Global Developments and Analysis: Weekly Monitor, 19 December - 25 December, 2022

Economic

A Crisis Is Looming For the U.S. Energy Grid

As U.S. energy infrastructure continues to go largely neglected and city populations keep rising, certain regions of America are under threat of electricity shortages for several years to come. In addition to inadequate energy infrastructure, the rise of renewable power sources and the growing countrywide energy demand are putting pressure on the grid like never before. The Midwest and South-Central U.S. appear to be most at risk of electricity shortages according to a recent analysis. These regions fall into the “high risk” and “elevated risk” categories. The shortages are most likely to be seen during peak energy usage times, according to the North American Electric Reliability Corporation (NERC). There is a multitude of reasons for the shortages, largely centered around America’s aging energy infrastructure. At present, across the Midwest, a larger quantity of power generation is going offline than new electricity being brought online. This has meant shortages in the region since 2018. In contrast, California uses a wide mix of electricity sources, including renewable energy options such as solar power, which is not consistent. In addition, the demand varies throughout the day, with peak times failing to coincide with high-solar power output times. The energy issues have also been spurred by a general global shortage of LNG following the Russian invasion of Ukraine and subsequent sanctions on Russian energy. Click here to read... [2]

Russia Didn’t Consult With OPEC+ Over Price Cap Retaliation

Russia has the sovereign right to respond to the G7 oil price cap, and it hasn’t consulted with OPEC+ over the response, Kremlin spokesman Dmitry Peskov said on Dec 28. On Dec 27, Russian President Vladimir Putin banned the sale of Russian oil to countries that have joined the so-called Price Cap Coalition and comply with the cap imposed by the Western countries. The Russian move was weeks in the making and follows the start of the price cap mechanism that the G7, the EU, and Australia implemented on December 5. The EU and G7 banned maritime transportation services from shipping Russia’s crude oil to third countries if the oil is bought above the price cap of $60 per barrel, and the EU imposed an embargo on seaborne imports of Russian oil into the bloc. A decree signed by Putin on Dec 27 bans the sale of Russian oil to countries that comply with the price cap and will be in effect from February 1 to July 1, 2023. Russia has the right to respond to “illegal measures” as it sees fit, Putin’s spokesman Peskov said today. While Russia hasn’t consulted fellow OPEC+ producers over its response to the price cap, Moscow and the other members of the group are in contact on other issues, Peskov added. Click here to read... [3]

Putin inspects Russian defense industry 'capital'

Russian President Vladimir Putin met with top defense industry executives in Tula on Dec 23, laying out his expectations for supplying the military in 2023 amid the ongoing conflict in Ukraine. The president also reminded them of a practice successfully developed in fighting against Islamic State terrorists in Syria. “The most important and key objective of the defense industry is to provide our frontline units with all the necessary weapons, vehicles, ammunition and equipment, of the required quality and in the required numbers. On a short deadline,” he said. The second objective will be to “improve and substantially upgrade” the performance of certain weapons systems, in line with the experiences gained in the fighting in Ukraine, the Russian president added. Industry specialists are working “right on the frontlines” to repair any damaged equipment and evaluate its combat performance, Putin pointed out. This is then transmitted back to the factories, where their colleagues make the recommended improvements. This practice must remain efficient and become permanent, he added. “We began doing this a while back, when we used our weapons against the terrorist groups in Syria,” Putin said. “I know that your employees also went to Syria. They made decisions on the spot. They did a good job then and continue doing a good job now.” Click here to read... [4]

Biden signs $858bn defense bill including funds for Taiwan, allies

U.S. President Joe Biden on Dec 23 signed into law an $858 billion defense policy bill set to increase security cooperation with Taiwan by providing billions in aid over the coming years, while continuing to invest in alliances and partnerships amid China's assertiveness and Russian threats. The National Defense Authorization Act for fiscal 2023 through next September authorizes about 10 percent more in spending than last year's budget, with $11.5 billion eyed for an initiative to enhance U.S. deterrence and defence in the Indo-Pacific. The law increased the authorized defense funding by $45 billion above Biden's budget request, partly to address the effects of inflation, according to a summary of the bill issued by the U.S. Senate Committee on Armed Services earlier this month. It focuses on "the most vital national security priorities for the United States, including strategic competition with China and Russia," the summary said. As Taiwan faces growing pressure from China, which endeavours to bring the self-ruled democratic island back into its fold, by force if necessary, the legislation authorized up to $10 billion in security assistance over the next five years to modernize Taiwan's security capabilities to deter aggression by Beijing. Taiwan and mainland China have been governed separately since they split in 1949 due to a civil war. Click here to read... [5]

