Economic

U.S. to coordinate defence supply chains with Indo-Pacific partners

The U.S. will explore a new multilateral defence industry arrangement in the Indo-Pacific to prepare for possible conflicts in the region, the Pentagon's new strategy document noted Jan 10, following the success of American-led efforts to deliver weapons and ammunition to Ukraine. "We now have an opportunity to address those challenges, including increasing our production capacity and strengthening our supply chains," Kathleen Hicks, deputy secretary of defence, said in the first National Defense Industry Strategy document, adding that "as this strategy makes clear, we must act now." After the end of the Cold War, the document said, U.S. defence production capacity was consolidated and supply chains migrated overseas, while China substantially increased its domestic capacity." Over three decades, [China] became the global industrial powerhouse in many key areas -- from shipbuilding to critical minerals to microelectronics -- that vastly exceeds the capacity of not just the United States, but the combined output of our key European and Asian allies as well," the document said. To prepare for a crisis with China in mind, Washington envisions a new consultation group with allies and partners in the Indo-Pacific to deepen defence industry cooperation and address manufacturing production challenges. Click here to read...

China’s exports to US endure steepest plunge in nearly 30 years

China’s exports to the United States suffered their deepest decline in 2023 in almost three decades, as Washington’s efforts at re-shoring and “friend-shoring” supply chains create diversions. Total shipments from China to the US last year fell by 13.1 per cent compared to a year earlier, to US$500.3 billion, according to China customs data released on Jan 12.It is the biggest slump since the agency’s records began in 1995 – more than the declines experienced either during the global financial crisis of 2008-09 or the start of the US-China trade war in 2018-19.Still, analysts said, the dramatic drop – partly due to a high base in 2022 when US importers front-loaded inventory amid Covid-19 supply chain disruptions – does not prove a real reduction in the US reliance on “Made in China”. Rather, they contended, it indicates a lengthening of the global supply chains, in which China remains an important part. According to US data, China is also set to lose its position as the top exporter to the US for the first time in 17 years. From January to November in 2023, total US imports for consumption – those have physically cleared customs – from China were US$388 billion, outpaced by Mexico and even Canada, according to the US International Trade Commission. Click here to read...

Nikkei index closes above 34,400 for first time in 34 years

The Nikkei 225 index hit 34,441.72 when trading ended on Jan 10 its first close above 34,400 since March 1990 during the asset-inflated bubble economy. Semiconductor stocks led the surge in Tokyo, following a similar trend on the New York Stock Exchange. At one time during trading, the benchmark index increased by more than 770 points over the previous day’s close. It ended up 678.54 points, a 2.01-percent increase. Expectations of further monetary easing in the United States and Japan led to a rush of buy orders on the Tokyo Stock Exchange. Weak economic statistics in the United States have stoked expectations of an interest rate hike by the Federal Reserve, while the Bank of Japan is expected to continue its ultra-loose monetary policy to provide funds for rebuilding after the Noto Peninsula earthquake. The Nikkei average on Jan. 9 also reached a level not seen since the bubble economy. Over the two-day period, the index increased by a combined 1,000 points or so. Click here to read...

China to launch 26,000 satellites, vying with U.S. for space power

China will start building this year its own version of StarLink, a satellite internet constellation using low Earth orbit, with plans of launching some 26,000 satellites to cover the entire world led by state-run companies. Now that the military use of satellite-based communications systems for warfare in such places as Ukraine and Gaza is increasing, China will set up its own satellite network to compete with the U.S. as a "space power."The construction of a commercial spacecraft launch site for China's StarLink is underway near the Wenchang Space Launch Site, one of the country's spaceports for big rockets in the southern province of Hainan. The launch site will be used mainly by the China Satellite Network Group, wholly owned by the Chinese government. The group was founded in 2021 after Beijing informed the International Telecommunication Union (ITU) of its plan in 2020 to launch some 13,000 satellites to establish a high-speed internet network. China Satellite Network will launch about 1,300 satellites, or 10% of the planned number, from the first half of 2024 until 2029, according to Chinese media. This is hoped to pave the way for liftoff by 2035 to establish a network supporting high-speed 6G communications. Top executives of the group come from state-owned, military-industrial complex enterprises linked to China's People's Liberation Army. Click here to read...

