Economic

China’s job market plagued by zero-Covid ‘uncertainty’, with swift rebound unlikely

China is facing grimmer unemployment prospects than at the beginning of the coronavirus pandemic in 2020, experts say, as lockdowns and virus control measures stoke market uncertainty and dampen the economic growth outlook. The headline jobless rate – the surveyed urban unemployment rate – rose by 0.3 percentage points to 6.1 per cent in April, the highest level since March 2020, according to data released by the National Bureau of Statistics on May 16. It was the second highest reading since 2018, when China first started publishing the data monthly, and above the government’s target to keep unemployment under 5.5 per cent this year. For China’s 31 largest cities, the unemployment rate jumped to 6.7 per cent in April from 6.0 per cent in March, higher than the 2020 peak of 5.9 per cent. Strict coronavirus controls, including lockdowns, have disrupted production and dealt a heavy blow to private firms and the service sector, both major sources of job creation. Gavekal Dragonomics analyst Cui Ernan said the labour market is facing a more challenging environment than two years ago and is unlikely to see a recovery as swift as what occurred after the Wuhan outbreak. The economy is facing substantial uncertainty because of Beijing’s zero-Covid policy, which has shut down major cities like tech hub Shenzhen and China’s financial centre Shanghai. Click here to read...

China’s market interference keeps it from achieving a ‘unified domestic market’, economists say

Political interjection in China’s economy serves as a fundamental stumbling block to achieving a mega “unified domestic market” in the country, Chinese economists warn while calling for a better levelling of the playing field for all types of companies. As central leadership has been ramping up efforts to make the national economy less dependent on the outside world, Beijing last month announced plans to build a “unified domestic market”. Under the strategy, the world’s second-largest economy would also become a bigger magnet for global firms and investors, with additional emphasis on more efficient production, distribution, circulation and consumption. Such moves are being made against the backdrop of rising complaints among foreign business communities and private firms who say that extensive market-access barriers, local protectionism, an opaque regulatory system and discriminatory enforcement continue to hinder their activity in China. Favouritism shown toward state-owned enterprises has resulted in mismatched resources and a distorted industrial structure that has become “a very serious problem” standing in the way of a single market, said Shi Jinchuan, an economics professor at Zhejiang University. He argued that state-owned players can leverage their “special political positions or resource advantages” to freely get into industries that other types of companies have developed, but it remains “very difficult” for non-state firms to enter sectors occupied by state enterprisesClick here to read...

EU Sees Economic Contraction if Russian Gas Supplies Are Halted

The European Union’s economy would likely contract during the remainder of this year if supplies of natural gas from Russia were to be halted soon, with the deepest recessions felt by countries that rely on that source for much of their energy generation, the bloc said May 16. European nations have been scrambling to sever their energy relationship with Russia since the start of the war in Ukraine. While some have made significant progress, May 16’s warning underlines the extent of the work that remains to be done to end the continent’s reliance on Russian supplies. European governments want to wean the region off Russian oil and gas to deprive Moscow of funds to finance its war effort and to reduce the economic leverage the Kremlin currently has on European governments. In the latest of four reports on the economic outlook published each year, the EU said that Russia’s invasion of Ukraine would slow economic growth this year as higher energy prices drain household spending power and eat into company profits. But it said that as long as energy supplies from Russia continue, and energy prices don’t rise much further, the bloc’s economy should continue to grow. Click here to read...

European development bank seeks Ukraine loan guarantees: president

The European Bank for Reconstruction and Development is seeking loan guarantees for Ukraine from major EBRD shareholders, including Japan, EBRD President Odile Renaud-Basso said during an exclusive online interview with Nikkei. The bank is endeavouring to protect the cash flow -- and the very existence -- of Ukrainian companies by asking other governments to accept some amount of risk. Established at the end of the Cold War, the EBRD has been investing in and lending mainly to private and public enterprises in Central and Eastern Europe as it supports transitions to market economies. Ukraine is one of the largest recipients of funds, and the EBRD in early March, shortly after Russia invaded, announced a 2 billion euro ($2.11 billion) aid package. The main emphasis will be on direct loans to local companies and institutions and the provision of funds to financial institutions. However, "nobody knows how the war will evolve," Renaud-Basso added. "We invested in some projects in Ukraine, and they have been destroyed by the war, or their capacity to pay back [debt] is at risk. ... We are ready to take part of the risk on our balance sheet. We need to have some risk-sharing framework with donors or shareholders in order to help us take this risk and to share the risk with us." Click here to read...

