Global Developments and Analysis: Weekly Monitor, 23 May 2022 - 29 May 2022
Prerna Gandhi, Associate Fellow, VIF
Economic
China urged to deepen ASEAN ties as US becomes India’s biggest trading partner

Fast growing trade between India and the United States has raised eyebrows in China, fuelling concern that the Biden administration is moving swiftly to use its new Indo-Pacific Economic Framework to contain the world’s No 2 economy. China lost its title as India’s biggest trading partner to the US last year, according to new data from the Indian Ministry of Commerce and Industry. The value of merchandise trade between the world’s two most populous countries reached a high of US$115.4 billion in the 2021-22 financial year that ended in March, an increase of 33.6 per cent from a year earlier. But it was surpassed by trade with the US, which rose 48.3 per cent to US$119.4 billion. Indian imports from China, mainly machines and electronics, rose 44.4 per cent to US$94.2 billion, but its China-bound shipments grew only 0.3 per cent to US$21.3 billion. On the contrary, its exports to the US jumped 47.4 per cent from a year earlier to US$76.11 billion, while imports rose 50 per cent to US$43.31 billion. India recorded a US$32.8 billion trade surplus from the US last year, compared with a deficit of US$72.9 billion with China. India’s top 10 trading partners were rounded out by the United Arab Emirates, Saudi Arabia, Iraq, Singapore, Hong Kong, Indonesia, South Korea and Australia. Click here to read...

EU won't approve full Russian oil embargo – Bloomberg

The European Commission has suggested kick-starting an embargo on Russian oil by giving up on seaborne deliveries, while delaying a ban on pipeline supplies, Bloomberg reported on May 28, citing “people familiar with the matter.” The revised proposal was sent to the governments of member states on May 28 and could be discussed by EU ambassadors as soon as May 29, according to the news agency. The EU's executive arm says shipments of oil through the Druzhba pipeline, which connects Russia to Ukraine, Belarus, Poland, Hungary, Slovakia, the Czech Republic, Austria and Germany, should for now be spared from the embargo that the bloc is looking to impose on Moscow over its military offensive against Ukraine. The proposal is allegedly aimed at satisfying the objections of Hungary, which has been stalling the sixth package of EU sanctions against Russia. Budapest receives most of its oil from Russia, and has compared a full ban to “an atomic bomb.” Other landlocked nations including the Czech Republic and Slovakia have also voiced reservations over an embargo. The new proposal would give more time to Hungary to find a replacement for Russian pipeline oilClick here to read...

Russian parliament leader calls on Japan to give up Sakhalin-2 stake

The head of Russia's lower parliamentary house on May 25 slammed Japan as an "unfriendly nation" that is benefiting from its interests in the Sakhalin-2 energy project. Vyacheslav Volodin, the chairman of the State Duma, singled out Japan, the U.K. and the Netherlands for receiving "huge profits" from the Sakhalin-2 oil and gas project in Russia's Far East, according to the Duma's website. He insisted stakes in the project held by companies in those countries should be sold to Russia's state-owned energy company Gazprom or to enterprises from friendly nations. Japanese resources traders Mitsui & Co. and Mitsubishi Corp. own 12.5% and 10% of Sakhalin-2, respectively. Gazprom owns about 50% while U.K.-based Shell controls roughly 27.5%. Sakhalin-2 produces 10 million tons of liquefied natural gas per year, with 50 to 60% of the volume bound for Japan. The project accounts for virtually all of Japan's LNG imports from Russia, and for about 10% of Japan's overall LNG imports. Shell has announced it will exit from the Sakhalin-2 project over Russia's war with Ukraine. The energy major is reportedly discussing a sale of its stake to Chinese enterprises. Japan has decided to maintain the interests in Sakhalin-2 to avoid potential disruptions in gas supplies. Click here to read...

Brent crude climbs above $120 a barrel as China eases lockdowns

Oil climbed to a two-month high as China eased anti-virus lockdowns and the EU worked on a plan to ban imports of Russian crude. Brent crude rose above $120 a barrel, building on last week’s 6% rally, to reach the highest intraday level since late March. China’s key commercial hub of Shanghai allowed all manufacturers to resume operations from June, while officials said Beijing’s coronavirus outbreak is under control. Brent crude is on course for a sixth straight monthly climb that would be the longest such run in more than a decade. The advance has been driven by the fallout from the war in Ukraine, as well as increased demand as more economies return from Covid-related restrictions. In the US, the summer driving season kicked off at the weekend with retail gasoline prices at a record. “It’s tight supply – China demand and beginning of US driving season in focus,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. At the same time OPEC+ has fallen behind production targets and is struggling to meet quotas. The surge in energy prices has contributed to a sharp pick-up in the pace of inflation, spurring central bankers to move toward tighter monetary policy. Data this week will likely show record price gains in European economies. Click here to read...

