Economic

An Important Shift in Fed Officials’ Rate Stance Is Under Way

For more than a year, Federal Reserve policy makers were unanimous that they would rather raise interest rates too much than too little—that is how serious they considered the threat of persistently high inflation. That is changing. Some officials still prefer to err on the side of raising rates too much, reasoning that they can cut them later. Now, though, other officials see risks as more balanced. They worry about raising rates and causing a downturn that turns out to be unnecessary or triggering a new bout of financial turmoil. The shift toward a more balanced bias on rates is driven by data showing easing inflation and a less overheated labour market. In addition, the unusually rapid rate increases implemented over the past 1½ years are expected to continue crimping demand in coming months. Fed officials raised rates at 11 of their past 12 meetings, most recently in July, to a range between 5.25% and 5.5%, a 22-year high. They appear to be in broad agreement to hold interest rates there at their Sept. 19-20 meeting, giving them more time to see how the economy is responding to increases. The bigger debate is what would prompt them to raise rates again in November or December. In June, most officials projected they would need to raise rates by another quarter point this year. Click here to read...

The Middle East Becomes the World’s ATM

Five years ago, Saudi officials watched a wave of American finance executives pull out of a free investment confab in Riyadh after the murder of a dissident journalist made the kingdom a toxic place to do business. This year, the conference, nicknamed “Davos in the Desert,” is expecting so much demand it is charging executives $15,000 a person. Middle East monarchies eager for global influence are having a moment on the world’s financial stage. They are flush with cash from an energy boom at the very time traditional Western financiers—hampered by rising interest rates—have retreated from deal making and private investing. The region’s sovereign-wealth funds have become the en vogue ATM for private equity, venture capital and real-estate funds struggling to raise money elsewhere. The market for marquee mergers and acquisitions has seen a surge of interest from the region. Recently announced deals include an Abu Dhabi fund’s purchase of investment manager Fortress for more than $2 billion and a Saudi fund’s $700 million purchase of global lender Standard Chartered’s aviation unit. Companies and funds overseen by Abu Dhabi’s national security adviser, Sheikh Tahnoun bin Zayed Al Nahyan, have made runs at buying Standard Chartered and investment bank Lazard. They have also struck recent deals to buy a $1.2 billion U.K. healthcare company and to take partial control of a nearly $6 billion Colombian food giant. Click here to read...

China's state planner to set up special bureau to support private economy

China's central government has approved setting up a special bureau within the National Development and Reform Commission (NDRC) to promote the development and growth of the private economy, the NDRC said on Sept 04. The bureau will be responsible for devising policies to promote the development of private companies, both domestically and in terms of their international competitiveness, and provide a trouble-shooting function, said Cong Liang, the state planner's vice chairman. The private sector is responsible for 80 per cent of new urban jobs but has struggled to attract investment amid a frail economic recovery over the first half of the year, with business owners also constrained by weak domestic demand. "This is a powerful initiative ... that fully reflects the great importance the Chinese Communist Party Central Committee attaches to the private economy," said Zhang Shixin, an official within the state planner. Few analysts expect policymakers to introduce any aggressive stimulus due to concern about debt and financial risk, with the government instead likely continuing to introduce incremental measures in the face of sustained pressure to shore up growth. Click here to read...

Europe's carmakers fret over China's EV prowess at Munich car show

Europe's carmakers have a fight on their hands to produce lower-cost electric vehicles (EVs) and erase China's lead in developing cheaper, more consumer-friendly models, executives said at Munich's IAA mobility show. "We have to close the gap on costs with some Chinese players that started on EVs a generation earlier," Renault CEO Luca de Meo told Reuters at the car show, adding when manufacturing costs decline, prices will also go down. De Meo said as part of the French carmaker's drive toward price parity with the Chinese, its R5 EV due out next year will be 25 per cent to 30 per cent cheaper than its electric Scenic and Megane models. Chinese EV makers, including BYD, Nio and Xpeng are all targeting Europe's EV market, where sales soared nearly 55 per cent to about 820,000 vehicles in the first seven months of 2023, making up about 13 per cent of all car sales. Xpeng plans to expand into more European markets in 2024, and Zhejiang Leapmotor Technology announced five models for overseas markets, including Europe, over the next two years. According to auto consultancy Inovev, 8 per cent of new EVs sold in Europe so far this year were made by Chinese brands, up from 6 per cent last year and 4 per cent in 2021. Click here to read...