China yuan: IMF win as currency granted higher weight in special drawing rights

The Chinese yuan has been awarded a higher weight in the International Monetary Fund (IMF)’s five-yearly review of the special drawing rights currency basket, in an international acknowledgement of the currency and China’s economic status. The Chinese currency’s weight will be raised to 12.28 per cent, an increase of 1.36 percentage points from the 2016 assessment, according to an IMF statement on May 14. The decision will take effect from August 1. The increase, however, was overshadowed by the 1.65 percentage point increase for the US dollar, which now accounts for 41.73 per cent of the currency basket, indicating great challenges ahead to break the US dollar’s dominance in the international financial system.The euro maintained its No 2 place, although at a weight lowered to 29.31 per cent from 30.93 per cent. That of the Japanese yen and British pound were also lowered, to 7.44 per cent and 7.59 per cent, respectively.China has tried to expand the overseas use of the yuan, starting from trade settlement and domestic financial opening. However, it is still held back by the currency’s partial convertibility and the country’s capital controls. The currency’s internationalisation index is far below China’s status as the world’s second-largest economy, and its reliance on the US dollar continues. Click here to read...

Western banks eyeing asset swaps to exit Russia – media

In an attempt to escape hefty write-downs on operations in Russia due to their exit from the sanction-hit country, UniCredit and Citigroup are exploring the possibility of swapping assets with Russian banks, FT reports, citing people with knowledge of the matter. The plan comes amid a mass exodus of foreign lenders from Russia due to Western sanctions imposed on the nation over its military operation in Ukraine. According to estimates revealed last week, European banks took a hit of nearly $10 billion writing down assets and setting aside cash to protect themselves against the expected economic ramifications of anti-Russia sanctions. UniCredit is discussing the sale of its Russian business to several financial institutions that haven’t been sanctioned by the West, people briefed on the talks told the media. The Italian lender, which could lose €5.3 billion ($5.5 billion) due to its exit, reportedly rejected the offer by Interros group, the investment business owned by Vladimir Potanin, one of Russia’s richest men who has not been included on the sanctions list. Meanwhile, Citigroup is holding “multiple conversations” with medium-sized Russian banks to sell its consumer operations and part of its commercial undertakings in the country, a person familiar with the matter said. Click here to read...

Russia set to reap largest-ever wheat harvest

Russia is expecting a bumper crop this year, including a record wheat harvest, Russian President Vladimir Putin said on May 12, citing preliminary data. “A good harvest is expected this year. According to experts – of course, these are preliminary estimates – grain harvest can reach 130 million tons, including 87 million tons of wheat,” Putin said, noting that “this can become a record [wheat harvest] in the entire history of Russia.”According to the Russian president, such a result “will allow not only to meet domestic needs with a margin, but also to increase supplies to the global market for our partners, which is very important for the world food markets.” Putin added that a number of countries are facing the threat of famine, pointing out that the blame for that lies entirely on “the Western elites.” Russia’s largest grain harvest was recorded in 2017, which came in at 135.5 million tons, including 86 million tons of wheat. In 2020, the figure was 133.5 million tons of grain (including 85.9 million tons of wheat). Last year, the harvest stood at 121.4 million tons (with 76 million tons of wheat). Russia is projected to retain its leadership in the world's wheat market in the coming years. Click here to read...

Egypt assesses impact of Ukraine-related crisis

Egypt’s economy has sustained losses of up to 130 billion Egyptian pounds ($7 billion) amid the Ukrainian crisis, according to the country’s Prime Minister Moustafa Madbouly, as quoted by TASS. “The aftermath of the war has placed a huge financial burden on us and we have invested 130 billion pounds to cover rising prices for strategic goods,” Madbouly said on May 15, pointing out that the indirect consequences of the events in Ukraine are estimated at another over $18 billion. According to the PM, the current conflict between Russia and Ukraine has sent prices for vital produce soaring, having posed enormous challenges to the Egyptian economy. “In May 2021, the price of a barrel of oil was $67, now it has reached $112, while a ton of wheat cost $270 a year ago, now we pay for the same volumes based on a price of $435 per ton,” Madbouly explained. “Previously, we had imported 42% of grain, while 31% of tourists were from Russia and Ukraine, and now we have to look for alternative markets.” The PM also said that Egypt had managed to restore tourism after the Covid-19 pandemic and “achieve budget profitability of $5.8 billion ahead of the Russian-Ukrainian crisis.” He added that despite Covid-related crisis and turmoil in the movement of world trade, the nation saw an unprecedented increase in income from the Suez Canal. Click here to read...