Economist points to downside of strong ruble

The combination of a strong ruble and high oil prices will temporarily tame inflation, however, it also could accelerate consumer prices in the future, according to Dr Denis Domashchenko, as quoted by the Russian business daily RBC. The analyst warns that the dominance of energy sector revenues along with a firm national currency may evoke the so-called ‘Dutch disease’. In economics, the ‘Dutch disease’ is the seemingly causal relationship between the increase in economic development of a specific sector and a decline in other sectors. It could emerge as the negative consequences that can arise from a spike in the value of a nation’s currency due to the rapid growth of the export of goods of one dominant industry, most commonly fossil fuels. At first, the influx of foreign currency reduces inflation in the country, but at the same time, it slows down the development of other industries and hinders economic growth, leading to price acceleration. The term was first used in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of the large Groningen natural gas field in 1959. The economist warned that the ‘Dutch disease’ or the Groningen effect may manifest itself in the Russian economy, as a high exchange rate can provoke a backlog of high-tech sectors of the economy and lead to a delayed price increase. Click here to read...

Russian reserves frozen by EU much smaller than expected – Reuters

The European Union has frozen roughly €23 billion ($24.5 billion) worth of assets of the Russian Central Bank, Reuters reported, citing EU Justice Commissioner Didier Reynders, who revealed the figure at a news conference on May 25. The amount is much smaller than expected out of the reported $300 billion frozen by the US and its allies as part of Ukraine-related sanctions against Russia. According to Reynders, some €10 billion ($10.68 billion) worth of physical assets linked to Russian businessmen and officials, their yachts and villas, for instance, were also arrested. The official did not mention whether all 27 EU member-states had reported the seizure of Russian assets and their amount. This is the first time the EU has revealed the amount it froze in connection with the conflict in Ukraine. Previously, Moscow confirmed that a total of about $300 billion of the central bank’s assets had been seized globally, which is roughly half the Bank of Russia’s overall reserves. Of these funds, around $100 billion was reportedly frozen by the US, while other funds appear to be scattered in central banks across the globe. Click here to read...

Global food crisis may spread from grain to sugar

Sugar prices are expected to soar due to the export restrictions imposed by a number of key producing nations seeking to tame rising domestic food prices. The impact of the Covid-19 pandemic, which seriously undermined global supply chains, has been dramatically aggravated by the crisis in Ukraine and the subsequent sanctions imposed on Russia. The conflict between the two major grain exporters has disrupted global supplies. A number of countries have moved to limit exports of other key commodities, putting global food security under threat, while risking further increases in the prices of agricultural products. On May 22, Kazakhstan began a six-month ban on white and cane sugar exports. India is reportedly considering placing restrictions on sugar exports for the first time in six years to prevent a surge in domestic prices. India’s ban is expected to target around 10 million tons of this season’s exports. Last week, Reuters reported that sugar cane mills in Brazil, the world’s biggest producer and exporter of sugar, were cancelling sugar export contracts and shifting production to ethanol in an attempt to take advantage of the high energy prices. The estimated cancelations could equate up to 400,000 tons of raw sugar. In March, Russia banned sugar exports until the end of August. Click here to read...

African Development Bank to send emergency fertiliser to W Africa

The African Development Bank is looking to source about 500,000 tonnes of fertiliser for West Africa by the end of August as an emergency stopgap to avert a food crisis, a source with direct knowledge of the matter has told the Reuters news agency. The move is part of the bank’s announced allocation of $1.5bn to shore up the continent’s food production and help with fertiliser due to the disruptions caused by the Russia-Ukraine war, Reuters reported on May 27. Akinwumi Adesina, its president, told Al Jazeera in April that the price of urea, a low-cost fertiliser, has gone up by 300 percent. “It’s [the war] driving inflation in Africa, and it could — if not quickly well-managed — trigger a food crisis in Africa,” he said. The bank said there was a two-million-tonne fertiliser supply gap across the continent. It has been meeting with chief executives of leading fertiliser companies in Africa and abroad to discuss fertiliser affordability, without confirming the volume sought. “We are talking to partners and farmers as well,” the bank said in a statement to Reuters, adding that a country must request to participate. “Fertiliser needs are two-fold at this time, half of the fertiliser in May and June for some planting seasons, depending on location across the continent. The second half, called a top dressing, is needed a month or two months later.” Click here to read...

