global recession weighs it down. But oil is not going as far down as drivers across the world would like it to go—or as far as politicians up for reelection would like it to go. Barring a dramatic event of demand destruction, oil is going to remain expensive for the observable future. OPEC has repeatedly signalled that it is in no rush to deploy its spare capacity to boost global supply and bring down prices. One reason for this is the prices themselves: Saudi Arabia has been raising its oil prices for Asian buyers for several months in a row now because it can. The other reason is that spare capacity is limited. Earlier this week, when it released its latest Monthly Oil Market Report, OPEC warned that global oil demand is set to rise to levels that would test its production capacity. Known as the “call on OPEC crude,” the amount of oil that the cartel needs to produce in order to cover global demand could rise to 32 million barrels daily in 2023, OPEC said. That would be up from 28.7 million bpd as of this June, which means OPEC would need to boost its production by over 3 million bpd within the next year and a half to cover demand, coming mostly from China and India. And it may not have the spare capacity to do itClick here to read...

Russia won’t supply oil to ‘price cap’ participants — head of Central Bank

Russia will stop supplying countries that cap the price of its oil, the nation's Central Bank head Elvira Nabiullina announced on July 22. Moscow has argued that a price ceiling would make oil more expensive and hurt Russian producers. Nabiullina said that instead of complying with a price limit, Russia would redirect its supply to countries not imposing such a limit. Her comments came a day after Russian Deputy Prime Minister Alexander Novak issued a similar warning, telling Russia’s Channel One that a price cap would drive revenue lower than the cost of production, and that Russia’s producers “simply will not work a negative profit.” Seen by the US as a means of lowering global oil costs while simultaneously denying Russia revenue, the possibility of a price cap was agreed by the leaders of the G7 nations during their summit in June. Participating countries would deny shipping and insurance to Russian oil priced above a set rate. The participation of only a small number of countries would have a global effect, as British and European companies currently insure 85-90% of seaborne Russian oil cargoes, according to figures from the Brookings Institution, a US think tank. While no concrete price has yet been set, Japanese Prime Minister Fumio Kishida recently suggested that the upper threshold for a price cap would be set at around half the current market price for Russian oil. Click here to read...

Russia resumes gas flow through Nord Stream

Gazprom resumed the delivery of gas from Russia to Germany through the Nord Stream 1 Baltic Sea pipeline on July 21, the operator told news agency Deutsche Presse-Agentur (dpa). A spokesperson for Nord Stream AG was quoted as saying that the pipeline was operating at 40% of capacity. Gazprom reduced the flow through Nord Stream last month and suspended it entirely on July 11, citing routine maintenance work. News of the resumption of supply comes after the European Commission urged EU members on July 20 to cut their use of gas by 15% until March of next year, amid fears that Moscow could stop deliveries to Europe in retaliation to the sanctions imposed on Russia for its military operation in Ukraine. “Russia is blackmailing us. Russia is using energy as a weapon,” European Commission President Ursula von der Leyen said. Gazprom had said that it needed a repaired turbine to be returned from Canada to have the Nord Stream functioning properly. Ottawa allowed the equipment to be returned to Germany earlier this month, granting an exemption from the sanctions. The Russian gas giant said on July 20, however, that it still had not received the documents required to reinstall the turbine from its German manufacturer, Siemens. Click here to read...

Deal struck on Ukraine grain exports

A deal to unblock much-awaited grain exports from Ukraine was signed at the UN-brokered talks in Istanbul, Turkey on July 22. Under the terms of the deal, which was agreed provisionally last week, representatives of Ukraine, Russia, the UN, and Turkey agreed to open a joint coordination center in Istanbul to oversee shipments from Ukraine, and to maintain safe transit routes for these shipments across the Black Sea. Russian Defense Minister Sergey Shoigu and his Turkish counterpart, Hulusi Akar signed an agreement with UN Secretary General Antonio Guterres, while Ukrainian Infrastructure Minister Aleksandr Kubrakov signed a separate document with Akar, completing the deal. Guterres described the signing as “a beacon of relief in a world that needs it more than ever,” and thanked Turkish President Recep Tayyip Erdogan for his “persistence” in getting the agreement signed. Guterres also praised Russian and Ukrainian officials for “putting aside [their] differences” for the sake of the world’s food supply, particularly in developing countries. Wheat deliveries from Ukraine, a major producer, were disrupted after Russia launched its military operation in the neighboring state in late February. The sides previously blamed each other for causing the crisis. Ukraine and some Western officials have accused Russia of deliberately preventing the shipments by blockading the country’s Black Sea ports. Moscow insists that Ukraine made the shipments impossible by laying naval mines outside of the ports, including Odessa. Click here to read...