China’s provinces target wheat output as nation braces for food security challenges

Several major grain-producing provinces in China have issued emergency notices, ordering farmers and businesses not to destroy or cut down unripe wheat, as the country sounds the alarm about unprecedented challenges to food security this year.Earlier this week, provincial governments from Hebei in north China to central Henan and Anhui launched region-wide investigations into whether any wheat farmland was being cleared for construction projects, mainland media reports said. Other provinces said farmers found cutting the grain prematurely to sell as silage for animal feed would be severely punished, online daily The Paper reported on May 14. Dairy companies have also been warned to not buy any wheat for feed, or face heavy penalties. The warnings came after a number of videos on Chinese social media platforms showed farmers cutting immature wheat for sale as silage to livestock companies. The videos sparked a storm of criticism against the farmers, with China having raised the alarm about risks to its wheat output months ago as it eyes greater self-sufficiency in grain production. The government of Benghu in the eastern province of Anhui announced on May 13 that harvesting of immature wheat was taking place in large swathes across several provinces. Click here to read...

Nepotism, bad policy push Sri Lanka to brink of economic ruin

Sri Lanka is on the brink of economic collapse, mired in its biggest financial crisis since independence in 1948. The Sri Lankan government, which declared a state of emergency in early April, reinstituted the measure on May 6 to quell growing anti-government demonstrations by citizens angered by the economic chaos. Prime Minister Mahinda Rajapaksa on May 9 announced his resignation, but that has not mollified protesters. The spread of COVID-19 deepened Sri Lanka’s predicament. Inflows of foreign currency fell sharply as tourists deserted the country and remittances from an estimated 1.5 million Sri Lankan workers living overseas plummeted. The country has also been hit by high inflation stemming from the global supply chain crunch. The last straw was soaring commodity prices in the wake of Russia's Ukraine invasion, which has set off a vicious cycle of rising import costs, falling foreign reserves, supply shortages and high inflation. Some experts blame the crisis on China's "debt trap diplomacy," which critics say aims to ensnare developing countries with massive loans. Sri Lanka's debt to China accounts for about 10% of its total external borrowing, roughly the same level as its debt to Japan, according to the Sri Lankan government. But experts say that figure only covers loans from the Chinese government and does not include debt owed to Chinese state-run companies. Click here to read...

Japan passes law to bolster supply chains amid Russia, China fears

Japan's House of Councillors on May 11 enacted into law a bill for enhancing the country's economic security amid increasing geopolitical risks associated with Russia and China. The four pillars of the new law include strengthening supply chains to stably procure semiconductors and other vital products as well as facilitating the development of artificial intelligence and other cutting-edge technologies through public-private cooperation. They also include making certain patents related to sensitive technologies non-public and having the government screen equipment that infrastructure operators in such sectors as telecommunication and transportation plan to install to mitigate vulnerability to cyberattacks and other threats. The measures will take effect in steps starting next spring. The enactment of the law comes as China's rise has intensified global competition in the high-technology field and the security environment is rapidly changing amid Russia's invasion of Ukraine. In the public-private cooperation area, an association will be set up for each research field, such as AI, and government-backed think tanks will provide information on overseas development. The government will designate goods such as chips, pharmaceutical products and rare minerals as critical items to be closely monitored and for which it will financially support suppliers to help them stably procure them. As the details of the infrastructure equipment to be screened by the government will be separately set by ordinances that do not require Diet deliberations, businesses remain concerned about the ambiguity and the government's increased interference with their activities. Click here to read...

Nuclear talks: Iran’s Raisi launches major economic reform

Iran’s President Ebrahim Raisi has set about major reforms in the country’s subsidies system amid continued efforts to give new momentum to stalled talks aimed at restoring the country’s 2015 nuclear deal with world powers. The president announced, during a televised late-night interview on May 09, that he is gradually transforming a subsidies system introduced by his predecessor to stabilise prices in the face of sanctions, but that mostly ended up breeding corruption. “The prices of bread, medicine and petrol will not increase under any circumstances,” Raisi promised as he directly addressed the Iranian people. By the next morning, the central bank said an overwhelming majority of the country’s 85-million population had received Raisi’s promised cash subsidies – totalling 460 trillion rials ($1.6bn open market rate) for two months – in their bank accounts, which they will be able to use in the near future. Only the richest Iranians are excluded from the cash subsidies list, as about one-third of the population reportedly received 4 million rials ($13), and 60 percent received 3 million rials ($10) per individual in a month.After roughly two months, an electronic coupon scheme is expected to be implemented to control prices. The reforms have been welcomed by analysts as they signal a break from a faulty policy implemented by the administration of former President Hassan Rouhani at a time of immense volatility for Iranian markets. Click here to read...