Soaring energy prices cost EU $1 trillion – Bloomberg

EU member states have spent roughly a trillion dollars (€940 billion) in the face of the bloc's worst energy crisis in decades; Bloomberg is reporting on Dec 18, citing calculations based on market data. Soaring energy prices have sent its economies plunging into recession as most member states opted to stop importing gas from Russia, facing the necessity to turn to more expensive supplies. The agency highlighted that the total estimated losses marks just the beginning of a full-scale crisis, as a period of high prices for energy could last years, while aid is already becoming unaffordable.The security of energy supply is expected to remain an issue beyond next winter after the filled gas storage facilities across the region are emptied. The nations of the EU will have to refill their gas reserves for the next cold season with no deliveries from Russia, which also heats up competition for tankers. Even with more import terminals for liquefied natural gas (LNG) coming online, the crisis will reportedly loosen its grip only in 2026, when additional production capacity from the US or Qatar becomes available. At the same time, prices should remain high to attract LNG away from other buyers from energy-hungry Asian buyers.A state of emergency could linger for years, according to Brussels-based think tank Bruegel, as quoted by Bloomberg. Click here to read... [6]

Russia top destination for Ukrainian refugees – report

Ukrainian refugees fleeing their homeland in 2022 have resettled in Russia more than any other country, according to a report by Statista published last week. It revealed some 2,852,395 people had left their conflict-stricken homeland for the neighbouring country as of October. Trailing Russia in a distant second is Poland, which hosted 1,529,355 Ukrainian refugees as of December. Another 1,021,667 have fled to Germany as of November, while Czechia is home to 467,862, according to numbers from earlier this month. While Russia and Poland border Ukraine and thus present closer destinations for its inhabitants, Germany has attracted an outsized number of displaced people with its large financial support payments, which amounted to €449 ($475) per month as of June. Poland, by comparison, offered just over €15 ($16). Since the start of Russia’s military operation in Ukraine in February, 4.8 million Ukrainians have registered for the EU’s Temporary Protection Directive, which assures refugees access to living quarters, healthcare, welfare and other benefits, or other European refugee schemes. More than 7.8 million Ukrainians have been displaced this year in the conflict, which grew out of the previous eight years of fighting between the Western-backed government in Kiev and what were then the independent republics of Donetsk and Lugansk. Click here to read... [7]

Companies from Europe make up 44 of top 100 overseas investors in China: Hurun report

Companies from Europe account for nearly half of the top 100 overseas investors in China, according to a report released by the Hurun Research Institute on Dec 21, which highlights the close bilateral relationship between China and Europe. The report, called the Hurun Largest Foreign & HK/Macao/Taiwan Companies in China 2022, includes a list of the top 100 firms from these areas that made the greatest contribution to the economy, based on their sales and number of employees in the Chinese mainland. This is the second year the list has been produced. Companies on the list recorded combined sales of $1 trillion in the Chinese mainland last year, equivalent to 7 percent of the country's GDP. The companies employed just under 3 million people in China, at an average of 30,000 employees per company. In terms of business model, 59 percent are direct-to-consumer, while 41percent are business-to-business firms. Overall, 81percent sold physical products and 19 percent sold software or services. The top 10 on the list are Hon Hai Precision Industry Co, Volkswagen, Apple, General Motors, Charoen Pokphand, HSBC, Robert Bosch, Toyota Motor, Samsung Electronics and BMW. By country, the largest number of companies is from the US, followed by Japan, the UK, Germany and France, with the top five countries accounting for more than 80 percent of the Top 100. By continent, Europe contributed nearly half of the Top 100, Hurun Report Chairman and Chief Researcher Rupert Hoogewerf said. Click here to read... [8]

Chinese firms urged to look overseas as Covid supply chain disruptions drive friendshoring trend

China should encourage its companies – including platform firms – to participate in the regrouping of overseas industrial chains, as many developed countries look to reshore or friendshore production, a senior state researcher has said. The call from Zhuo Xian, senior fellow at the Development Research Centre of the State Council, or China’s cabinet, comes as Beijing anticipates a more turbulent international environment in the coming year. The headwinds faced by China include a potential global recession, bigger efforts to contain its technological advancements, and rising trade protectionism. But China holds a key advantage – a significant role in global supply chains, accounting for about one-third of the world’s industrial output. This is likely to prevent the US from total economic decoupling, though fresh challenges for China include an unprecedented surge in Covid-19 infections and other points of international rivalry. “Chinese companies should go out further,” Zhuo said in an interview with The Paper, a Shanghai-based digital daily, published on Dec 23. “If we don’t do it, we risk giving up our leadership in global production networks.” Chinese policymakers have long sought to maintain the smooth operation of industrial chains to ensure global supplies remain steady. They have also continued to roll out the red carpet for foreign investors, as part of an endeavour to consolidate China’s status as the world’s manufacturing hub. Click here to read... [9]