Cosco to Stop Booking Ships to Israel as Houthi Threats Grow

Container shipping giant China Cosco Shipping Corp. is to stop delivering goods into Israel because of the threats and attacks that Houthi militants have made against vessels that sail there.Amir Shani, Deputy president at the Federation of Israeli Chambers of Commerce, an umbrella organization for more than 5,000 businesses, said that Cosco informed his organization’s member firms of the decision. A person with knowledge of the matter confirmed Cosco won’t take bookings into Israel from next week. Israel’s Foreign Ministry will discuss Cosco’s move with the Chinese ambassador soon, according to an Israeli source familiar with the matter who requested to remain anonymous due to the matter’s sensitivity. It won’t be the only matter discussed during the meeting. The Houthis, siding with Hamas in its war with Israel, are going after merchant ships that have any ties to Tel Aviv, even if those connections sometimes look tenuous at best. The attacks — including drones, missiles and hijackings — have made numerous owners avoid the southern Red Sea and, by extension, Egypt’s Suez Canal. Hundreds of vessels are now sailing around Africa instead. Cosco’s decision goes a step further and means at least one huge shipping company is now unwilling to send boxloads of goods to Israel. The Houthis have carried out at least 24 attacks on merchant ships since Nov. 19, according to US Central Command. Click here to read...

Xi, Biden and the $10 Trillion Cost of War over Taiwan

War over Taiwan would have a cost in blood and treasure so vast that even those unhappiest with the status quo have reason not to risk it. Bloomberg Economics estimate the price tag at around $10 trillion, equal to about 10% of global GDP — dwarfing the blow from the war in Ukraine, Covid pandemic and Global Financial Crisis. China’s rising economic and military heft, Taiwan’s burgeoning sense of national identity, and fractious relations between Beijing and Washington mean the conditions for a crisis are in place. With cross-Strait relations on the ballot, Taiwan’s Jan. 13 election is a potential flashpoint. Few put a high probability on an imminent Chinese invasion. The People’s Liberation Army isn’t massing troops on the coast. Reports of corruption in China’s military cast doubts on President Xi Jinping’s ability to wage a successful campaign. US officials say tensions eased somewhat at the November summit between President Joe Biden and Xi, who pledged “heart-warming” measures to woo foreign investors. Still, the outbreak of war in Ukraine and Gaza are reminders of how long-simmering tensions can erupt into conflict. Everyone from Wall Street investors to military planners and the swathe of businesses that rely on Taiwan’s semiconductors are already moving to hedge against the risk. Click here to read...

Russia Prepares Legal Battle to Stall Seizure of Frozen Reserves

Russia is devising a legal challenge to snarl any efforts by the US or Europe to confiscate some of its $300 billion in frozen central bank assets in favour of Ukraine, according to people familiar with the matter. Officials in Moscow, who are studying the possibility of the funds being seized, have concluded such an outcome is unlikely, they said, asking not to be identified because the information isn’t public. The Bank of Russia is currently nearing an agreement with international law firms to represent the country’s interests in case of a court showdown. Authorities also commissioned expert views analyzing the relevant legislation abroad and precedents in other countries, the people said. Urgency has grown for Russia at a time when discussions intensify among the US and its allies over the fate of the holdings blocked days after the February 2022 invasion of Ukraine. The issue is also in the spotlight with political divisions in the US and the European Union holding up more than $110 billion in aid to the government in Kyiv. In a shift for President Joe Biden’s administration, it’s now backing legislation that would let it seize some of Russia’s assets, Bloomberg reported this week. The White House wants to align the move with Group of Seven allies, particularly in Europe, where about two-thirds of the frozen Russian funds are held and where support for seizure, particularly unilaterally, has been tepid. Click here to read...

US Agrees Preliminary Deal with Africa on Trade-Access

The US has reached preliminary agreement with African nations to extend their preferential trade access by another decade, pending approval by Congress, South Africa’s trade minister said. “We reached broad agreement on the need to extend it for another 10 years,” Ebrahim Patel said at a business forum on the sidelines of an event held to mark the 112th anniversary of the founding of the African National Congress in eastern South Africa on Jan 12. The South African government sought to conclude the renewal of the deal early this year, enabling more than 30 African countries to continue exporting goods to the American market duty-free. Their special access under the so-called African Growth & Opportunities Act is scheduled to expire in September 2025. “Above all, we pointed to the need to increase the level of manufactured exports to the United States as part of our reindustrialization strategy,” Patel said. “We were able to engage with policymakers from more than 30 sub-Saharan African countries and the United States and to showcase the industrial strengths and capabilities of South Africa and the rest of the continent.” South Africa hosted a three-day annual forum on AGOA in November. The following month, American and African trade officials agreed that the accord’s current iteration needs modernization and stronger implementation. Click here to read...