Japan and U.K. launch economic security dialogue

Japan and the U.K. agreed Sept 06 to establish a new ministerial dialogue on economic policy and trade, and affirmed plans for joint investment to secure rights to critical minerals in regions such as Africa. Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura and British counterpart Kemi Badenoch issued a joint statement on the framework after their meeting here. The dialogue will be the first between Tokyo and London to cover economic security topics such as supply chain resilience. In addition to the trade ministers, the dialogue will involve the U.K.'s Department for Science, Innovation and Technology, and its Department for Energy Security and Net Zero. As part of their partnership, the two countries will formulate a memorandum of cooperation on critical minerals, according to the joint statement. Joint investment in mining projects in Africa and elsewhere may be considered as the two countries seek stable, low-risk supplies of minerals needed to produce electric vehicles and other technologies. Japan is one of the Indo-Pacific region partners with which the U.K. has sought closer ties since leaving the European Union. Noting the U.K.'s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade and investment pact, the ministers committed to "working together to uphold its high standards and ensure businesses can access the benefits of both CPTPP and the U.K.-Japan Comprehensive Economic Partnership Agreement." Click here to read...

China misses 'common prosperity' goal as income gap now widest

China's income gap has grown to the widest it has ever been since records began, as the average household income of the top 20% in urban areas reaches 6.3 times of the lowest 20%. Those in the service industries, including restaurants, hotels and entertainment, had lost their jobs or had their salaries cut during President Xi Jinping's "zero COVID" policy over the last three years. Their salaries have yet to catch up since the policy was lifted in January this year. On the other hand, the urban rich with large financial assets continued to thrive during this time. In the face of travel restrictions and lockdowns, they spent less as their savings accumulated and as those assets grew on the back of rising interest rates. Despite the lifting of COVID restrictions, the pace of economic recovery and income growth this year has been slow, while local governments face huge financial burdens as they try to support those who are struggling. One of Xi's political slogans is "common prosperity," which places high priority on a fair income distribution. This now seems like a distant goal, given the economic malaise China faces amid a beleaguered property market. The income gap in urban areas has worsened since 2015, when the top 20% earned 5.3 times more than the bottom 20%, according to the National Bureau of Statistics of China. Click here to read...

Huawei's Mate 60 Pro has U.S. asking questions on chips

The U.S. will seek technical details of the latest smartphone made by Huawei Technologies, the Chinese manufacturer blacklisted from accessing advanced chip technology for its products. The Mate 60 Pro has created a buzz in China since its release last month. Research firm TechInsights says the phone is powered by Huawei's own Kirin chip, which is built by Chinese foundry Semiconductor Manufacturing International Corp (SMIC). The chip was manufactured with a 7-nanometer process, according to the TechInsights analysis, and appears capable of 5G-level performance. Apple and Samsung Electronics started releasing phones with 7-nm chips around 2018. This puts the Kirin chip two generations behind the 3-nm and 4-nm chips that are starting to be mass-produced by the world's leading chipmakers. But it suggests SMIC is at least moving closer to the advanced production processes attained by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics. "I'm going to withhold comment on the particular chip in question until we get more information about precisely its character and composition," U.S. national security adviser Jake Sullivan said during a press briefing Sept 05. Sullivan later added that the U.S. should stay the course on a "set of technology restrictions focused narrowly on national security concerns" and reiterated the "need" for more information on Huawei's chips. Click here to read...

China Bans iPhone Use for Government Officials at Work

China ordered officials at central government agencies not to use Apple’s iPhones and other foreign-branded devices for work or bring them into the office, people familiar with the matter said. In recent weeks, staff were given the instructions by their superiors in workplace chat groups or meetings, the people said. The directive is the latest step in Beijing’s campaign to cut reliance on foreign technology and enhance cybersecurity, and comes as China seeks to limit flows of sensitive information outside of China’s borders. The move by Beijing could have a chilling effect for foreign brands in China, including Apple. Apple dominates the high-end smartphone market in the country and counts China as one of its biggest markets, relying on it for about 19% of its overall revenue. It wasn’t clear how widely the orders were being distributed, but similar messages were communicated to employees at some central government regulators. China’s State Council Information Office, the National Civil Service Administration and Apple didn’t respond to requests for comment. Shares of Apple fell 3.6% Sept 06 and were the worst performer in the Dow Jones Industrial Average. Beijing has for years restricted government officials at some agencies from using iPhones for work, but the order has now been widened, the people said. Click here to read...