China faces first drop in local land-use sales since 2015

China's local governments are on track for the first decline in annual revenue from sales of land use rights since 2015, dimming Beijing's hopes of shoring up a sagging economy with public works projects. Sales for the first half of 2022 sank 31% on the year, China's Finance Ministry reports. Regional governments and municipalities have come to rely heavily on this income stream, as other revenue has dwindled due to tax breaks aimed at boosting China's economy. Revenue from land-rights sales exceeded the amount from taxes in 2020 for the first time in data going back to 2010. But income from this lifeline has slumped since last summer, as tighter restrictions on the housing sector chill real estate demand. Last month's year-on-year drop of 39.7% was the steepest decline since May 2015, amid an economic shock. At that time, the housing market had cooled during 2014 in terms of prices and floor space sold. Revenue from land-rights sales only started to recover in 2016, after condominium inventories ran low and developers sought more real estate for new construction, putting money back in the coffers of local authorities. Looking at housing sales now as a predictor of land-rights sales does not paint an optimistic picture. Transactions in 30 major cities tumbled 38% on the year by area for the July 1-16 period, according to GF Securities. Click here to read...

Myanmar seeks Russian assistance in push for nuclear energy

Myanmar is pursuing greater economic cooperation with Russia including on nuclear energy, as U.S. and European sanctions increasingly isolate them from the rest of the world. Myanmar leader Sen. Gen. Min Aung Hlaing on July 11 met with Alexey Likhachev, director general of Russian state energy company Rosatom, during a weeklong trip to Russia. The meeting resulted in memorandums of understanding to cooperate on skills development in nuclear energy in Myanmar, Rosatom said in a release. Myanmar Energy Minister Thaung Han also met with Likhachev in June while visiting Russia, where they discussed Myanmar's electricity sector. Russia agreed to build a small nuclear research reactor in Myanmar in 2007, when the Southeast Asian country was under its last military government. But construction never moved forward amid pushback from the U.S. and other countries. Myanmar has since signaled a greater interest in nuclear nonproliferation. It signed the Comprehensive Nuclear Test Ban Treaty in 2016, under the democratically elected government led by Aung San Suu Kyi's National League for Democracy. The recent trip was Min Aung Hlaing's second time in Russia since the Myanmar military took control of the government in February 2021. He toured mainly defense contractors during his first visit, but also made his way to universities and other science- and technology-focused institutions this time around. Click here to read...

Russia begins building Egypt’s first nuclear power plant

Russian state-owned energy giant Rosatom has begun construction on the El Dabaa nuclear power plant, the company said in a press release published on July 20. “The start of construction on the El Dabaa power plant’s first reactor means Egypt is now joining the club of the world’s nuclear energy producing nations,” Rosatom CEO Alexey Likhachyov said at a ceremony launching the construction. Located on Egypt’s northern coast, some 130 kilometers northwest of Cairo, El Dabaa will be Egypt’s first nuclear power plant as well as Rosatom’s first major project in Africa. The plant, which is set to be completed by 2028, will have four VVER-1200 reactors with a total nameplate capacity of 4,800 megawatts. The construction is financed jointly by Moscow and Cairo, with the Russian government providing 85% of the $30 billion cost in the form of a state loan. The rest will be funded by Egypt with financial backing from private investors. Under the terms of agreements signed by the two countries, Rosatom will also be supplying nuclear fuel for the plant for its entire 60-year design lifetime, and providing maintenance and repairs for ten years after the launch of each reactor. Additionally, the company will provide staff training. Click here to read...

China plans three-tier data strategy to avoid US delistings: Report

China plans to sort US-listed Chinese companies based on the sensitivity of the data they hold in an attempt to stop US regulators from delisting hundreds of firms, groups, the Financial Times said on July 23. The three-tier system aims to bring Chinese companies into compliance with US rules that would require public companies to let regulators inspect their audit files, the FT said, citing four unnamed people with knowledge of the situation. The three broad categories include companies with non-sensitive data, sensitive data and secretive data, the newspaper said. Reuters could not immediately reach the CSRC for comment during non-business hours on July 24. Washington has long demanded complete access to the books of US-listed Chinese companies, but Beijing, citing national security concerns, bars foreign inspection of working papers from local accounting firms. Reuters reported in March that Chinese regulators had asked some of the country's US-listed firms, including Alibaba, Baidu and JD.com, to prepare for more audit disclosures. In April, Reuters reported China and US regulators were discussing operational details of an audit deal that Beijing hoped to sign this year to keep Chinese companies listed on US exchanges. Click here to read...