US budget deficit tops half a trillion

The US federal budget deficit reached half a trillion dollars in the first three months of the new fiscal year as spending picked up while receipts shrank, the US Treasury revealed on Jan 11.In December alone, the US budget gap totalled $129 billion, up $44 billion, or 52%, from a year earlier, the data showed. For the first three months of the fiscal year 2024, which started on October 1, 2023, the US federal deficit surged by $89 billion, or by 21%, to reach $510 billion, up from the $421 billion shortfall over the same period the previous year. The jump in the deficit pushed total US government debt past the $34 trillion mark for the first time ever. According to the Treasury, outlays for December rose by 3% to $559 billion, a record for the month, partly due to higher Social Security expenses and interest payments on the public debt. Meanwhile, receipts for the month dropped by 6% to $429 billion. Between October and December, interest costs on the federal debt soared by $78 billion, to $288 billion, compared to the same period of last year as a series of rapid rate hikes by the Federal Reserve pushed interest expenses higher. With interest rates elevated as the Federal Reserve fights inflation, financing costs for the government in 2023 totalled nearly $660 billion, the data showed. Click here to read...

Economic cost of natural disasters estimated

Destructive thunderstorms and devastating earthquakes last year cost the world around $250 billion in damages, according to a new report issued this week by German reinsurance giant Munich Re. The figure is similar to what was recorded in 2022 and is close to the average of the previous five years, but above ten-year and 30-year trends. Overall, global insured losses for the year came in at $95 billion, down from $125 billion in 2022. The report indicated that earthquakes in Türkiye and Syria were the most destructive events last year, causing $50 billion in overall losses and $5.5 billion in losses covered by insurance. The quakes killed over 55,000 people, with a further 100,000 injured, according to the British Red Cross. Munich Re also pointed to a growing number of severe regional storms in the US and Europe as a result of climate change. “After years of relative calm, a series of devastating earthquakes led to humanitarian disasters. Around 63,000 people (85% of the year’s total fatalities) lost their lives as a result of such geophysical hazards in 2023 – more than at any time since 2010,” Munich Re stated. It noted that 2023 marks another year of “extremely high” damages even without any so-called mega-disasters in industrialized countries. Click here to read...

Egypt’s Suez Canal revenues plunge

Revenues generated by Egypt’s Suez Canal saw a 40% year-on-year decline in the first eleven days of 2024, canal authority head Osama Rabie said earlier this week. Ship traffic through the maritime artery connecting the Mediterranean and the Red Sea dropped 30% between January 1 and January 11 compared to the same period a year prior, the official noted, speaking on a talk show Jan 11 night. According to Rabie, the number of ships that have moved through the Suez Canal fell to 544 in the first eleven days of the current year compared to 777 in the equivalent period of 2023. He pointed out that the period of cargo transportation has increased by at least two weeks while costs for the delivery of goods and insurance were also growing. “The Cape of Good Hope is not a valid and safe route for ships to cross at this time, especially in light of bad weather and the long duration of the crossing,” the official said, adding that navigating around the African continent adds up to 15 days compared to passing through the Suez Canal. The canal is a major source of foreign currency for Egypt. In recent years, the country’s government has been trying hard to increase revenues generated by allowing commercial vessels through it. The route was expanded in 2015, with further enlargement underway. Click here to read...

Europe’s Growth Engine Is Broken

Germany is stuck in a rut, and there is no quick way out. The European powerhouse’s economy, the largest on the continent and the world’s fourth biggest, shrank last year, extending a six-year slump that is raising fears of deindustrialization and sapping support for governments across the region. Output in the country likely shrank by 0.3% in the three months through December from the previous quarter, the German federal statistics agency said Jan 15. For 2023 as a whole, it contracted by 0.3%, leaving it only 0.7% larger than in 2019, before the Covid-19 pandemic, the agency said. Other large eurozone economies likely grew last year, including France, Italy and Spain, according to European Union estimates. The downturn reflects a confluence of headwinds that are upending the country’s export-focused business model, from slower growth in China to higher energy prices and interest rates, mounting tensions around global trade, and a tricky transition to green energy. And with no sign that any of these cyclical and structural factors are about to improve, Germany’s prospects aren’t looking good.“I’ve never been so worried about the medium-term outlook for Germany,” said Dirk Schumacher, an economist with Natixis in Frankfurt who has been tracking the German economy for decades. The country’s gross domestic product is only 1% larger than it was at the end of 2017 after adjusting for inflation. Click here to read...