Brazil takes US crown in critical crop exports

Brazilian corn growers have managed to dethrone the US as the world’s number one exporter of corn, Bloomberg reported last week, adding that the South American nation would account for about 32% of global exports of the staple crop in the 2023 agricultural year. According to the data from the US Department of Agriculture, as cited by the media, the US will account for only 23% of global corn exports in the agricultural year that ended August 31, well below the new leading exporter. Brazil is expected to keep the leadership in the 2024 harvest year that begins on September 1. In recent years, the US dropped out of the first spot in the ranking just once – in 2013 – due to a devastating drought. Before that, the nation’s corn producers spent two back-to-back years in second place in the early 1960s during the Kennedy administration. Over the last decade, American agricultural producers have relinquished the top spot in soybean and wheat shipments. Brazil managed to take the lead in exports of soybeans in 2013. The following year, the European Union and Russia began undermining the US’ global wheat dominance. The shift is reportedly attributed to rising labor and logistical costs in the US, a shortage of open farmland, the negative impact of a long-standing trade war with China, and a strong US dollar. Click here to read...

Apple, TikTok owner named among 'gatekeepers' in EU tech rules

China's ByteDance -- the owner of TikTok -- and U.S. companies Apple, Meta, Amazon, Alphabet and Microsoft are subject to new European Union legislation designed to ensure Big Tech plays by EU competition rules, the bloc announced Sept 06. The six tech giants, designated as "gatekeepers" between users and services, will be required to make services interoperable with competing apps and share data. The EU aims to prevent the companies from abusing their dominant position and create a level playing field for European startups. Sept 06's announcement by the European Commission was the first time the EU designated specific companies under the Digital Markets Act (DMA). The act is set to take full effect in 2024. Companies that have either 7.5 billion euros ($8 billion) or more in annual sales in the EU over the past three years, or at least 75 billion euros in market capitalization, and also have 45 million or more monthly active users in the EU, are designated as gatekeepers and subject to the regulations. Twenty-two services that serve as "gateways" were named, such as Meta's Instagram, Google search and TikTok. The DMA prohibits companies from giving preferential treatment to their services, as well as using personal information obtained from one service in another service. Click here to read...

China Races Ahead In Global Nuclear Power Development

China is by far the world leader in nuclear reactor development at present. The country has been rapidly expanding its nuclear energy industry in line with its renewable energy development, to diversity and become a leader in several clean energy sources. In contrast, the development of new plants in the U.S. has gradually dwindled in recent decades, following public and government scepticism around nuclear safety and the high costs involved with new projects. So, will China achieve its aim of becoming the world leader in nuclear power in the long term? China currently has 55 nuclear reactors in operation, according to the International Atomic Energy Agency (IAEA). In 2021, nuclear power contributed 5.02 percent of the country’s energy mix, a figure that is expected to increase significantly with the opening of new facilities. During the 13th Five-Year Plan period, China rolled out several renewable energy projects, increasing the figure for non-fossil energy consumption to 15.9 percent. The 14th Five-Year Plan period is aimed at achieving peak carbon emissions by 2030 and net-zero emissions by 2060, meaning that China needs to rapidly develop a wide range of clean energy sources. China now has 21 new nuclear reactors under construction, which will have a capacity for generating more than 21 GW of electricity. This is two and a half times more than any other country’s nuclear construction pipeline. Click here to read...

Western officials visit UAE in efforts to halt exports to Russia: Report

United States, British and European Union representatives are visiting the United Arab Emirates amid concerns regarding shipments of goods, including computer chips, to Russia that could help Moscow in its war on Ukraine. The senior Western officials arrived in the Gulf nation this week to discuss sanctions on Russia, as concerns mounted that Moscow was bypassing them through various means, a US embassy spokesperson told CNN on Sept 06. The report came on the heels of another by the Wall Street Journal on Sept 04 – citing US and European officials – that discussed plans to jointly press the UAE to halt shipments of goods to Russia. This was part of a collective global push to keep computer chips, electronic components and other so-called dual-use products out of Russian hands, the WSJ report said. The UAE, a member of the OPEC+ oil alliance that includes Russia, has maintained good ties with Moscow despite Western pressure to isolate Russia over the invasion of Ukraine that began in February 2022. It has not matched the global sanctions imposed on Moscow. The WSJ first reported the visit, saying that it comes as part of “a collective global push to keep computer chips, electronic components and other so-called dual-use products, which have both civilian and military applications, out of Russian hands”. Click here to read...

Why is the Shalamcheh-Basra railroad so important to Iran and Iraq?