AU chairperson says Africa a ‘collateral victim’ of Ukraine war

Africa has become a “collateral victim” of the Russia-Ukraine conflict, further denting the continent’s ability to fulfil its “enormous promise and potential”, top officials of the African Union and United Nations have said in messages for Africa Day. Every year, May 25 is marked as Africa Day, the anniversary of the founding of the Organisation of African Unity (OAU) on May 25, 1963, which became the African Union in July 2002. “Africa has become the collateral victim of a distant conflict, that between Russia and Ukraine,” said Moussa Faki Mahamat, chairperson of the African Union Commission. “By profoundly upsetting the fragile global geopolitical and geostrategic balance, it has also cast a harsh light on the structural fragility of our economies. “The most emblematic sign of these fragilities is the food crisis following the climatic disorders, the health crisis of COVID-19, amplified today by the conflict in Ukraine,” he added. “This crisis is characterised by a shrinking world supply of agricultural products and a soaring inflation of food prices.” Millions of people in Africa, which has an estimated population of 1.3 billion, have been pushed into extreme poverty by the COVID-19 pandemic. And now, the continent has been hit hard by rising food costs caused partly by disruptions linked to the war. Click here to read...

Australia's record wheat harvest is no fix for the global food crisis

Clogged ports and soaring fertilizer costs are impeding Australia's bid to boost exports of its bumper wheat harvest, worsening a global food crisis. Australia typically accounts for 10-15% of the 100 million ton annual global wheat trade and was seen as making up some of the shortfall this year from Russia and Ukraine, which together supplied more than a quarter of the world's wheat before Russia's invasion. But its exporters say they have been unable to cater to the recent spike in overseas demand. "Our limited port capacity means we are fully booked," said Rabobank senior grains analyst Cheryl Kalisch Gordon. "We're trying to respond to the additional demand in international markets, but we can't move it fast enough to meet that need at this point." Thanks to above average rainfall, Australia is set to realize a record wheat crop of 36.3 million tons for the 2021-22 financial year that ends June 30, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. This follows a previous best harvest of 33.3 million tons in the last fiscal year. A potentially even bigger challenge developing for Australian farmers -- directly related to the war in Europe -- is the soaring costs of fertilizers and other inputs. Click here to read...

China, Sri Lanka’s ‘all-weather friend’, is now displaying low-key approach to island’s economic meltdown – which could upend IMF debt discussions

Sri Lanka’s Prime Minister Ranil Wickremesinghe has said he is expecting China, along with India and other creditor nations, to help keep the island’s bankrupt economy afloat until the government can clinch an International Monetary Fund (IMF) bailout and tackle its huge foreign debt. So far, though, China, hitherto considered an “all-weather friend” by Sri Lanka – which belongs to its flagship Belt and Road Initiative – has displayed a low-key approach to the island’s economic meltdown that has triggered mass protests over widespread food, fuel and other shortages, 10-hour power cuts and soaring inflation. China has offered to lend a “few hundred million dollars” for essential imports and early-stage talks are under way for more loans, Wickremesinghe, who has assumed the crucial finance job in his shaky unity government, told The Financial Times late last week. But China’s immediate cash outlay will not go far as Sri Lanka needs US$500 million in foreign exchange each month to cover basic imports, according to the central bank, and foreign exchange reserves are “running on fumes” at near zero, a government official said. Wickremesinghe expects to meet China’s ambassador in the coming days and get more clarity on what Beijing is offering. Click here to read...

Pakistan says IMF is only resort, shut out of bond markets

Pakistan’s government is unable to secure funding from the global bond market and commercial banks, making it even more important to secure an agreement with the International Monetary Fund, Finance Minister Miftah Ismail said. Pakistan’s dollar bonds, which reached a record low this month, gained on May 27 after the government raised fuel prices, a key benchmark for the IMF to resume its loan program. Pakistan is seeking to secure a staff-level agreement with the fund in June. “All roads lead to the IMF,” Ismail said May 28 to a virtual conference. “Saudi Arabia and other countries are all ready to give money, but all of them say we need to go to the IMF first.” Former Prime Minister Imran Khan reduced and froze fuel prices, stalling the $6 billion bailout program. His successor Shehbaz Sharif, who took office in April, banned luxury imports and the central bank raised borrowing costs more than expected this month to deal with all-time high imports. Pakistan needs about $36 billion to $37 billion in financing for the fiscal year starting June, said Ismail. An IMF deal would help secure funds from other sources such as the World Bank and friendly nations including China. Click here to read...