Hunt for Critical Minerals Draws World Powers to Saudi Arabia

The U.S., China and Russia are racing to secure critical metals needed to power the energy transition away from fossil fuels. Their latest battleground: oil-rich Saudi Arabia. Government officials and top mining executives descended on Riyadh this week to tap in to the gusher of cash the Saudis are pouring into mining investments. The kingdom is positioning itself at the center of a “super region” extending from Central Asia to the Middle East and Africa, which it says holds at least a third of the world’s natural resources, including critical minerals. Robust attendance at a mining conference held in the Saudi capital this week wasn’t solely about sealing financial deals, with foreign governments also eager to cement broader diplomatic relationships with the kingdom. Riyadh has worked to cast itself as a neutral party able to do business with all sides. Saudi leaders have reset relations with Washington, long the kingdom’s protector in the Persian Gulf, and developed closer ties with Russia and China in recent years. “We are in the middle of the world,” said Khalid al-Mudaifer, Saudi Arabia’s vice minister for mining. “Saudi Arabia is location-wise between three continents…we think we connect the whole world all together.” The kingdom expects some 75 billion riyals, equivalent to about $20 billion, worth of deals to have been struck during the three-day conference. The U.S. and Russia both signed memorandums of understanding with Saudi Arabia related to minerals. Click here to read...

Taiwan election: Beijing gives details on Fujian cross-strait ‘model zone’, 3 days before island votes in new president

Beijing has announced further details of its plan to make the coastal province of Fujian a “model zone” for integrated development with Taiwan, three days before the island elects a new president. It is the latest in several cross-strait economic policies announced by Beijing in the lead-up to Jan 13’s vote and criticised by Taiwan as coercive. The measures were jointly announced on Jan 09 by the mainland Ministry of Commerce, its top economic planning body the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Taiwan Affairs Office – the official agency managing cross-strait ties. This comes four months after Beijing announced sweeping guidelines on an “interconnected living” plan for Taiwan and Fujian, the south-eastern mainland province geographically and culturally closest to the island. But the Ministry of Commerce also hit out at Taiwan’s ruling Democratic Progressive Party (DPP) on Jan 09, saying it had not taken any “effective measures” to lift trade restrictions on mainland goods and warning of further retaliatory moves. Taiwan’s fisheries, machinery, automotive and textile sectors might be targeted for further suspension of preferential tariffs, a ministry spokesman told state broadcaster CCTV. However, Beijing’s carrot-and-stick trade approach to cross-strait ties has also seen a ban on Taiwanese grouper fish and some fruit imports being lifted. Click here to read...

China’s military and government acquire Nvidia chips despite U.S. ban

Chinese military bodies, state-run artificial intelligence research institutes and universities have over the past year purchased small batches of Nvidia semiconductors banned by the U.S. from export to China, a Reuters review of tender documents show. The sales by largely unknown Chinese suppliers highlight the difficulties Washington faces, despite its bans, in completely cutting off China’s access to advanced U.S. chips that could fuel breakthroughs in AI and sophisticated computers for its military.Buying or selling high-end U.S. chips is not illegal in China and the publicly available tender documents show dozens of Chinese entities have bought and taken receipt of Nvidia semiconductors since restrictions were imposed. These include its A100 and the more powerful H100 chip - whose exports to China and Hong Kong were banned in September 2022 - as well as the slower A800 and H800 chips Nvidia then developed for the Chinese market but which were also banned last October. The graphic processing units - a type of chip - that are built by Nvidia are widely seen as far superior to rival products for AI work as they can more efficiently process huge amounts of data needed for machine-learning tasks. The continued demand for and access to banned Nvidia chips also underlines the lack of good alternatives for Chinese firms despite the nascent development of rival products from Huawei and others. Click here to read...

Strategic

US and UK Strike Yemen’s Houthis after Red Sea Ship Attacks

The US and UK launched about 70 airstrikes on Houthi targets in Yemen early on Jan 12 in a bid to stop the Iran-backed group’s shipping attacks in the Red Sea. The Houthis appeared undeterred, vowing to continue targeting commercial vessels and saying they would expand their campaign “very soon.” They said all US and UK interests are now legitimate targets. Oil prices rose more than 4%, with Brent climbing above $80 a barrel for the first time since late December. The military action underscores the deepening fallout across the Middle East from the Israel-Hamas war, which has entered a fourth month. The Houthis started attacking ships in mid-November, ostensibly in support of Hamas, and have said they won’t back down until Israel stops fighting in Gaza. The US and its allies have worked to prevent any escalation. But the Houthis have ignored all their warnings over recent weeks to end the assaults, which have roiled global supply chains and pushed up freight costs. The strikes came hours after US President Joe Biden’s top diplomat, Antony Blinken, ended another whirlwind tour of the region to ease tensions. The Houthis said there were 73 strikes in total and that five fighters were killed. It’s unclear if any there were civilian casualties. American and British forces hit 16 sites including airports, radar installations and storage and launch sites for drones and missiles, according to the US military. Click here to read...