Saudi oil giant Aramco’s first-quarter profits surge 80 percent

Oil giant Saudi Aramco said its profits soared more than 80 percent in the first three months of the year as the state-backed company cashes in on the volatility in global energy markets and soaring oil prices following Russia’s invasion of Ukraine. The bumper first-quarter earnings by the firm formally known as the Saudi Arabian Oil Co show a record net income of $39.5bn, up from $21.7bn during the same period last year. The surge was “primarily driven by higher crude oil prices and volumes sold, and improved downstream margins”, Saudi Aramco said in a press release on May 15. “Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth,” said Aramco Chief Executive Amin Nasser. Resurgent economic activity and the relaxation of global coronavirus restrictions had already revived demand for hydrocarbons and delivered strong annual results for the state-backed company last year. In March, Aramco reported a 124 percent net profit surge for 2021. Oil prices rallied to a 14-year high of $139 a barrel in March immediately after Russia’s invasion of Ukraine, although they later receded as Russian oil continued to flow and new lockdowns hurt oil demand in China. Aramco overtook Apple as the world’s most valuable company as higher oil prices pushed its shares to record levels last week, with the company’s market cap at $2.43 trillion. Click here to read...

Strategic

15 months and counting, massive China bill tests ability of a divided US Congress to compromise

In late February 2021, as US President Joe Biden’s administration was just getting started, a Congress hungry to confront Beijing dived into a new project – sweeping legislation meant to jolt American industry and alliances in the competition with China.Fifteen months later, after scores of hearings, speeches, votes, and even name changes, the bill now faces a final, towering hurdle: actually becoming law. In a potential coup for Beijing, observers inside and outside Congress say they do not know if it will pass because of toxic partisanship, particularly in the House of Representatives – even though Republicans and Democrats alike say that the US must do more to take on China. “Pass the damn bill and send it to me,” Biden said on May 6. Congress is trying. But in interviews, aides in both the House and Senate who are closely involved in the bill negotiations described deep uncertainty about what is to come. They warned that the clock is ticking before the midterm elections in November. Every day that the bill does not become law is another day closer to a potential flip in congressional leadership, from Democrats to Republicans. “What we’re already starting to hear is: why would we vote for this bill?” one Senate Republican aide said, referring to colleagues in the House. “We’re going to win the majority in a significant way in November. Why don’t we just pass our own China bill at that point?” Click here to read...

As China, US vie for influence, Asean states put their own needs first, experts say

Asean states will not take sides as US-China competition intensifies in the region, opting instead to engage the two powers based on their own needs, according to diplomatic observers. The assessment follows Washington’s decision to upgrade relations with the 10-member Association of Southeast Asian Nations and name the White House National Security Council’s chief of staff as the new envoy to the region, a position vacant since 2017. “As we look around the world – all the challenges we’re facing – the Asean-US partnership is critical, I think, to meeting the moment we find ourselves in history right now,” US President Joe Biden said on May 13 as he hosted Asean leaders in Washington. Biden said US relations with Asean were entering a “new era”, and cooperation would be expanded on a range of fronts, from the digital economy to security in the South China Sea. Washington’s renewed interest in Southeast Asia comes after years of engagement by Beijing via trade, infrastructure projects and pandemic control measures. Following the summit, Asean and the US said they would establish an “Asean-US Comprehensive Strategic Partnership” in November. As part of the deal, the two parties will step up maritime cooperation, including coordination among maritime law agencies to curb illegal fishing, and ensure freedom of navigation over the South China Sea – a frequent source of friction between Washington and Beijing. Click here to read...