Iran and Iraq have announced that work on a railroad linking the two countries that was initially envisioned decades ago has officially begun. When complete, it will facilitate the movement of millions of Iranian pilgrims heading to holy sites in Iraq. Iranian First Vice President Mohammad Mokhber and Iraqi Prime Minister Mohammed Shia al-Sudani marked the start of construction on the Shalamcheh-Basra railroad along their border on Sept 02. So what is the rail project, what are the challenges and why does it matter geopolitically to both countries? What is the Shalamcheh-Basra railroad? The railroad is to connect the Iranian border town of Shalamcheh with the south-eastern Iraqi city of Basra to transport passengers and cargo. Iranian officials said the 32km (20-mile) railroad will be completed in 18 to 24 months. Tehran and Baghdad first inked an agreement to develop the route in 2014 but were forced to halt the project a short time later as the ISIL (ISIS) group conducted its violent offensive through large parts of Iraq. Years passed without much progress, but after the security and political situation in Iraq improved, they committed to the project again in late 2021. However, they did not manage to achieve their target of completing the project within two years. Click here to read...

The impact of Russia sanctions on Swiss banks

Russian millionaires are taking their money elsewhere, most notably the Middle East, amid doubts about the true value of Swiss neutrality. In its Global Wealth Report 2023, the Boston Consulting Group (BCG) spoke of a “significant exodus of Russian assets from Europe to the Middle East”, evidenced by a $100 billion (CHF88 billion) rise in wealth deposited in the United Arab Emirates last year, the fastest annual growth of any offshore booking centre. On the other hand, the G7 countries, particularly the United States, have questioned whether Switzerland is doing all it can to track Russian assets stashed away in bank vaults. Swiss banks complain of being caught in the middle and lumbered with yet more paperwork on top of existing anti-tax evasion and money laundering regulations. “Contradictions between sanctions regimes [the United States, European Union and Britain] are repeatedly leading to major difficulties with implementation and unnecessary compliance risks,” Philipp Rickenbacher, CEO of Julius Bär bank and president of the Swiss Wealth Management Association, said at a private banking summit in June. The patchwork of sanctions is particularly challenging for banks with multiple branches abroad that bear the extra risk of needing to work with local banks in each of the countries that they operate – any one of which could be turning a blind eye to certain sanctions. Click here to read...

Chinese rare earth prices hit 20-month high on Myanmar supply worry

Chinese rare earth prices jumped to their highest in 20 months, as mining suspension in major producer Myanmar sparked stockpiling ahead of the peak consumption season, analysts said on Sept 07. Prices of dysprosium oxide leapt to 2,610 yuan ($356) per kilogramme on Wednesday, the highest since May 2022, latest data provided by Shanghai Metals Market (SMM) on LSEG Eikon showed. Terbium oxide prices rose to 8,600 yuan a kilogramme, a level unseen since July 3. Mines in Myanmar's Pangwa region in Kachin State, the country's biggest source of rare earth, have been closed from Sept 04 in preparation for inspections during Sept. 6-7, consultancy SMM said in a report on Sept 07. "A local miner said they have not resumed production and are waiting for a notice on the next step from the inspection team," said Yang Jiawen, an analyst at SMM. Rare earth is a prized group of 17 minerals used in consumer electronics and military equipment. Myanmar accounted for 38 per cent of rare earth imports into China in January-July, Chinese trade data showed, while the Southeast Asian country was the fourth biggest source of rare earth mining in 2022, data by the U.S. Geological Survey showed. A local resident in the town of Chipwi told Reuters she saw workers from nearby Pangwa coming to her town as mining activities have been paused. Click here to read...

UK’s second-largest city ‘declares bankruptcy’

Birmingham, the largest metropolitan area in the UK outside of London, has effectively declared itself bankrupt after its city council shut down all non-essential spending following an equal pay settlement bill that could be as high as $956 million. In a statement on Sept 05 declaring itself in financial distress, Birmingham City Council said it will “tighten the spend controls already in place” and appoint an external administrator to oversee short-term fiscal planning. “In June, the council announced it had a potential liability relating to equal pay claims in the region of £650 million to £760 million ($816 million to $956 million), with an ongoing liability that is accruing at a rate of £5 million to £14 million ($6.3 million to $17.5 million) per month,” the statement said. It added that the council “does not have the resources” to pay the outstanding sum but is “committed to dealing with the financial situation.” The body also said that all new spending is to be ceased, except support to vulnerable people and various statutory services. The settlement bill stems from a 2012 Supreme Court ruling in favour of predominantly female Birmingham City Council employees who complained that bonus scheme payments had been mainly issued to staff in roles primarily occupied by men. Click here to read...