Taiwan elections 2024: president-elect William Lai faces new era with legislature in the balance

Taiwan’s president-elect will confront a new political era on day one in office, facing the prospect of a hostile legislature that could hobble any pro-independence agenda for the island. William Lai Ching-te, from the independence-leaning Democratic Progressive Party, fended off his Kuomintang (KMT) and Taiwan People’s Party (TPP) rivals in the presidential race on Jan 13 by winning 5.59 million votes or just over 40 per cent of the total. But the DPP lost its majority in the 113-seat Legislative Yuan, retaining just 51 of its previous 61 seats while the KMT added 14 to have 52 lawmakers. “This is a completely new scenario,” Ku Chung-hwa, a national policy adviser to President Tsai Ing-wen, said at a post-election forum in Taipei on Jan 14 morning. “While having won the presidential election, the DPP is actually in a situation where it is a minority in both popular votes and in the legislature,” Ku said at the event hosted by Citizen Congress Watch, an independent watchdog. It is the first time in 16 years that no party has had an absolute majority in the legislature, and the first time that a third party – the TPP with eight seats – has had a swing vote. The two remaining seats went to independents. Click here to read...

Blinken says path to a Palestinian state can stabilise region, isolate Iran

Offering Palestinians, a path to statehood can stabilise the Middle East and isolate Iran, US Secretary of State Antony Blinken has said as he wrapped his latest visit to the region amid Israel’s continuing war on Gaza. Speaking to reporters on Jan 11 after meeting Egyptian President Abdel Fattah el-Sisi, the US top diplomat said the region faced two paths, the first of which would see “Israel integrated, with security assurances and commitments from regional countries and as well from the United States, and a Palestinian state – at least a pathway to get to that state”. “The other path is to continue to see the terrorism, the nihilism, the destruction by Hamas, by the Houthis, by Hezbollah, all backed by Iran,” he said. “If you pursue the first path … that’s the single best way to isolate, to marginalise Iran and the proxies that are making so much trouble – for us and for pretty much everyone else in the region.” Blinken’s visit came a day after Egypt and Jordan warned that Israel’s military campaign, which has killed more than 23,000 people in Gaza according to the Health Ministry in the Palestinian territory, must not displace the strip’s 2.3 million people or end in an Israeli occupation. Blinken’s comments came after he visited several allies in the region, including Saudi Arabia, the United Arab Emirates, Qatar and Turkey in an effort to prevent the Gaza war setting off a regional conflagration. Click here to read...

Blinken Meets Top China Official on Cusp of Taiwan Elections

Secretary of State Antony Blinken met with a top Chinese foreign-policy official on Jan 12, as their nations work to re-establish contacts that had been severed as tensions rose in recent years. Blinken sat down in Washington with senior diplomat Liu Jianchao, who has been in the US for several days for talks with White House officials. Liu also met with Bridgewater Associates founder Ray Dalio and a handful of former Treasury Department officials. Liu heads the Communist Party’s International Department, which exercises a quiet but important role in Chinese diplomacy. A career diplomat who has also held several important Communist Party roles, Liu is widely expected to rise to a higher office — perhaps even foreign minister — in the future. The two sides discussed a range of issues including Taiwan, the Russia-Ukraine war, South Korea, the Middle East and the importance of upholding and defending navigational rights and freedoms in the Red Sea, according to a statement issued after the meeting. Earlier this month, President Xi Jinping said China wants to work with the US to improve ties between the world’s biggest economies. The Financial Times reported that President Joe Biden will send a bipartisan group of former top officials to Taiwan following the voting there. The US has made similar moves in the past, but the decision is still likely to irk Beijing. Click here to read...

U.S. and China hold defence talks ahead of Taiwan election

Senior U.S. and Chinese defence officials held a two-day dialogue that ended Jan 09, the latest effort to manage tensions just days before Taiwan's presidential election. The U.S. side "highlighted the importance of maintaining open lines of military-to-military communication in order to prevent competition from veering into conflict," Pentagon spokesperson Martin Meiners said in a statement, adding that the two countries will seek “future engagements between defence and military officials at multiple levels.”The two-day dialogue, officially known as the Defense Policy Coordination Talks (DPCT), is the first to take place since 2021, when the talks were held online during the pandemic. U.S. President Joe Biden and Chinese counterpart Xi Jinping agreed to resume the annual dialogue when they met in November. The U.S. was represented by Michael Chase, the deputy assistant secretary of defence for China, while Song Yanchao, who is the deputy director of the Central Military Commission's Office for International Military Cooperation, led Beijing's delegation. According to the Pentagon’s statement, Chase underscored the importance of freedom of navigation in the South China Sea as Chinese vessels repeatedly used water cannons against Philippine ships. They also discussed North Korea’s provocations, Taiwan and the war in Ukraine. The talks came after China named Dong Jun as defense minister in late December. Click here to read...