SMIC’s 7-nm chip process a wake-up call for US

A TechInsights report stating that a bitcoin mining integrated circuit (IC) sold by MinerVa “appears to be manufactured in SMIC 7-nm technology node” has triggered an outburst of commentary about the failure of American sanctions to stop the advance of Chinese semiconductor technology. TechInsights is a Canadian provider of semiconductor-related analysis and intellectual property services to technology companies and other subscribers. It is known for its reverse engineering capability. Referred to as “China-based” by Bloomberg, MinerVa Semiconductor is registered in Canada. But the three directors listed in its registration are Chinese and the address given for one of them is in China’s Henan province. The “About Us” section on the company’s website is blank. MinerVA Semiconductor claims that its MinerVa7 is “one of the best-valued chips” for mining Bitcoin and that it “utilizes mature foundry technology to ensure chip yield, quality and reliability.” Semiconductor Manufacturing International Corp, or SMIC, is China’s largest semiconductor foundry (contract manufacturer) and a prominent target of US technology sanctions aimed at curbing China’s access to advanced chips and the capacity to produce them. The report describes SMIC’s efforts to put 7-nm process technology into production as a qualified success. After noting similarities with Taiwan Semiconductor Manufacturing Company’s (TSMC) 7-nm process, it goes on to say that SMIC’s System-on-Chip (SoC) device seems to be a low-volume “steppingstone” that has the logic but not the memory aspects of a standard TSMC or Samsung product. Click here to read...

Chinese mainland holdings of US treasuries drop below $1 trillion for the 1st time in 12 years

Chinese mainland's holdings of US treasury securities dropped to $980.8 billion in May 2022, which was the first time for it to drop below $1 trillion in 12 years since May 2010, according to data released by the US Department of the Treasury on July 18. Chinese mainland, as the second largest holder of the US treasury, has reduced its holdings six months in a row from $1.08 trillion in November 2021 to $980.8 billion in May 2022. The previous time when it held less than $1 trillion of US treasury was in May 2010 - $843.7 billion. Japan remained the largest holder of US debt, but has also recorded decreasing holdings recently from $1.232 trillion in March to $1.212 trillion in May. The US economy has been mired in skyrocketing inflation and potential risk of recession. Consumer Price Index (CPI) in the US hit a 41-year high to 9.1 percent in June, fueling market speculation that the US Fed may stick to its hawkish stance and further hike the US interest rate by 0.75 percentage points or even more in the upcoming meeting in late July. The sum total of US treasury held by foreign holders has recorded a decrease three months in a row, from $7.71 trillion in February to $7.42 trillion in May. Click here to read...

China on guard as European Central Bank, US Fed interest rate hikes threaten greater spillover effects

Beijing will “pay close attention” to external monetary policy tightening and conduct a timely assessment of its spillover effects after the European Central Bank joined the US Federal Reserve-led chorus of worldwide interest rate increases. Following the first increase in 11 years by the European institute, which on July 21 pushed its benchmark rate up by 50 basis points, China has become the only major economy that is maintaining a loose monetary stance. This means it could face further tests in terms of capital outflow, foreign-exchange volatility and market expectations. The world’s second-largest economy, which is preoccupied with economic recovery after its gross domestic product growth slumped to 0.4 per cent in the second quarter, could come under even greater pressure from steeper rate increases overseas. Like it did last month, the US Federal Reserve is likely to raise its benchmark rate by another 75 basis points next week – and more later this year – in a bid to tackle 40-year-high inflation. “The Fed is also faced with a dilemma between controlling inflation and stabilising the economy. We need to keep an eye on its monetary policy adjustment in the future,” said Wang Chunying, deputy director of the State Administration of Foreign Exchange (SAFE), on July 22. Beijing was hit hard in the previous round of rate increases that started in 2014. Click here to read...

Weak Earnings Reports Aren’t Fazing Investors After Brutal Year for Stocks

Disappointing earnings reports from several big companies don’t seem to be fazing investors, with the S&P 500 up nearly 5% this month, and 2.5% last week, after a punishing start to the year. Even some companies that have posted sharply lower quarterly results have seen their shares rally in the following days. Bank of America Corp posted a slimmer-than-expected profit last week, yet its shares finished the session little changed and jumped 3.4% the subsequent day. Netflix Inc. said it lost nearly a million subscribers, and its stock jumped 7.3% in the next session. Tesla Inc. snapped its streak of record quarterly profits, yet its shares rallied 9.8% the following day. All three stocks have underperformed the broader market this year. So far this reporting season, shares of companies in the S&P 500 that have missed Wall Street’s earnings expectations have slipped 0.1% on average in the two days before their report through the two days after, according to FactSet. That compares with the five-year average of a 2.4% decline. With inflation at a four-decade high and the Federal Reserve in the midst of an aggressive campaign to raise interest rates to rein in rising prices, many investors say they had braced for a messy quarter. Click here to read...