Strategic

US, Russia praise G20 summit declaration as India meeting closes

Russia and the US both praised a G20 summit declaration that stopped short of directly criticising Moscow for the war in Ukraine as the bloc’s leaders headed into the final day of deliberations on Sept 10. The world’s biggest economies adopted a consensus declaration in New Delhi that avoided condemning Russia for the war but highlighted the human suffering the conflict had caused and called on all states not to use force to grab territory. “Everything was reflected in a balanced form,” Svetlana Lukash, the Russian G20 sherpa, or government negotiator, was quoted as saying by Russian news agency Interfax. “All members of the G20 have agreed to act as one in the interests of peace, security and conflict resolution around the world.” White House national security adviser Jake Sullivan told reporters the declaration “does a very good job of standing up for the principle that states cannot use force to seek territorial acquisition or to violate the territorial integrity and sovereignty or political independence of other states”. Germany and Britain also praised the resolution but Ukraine said “it was nothing to be proud of”. In the weeks leading to the summit, sharply differing views on the war had threatened to derail the meeting, with the West demanding members call out Moscow for the invasion and Russia saying it would block any resolution that did not reflect its position. Click here to read...

G20 admits African Union as permanent member at New Delhi summit

The African Union was made a permanent member of the G20, comprising the world's richest and most powerful countries, Indian Prime Minister Narendra Modi said at the bloc's summit in New Delhi on Sep 09. The African Union, a continental body of 55 member states, now has the same status as the European Union - the only regional bloc with a full membership. Its previous designation was "invited international organisation". Modi, in his opening remarks at the summit, invited the AU, represented by Chairperson Azali Assoumani, to take a seat at the table of G20 leaders as a permanent member. "Honoured to welcome the African Union as a permanent member of the G20 Family. This will strengthen the G20 and also strengthen the voice of the Global South," said a message on Modi's official account on social media platform X, formerly known as Twitter. The move was proposed by Modi in June. Reuters earlier cited the draft declaration admitting the African Union as a permanent member. The G20 previously comprised 19 countries and the European Union, with the members representing around 85 per cent of global GDP, more than 75 per cent of global trade and about two-thirds of the world population. Click here to read...

Saudi, Iran exchange ambassadors after years-long rupture

Saudi Arabia's ambassador to Iran arrived on Sep 05 in the Islamic Republic, and his counterpart landed in Riyadh, cementing a restoration of ties between the Gulf rivals after a seven-year rupture in ties. Shiite-dominated Iran and Sunni Muslim Saudi Arabia agreed to resume diplomatic relations and reopen their respective embassies following a China-brokered deal announced in March. Riyadh and Tehran severed ties in 2016 after Saudi diplomatic missions in Iran were attacked during protests over Riyadh's execution of Shiite cleric Nimr al-Nimr. Saudi Arabia's leadership recognises the "importance of strengthening ties, increasing engagement ... and taking the (relationship) to broader horizons," ambassador Abdullah Alanazi said upon his arrival in Tehran to take up his duties, according to a Saudi Foreign Ministry statement. Also on Sep 05, Iran's ambassador to Saudi Arabia, Alireza Enayati, arrived in the capital Riyadh where he was received by foreign ministry officials and embassy staff, according to Iran's official IRNA news agency. Alanazi was formerly Saudi Arabia's ambassador to Oman, while Enyati was previously Iran's Kuwait envoy. Saudi Arabia's embassy in Tehran resumed operations last month. In June, Iran marked the reopening of its embassy in Riyadh with a flag-raising ceremony. Click here to read...

Blinken contradicts Ukraine on peace negotiations

US Secretary of State Antony Blinken has claimed that the Ukrainian government will agree to peace talks with Russia if Moscow offers to negotiate first. Ukrainian leaders have argued otherwise, however, and insist that peace “needs to be won on the battlefield.” “Thus far, we see no indication that [Russian President] Vladimir Putin has any interest in meaningful diplomacy,” Blinken told ABC News on Sept 10. “If he does, I think the Ukrainians will be the first to engage, and we’ll be right behind them,” he added. Blinken and other top American officials have long insisted that the Ukrainian government will decide when to seek peace with Russia, and that the US will continue to supply Kiev with weapons until that time comes. Ukraine agreed in principle to a Turkish-mediated peace deal in April 2022, but walked away from the agreement after a visit to Kiev by then-British prime minister Boris Johnson. Ukrainian President Vladimir Zelensky has since issued a decree forbidding any negotiations with Putin’s government, as well as repeatedly vowing to take back the territories of Donetsk, Lugansk, Kherson, Zaporozhye, and Crimea – the latter of which voted to join Russia in 2014 – by force. Retaking this land, however, has proven costly for Kiev. Click here to read...