China aircraft carrier stages 100-plus takeoffs near Okinawa islands

Chinese warplanes have taken off from an aircraft carrier sailing near Okinawa more than 100 times in the past week, Japanese defence officials said May 10. The Chinese carrier Liaoning staged the takeoffs May 3 through May 08, Japanese Defense Minister Nobuo Kishi told reporters. The Defense Ministry's joint staff reported that fighter and helicopter launches took place May 09as well. The Japan Maritime Self-Defense Force has dispatched the destroyer Izumo to gather information. A flotilla of eight Chinese vessels including the Liaoning and missile destroyers travelled south between Okinawa's main island and the prefecture's Miyako Island on May 2. "Of what we've confirmed to date, these [takeoffs] have occurred in maritime territory closest to Japan," Kishi said, adding that Tokyo must monitor Beijing's military activity in the waters and airspace around the Nansei Islands -- extending southwest from Kyushu -- and Taiwan. "We'll continue to maintain close surveillance," he said. These activities may be intended "to improve operational capabilities of aircraft carriers and other assets, as well as to improve the capabilities to execute operations in distant seas and airspace," Kishi said. The carrier drew near Taiwan, which Beijing regards as a "core interest." Click here to read...

Do PLA drills reveal China strategy to deny military help for Taiwan?

An analysis of recent PLA exercises appears to show China has been testing a key strategy to restrict other countries’ ability to respond to an effort to take Taiwan, which Beijing considers part of its territory. Drills have included a three-day exercise from May 6 involving naval, air and conventional missile forces from the PLA’s Eastern Theatre Command to the east and southwest of the island. In the same period, the PLA kept up its air patrols over the Taiwan Strait, sending 18 planes on May 14 into the Taiwanese air defence identification zone in the strait and to the southeast of the island, according to Taiwan’s defence ministry. The Japanese Defence Ministry also reported that China’s Liaoning aircraft carrier was further east of the island, on an exercise that included its ship-borne J-15 fighters and Z-18 helicopters. The USS Abraham Lincoln carrier strike group was also deployed in the nearby Philippine Sea. There was a similar proximity on April 11, when four of China’s largest and most advanced Type 055 destroyers were spotted off the east coast of the mainland in the Yellow Sea as a US carrier group conducted an exercise with Japan near the Korean peninsula. With China, Japan and the US all ramping up their military activities in the region, perhaps it was coincidence that so many exercises overlapped. Click here to read...

Japan in talks on BAE joining development of next-gen fighter jet

Japan is in discussions to have British aerospace and defence contractor BAE Systems join development of a next generation fighter jet that the government aims to deploy in 2035. Japan and the U.K. have already decided to collaborate on engine parts and aim to hammer out the specifics of expanded cooperation by the end of the year. The next-generation fighter is the successor to the Air Self-Defense Force's F-2 fighter, which was jointly developed by Japan and the U.S. Mitsubishi Heavy Industries will be the main developer of the new jet. The engine is being handled by IHI and Rolls-Royce, which began work in January toward a demonstration aircraft to test performance. BAE Systems is already involved in the development of the U.K.'s next fighter aircraft, the Tempest. Seeing that both had similar timetables, Japan and the U.K. have decided there would be significant benefits to having a joint development effort, including cost reductions. Japan's Ministry of Defense announced at the end of 2020 that it would work with American company Lockheed Martin as a possible partner on the fighter, but later issues emerged in coordinating the relationship, such as how aircraft upgrades would be handled after deployment. Tokyo will require the next generation of fighter aircraft to have systems that integrate radar, missiles and other capabilities as well as a high degree of stealth. Click here to read...

Russian and US defence chiefs hold talks

US Defense Secretary Lloyd Austin and Russian Defense Minister Sergei Shoigu conducted their first phone call since the start of Moscow’s operation in Ukraine in late February. The news was confirmed by both sides on May 13. Austin has called for an “immediate ceasefire in Ukraine,” Pentagon Press Secretary John Kirby said. According to Kirby, Austin also “emphasized the importance of maintaining lines of communication” after nearly three months without contact with his Russian counterpart. The Russian Ministry of Defense later on May 13 confirmed the call, noting that the pair discussed issues of international security, including but not limited to the situation in Ukraine. Russia attacked the neighbouring state on February 24, following Ukraine's failure to implement the terms of the Minsk agreements, signed in 2014, and Moscow's eventual recognition of the Donbass republics of Donetsk and Lugansk. The German- and French-brokered Minsk Protocol was designed to give the breakaway regions special status within the Ukrainian state. The Kremlin has since demanded that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. Kiev insists the Russian offensive was completely unprovoked and has denied claims it was planning to retake the two republics by force. Click here to read...