Bangladesh needs preferential trade terms beyond 2026, PM says

Bangladesh last year gained United Nations recognition to move from "least developed country" (LDC) status to "developing country" in 2026, although Prime Minister Sheikh Hasina is asking for extended assistance from OECD countries beyond that time frame. "We have urged through the U.N. mechanism to our friends and partners to consider extending preferential facilities to Bangladesh for an extended period beyond 2026," Hasina said in a pre-recorded speech during Nikkei's Future of Asia conference on May 27. "We would deeply appreciate if Japan and other OECD countries do it at least till 2029 to help us to attain the overarching goals of sustainable development by 2030," she said. Bangladesh, one of the fastest growing economies of the Asia-Pacific region, met the targets to move above LDC in 2018. After the second review in February 2021, the U.N. recommended an official change in status in 2026. Such a move will improve the country's image, and mark a major milestone given that last year was only Bangladesh's 50th anniversary of independence from Pakistan. On the other hand, the removal of LDC status also has some disadvantages. For example, Bangladesh will lose special preferential treatment in export tariffs. "We are already taking various measures for a smooth graduation," she said. Click here to read...

Tourism in Asia is bouncing back, but can the rebound survive a global recession?

The sigh of relief was palpable across Asia as countries began lifting strict Covid-19 movement restrictions to allow in foreign travellers after two years of living in the shadow of the coronavirus. From Singapore to Japan, and most everywhere in between, inbound travel protocols are being relaxed as governments and the public adapt to the shift towards treating Covid-19 as endemic, buoyed by the protection against severe infections afforded by high rate of vaccinations. Travel surged as people celebrated their renewed freedom of movement, but for governments and tourism industry players, the reopening of borders addresses the more existential issue of survival. The total number of international arrivals in the Asia-Pacific region plunged by 94 per cent to just 21 million in 2021 – compared to more than 360 million two years earlier before Covid-19 struck – according to data from the World Tourism Organization. For many tour operators and airlines, that meant major job cuts, or even closing up shop for good. But for those who managed to tough it out, the reopening of international borders has presented an opportunity to rebuild with fewer competitors. However, the region’s tourism rebound risks being grounded by the combined effects of soaring food prices, runaway inflation and global supply chain disruptions. Click here to read...

Indonesia's Jokowi urges quick rollout of China-backed trade bloc

Indonesian President Joko "Jokowi" Widodo urged the swift implementation of the world's largest trade bloc backed by China, just a few days after the launch of a new economic grouping in the Indo-Pacific region led by the U.S. The 15-member Regional Comprehensive Economic Partnership formally took force on Jan. 1, but not all of the provisions in the pact, including lowering tariffs, are expected to immediately take effect. Widodo said the free trade agreement has become more important than ever as supply chain disruptions and inflation due to the Russia-Ukraine war cloud the growth outlooks for Asian countries still reeling from the COVID-19 pandemic. "RCEP that was agreed on two years ago needs to be implemented immediately to strengthen a mutually beneficial regional economic integration," Widodo said in a pre-recorded speech during the Future of Asia conference in Tokyo on May 27. "The implementation of RCEP has a potential to lift regional trade by 10% in the next five years and to contribute $187 billion to the region's GDP." Three signatories have not yet ratified the pact: Indonesia and two other ASEAN members, the Philippines and Myanmar. Indonesian Trade Minister Muhammad Lutfi on May 30 said Southeast Asia's largest economy is "finalizing" its ratification. Click here to read...

Strategic
Antony Blinken delivers ‘old content in a new context’ in China speech

US Secretary of State Antony Blinken’s long-awaited policy address may have rattled some in China, with a narrative aimed at rallying support for American efforts to “shape the strategic environment around Beijing”. And while Chinese observers say there was less confrontational rhetoric in May 26’s speech, few see any signs of a softening in Washington’s China policy following recent US inroads into the Indo-Pacific region. The speech has been described by some as underwhelming and was not well received in Beijing, where the foreign ministry called it an effort to “contain and suppress China’s development and maintain the US hegemony and power”. Despite Blinken’s “eloquence”, ministry spokesman Wang Wenbin said: “In essence, it was spreading false information, exaggerating China’s threats, interfering in China’s internal affairs, and smearing China’s domestic and foreign policies.” Wang also accused the US of forming a “small bloc” with other regional nations to contain China, and again stated that Hong Kong, Taiwan, Xinjiang and Tibet were all internal matters for China. Blinken reiterated that the US one-China policy had not changed, after Biden on May 23 pledged to defend Taiwan in the event of an attack from mainland China. Click here to read...