Ministerial meeting heralds warmer relations between Greece and Turkey

The foreign ministers of Greece and Turkey have agreed to revive high-level contacts between their countries and seek “new approaches” to problems as part of an effort to improve ties between the two NATO neighbours, who have been at loggerheads over a string of decades-old disputes. Discussions between Greece’s Giorgos Gerapetritis and Turkey’s Hakan Fidan on Sept 05 were held in a relatively friendly climate triggered by Greece sending assistance to Turkey following a devastating earthquake earlier this year and Turkey offering condolences after a deadly train accident in Greece. “We have entered a new and positive period in our relations with Greece,” Fidan told journalists at the end of their talks. “We reiterated our belief that our problems will be resolved through a constructive dialogue between the two neighbours and allies.” The meeting came as Ankara, in the throes of an economic downturn, is seeking a reset of its often-troubled relations with Western nations. It follows a rare meeting between President Recep Tayyip Erdogan and Greek Prime Minister Kyriakos Mitsotakis on the side-lines of a NATO summit in Lithuania in July. According to a “roadmap” unveiled by the two ministers, Mitsotakis and Erdogan would meet again on the sidelines of the United Nations General Assembly in New York on September 18, followed by a meeting of high-level officials in October. Click here to read...

Over 2,000 dead as powerful earthquake hits Morocco near Marrakesh

A magnitude 6.8 earthquake has hit Morocco killing at least 2,012 people, injuring more than 2,059, damaging ancient buildings, and sending terrified residents fleeing their homes into the streets for safety. Troops and emergency services scrambled on Sept 09 to reach remote mountain villages, the epicentre of the quake, where casualties are still feared trapped, as authorities declared three days of national mourning in the wake of the deadliest quake in decades. Montasir Itri, a resident of the mountain village of Asni near the epicentre, said most houses there were damaged. “Our neighbours are under the rubble and people are working hard to rescue them using available means in the village,” he said. Residents of Marrakesh, the nearest big city to the epicentre, said some buildings collapsed in the old city, a UNESCO World Heritage site. Local television showed images of a fallen mosque minaret with rubble lying on smashed cars. The Interior Ministry urged calm saying in a televised statement the quake hit the provinces of Al Haouz, Ouarzazate, Marrakesh, Azilal, Chichaoua and Taroudant. The temblor hit shortly after 11pm local time (22:00 GMT) on Sept 08 evening, according to the United States Geological Survey (USGS). The USGS estimated the epicentre occurred in the Atlas Mountains, some 75km (44 miles) from Marrakesh, the fourth largest city in the country. Click here to read...

Filling of Grand Renaissance Dam on the Nile complete, Ethiopia says

Ethiopia has announced that it has filled its Grand Ethiopian Renaissance Dam (GERD) on the Nile, which has been the source of a long-running water dispute with downstream countries Egypt and Sudan. The announcement on Sept 10 came just a fortnight after the three countries resumed negotiations, after a lengthy break, on an agreement that takes account of the water needs of all three. Egypt and Sudan fear the massive $4.2bn GERD will severely reduce the share of Nile water they receive and have repeatedly asked Addis Ababa to stop filling it until they have all reached agreement on how it should work. “It is with great pleasure that I announce the successful completion of the fourth and final filling of the Renaissance Dam,” Ethiopia’s Prime Minister Abiy Ahmed said on X, formerly known as Twitter. “There was a lot of challenge. We were many times dragged to go backwards. We had an internal challenge and external pressure. We’ve reached [this stage] by coping together with God,” Abiy said. “I believe that we will finish what we have planned next,” he said. The Ethiopian government’s communications service said on X that GERD, arguably the largest dam in Africa, was “a gift to generations”. Click here to read...

Italy Reassures China on Ties Even as It Inches Toward BRI Exit

Italy’s top diplomat tried to reassure China on ties even as Rome looks increasingly likely to withdraw from President’s Xi Jinping’s flagship infrastructure initiative. Foreign Minister Antonio Tajani said in a post on X, the social media site formerly known as Twitter, after meeting Foreign Minister Wang Yi in Beijing on Sept 05 that Italy was “actively working to foster dialogue and exchanges in the cultural, economic and scientific fields.” He also said the meeting with China’s most senior foreign policy official was something “we want to continue.” Wang told Tajani that “cooperation in jointly building the Belt and Road Initiative has yielded fruitful results,” according to a statement from China’s Foreign Ministry, adding that it benefited the two nations’ trade. The exchange seems unlikely to prevent Italy from leaving the Belt and Road Initiative that China has rolled out to build infrastructure — and expand its influence — mostly in Asia, Africa and Eastern Europe. Tajani visited Beijing to discuss the possibility of leaving the agreement that Rome signed onto in 2019, which he said had fallen short of expectations. Regardless of what Italy decides regarding the pact, “it will not be a message against China,” he said. Italy, like much of Europe, has been caught in the middle as tensions escalate between Washington and Beijing, and that’s been compounded by China’s support for Russia since it invaded Ukraine. Click here to read...