Janet Yellen Calls for Trade Overhaul to Diversify From China

Treasury Secretary Janet Yellen called for a reorientation of the world’s trading practices in the wake of Russia’s invasion of Ukraine, pushing again for countries to become less reliant on China for critical components like semiconductors. Speaking at an LG Group research facility in South Korea’s largest city and capital, Ms. Yellen explored so-called “friend-shoring,” a proposed paradigm shift that would have the U.S. and its allies trade more closely with one another and less with geopolitical rivals. Supply disruptions during the Covid-19 pandemic, as well as the war in Ukraine, have exposed the danger of depending too heavily on a single producer, Ms. Yellen said. “Friend-shoring is about deepening relationships and diversifying our supply chains with a greater number of trusted trading partners. The purpose is to lower risks for our economy and theirs,” she said. South Korea, a longtime U.S. ally and the world’s 10th largest economy, is a critical partner in the Biden administration’s efforts to prevent China from dominating key technological industries such as semiconductors and electric-vehicle batteries. In her remarks at the LG facility, Ms. Yellen specifically targeted China, accusing the country of using unfair trade practices to gain a dominant position in certain industries, including semiconductor production. Click here to read...

Russian Titanium Maker Is Pulled Off Sanctions List

The European Union blocked a proposal to sanction Russian Metals Company VSMPO-Avisma PJSC at the last minute, EU diplomats said, after France and other member states objected to the move over fears of a potential retaliatory ban by Russia on titanium exports to the bloc. The company is a critical supplier of titanium to Airbus SE, the world’s biggest commercial jet maker. Airbus, headquartered in France, employs a large workforce across Europe. It has publicly called for the EU to refrain from banning Russian sales of titanium. The move illustrates the complex balance the bloc is trying to maintain to squeeze Russia’s economy after the Kremlin’s decision to invade Ukraine, while also protecting the EU’s own economic interests. After presenting a united front over financial, central-bank and individual sanctions during the first weeks of the war, the bloc has been divided more recently over energy sanctions and whether such restrictions might hurt Europe’s economy more than Russia’s. European officials have been working on a seventh package of sanctions against Russia. The package, which includes new measures such as a ban on Russian gold sales into the bloc, took effect late July 21. Click here to read...

Chinese spending on belt and road projects remained low in first six months, report says

Chinese financing and investment under its Belt and Road Initiative remained at low levels in the first half of the year, and there was no spending at all in Russia, Sri Lanka and Egypt, a new study has found. Total financing and investment stood at US$28.4 billion in the first six months, down slightly from US$29.4 billion a year earlier, according to a report by Fudan University’s Green Finance and Development Centre (GFDC) in Shanghai, released on July 24. It was 40 per cent lower than the same period in 2019. It comes amid warnings from observers that a deepening US-China feud in combination with an economic downturn at home – worsened by Beijing’s tough response to Covid-19 outbreaks – will add to pressure on its belt and road foreign policy and investment strategy. The study also cast doubt over the initiative’s prospects. “For the rest of 2022, despite continued lockdowns, particularly in China, with the continued uncertainty of Covid-19, and continued issues of sovereign debt, as well as the Ukraine war, further recovery of [belt and road] investments requires caution,” the report said. It said investment and spending under the programme would be unlikely to return to 2019 levels. China has spent US$932 billion on President Xi Jinping’s signature project since it began in 2013 and it now involves 147 countries, according to the report. Click here to read...

Strategic

Pelosi and Biden, Taiwan and China- WSJ

President Biden has a habit of creating trouble when he pops off to the press, and this week’s entry in the canon concerned a mooted visit by Nancy Pelosi to Taiwan. He didn’t make the trip easier for anyone, least of all the House Speaker. Mrs. Pelosi hasn’t confirmed if she’s going to Taiwan next month, but news of the trip leaked earlier this week and we know she has invited other Members of Congress to travel with her. China reacted with its usual fury at the news, and a reporter asked Mr. Biden on July 20 what he thought about it. He replied that “the military” thinks Mrs. Pelosi’s Taiwan trip is “not a good idea right now.” He didn’t elaborate, so the ominous implications were left hanging. Naturally Mrs. Pelosi was asked about Mr. Biden’s remarks at her weekly presser. “I think what the President is saying,” she replied, is that “maybe the military was afraid our plane would get shot down or something like that by the Chinese. I don’t know exactly. I didn’t see it. I didn’t hear it. You’re telling me, and I’ve heard it anecdotally, but I haven’t heard it from the President.” Yikes. The Pentagon fears China might shoot down a U.S. aircraft carrying the person third in line to the Presidency? Click here to read...