Chinese food security push poses threat to US – report

China’s efforts to achieve food security represent a threat to the US, according to an American federal agency focused on trade with Beijing. Officials warn that Chinese firms could attempt to steal intellectual property, cut into Washington’s foodstuff exports profits, undermine supply chains, and even target America's genetically modified crops with biological warfare. A report issued this week by the US-China Economic and Security Review Commission centers on “China’s interest in US agriculture” and states that Beijing is “augmenting food security through investment abroad” after facing “challenges” in recent years. “The Chinese government’s domestic efforts, however, are not enough to solve China’s problems,” the report concluded, adding that Beijing is now looking overseas “to address its needs through investments and acquisitions of farmland, animal husbandry, agricultural equipment, and intellectual property (IP), particularly of GM [genetically modified] seeds.” Arguing that China is “hungry” for American intellectual property, the document goes on to warn of potential “military applications” of agricultural technologies, even suggesting the People’s Liberation Army could someday attempt to wage biological warfare against genetically modified American crops. Click here to read...

China and Russia block US sanctions drive against North Korea

The UN Security Council failed to reach common ground on new sanctions against North Korea (the DPRK), on May 26. Washington proposed the penalties in the wake of Pyongyang's latest missile test this week, which came on the heels of US President Joe Biden's Asia tour.The vote took place just a day after North Korea was accused of test-launching its largest intercontinental ballistic missile and two others. Ahead of the vote, US Ambassador Linda Thomas-Greenfield called for unity in the face of “a threat to the entire international community.” However, China and Russia vetoed new sanctions on humanitarian grounds, pointing to their futility and even “inhumanity,” as North Korea struggles to contain a massive Covid-19 outbreak.The UNSC imposed sanctions on the country back in 2006, following its first nuclear test, and has tightened them over the years. Since the latest round of restrictions in 2017, Moscow and Beijing have increasingly been arguing that further pressure is a road to nowhere and unlikely to force Pyongyang to disarm unilaterally. “We do not think additional sanctions will be helpful in responding to the current situation. It can only make the situation even worse,” China's UN Ambassador Zhang Jun said on May 26. Click here to read...

Xi Jinping invokes China’s past to rally confidence in its future as country vies with West

China’s president has urged top officials to look to the country’s history as a source of confidence, saying the nation had long walked a “different path” from other civilisations. Xi Jinping’s appeal to members of the Communist Party’s Politburo on May 27 is the latest in a series of attempts to use culture to bolster confidence in China’s political system in the face of growing competition with Washington and its allies. “Chinese civilisation … is the unique spiritual identity of the Chinese nation, the root of Chinese culture and the spiritual bond that links the Chinese people around the globe,” Xi told the 25 members of the party’s decision-making body. “In its long history, the Chinese nation has … walked a different path from other civilisations. “[We should] have a profound understanding of the 5,000-plus years of history of the Chinese civilisation to enhance historical awareness and cultural confidence in the pursuit of national rejuvenation,” state news agency Xinhua quoted Xi as saying. The message was underlined at the meeting on May 27 with a report from Wang Wei, a researcher with the Chinese Academy of Social Sciences. Wang is best known for heading a 14-year research project to determine how far back Chinese civilisation extended. Click here to read...

Analysis: Xi envoy Wang Qishan visits Seoul with message for U.S.

Washington earlier this week conducted a flurry of top-level diplomacy in Asia. The underlying theme in President Joe Biden's visit to South Korea and Japan, the Quad leaders’ summit, and the launch of the Indo-Pacific Economic Framework was how to deal with China. Meanwhile, U.S.-China relations are teetering on the edge of an abyss. This is a major concern for Chinese President Xi Jinping as he seeks to remain the country's top leader at the Chinese Communist Party's national congress this autumn. Under the circumstances, he has made a quiet, strategic move. Xi seems to have tapped Vice President Wang Qishan, his long-time ally, to put relations with Washington back on track. Wang has strong connections to Wall Street due to his long career overseeing China's finance and commerce sectors. On May 10, when new South Korean President Yoon Suk-yeol held an inauguration ceremony, Wang was dispatched as "Chinese President Xi Jinping's special representative." Wang handed Yoon a personal letter from the Chinese leader. Sources familiar with the matter said that during this short visit, Wang sent a signal to the U.S. delegation showing China was ready for dialogue. He was putting out feelers to gauge if some kind of U.S.-China high-level engagement would be possible in the near future. Click here to read...