Sanctions hurt US more than Russia – poll

A new poll has found that 53% of Americans believe that sanctions on Moscow hurt the US more than Russia. Amid soaring gas prices and rising living costs, voters are losing confidence in US President Joe Biden’s leadership, and 43% say they’re “OK” with Ukraine losing its ongoing conflict with Russia. With inflation at a 40-year peak and gas prices near record highs, the Democracy Institute/Express.co.uk poll revealed that Biden is polling negatively in all policy areas, with foreign policy the worst. Some 56% disapprove of his handling of foreign matters, compared to 40% approving. On Ukraine specifically, only 38% approve of his stewardship, while 52% disapprove. The Biden administration has attempted to blame Russia and its president, Vladimir Putin, for the rising cost of living at home, with his officials repeatedly referring to “Putin’s price hike.” However, living costs were rising for months before Russia sent troops into Ukraine, and voters are pointing the finger at Biden for their economic woes. Some 50% said they’d back Republicans in November’s midterm elections, compared with 42% saying they’d vote Democrat. In addition to more voters being “OK” than “not OK” with Ukraine losing the conflict with Russia (43% to 41%), a majority of Americans think it would be better for Biden to leave office than for Putin to step down, by 53% to 44%.Click here to read...

Xi Jinping tells youth league to ‘dare to struggle’ and unify around the Communist Party

Chinese President Xi Jinping has told members of the Communist Youth League to dare to struggle and “actively” unify around the Communist Party. “[You] must take the lead in daring to – and being good at – struggle, confront difficulties in the face and overcome hardships,” he said during an event in Beijing marking the youth league’s centenary on May 10. “Members of the league should treat political training seriously and actively seek political progress and unify around the party,” he said. “[You] must strive to be members of the Communist Party.” The youth league – copied from the Soviet model – serves as a “reserve force” for China’s ruling Communist Party, according to its constitution. Members must be Chinese nationals aged between 14 and 28, though anyone appointed to an official position can remain in the youth league for longer. It has more than 73.1 million members, according to the latest official figures. At its peak in the late 2000s, around a quarter of all Chinese nationals in the age group were youth league members. During his speech, Xi also urged youth league officials to step up education and guidance for young Chinese. Beijing has been ramping up political indoctrination efforts among young Chinese, who are seen by many observers as more patriotic – and also more nationalistic – than previous generations. Click here to read...

New data transfer rules pursued to keep out China and Russia

Japan, the U.S., South Korea and four other APEC members have agreed to make personal data transfer rules independent of the regional forum's current framework in a move to exclude China and Russia. With Russia and China as members of the Asia-Pacific Economic Cooperation forum, there were concerns about the flow of personal data. The new rules create a framework among members with a shared sense of trust. Plans call for the inclusion of non-APEC members, including South American countries.APEC's Cross-Border Privacy Rules, which have served as a unified standard, will be reassessed. Companies are required to comply with each country's regulations in handling personal information, and the numerous procedures involved in transfers across borders can be a burden. Once certified, companies can smoothly transfer data among APEC markets, making it easier to do business. Nine APEC members participate in the CBPR: Japan, the U.S., South Korea, Canada, Taiwan, the Philippines, Singapore, Australia and Mexico. Excluding Australia and Mexico, the other seven members agreed to establish a new global CBPR framework. It will be independent of APEC and actively accept participation by non-APEC members. There has been a growing shared recognition between the U.S. and Japan that data transfer frameworks had reached their limits with the involvement of Russia and China. Click here to read...

Turkey sets demands, not opposed to Finland, Sweden NATO bid

NATO and the United States say they are confident Turkey will not impede the membership of Finland and Sweden in the Western military alliance, despite Ankara expressing reservations. Turkey laid out demands on May 15 on the sidelines of a meeting of NATO foreign ministers in Berlin, saying it wanted the two Nordic countries to end support for Kurdish groups present on their territory, and to lift the ban on sales of some arms to Turkey. Foreign Minister Mevlut Cavusoglu said his talks with Swedish and Finnish counterparts in Berlin had been helpful. The two countries had made suggestions to respond to Ankara’s concerns, which Turkey would consider. Cavusoglu added that he had provided proof that “terrorists” were present on their territory. He singled out Sweden in particular, saying the Kurdish group the Kurdistan Workers’ Party (PKK), banned as “terrorist” by the US and European Union, had held meetings in Stockholm over the weekend. Nevertheless, he said, Turkey did not oppose the alliance’s policy of being open to all European nations that wish to apply. NATO Secretary-General Jens Stoltenberg said he was confident “that we will be able to address the concerns that Turkey has expressed in a way that doesn’t delay the membership”. Click here to read...