Chinese military issues warning to US

The foreign and defense ministries in Beijing issued harsh statements on July 18 condemning the Biden administration’s approval of a new US arms sale to Taiwan. The deal is worth an estimated $108 million and includes armored vehicle parts and technical assistance. Beijing “demands” that the United States “immediately withdraw the above-mentioned arms sales plan to Taiwan,” halt all other such arms deals, and cut military ties with the island, said Defense Ministry spokesman Colonel Tan Kefei. “Otherwise, the US side will be solely responsible for undermining the relationship between China and the US and the two militaries and the peace and stability of the Taiwan Strait.” “The Chinese People's Liberation Army will take all necessary measures to firmly defend national sovereignty and territorial integrity, and resolutely thwart any form of external interference and separatist attempts for ‘Taiwan independence’,” the colonel added. Chinese Foreign Ministry spokesman Wang Wenbin echoed the sentiment, saying Washington’s arms supplies “gravely undermine China’s sovereignty and security interests, and severely harm China-US relations and peace and stability across the Taiwan Strait.” “China will continue to take resolute and strong measures to firmly defend its sovereignty and security interests,” Wang added. The Pentagon revealed on July 15 that the US State Department had greenlit the transaction. Click here to read...

Korea in bind over US-led chip alliance

Despite a change in government, Korea still finds itself in a tricky situation over how to balance its military alliance with the United States and its economic relationship with China, as Washington pushes to form an anti-Beijing chip alliance. Since taking office in May, President Yoon Suk-yeol has shown signs of coming closer to the U.S., a drastic shift from his predecessor Moon Jae-in's so-called "balanced diplomacy" between the two countries. But the latest development is posing a challenge for Korea, the world's semiconductor powerhouse, because China is its biggest client and the possible ramifications could affect the entire economy in consideration of its portion in the nation's exports. Even Science and ICT Minister Lee Jong-ho said that Korea should be cautious in deciding whether to join the chip alliance due to possible fallout, July 20. According to media reports, the U.S. government has asked the Korean government to respond to its invitation by the end of August to participate in the envisaged strategic alliance of four global chip powerhouses that also includes Japan and Taiwan, also known as the Chip 4 or Fab 4, a platform apparently aimed at countering China's growing influence in global supply chains. Click here to read...

‘Surprising shortfalls’ in China military logistics suggest lack of conflict readiness: US analysts

Senior American military analysts have identified “surprising shortfalls” in the Chinese military’s logistics despite recent reforms, suggesting a lack of preparedness if it engages in a conflict in the near term. US Department of Defence senior analyst Joshua Arostegui and other military experts said logistical gaps meant serious weaknesses in the People’s Liberation Army’s readiness to fight, notwithstanding its high enlistment numbers. “There seem to be some surprising shortfalls in logistics support for PLA Army combat at times,” Arostegui said at the Centre for Strategic and International Studies in Washington on July 19. “Without modern logistics methods, how long can the PLA really expect to operate at a tactical level where the fighting really takes place?” His conclusions are based on a recent Pentagon analysis of Chinese journal articles and official footage from state broadcaster CCTV focusing on the PLA’s lack of logistical infrastructure, from navy replenishment ships to aircraft apron space for maintenance. Seeking to overhaul logistics in China’s military, President Xi Jinping in 2016 established the Joint Logistics Support Force, consolidating and integrating joint operations into a single national entity. While the model creates greater potential efficiencies, analysts said it sacrifices direct authority for commanders in a specific theatre and invites bureaucratic delays. Beijing continues to debate the pros and cons of various models, indicating the PLA maintains different operating models for peace and wartime and has yet to settle on how wartime operations for the joint logistics force would be carried out. Click here to read...

Russia now seeking regime change in Ukraine, Lavrov says as Moscow expands war goals

Moscow is seeking to overthrow the Ukrainian government, Russia’s Foreign Minister Sergey Lavrov said, going back on earlier statements that the leadership question was up to the Ukrainian people. “We will definitely help the Ukrainian people to free themselves from the regime that is absolutely anti-people and anti-history,” Lavrov said on July 24, five months to the day since the start of Russia’s invasion of Ukraine. The Russian and Ukrainian people will live together in the future, he said in Cairo at the start of a diplomatic trip to Egypt, Ethiopia, Uganda and the Democratic Republic of Congo, to shore up support for Russia’s war. Russian President Vladimir Putin calls the war a “special military operation” and has said it is aimed at demilitarising Ukraine and rooting out dangerous nationalists. Kyiv and the West call this a baseless pretext for an aggressive land grab. Lavrov’s remark came as the Russian leadership has publicly toughened its position in the Ukraine war in recent days. On July 20, Lavrov threatened to occupy further territories outside the eastern Donbas region where most of the fighting is currently concentrated, in what would be be an expansion of the Kremlin’s previously stated war goals. With his announcement that he wants to change the political leadership in Kyiv, Lavrov also contradicted his own statements in April. Click here to read...