Pakistan court lifts lifetime election ban on ex-PM Nawaz Sharif

Pakistan's Supreme Court on Jan 08 scrapped lifetime bans on contesting elections for people with criminal convictions, paving the way for Nawaz Sharif to run for prime minister for a fourth time.Sharif's party, Pakistan Muslim League-Nawaz (PML-N), is considered a front runner to win elections scheduled for Feb. 8, with his main rival, former prime minister Imran Khan, in jail and barred from contesting for five years.In his ruling, Chief Justice Qazi Faez Isa, who headed a seven-member panel of judges, said the life bans "abridge the fundamental right of citizens to contest elections and vote for a candidate of their choice." The court's decision was six to one in favor of overruling a previous 2018 decision that imposed life bans on politicians convicted under certain provisions of the constitution. Sharif, 74, was found guilty in 2017 of dishonest practices. While Sharif was not an applicant in the latest case, which was filed by other politicians, the ruling makes him eligible to contest the polls as more than five years have elapsed since 2017. Khan, 71, whose party won the last elections in 2018, will not benefit from the ruling as it abolishes only life bans, which means the cricketer-turned-politician remains disqualified until 2028. Click here to read...

Bhutan opposition party wins election amid economic challenges

Voters in Bhutan backed the opposition People's Democratic Party, led by former Prime Minister Tshering Tobgay, in the final round of parliamentary elections Jan 09, local media reported. The party won a majority of seats in the lower house in the fourth general election held by the small Himalayan country since its 2008 transition to a constitutional monarchy. The ruling Druk Nyamrup Tshogpa Party had been eliminated in a preliminary round of voting in late November, leaving the final round as a contest between the People's Democratic Party and the new Bhutan Tendrel Party and guaranteeing a change of government. During the campaign, Tobgay criticized previous Prime Minister Lotay Tshering for the economy's poor recovery from the coronavirus pandemic. He set out a 15 billion ngultrum ($180 million) stimulus plan to attract foreign investment and expand the tourism sector. The government has moved to cut jobs in the public sector, the country's largest employer. The youth unemployment rate doubled over five years to 28.6% in 2022, and many young people have left for Australia. The next administration will face the challenge of turning around the ailing economy. Gross domestic product shrank 3.3% in 2021, the International Monetary Fund reports. Though the economy rebounded to a 5.3% expansion in 2023, growth is forecast to slow to 3% this year. Click here to read...

Indonesia's Jokowi begins trip to Philippines, Vietnam, Brunei

Indonesian President Joko "Jokowi" Widodo on Jan 09 left for the Philippines, Vietnam and Brunei to meet his counterparts in those countries. Widodo is slated to meet President Ferdinand Marcos Jr. on Jan 10 during his visit to the Philippines, as the neighbours work to enhance their security cooperation and economic ties against a backdrop of growing Chinese influence. "Indonesia and the Philippines [will] celebrate 75 years of diplomatic relations, and the Philippines is an important partner of Indonesia," Widodo told reporters before departing from Jakarta for Manila, referring to the anniversary in November this year. "Indonesian defence equipment products are purchased by the Philippines and Indonesia's investment in the Philippines is also quite significant," he added. Meanwhile, the Philippine government announced that Widodo's official visit will examine the progress of relations between the two Southeast Asian nations. Manila also stressed the visit is "expected to reaffirm their commitment to deepening and expanding Philippines-Indonesia ties."The latest trip by Widodo reciprocates Marcos' visit to Indonesia in September 2022, which was his first state visit following his election as president in May 2022. Widodo, meanwhile, is set to step down in October, when his second and final presidential term ends. Indonesia will hold a presidential election in February. Click here to read...

Biden: U.S. does not support Taiwan independence

U.S. President Joe Biden said on Jan 13 the United States does not support the independence of Taiwan, after Taiwanese voters rebuffed China and gave the ruling party a third presidential term. Earlier in the day, the Taiwanese ruling Democratic Progressive Party's (DPP) presidential candidate Lai Ching-te came to power, strongly rejecting Chinese pressure to spurn him, and pledged both to stand up to Beijing and seek talks. "We do not support independence..." Biden said, when asked for reaction to Jan 13's elections. Hours ahead of the polls opening, Washington had warned "it would be unacceptable" for "any" country to interfere in the election. Taiwan, a neighbouring island China claims as its own, has been a democratic success story since holding its first direct presidential election in 1996, the culmination of decades of struggle against authoritarian rule and martial law. The United States is Taiwan's most important international backer and arms supplier despite the lack of formal diplomatic ties with the island. U.S. Secretary of State Antony Blinken congratulated Lai Ching-te on his victory and said the United States "is committed to maintaining cross-strait peace and stability, and the peaceful resolution of differences, free from coercion and pressure."He said the U.S. looks forward to working with Lai and leaders of all parties in Taiwan to advance their "longstanding unofficial relationship, consistent with the U.S. one China policy." Click here to read...