After China visit, U.N. rights chief says she urged counterterrorism review

U.N. human rights Chief Michelle Bachelet, whose rare visit to China was criticized by rights groups and Western countries, said she urged Beijing to review its counterterrorism policies to ensure they comply with international human rights standards. Bachelet reiterated, however, that her six-day trip, which ended on May 28 and included a visit to the western region of Xinjiang, was not an investigation into China's human rights policies but an opportunity to engage with the government.Bachelet started her China trip, the first by a U.N. Human Rights High Commissioner in 17 years, on May 23 in the southern city of Guangzhou before heading to Xinjiang. Her office said last year it believed Uyghurs in Xinjiang had been unlawfully detained, mistreated and forced to work. "I have raised questions and concerns about the application of counterterrorism and deradicalization measures under broad application, particularly the impact on the rights of Uyghurs and other predominantly Muslim minorities," she said during an online press briefing on May 28. China denies all accusations of abuse in Xinjiang. Bachelet's access was limited as China arranged for her to travel in a "closed loop" -- isolating people within a virtual bubble to prevent the spread of COVID-19 -- with no foreign press. Click here to read...

China, Pacific islands unable to reach consensus on security pact

China's Foreign Minister Wang Yi on May 30 urged the Pacific region not to be "too anxious" about his country's aims after a meeting in Fiji with his counterparts from 10 island nations was unable to agree to a sweeping trade and security communique. Wang hosted the meeting with foreign ministers from Pacific island nations with diplomatic ties with China midway through a diplomatic tour of the region where Beijing's ambitions for wider security ties has caused concern among U.S. allies. A draft communique and five-year action plan sent by China to the invited nations ahead of the meeting showed China was seeking a sweeping regional trade and security agreement. But the draft communique, first reported by Reuters, prompted opposition from at least one of the invited nations, Federated States of Micronesia, according to a letter leaked last week. After the meeting, which included Samoa, Tonga, Kiribati, Papua New Guinea, Vanuatu, Solomon Islands, Niue and Vanuatu, Wang said the nations had agreed on five areas of cooperation, but further discussions were needed to shape more consensus. The five areas he listed included economic recovery after the COVID pandemic, and new centers for agriculture and disaster, but did not include security. Click here to read...

China unseats Japan as 'important partner' to top ASEAN poll

China is seen as an important partner for the future by the largest share of respondents in a survey in Southeast Asia, knocking Japan from the top perch. When asked which among the Group of 20 leading economies will be an "an important partner in the future," 48% chose China while 43% picked Japan. The results, released May 25, are a reversal of the 2019 poll, which placed Japan in the lead with 51% while China garnered 48%. China is the biggest trading partner for Indonesia, the Philippines and other members of the Association of Southeast Asian Nations, according to 2020 data from Japan's Ministry of Foreign Affairs. Beijing is also forming closer economic ties in the region through the Belt and Road Initiative, a cross-border infrastructure program. The Ipsos poll, commissioned by Japan's foreign ministry, surveyed 2,700 people between the ages of 18 and 59 in January. Answers were either received online or through in-person interviews.In a separate poll commissioned by the foreign ministry, 70% of Americans in a general population survey of just over 1,000 people described Japan-U.S. relations as "friendly." The figure rises to 94% in a poll of 200 U.S. opinion leaders, which include government officials, businesspeople, media members and academics. Click here to read...

Americans use lessons from Ukraine in Taiwan – NYT

The US is seeking to reshape Taiwan’s defence systems in light of the experience gained from sending military aid to Ukraine, which is currently locked in a conflict with Russia, the New York Times reported on May 24, citing unnamed American officials. Washington’s new strategy focuses on providing Taiwan with asymmetric defence capabilities that would help it stave off a much more powerful force, the paper said. The latest arms purchases Taiwan made from the US reflect this changing approach, the NYT said, adding that mobile rocket platforms, F-16 fighter jets, and anti-ship missiles “are better suited for repelling an invading force.” At the same time, Washington has reportedly discouraged Taipei from buying MH-60R Seahawk helicopters and M1A2 Abrams tanks. Analysts told the NYT what future purchases could consist of: “That would include smart mines, anti-ship cruise missiles, cybersecurity capability and special forces who can neutralize Chinese advance teams, and air defence systems,” James Stavridis, a retired four-star admiral and ex-dean of the Fletcher School of Law and Diplomacy at Tufts University, explained.“The aim is to turn Taiwan into what some officials call a ‘porcupine’ – a territory bristling with armaments and other forms of U.S.-led support that appears too painful to attack,” the NYT said. Click here to read...