Taliban talks to Malaysia, Indonesia, other far-off Muslim-majority nations, ‘to create engagement perception’, say analysts

The Taliban is reaching out to Muslim-majority nations far from Afghanistan, like Malaysia and Indonesia, to create the perception that an increasing number of countries are interested in engaging with the regime to “strengthen their case for international recognition”, say analysts. On July 24, the Taliban’s acting foreign minister Amir Khan Muttaqi met Malaysia’s special adviser on Afghanistan, Ahmad Azam Abdul Rahman, to discuss banking, education, bilateral cooperation and scholarships for Afghan students, said the Kabul-based Tolo news channel. On the same day, the Taliban’s Interior Minister Sirajuddin Haqqani, wanted by the FBI for questioning in relation to a 2008 attack on a Kabul hotel that killed six people, called on the global community to recognise its legitimacy as the official government in the country. Malaysia’s foreign ministry was approached for a comment about the recent visit to Afghanistan. In February, Foreign Minister Saifuddin Abdullah said a humanitarian mission to Kabul was not to recognise the Taliban but to ensure Afghans were helped. Last year, Indonesian Foreign Minister Retno Marsudi met Sher Mohammad Abbas Stanikzai, deputy director of the Taliban’s political office, in Qatar’s capital, Doha, and stressed the importance of an inclusive government in Afghanistan and respect for women’s rights. Click here to read...

Philippines will be ‘a good neighbour’ but won’t yield territory, Marcos says in first policy speech

President Ferdinand Marcos Jnr on July 25 pledged that the Philippines would use diplomacy and be “a good neighbour” to other countries, but would not yield an inch of its territory. In his first State of the Nation address, he made wide-ranging promises, including tax and agriculture reforms, a faster infrastructure upgrade, and plans to turn his country into an investment destination. “On the area of foreign policy, I will not preside over any process that will abandon even a square inch of territory of the Republic of the Philippines to any foreign power,” said Marcos Jnr, to applause by lawmakers. “If we agree, we will cooperate and we will work together,” he said. “If we differ, let us talk some more until we agree. After all, that is the Filipino way.” His foreign policy pronouncements consisted only of 15 paragraphs in the nearly two hour-long speech, and made no mention of any other country by name, or the South China Sea conflict. Marcos Jnr stressed the need to reinstate a “mandatory Reserve Officers’ Training Corps and National Service Training Program” but did not explain why there was a need for “national defence preparedness”. Instead, he rattled off a long list of targets that included the need to “re-examine” the construction of a nuclear power plant, while emphasising the use of renewable energy. Click here to read...

Cameras to replace peacekeepers at Red Sea Tiran, Sanafir islands

Remote-controlled cameras will take over responsibility from US-led peacekeepers for ensuring international shipping retains freedom of access to the Gulf of Aqaba, whose coastline is shared by Israel and three Arab nations, officials said on July 21. The uninhabited Tiran and Sanafir islands lie between Egypt and Saudi Arabia. The islands were ceded to Saudi Arabia from Egypt in 2016. The Gulf of Aqaba is Israel’s only sea route to its southern port of Eilat and is vital to its trade connections to Southeast Asia. During a visit to Israel and Saudi Arabia last week, United States President Joe Biden announced that the tiny Multinational Force and Observers (MFO) contingent on Tiran would depart. The MFO monitors a 1979 US-brokered peace accord between Egypt and Israel, which deployed peacekeepers across the demilitarised Sinai and – to ensure free movement in and out of the Gulf of Aqaba – atop Tiran. Any MFO redeployment from the island requires Egyptian, US and Israeli agreement. None of those countries, nor the MFO, has publicly discussed when the contingent will leave nor what might follow. But an official from one of the countries told Reuters news agency: “The peacekeepers will be replaced by a camera-based system.” Two officials from another of the countries said cameras already in place at an MFO base in the Egyptian resort of Sharm el-Sheikh, 4km (2.5 miles) across the Straits of Tiran from the now Saudi-held islands, would be upgraded for the taskClick here to read...

Sri Lankan forces make arrests, clear main protest site

Sri Lankan security forces arrested several people by early July 22 and cleared the main camp protesters have occupied for more than three months while demanding the nation’s leaders resign over an unprecedented economic collapse. Army and police personnel arrived in trucks and buses around midnight, removing tents and protest banners at the site near the presidential palace in the capital, Colombo, where demonstrators have gathered for the past 104 days. They blocked off roads leading to the site and carried long poles. The security forces were witnessed beating up at least two journalists. The Bar Association of Sri Lanka, the main lawyers’ body in the country, also said at least two lawyers were assaulted when they went to the protest site to offer their counsel. Its statement July 22 called for a halt to the “unjustified and disproportionate actions” of armed forces against civilians. The move against the protesters followed the swearing-in July 21 of new President Ranil Wickremesinghe, who was chosen by lawmakers earlier this week to finish the term of the leader who fled the country after protesters stormed his residence. He now has the power to choose a prime minister to succeed himself. The months of protests concentrated on the ousted President Gotabaya Rajapaksa and his family’s political dynasty, but Wickremesinghe has also drawn their ire as a perceived Rajapaksa surrogate and an example of the country’s problematic political establishment. Click here to read...