North Korea’s Foreign Minister in Russia as Arms Ties Build

North Korean Foreign Minister Choe Son Hui arrived in Russia for a trip that could facilitate a visit by President Vladimir Putin to Pyongyang and enhance arms transfers that have replenished the Kremlin’s arsenal to attack Ukraine. Choe will be in Russia through Jan 10, North Korean state media said. This is her first trip to the country since September, when she joined Kim Jong Un for a visit in which he met Putin, who accepted an invitation from the North Korean leader for a reciprocal trip. The US and South Korea said soon after Kim’s visit, North Korea began shipping more than a million rounds of artillery and some of its newest ballistic missiles to Russia, which have made their way to the battlefield in Putin’s assault on Ukraine. The flood of munitions is coming as Kyiv’s stocks of certain types of weaponry are running thin. Choe is set to have talks with her counterpart Sergei Lavrov on Jan 09, Russia’s foreign ministry said to the Tass news wire. Lavrov travelled to Pyongyang in October in his first such trip there in about five years. Kim pledged at the end of last year to “develop the relations of strategic cooperation with the anti-imperialist independent countries,” and the visit of his foreign minister is worrisome because it could mean North Korea taking a more active role in global conflicts such as the war in Ukraine. Click here to read...

Ukraine Peace Plan Talks in Davos End with No Clear Path Forward

A meeting of national security advisers focused on Ukraine’s peace blueprint ended in Davos with no clear path forward ahead of the arrival of President Volodymyr Zelenskiy to the global gathering on Jan 09. Kyiv had hoped the meeting, held before the official start of the World Economic Forum in the Swiss mountain town, would help build backing for its 10-point peace plan among countries from the Global South, many of which have been reluctant to support Kyiv since Russia’s invasion almost two years ago. Swiss Foreign Minister Ignazio Cassis, who co-chaired the meeting, said the gathering clarified points up for discussion at some stage, but that neither Ukraine nor Russia - which wasn’t invited - is prepared to make territorial concessions. A leader-level meeting that Ukraine is keen to hold hasn’t been scheduled. At a press conference, presidential aide Andriy Yermak said Ukraine wasn’t pressured by partners to discuss giving up territory to Russia, almost two years after the invasion. A return to 1991 borders remains Ukraine’s strategic goal, said Defense Secretary Rustem Umerov. That would include Crimea, the peninsula illegally annexed by Russia in 2014. In general, Ukraine aims to leverage the annual gathering of political and business leaders in Davos this week to rekindle support and attention for its fight against Russia’s invasion. Click here to read...

US military moving fuel closer to Taiwan

The US has confirmed that it has transferred large amounts of fuel from a military base in Hawaii to storage facilities across Southeast Asia. The announcement came after a senator in the Philippines raised concerns that Washington is pre-positioning military supplies for a potential conflict with China over Taiwan. Tensions between Washington and Beijing have escalated in recent years over the self-governing island. China claims sovereignty over Taiwan while the US, despite officially recognizing Beijing’s ‘One-China’ policy, has continued to support the Taiwanese government and has vowed to protect the island in the event of a military conflict with Beijing. On Jan 11, a spokesperson for the US Embassy in Manila, Kanishka Gangopadhyay, confirmed that the US had delivered a fuel shipment from one of its naval bases in Hawaii to a commercial storage facility in Subic Bay – a former US military base. He added that the delivery was “one of multiple shipments of safe, clean fuel” but did not give any details about the actual size of the shipment. Gangopadhyay stressed, however, that the shipment was conducted in full cooperation with the relevant Philippines authorities. However, Philippines senator Imee Marcos, who serves as chairman of the Senate Committee on Foreign Relations, has insisted that the fuel transfer was done in “inexplicable silence” by both the Philippines and US governments, and decried the shipment of what she said was 39 million gallons of fuel. Click here to read...