Iran Slows Uranium Production After Secret Diplomacy

Iran slowed its production of near weapons-grade uranium in recent months, the latest in a series of signals that the Islamic Republic may be ready to re-enter talks about the scope of its nuclear program. Inspectors from the UN atomic watchdog told diplomats Monday that Iran’s stockpile of highly-enriched uranium grew just 7% in the last three months compared with a 30% increase in the previous quarter. That’s the most dramatic slowdown since the country began purifying the heavy metal to higher grades in 2021.Iran’s engineers also took the unusual step of diluting more than 5% of its highly-enriched inventory, according to the restricted 12-page report prepared by International Atomic Energy Agency inspectors and seen by Bloomberg. And it paused plans to reconfigure centrifuges enriching to high purity levels. The shift follows months of secret diplomacy between Tehran and Washington that have led to an understanding to free American prisoners held by Iran and release billions of dollars in Iranian funds frozen by the US and stranded overseas. While US officials have been careful to distinguish that progress from formal nuclear talks, which remain stalled, Iranian Foreign Minister Hossein Amir-Abdollahian has indicated that his country may be willing to discuss potential limitations on its nuclear work with world powers. Click here to read...

US President Biden hails closer ties with Vietnam: ‘critical partners, critical time’

President Joe Biden hailed closer ties with Vietnam on his first visit to the country, as the US seeks to make deeper inroads in the region by offering nations an alternative superpower to China. “I think we have an enormous opportunity,” Biden told General Secretary Nguyen Phu Trong, the leader of the country’s ruling Communist Party, at a meeting in Hanoi. “Vietnam and the United States are critical partners at what I would argue is a very critical time. I’m not saying that to be polite. I’m saying it because I mean it from the bottom of my heart.” Biden also said the two countries were strengthening their partnership on the climate and human rights. Relations between the US and Vietnam have grown warmer in recent years, with both governments moving to upgrade ties that had long been strained over legacy issues stemming from the Vietnam war, which ended in 1975. Ties may get a formal upgrade after Sept 10’s meeting, particularly after Trong and Biden vowed in March to deepen the relationship between their nations. The partnership is not without complications, though. Vietnam has relied heavily on Russia for military equipment, even as the US has sought to isolate Moscow over President Vladimir Putin’s invasion of Ukraine. Click here to read...

ASEAN summit begins as China's new territorial map fuels tensions

Leaders from members of the Association of Southeast Asian Nations kicked off summit meetings on Sept 05 in Jakarta, testing the 10-nation bloc's ability to respond quickly during crises amid escalating U.S.-China tension and territorial disputes in the South China Sea. Speaking at the opening ceremony, Indonesian President Joko "Jokowi" Widodo, this year's chair of the bloc, said that future challenges are "getting tougher" amid geopolitical tensions across the world. "But ASEAN has agreed to not become a proxy for any power, and to work together with anyone for peace and prosperity," he stressed. "We should not make our ship, ASEAN, an arena of mutually destructive rivalries." The three days of talks will see a series of high-profile meetings including the East Asia Summit, which draws a broader group of leaders from regional powers such as Chinese Premier Li Qiang and Japanese Prime Minister Fumio Kishida. The meetings will also highlight the diplomatic debut of Cambodia's new Prime Minister Hun Manet, who last month succeeded his father, Hun Sen. But U.S. President Joe Biden is skipping the meetings, although he will attend the G20 summit in India later this week followed by a state visit to Vietnam. Washington is instead dispatching Vice President Kamala Harris for the ASEAN-related sessions. Click here to read...

ASEAN to engage Myanmar in 'troika' model to cool political unrest

Leaders of the Association of Southeast Asian Nations agreed on Sept 05 to tackle political unrest in Myanmar by having three of the group's member countries work together to engage with the military regime. The task of shepherding ASEAN leaders into action now will fall to the current, previous and next chairs of the regional bloc, Indonesian Foreign Minister Retno Marsudi said. This responsibility has belonged solely to whichever country has held the current yearly chair since the Myanmar military takeover in 2021. Marsudi told reporters on Sept 05 the informal "troika" model would ensure "sustainability" in handling the crisis "because everyone understands that the situation cannot change in one year." Laos hosts ASEAN's 2024 summit, and Malaysia chairs the event in 2025. Previous efforts to facilitate a cease-fire were largely unsuccessful, but the new troika model represents a semblance of consensus for the regional bloc. The agreement on the model was reached as dignitaries from the regional bloc gathered in Jakarta for a series of high-profile summits. The crisis in Myanmar was a top agenda item during the first day of the ASEAN Summit, as the country has been mired in deadly crackdowns and violence since the military removed the government in February 2021. Click here to read...