Japan-South Korea meeting leaves historical sore spots open

Japan and South Korea took steps toward improving strained bilateral relations with a meeting between their foreign ministers, but the two sides still remain divided over how to resolve contentious wartime issues. South Korean Foreign Minister Park Jin, in his first trip to Japan on July 18, expressed an intent to honor the 2015 bilateral agreement intended to resolve the wartime "comfort women" issue "finally and irreversibly." That same day, Park and Japanese counterpart Yoshimasa Hayashi agreed to pursue a quick settlement of the dispute over compensation for Korean wartime laborers. These issues have produced great friction between Japan and South Korea. When the comfort women accord was struck, then-Japanese Prime Minister Shinzo Abe expressed his "most sincere apologies and remorse" to the victims, and Japan contributed 1 billion yen ($8 million at the time) toward a foundation to assist the women. But Moon Jae-in, who became South Korea's president in 2017, was a critic of the deal. In late 2018, he announced the decision to dismantle the foundation. The agreement was basically gutted within three years. Fumio Kishida, Japan's current prime minister, had pushed for the deal when he served as foreign minister. Thus, any summit between Kishida and South Korea's new president, Yoon Suk-yeol, is unlikely unless Seoul pledges to carry out the 2015 deal. Disagreements remain over compensation for those conscripted to work for Japan during Tokyo's colonial period in Korea. Click here to read...

Putin forges ties with Iran's supreme leader in Tehran talks

Russian President Vladimir Putin had talks with Iranian Supreme Leader Ayatollah Ali Khamenei in Iran on July 19, the Kremlin leader's first trip outside the former Soviet Union since Moscow's Feb. 24 invasion of Ukraine. In Tehran, Putin also held his first face-to-face meeting since the invasion with a NATO leader, Turkey's Tayyip Erdogan, to discuss a deal that would resume Ukraine's Black Sea grain exports as well as the conflict in northern Syria. Putin's trip, coming just days after U.S. President Joe Biden visited Israel and Saudi Arabia, sends a strong message to the West about Moscow's plans to forge closer strategic ties with Iran, China and India in the face of Western sanctions. Khamenei called for long-term cooperation between Iran and Russia, telling Putin that the two countries needed to stay vigilant against "Western deception," Iran's state TV reported. He said Putin had ensured Russia "maintained its independence" from the United States and that countries should start using their own national currencies when trading goods. "The U.S. dollar should be gradually taken off global trade, and this can be done gradually," Khamenei said during the meeting, in a spartan white room with an Iranian flag and a portrait of late revolutionary leader Ayatollah Khomeini. Click here to read...

Iran says won't turn on IAEA cameras until nuclear deal revival

The Iranian nuclear chief said his country will not turn on the surveillance cameras of the International Atomic Energy Agency (IAEA) installed within the framework of a 2015 nuclear deal until parties resume honoring their commitments under the deal. Mohammad Eslami, president of the Atomic Energy Organization of Iran (AEOI), made the remarks in an address to reporters on the sidelines of an exhibition in Tehran on July 25, the official news agency IRNA reported. He said the Islamic Republic sees no reason for the presence of these cameras at its nuclear sites as they had been recording data supposed to exonerate Tehran from certain accusations, which are still in place. Eslami added although in 2015, lengthy negotiations between Iran and the world powers resulted in the signing of a nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), the West is still leveling accusations at Iran based on stolen documents and "baseless claims." "Iran accepted to put curbs on its (nuclear) capacities to build trust, but despite all these, they did not remain committed to their obligations," he said. Eslami said the agency itself has removed the cameras and sealed them, adding they will be kept in Iran's nuclear facilities until the other sides return to the JCPOA. Eslami emphasized that the IAEA is currently monitoring Iran's nuclear activities according to the safeguards agreements. Click here to read...

U.S. Confronts the Reality of North Korea’s Nuclear Program

In late May, dozens of U.S. intelligence officials, military officers and security analysts gathered in Omaha, Neb., to assess the escalating nuclear threat from North Korea as the regime develops new tactical nuclear weapons. The previously unreported event was the first at the headquarters of U.S. Strategic Command, the arm of the Pentagon charged with deterring America’s rivals, to focus solely on North Korean dictator Kim Jong Un’s nuclear program, according to a spokesman for the organization. Views on the nuclear threat posed by North Korea from those in attendance varied, but for some the broader message of the meeting was clear: While U.S. policy remains aimed at ending the North’s nuclear status, the program is now so far advanced that the priority is preventing its use. “It was a symbol of how many people have come to think that North Korea is a deterrence challenge, no longer a nonproliferation or disarmament one,” said Jeffrey Lewis, an arms-control expert at the Middlebury Institute of International Studies in Monterey, Calif., who was at the meeting. At the meeting, one senior U.S. military official said the likelihood of the North giving up its nuclear weapons anytime soon was “zero percent,” according to another person who took part. Click here to read...