U.K. Boosts Military Aid to Ukraine amid U.S. Deadlock

The U.K. government pledged nearly $3 billion in fresh military support for Ukraine on Jan 12, the latest example of Europe bolstering aid for the war-torn country as additional U.S. funding hangs in the balance amid deadlock in Congress. British Prime Minister Rishi Sunak announced the £2.5 billion package, which is £200 million more than the U.K. pledged last year, during a trip to Kyiv. Britain also said it would sign a long-term security-cooperation agreement with Ukraine guaranteeing “swift and sustained” assistance to the country should it ever be attacked by Russia again. “I am here today with one message: The U.K. will also not falter,” said Sunak in a statement. “We will stand with Ukraine, in their darkest hours and in the better times to come.” The agreement is a boost for the Ukrainian government, which has struggled to maintain momentum among Western donors as the war approaches a third year with no obvious sign of quick resolution. After repelling Moscow’s assault on Kyiv and seizing back swaths of territory in 2022, Ukraine’s military failed to score decisive victories on the battlefield last year. International attention has shifted to Israel’s war in Gaza and strikes in Yemen. Military and financial-aid packages currently worth over $100 billion are blocked in the U.S. and the European Union amid political disputes. Click here to read...

China, Iran sign policing pledge during Iranian police chief’s Beijing visit

Beijing and Tehran have pledged to strengthen their cooperation against terrorism and transnational crime, as well as to build law enforcement capacity, according to state media reports in China and Iran. Wang Xiaohong, the Chinese security minister, and Iranian police chief Ahmad Reza Radan signed a memorandum of understanding (MOU) for “law enforcement cooperation” during a meeting in Beijing on Jan 15. Neither China’s state news agency Xinhua nor its Iranian counterpart IRNA released the content of the memorandum, which follows a similar public security MOU signed by Tehran and Moscow last year. According to IRNA, the Iran-Russia MOU calls for “the expansion of security and law enforcement cooperation between the two sides and the exchange of experiences in dealing with factors that foment insecurity”. In his meeting with Wang, Radan expressed Iran’s willingness to further cooperation on potential technology for use by the two countries’ police forces, IRNA said. The first day of Radan’s visit to China included a tour of the public security ministry’s technology centre, where he was informed of “the latest scientific, technical and technological developments” aligned with police missions in China, IRNA said. “This centre has been successful in using modern equipment to make the police’s capabilities scientific and operational and to improve them,” Radan said, according to the IRNA report. Click here to read...

NATO allies Turkey, Romania, Bulgaria sign deal to clear Black Sea mines

Turkey, Romania and Bulgaria have signed an agreement to clear mines drifting in the Black Sea that have posed a threat to shipping since the start of Russia’s war in Ukraine. On Jan 11, Turkish Defence Minister Yasar Guler said the deal establishes a Mine Countermeasures Task Group among the three NATO allies to deal with the mines as he met in Istanbul with his Romanian counterpart, Angel Tilvar, and Bulgarian Deputy Defence Minister Atanas Zapryanov. Zapryanov said mines pose a “danger to ports, communication networks and key water infrastructure” while Tilvar added that Russia’s “disdain for the norms of international law and its aggression in the Black Sea is not only a regional problem but also a problem with global consequences”. Sea mines have posed a threat to Ukraine’s Black Sea export routes since Russia’s invasion in February 2022, and several commercial ships have been hit, including a bulk carrier heading to a Danube River port to load grain in December. Ukraine has two main ports on the Danube – Reni and Izmail – which have become central to the country’s grain exports since Russia’s blockade of Ukraine’s Black Sea ports and Moscow’s withdrawal in July from a United Nations-backed agreement that had allowed grain shipments safe passage across the Black Sea. Three mine hunting ships from each country and one command-control ship will be assigned to the initiative, a Turkish Ministry of National Defence official said. Click here to read...

Health

Norovirus spreads among quake evacuees in Ishikawa

Gastrointestinal infectious diseases, including the norovirus, are spreading in evacuation centers sheltering victims of the New Year’s Day earthquake in Ishikawa Prefecture. About 30 cases had been confirmed by Jan. 8 in evacuation centers and nursing care facilities in the prefecture, health minister Keizo Takemi said on Jan. 9.The ministry has dispatched a disaster infection control support team, including two specialists from the National Center for Global Health and Medicine to the prefecture. The government decided at a Cabinet meeting on Jan. 9 to spend 4.74 billion yen ($33 million) in reserve funds set aside in the fiscal 2023 budget to provide relief supplies to areas trying to recover from the Jan. 1 magnitude-7.6 earthquake. Most of the hardest-hit municipalities are in the Noto Peninsula. Prime Minister Fumio Kishida later said at a meeting of the Headquarters for Emergency Disaster Response that the government will not wait for requests for help from the affected areas. “We will swiftly execute this allocation to accelerate push-type support, with the hope of using it to improve the situation in the areas,” he said. Separately, the government plans to increase the amount of reserve funds earmarked under the fiscal 2024 draft budget for disaster restoration and reconstruction measures. The amount is currently 500 billion yen. Click here to read...