South Korea overhauls Unification Ministry amid harder line on North

South Korea's cabinet on Sept 05 approved a plan to downsize and reorganize the Ministry of Unification, reflecting a policy toward North Korea that has become less conciliatory and more focused on intelligence analysis and human rights issues. The restructuring, which will cut 81 employees from the staff of 617, overhauls functions related to cultural cooperation and cross-border exchanges amid a yearslong suspension of dialogue between the two neighbours. Bureaus responsible for economic cooperation, the Kaesong Industrial Complex, planning and supporting North-South dialogue as well as travel between the two countries will be merged into a single office for managing inter-Korean relations. "The Ministry of Unification is not the Ministry to Support North Korea," President Yoon Suk Yeol said. "The time has come for change." The restructuring also creates a five-person team for dealing with South Korean abductees and troops detained by the North, reporting directly to the unification minister. The group will look to share information with Japan, which has been trying for many years to resolve North Korean abductions of its citizens. The North Korea Intelligence and Analysis Bureau will be reorganized to strengthen its functions, and an office will be established to communicate information on real conditions in North Korea to people in that country. Click here to read...

North Korea unveils first tactical, nuclear-armed submarine

North Korea has launched its first operational “tactical nuclear attack submarine” and assigned it to the fleet that patrols the waters between the Korean peninsula and Japan, state media said on Sept 08. Submarine No. 841 - named Hero Kim Kun Ok after a North Korean historical figure - will be one of the main “underwater offensive means of the naval force” of North Korea, leader Kim Jong Un said at the launch ceremony on Sept 06. Analysts said the vessel appears to be a modified Soviet-era Romeo-class submarine, which North Korea acquired from China in the 1970s and began producing domestically. Its design, with 10 launch tube hatches, showed it was most likely armed with ballistic missiles and cruise missiles, analysts said. But such weapons won’t add much value to the North’s more robust land-based nuclear forces, because its submarines may not survive as long during a war, said Vann Van Diepen, a former U.S. government weapons expert who works with the 38 North project in Washington. “When this thing is field deployed, it’s going to be quite vulnerable to allied anti-submarine warfare,” he said. “So I think from a sort of hard-headed military standpoint this doesn’t make a lot of sense.” Click here to read...

Chinese President Xi Jinping visits flood damaged crops and homes after Typhoon Doksuri threatened northern food bowl

Chinese President Xi Jinping visited flood affected areas in Heilongjiang province in northeastern China where he inspected damaged homes and crops on Sept 07, state media reported. The president’s visit to Shangzhi came a month after Typhoon Doksuri brought heavy rain to the country’s north, particularly Heilongjiang, the nation’s biggest grain producer known as China’s “great northern granary”. He visited farmland at Longwangmiao village to inspect flood damaged rice crops, and walked along streets to inspect the progress of repair and reconstruction of damaged houses and infrastructure, state news agency Xinhua said. The state media outlet said Xi, when learning of victims’ losses and current needs, expressed sympathy and encouraged them to bolster their confidence to overcome difficulty. Xinhua said the president expressed hope that citizens could soon resume normal work and life, and that their lives would continue to improve. According to a video circulating on Chinese social media platforms, Xi told a group of villagers that when people encountered difficulties in China, they benefited from “the superiority of our socialism”, with the country giving its full support. “I hope the disaster relief and reconstruction work is successful and smooth,” he said in the video. Click here to read...

Health

How Daily Low-Dose Aspirin Could Help Reduce Type 2 Diabetes Risk

Older adults may be able to lower their risk of type 2 diabetes by taking daily low dose aspirin, new research suggests. Adults ages 65 and up who took 100 milligrams of aspirin daily were associated with a 15% lower risk of diabetes, according to the findings, which will be presented at the Annual Meeting of the European Association for the Study of Diabetes meeting in Hamburg, Germany, that runs from October 2 to 6. The findings show that daily aspirin improved fasting plasma glucose (FPG) levels (measuring blood sugar) and type 2 diabetes risk in older adults. However, low dose aspirin also increased the risk of hemorrhage and didn’t have a major impact on cardiovascular disease (CVD) risk. Before doctors start prescribing aspirin to help prevent diabetes, researchers need to continue investigating the drug’s impact and risks. “While this is exciting and encouraging, I’m skeptical about the magnitude of the results, and importantly, the abstract does not state the adverse events or risks involved,” Dr. Marilyn Tan, a clinical associate professor of medicine at Stanford University School of Medicine, told Healthline. The researchers wanted to understand the effects of low dose aspirin for older adults. They conducted a follow-up study on the results from a double-blind, placebo-controlled trial published in the New England Journal of Medicine in 2018. Click here to read...