China expands orbital outpost

China has expanded its orbital space station, Tiangong, with the first of two planned lab modules, according to state media. It marks a major milestone for Beijing's human space program, which it was forced to pursue alone after being barred from the International Space Station. The lab module named Wentian (“Quest for the Heavens”) successfully docked with the front port of the core module Tianhe at 3:13am July 25 Beijing Time, approximately 13 hours after its launch on July 24, the China Manned Space Agency announced, according to Xinhua. Three Chinese astronauts, who are currently on a six-month mission in orbit aboard the Tiangong (which translates as “Heavenly palace”), oversaw the arrival and docking, but have yet to enter the new module. The trio – commander Chen Dong, Liu Yang and Cai Xuzhe – are part the Shenzhou-14 mission, during which the Chinese space station is set to receive another module and become fully operational. The 23-tonne Wentian is around 18 meters long and 4.2 meters in diameter. While designed mainly as a platform for scientific experiments in ecology, biotechnology and gravity, it will also provide additional sleeping areas for the crew, as well as an extra toilet and kitchen. According to CGTN, the spacecraft also brought an additional robotic arm, which is smaller than the one already installed on Tiangong, and designed for more precise and delicate operations. Click here to read...

UK top court to hear Scottish independence case in October

Britain's Supreme Court on July 21 said it would hear a legal case in October to establish whether the Scottish government can hold an ­independence referendum without consent from Westminster. Scottish First Minister Nicola Sturgeon is seeking to hold a new independence referendum, but British Prime Minister Boris Johnson has declined to allow one. The Supreme Court said October 11 and 12 had been provisionally set as dates for the hearing after Sturgeon ­instructed Scotland's top law officer to make a referral on the legality of a referendum without permission from the British government. That means the case will be heard almost exactly one year before Sturgeon aims to hold the vote. Scotland's semi-autonomous government has published a bill outlining plans to hold the secession vote on October 19, 2023. Voters in Scotland, which has a population of around 5.5 million, rejected independence in 2014. But Sturgeon's Scottish National Party says Britain's departure from the European Union, which was opposed by a majority of Scots, means the question must be put to a second vote. Pro-independence parties won a majority in Scottish parliament elections last year, which Sturgeon says gives the Scottish government a mandate to hold a new independence vote. The British government has refused consent for a new referendum, saying the matter was settled in 2014 and that there are bigger priorities that people in Scotland want their government to focus on. Click here to read...

Health

Update: WHO declares monkeypox outbreak int'l public health emergency

The World Health Organization (WHO) officially declared on July 23 that the current multi-country monkeypox outbreak outside of the traditional endemic areas in Africa has already turned into a public health emergency of international concern (PHEIC). After reconvening the WHO Emergency Committee on July 21 concerning the monkeypox outbreak, WHO Direcotr-General Tedros Adhanom Ghebreyesus made the decision at a press briefing on Saturday to sound the highest level of alert that the global health authority can issue for the time being, even without a consensus of the committee. "So in short, we have an outbreak that has spread around the world rapidly, through new modes of transmission, about which we understand too little, and which meets the criteria in the International Health Regulations," said Tedros. "For all of these reasons, I have decided that the global monkeypox outbreak represents a public health emergency of international concern," he noted. He cited five reasons behind the decision. Click here to read...

WHO to roll out malaria vaccine in Africa even as funding dips

As the World Health Organization announces the next step in its distribution of the world’s first authorised malaria vaccine in three African countries, concerns about its value have come from an unlikely source: the Bill and Melinda Gates Foundation, arguably the vaccine’s biggest backer. WHO endorsed the vaccine last fall as a “historic” breakthrough in the fight against malaria but the Gates Foundation told The Associated Press (AP) news agency this week it will no longer financially support the shot. Some scientists say they are mystified by that decision, warning it could leave millions of African children at risk of dying from malaria as well as undermine future efforts to solve intractable problems in public health. The vaccine, sold by GlaxoSmithKline (GSK) as Mosquirix, is about 30-percent effective and requires four doses. The malaria vaccine has “a much lower efficacy than we would like,” Philip Welkhoff, the Gates Foundation’s director of malaria programmes, told the AP. Explaining its decision to end support after spending more than $200m and several decades getting the vaccine to market, he said the shot is relatively expensive and logistically challenging to deliver. “If we’re trying to save as many lives with our existing funding, that cost-effectiveness matters,” he said. Click here to read...