Biden: US will not send Ukraine rockets that can reach Russia

The United States will not send Ukraine rocket systems that can reach Russia, President Joe Biden said on May 30. The US president’s comments followed reports that the Biden administration was preparing to send advanced long-range rocket systems to Kyiv for its fight against Russia. “We’re not going to send to Ukraine rocket systems” that can reach Russia, Biden told reporters after arriving back at the White House on May 30, according to the Reuters news service. Ukrainian officials have sought a longer-range system called the Multiple Launch Rocket System, or MLRS, that can fire a barrage of rockets hundreds of miles away. It was not clear which system Biden was referring to in his remarks. CNN and The Washington Post reported on May 27 the Biden administration was leaning towards sending the MLRS and another system, the High Mobility Artillery Rocket System, known as HIMARS, as part of a larger military aid package to Ukraine. The Ukrainian government has urged the West to provide it with longer range weapons in order to turn the tide in the war, now in its fourth month. US officials had said such weapons systems are actively being considered. The US has provided thousands of portable Stinger anti-aircraft and Javelin anti-tank missiles to Ukrainian forces as well as advanced drones and field artillery. Click here to read...

Putin discusses Ukraine situation, food security with Macron, Scholz

Russian President Vladimir Putin held a phone conversation with French President Emmanuel Macron and German Chancellor Olaf Scholz on May 28 to discuss the situation in Ukraine and the global food security. Putin informed Macron and Scholz of the latest developments of the Russian special military operation in Ukraine, noting that the Russian armed forces strictly observe the norms of international humanitarian law, the Kremlin said in a press release.As for the peace talks between Russian and Ukrainian negotiators, Putin confirmed that the Russian side is open to resuming the frozen dialogue. The Russian leader criticized the supply of Western weapons to Ukraine, which could further destabilize the situation and aggravate the humanitarian crisis. When discussing the issue of ensuring global food security, Putin said the difficulties in food supplies are caused by the erroneous economic and financial policies of Western countries as well as their anti-Russian sanctions. Russia is ready to help find options for the unimpeded export of grain, including the export of Ukrainian grain from the Black Sea ports, he said. An increase in the supply of Russian fertilizers and agricultural products will also help reduce tensions on the global food market, which will require the lifting of relevant sanctions, Putin told Macron and Scholz. Click here to read...

U.N. Says Iran Has Enough Uranium to Produce Nuclear Weapon

The United Nations atomic agency said May 30 that Iran hasn’t offered credible answers to its probe into nuclear material found in the country and reported that Iran’s stockpile of highly enriched uranium has grown to roughly enough material for a nuclear bomb. The two reports, circulated to agency member states and seen by The Wall Street Journal, will sharpen concerns about Iran’s nuclear work at the same time negotiations on reviving the 2015 nuclear deal have stalled. That agreement placed tight but temporary restrictions on Iran’s nuclear work in exchange for lifting most international sanctions. Since the U.S. quit the nuclear deal in 2018, Iran has scaled up its nuclear work, including producing uranium enriched to 60%, which is near weapons-grade material. It has also largely stonewalled a probe into the nuclear material found in Iran, which many experts consider to be related to work on a nuclear weapon Iran carried out many years ago. The reports set up a fight at the International Atomic Energy Agency’s board of member states next month. Iran wants the agency’s investigation closed next month and Iranian officials have said that failure to end the probe could complicate efforts to revive the nuclear deal, according to Western diplomats involved in nuclear talks. Click here to read...

Iran unveils new drone factory in Tajikistan

Iran unveiled a drone factory in Tajikistan this month with the stated aim of increasing defence cooperation between the two countries. The factory in Dushanbe was built with the assistance of specialists from the Iranian Ministry of Defense and will produce the Iranian Ababil-2 drone. The Ababil-2 is a low-cost tactical drone designed for reconnaissance, surveillance and attack missions. It has a range of 200 kilometers and a one-and-a-half-hour endurance. It is not clear what Iran or Tajikistan’s intentions are with this new drone factory. However, Iran’s move to establish a drone factory in Tajikistan may be due to its need to shield its drone factories from attack, export its drones legitimately, escape international isolation and increase its military footprint in Central Asia. Iran’s drone factories are a priority target for Israel, as these facilities produce drones for Iran’s regional proxies. It is estimated that Hezbollah, an Iranian proxy militia based in Lebanon, has an arsenal of 2,000 drones, including advanced Iranian models such as the Mohajer, Shahed, Samed, Karrar and Saegheh types. Iran’s move to establish a drone factory in Tajikistan may be an effort to move these critical facilities out of reach of an enemy attack. Click here to read...