Japan pursues greater Five Eyes intel-sharing amid China concerns

As China continues its assertiveness in the Indo-Pacific and Russia's invasion of Ukraine has shaken the foundations of global security, Japan is looking to bolster cooperation with the Five Eyes intelligence-sharing alliance. There has been a push to expand the framework, which currently includes English-speaking democracies the U.S., the U.K., Canada, Australia and New Zealand. But Japan's lack of a dedicated intelligence agency could stand in the way of more comprehensive cooperation between the two sides.Japanese Prime Minister Fumio Kishida and his British counterpart, Boris Johnson, agreed in principle on May 5 to a reciprocal access agreement, smoothing the way for the Japanese Self-Defense Forces and the British military to exercise and operate together. Japan has a similar agreement with Australia, in addition to its Status of Forces Agreement with the U.S.Japan last month also agreed to start negotiating a security information agreement with New Zealand. Japan already has information security agreements with the U.S., the U.K. and Australia, and a pact with New Zealand would expand its options for intelligence-sharing with Five Eyes. In the meantime, concerns remain over Japan's information-gathering abilities. The country restricts domestic surveillance, and has no intelligence agency operating overseas. Click here to read...

Qatar leader in Iran in bid to help salvage 2015 nuclear pact

Qatar’s Emir Sheikh Tamim bin Hamad Al Thani has met President Ebrahim Raisi in Tehran as the Gulf state tries to help end a dispute between Tehran and Washington over revival of the 2015 nuclear deal. State TV showed the arrival of the Qatari leader at Tehran’s Mehrabad Airport, where he was received by Iran’s Senior Vice President Mohammad Mokhber. The report said bilateral, regional and international issues are on agenda during the visit. The one-day visit on May 12 came as the European Union’s coordinator for the nuclear talks, Enrique Mora, held a second day of meetings in Tehran with Iran’s chief negotiator Ali Bagheri. Qatar, a close ally of the United States, has added the Iran nuclear dispute to the list of diplomatic efforts where it has sought to play a behind-the-scenes mediating role, and Sheikh Tamim has called for more dialogue to settle the standoff.The trip was aimed to bring the parties to the Iran nuclear pact to “a new middle ground”, the Reuters news agency quoted an unnamed source as saying.The stakes are high since failure to reinstate the pact could carries regional risks. Israel, Iran’s rival, has threatened military action if diplomacy collapses. Talks in Vienna have been stalled for months, apparently over an Iranian demand that Washington lift a terrorism designation on Iran’s powerful paramilitary Islamic Revolutionary Guard Corps. Click here to read...

Lebanon election: Major changes not expected as voting concludes

Voters in Lebanon crowded into polling stations with no electricity and little stationery, but what the voting centres lacked in amenities was made up for by a sense of hope. “I hope for some change for my children,” Zeina Tabsh said after voting in Beirut on May 15. “I don’t want to have to leave Lebanon. I want change,” Tabsh said, explaining how she is currently unemployed and had chosen to vote for new candidates not from the country’s traditional parties. Voting closed on May 15 evening in a parliamentary election that was the first since Lebanon’s economy began to spiral in late 2019, leading hundreds of thousands to protest in the streets against the country’s rulers. Interior Minister Bassam Mawlawi said in a news conference that voter turnout was 41 percent, and with just a few polling stations still unaccounted for no major changes were expected. The turnout figure is lower than the 49 percent seen in 2018. “I don’t know if it’s because of citizens’ choice or if it’s to serve the political orientation of those who called for boycotts,” Mawlawi said of the lower turnout on Lebanese television earlier on May 15. Vote counting is expected to be “a little complicated”, and could take time, he added. For those who participated in the 2019 protests, new elections were seen as an opportunity to uproot Lebanon’s political establishment and throw out corrupt sectarian parties and cronies. Click here to read...

Sheikh Mohamed bin Zayed Al Nahyan elected UAE president

The United Arab Emirates de facto ruler Sheikh Mohamed bin Zayed Al Nahyan was elected as president on May 14 by the Federal Supreme Council, the state-run WAM news agency said, after years of calling the shots from behind the scenes while his half-brother President Khalifa bin Zayed Al Nahyan was sidelined by poor health. The rulers of the UAE’s seven sheikhdoms made the decision at a meeting. It comes after Sheikh Khalifa died on May 13 at age 73. After his election, Mohamed expressed appreciation of the “precious trust” placed in him by members of the council, WAM added.It described the vote as unanimous among the rulers of the country’s sheikhdoms, which also includes the skyscraper-studded city of Dubai. “We congratulate him and we pledge allegiance to him, and our people pledge allegiance to him,” Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, said on Twitter after the vote. “The whole country is led by him to take it on the paths of glory and honour, God willing.” Widely known as MBZ, Sheikh Mohamed is one of the Arab world’s most powerful leaders. A graduate of Britain’s Royal Military Academy Sandhurst, he commands one of the best-equipped armies in the Gulf region. Click here to read...

German state election leaves Chancellor Scholz reeling

Chancellor Olaf Scholz is digesting a major defeat after his Social Democrats were comfortably beaten into second place in North Rhine-Westphalia. He now needs a favor from the surging Green Party. May 15 night's election victory in North Rhine-Westphalia (NRW) must have tasted extra sweet for the center-right Christian Democrats (CDU). As in the federal election, the vote in Germany's most-populous state was long described as a neck-and-neck race between the CDU and the center-left Social Democrats (SPD), only for a previously unheralded candidate to score a clear victory. Only this time the boot was on the other foot. The CDU took 35.7% of the vote, well ahead of the SPD on 26.7%. The SPD saw its worst result in history in NRW, which the party has ruled for most of the state's 77-year existence. And the CDU, humiliated on the federal level last year, is now basking in a comfortable win and has the right to make initial approaches to potential coalition partners. It was a bad night for two of the three federal coalition partners. But the SPD's result did not reflect well on Chancellor Olaf Scholz, who had made a point of taking an active part in his party's campaign in support of regional candidate Thomas Kutschaty. Click here to read...

Medical

Explainer | What is the mystery hepatitis affecting children around the world?

Scientists are racing to understand the cause of an acute liver inflammation which has left at least nine children dead and affected hundreds of others in 20 countries in just over a month.More than 348 cases of the mystery hepatitis strain have been reported, with some children needing liver transplants. Most patients were previously healthy. Hepatitis is uncommon among children and testing has ruled out the five known hepatitis viruses. Several hypotheses are being considered – including whether the illnesses are related to Covid-19. Some progress has been made in refining the investigation in recent weeks, as health experts try to uncover the cause of the cases. Here is what scientists know so far and what steps they are taking to identify the mystery hepatitis. Scientists are now studying whether these adenoviruses, found in about 70 per cent of the children with confirmed hepatitis in Britain, were behind the outbreak. There are more than 50 adenoviruses and some of the patients were found to be infected with a particular type, called F41. Click here to read...

Explainer | Second boosters: what the studies tell us about the fourth Covid-19 jab

With Covid-19 cases surging again, many countries have rolled out fourth doses of the vaccines. But most of these second booster programmes are just for vulnerable groups like the elderly and the immunocompromised as questions remain over how lasting the immunity is, and if a second jab will benefit the wider population. There have been some studies done on the effectiveness of a fourth dose but more research is needed. Here is what the data tells us so far. How effective is a fourth dose for the elderly? Most of the data so far comes from Israel – the first country to start giving fourth jabs to people aged 60 and over, as well as high-risk groups such as the immune-suppressed and their carers. In findings published last month in the New England Journal of Medicine, the fourth dose was found to have provided significantly more protection against severe disease, hospitalisation and death for at least a month.Seven to 30 days after the fourth jab was given – compared to someone given a third shot – the relative effectiveness was 45 per cent against infection, 55 per cent against symptomatic disease, 68 per cent against hospitalisation, 62 per cent against severe disease and 74 per cent against death. Click here to read...

Reversing COVID-free claim, North Korea reports 'explosive' outbreak

Abandoning past boasts of no COVID-19 cases, North Korea reported May 13 that up to 187,800 people are "being isolated and treated," spurring speculation of a severe outbreak and a desire for international assistance. "A fever whose cause couldn't be identified explosively spread nationwide from late April" to affect more than 350,000 people, the official Korean Central News Agency reported May 13 in a story acknowledging "the nationwide spread of COVID-19." At least 162,200 of them have fully recovered, KCNA said. The country had long said it had zero cases. May 12 alone saw around 18,000 cases of fever, according to the story. It said six people have died so far, with one of them testing positive for the highly contagious BA.2 subvariant of omicron. "The situation is more dire than we had expected," a source in the South Korean president's office said May 13. The new president, Yoon Suk-yeol, has expressed interest in discussing potential assistance in vaccines with Pyongyang.North Korea had never published detailed case numbers before. "It likely changed its policy in response to a rapid increase in infections across the entire country," said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul. "It's a message that it may ask international organizations for help with vaccines," said Yang, whose areas of interest include North Korean foreign policy. Click here to read...