EU-UK tensions surge over N. Ireland

Britain has insisted it is up to the European Union to unblock political paralysis in Northern Ireland, after assuring a delegation from the US Congress of its "cast-iron" commitment to peace in the province. The UK government has provoked anger on both sides of the Atlantic with a plan to overhaul the so-called Northern Ireland Protocol, a trading arrangement that was agreed as part of its Brexit divorce deal with the EU. London is bidding to placate pro-UK unionists who are refusing to join a new power-sharing government in Belfast - led for the first time by pro-Irish nationalists - until the protocol is reformed. Interviewed by the Sunday Telegraph newspaper, Northern Ireland Secretary Brandon Lewis demanded that Brussels adopt a new negotiating mandate to address the fierce objections of the Democratic Unionist Party (DUP). "I made this point to the EU myself before the [May 5] elections. My view was, it was much easier to get a deal before the elections than afterwards." "The idea that it was going to be easier after the elections was a crazy one from the EU." The protocol recognized Northern Ireland's status as a fragile, post-conflict territory that shares the UK's new land border with the EU. Click here to read...

France limits water usage

A severe drought has prompted 24 out of France's 96 departments to impose limits on water usage, the country’s Ministry of Ecological Transition said on May 28. The restrictions range from simple calls to save water in some areas to a more than 50% reduction in agricultural withdrawals and bans on washing cars, watering gardens and filling swimming pools in others, the ministry told Le Figaro. Rainfall levels have been well below normal in France since September 2021, and last month the deficit reached 25%. The situation was exacerbated by abnormally hot temperatures in May, which is on track to become the warmest on record. As early as mid-April, eight French departments were forced to impose curbs on water use, compared to just three in the same period of 2021. “This year, the drought had started early,” France’s new Prime Minister Elisabeth Borne said earlier this week. “We are taking steps to manage the water resource and prevent the situation from being unmanageable this summer.” Local authorities have been instructed “to preserve the water resources as much as possible,” Borne said, also calling on “all French people to reduce their water consumption.” The premier also announced that €400 million would be allocated to support farmers, who may be lacking feed for livestock due to the drought. Click here to read...

Health
China Lockdown and Dye Shortage Lead U.S. Hospitals to Cancel Medical Scans

China’s Covid-19 pandemic lockdowns have led to a shortage of a dye widely used in medical scans, prompting U.S. hospitals including the Mayo Clinic to ration supplies, postpone procedures or switch to less optimal imaging. The shortage arose in recent weeks for iodinated contrast media products including Omnipaque, made by General Electric Co.’s GE Healthcare unit at a plant in Shanghai. Omnipaque is given by intravenous injection to patients before imaging procedures to make internal organs, blood and vessels more visible in procedures such as CT scans. The Shanghai plant was shut down for several weeks after Chinese authorities imposed tight restrictions on people’s movement in the city to try to squash a Covid-19 outbreak, GE Healthcare said. As a result, some hospitals in the U.S. have seen incoming Omnipaque supplies fall 80% compared with before the shortage, and have only days left of inventory, said Matthew Davenport, vice chair of the American College of Radiology’s commission on quality and safety. “It’s not an overstatement to say it’s going to be millions of exams that are affected by this and it’s going to last for months,” said Dr. Davenport, a professor of radiology and urology at the University of Michigan in Ann Arbor, Mich. Click here to read...

Countries agree to overhaul WHO funding

Shaken by the pandemic, the World Health Organization's member states agreed May 24 to overhaul how they fund the UN health agency, giving it much more money to spend on its own priorities. The budget revamp is aimed at strengthening the organization and making it more agile when responding to global health crises. The change will give the WHO a more stable income stream and control over a much bigger portion of the funding flowing through its Geneva headquarters. "This is a historic moment," WHO chief Tedros Adhanom Ghebreyesus said as the resolution was adopted at the World Health Assembly, the annual gathering of the organization's member states which serves as its decision-making body. He said it would transform how the WHO is funded, and how it works. "It will give us a predictable and sustainable funding platform from which to deliver long-term programming in countries," he said. Member states currently channel most of their cash into short-term health projects of their own choosing, which can fluctuate. But countries will now transition toward giving half of their WHO contributions as straightforward membership fees instead, giving the organization more flexibility. Tedros, who was re-elected earlier May 24, has made overhauling the agency's finances a key plank of his leadership. Click here to read...

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