China’s debt distress among local governments seen rising in 2023, with hard-to-reach economic targets

With questions mounting as to whether China’s policymakers will be able to continue supporting economic growth by spending more, some analysts say financial distress could rise next year even in the nation’s affluent eastern region that includes Shanghai. That powerhouse region, which has been a driving force behind China’s economic growth over the past few decades, was hit hard by months-long lockdowns earlier this year. And while analysts note that Beijing’s recent U-turn in zero-Covid policy will support economic growth, they also warn that local governments may not see a quick uptick in income from taxes or land sales. Meanwhile, their debt is rising. “The overall tax revenue in the eastern region is in a sluggish trend. Under the continuous impact of the outbreaks, the economic recovery of the eastern provinces and cities is slow,” a note by the Topsperity Securities financial group said last week. China’s international hub, Shanghai, which resorted to widespread lockdowns to stamp out coronavirus infections, plans to tap into its fiscal reserves amid a revenue shortfall, local finance authorities said last month. The city government has already asked the central government for more money – to the tune of 16.7 billion yuan (US$2.4 billion) – while slashing local spending by 4.3 billion yuan to trim its funding cap. Click here to read... [10]

‘China has turned the corner’: foreign business groups welcome post-Covid reopening plan

China’s latest reopening plan will help to rebuild foreign investors’ confidence in the Chinese market and go some way to repairing external relations, according to foreign business groups in the country. Beijing announced on Dec 26 that it was dropping centralised quarantine and most Covid-19 testing for inbound travellers from January 8, making its biggest move yet to reopening its borders. It also said it would gradually resume international flights and smooth visa applications for businesspeople, students and family reunions. Foreign business groups welcomed the decision, given quarantine and travel restrictions had been their major concern over the past three years of the pandemic. Colm Rafferty, chairman of the American Chamber of Commerce (AmCham) in China, said the end to quarantine “clears the way for resumption of normal business travel”. “It finally feels as if China has turned the corner,” Rafferty said. Jens Hildebrandt, executive director of the German Chamber of Commerce in China, said the announcement was welcome because the situation was “crushing business confidence” among German companies this year. “Trust in doing business in China will return if the Chinese government takes decisive action to revitalise the economy and further facilitates business travel,” he said. Since the pandemic erupted three years ago, China has imposed tough controls to prevent the spread of the virus, including quarantine and compulsory PCR testing, fewer incoming flights and suspension of outbound travel. Click here to read... [11]

Kishida Cabinet set to drastically alter post-2011 nuclear policy

Prime Minister Fumio Kishida’s Cabinet is preparing for a major change in its nuclear policy that would mean utilizing the energy source much more and far into the future. The basic direction for bringing about a green transformation toward a carbon-neutral future will be using nuclear energy as much as possible, according to the draft of a proposal for nuclear energy policy compiled on Dec. 22. This would alter provisions in place since the triple meltdown at the Fukushima No. 1 nuclear power plant in 2011. It means that not only will nuclear reactors be allowed to operate 60 years after they started operations; constructing new nuclear plants will again be on the table. A meeting on Dec. 22 to discuss the move toward a carbon-neutral society by 2050 saw the approval of the draft, and the Cabinet is expected to give its approval early next year. After the Fukushima disaster, the government stance had been that it was not considering building new nuclear plants. Under the new basic policy direction draft, however, constructing next-generation nuclear plants would be considered when a reactor is to be decommissioned. The draft also calls for considering adding new reactors to existing nuclear plants. The other major change pertains to the operating life of reactors.

A new rule after the Fukushima disaster was that reactors would only be allowed to operate for 40 years, with a one-time extension of 20 years, at most. Click here to read... [12]

Suppliers pulling out of defense industry despite new arms push in Japan

Key Japanese defense contractors, citing low profitability margins and export curbs, are pulling out of the industry even as the government forges ahead with a historic increase in spending to bolster national security. Prime Minister Fumio Kishida has ordered defense spending to rise to 43 trillion yen ($312 billion) over the five years through fiscal 2027 to bring such outlays to the equivalent of 2 percent of gross domestic product, about double the current figure. Shimadzu Corp. is among major players considering an exit from the sector. “We are, unfortunately, struggling in the defense business,” Shimadzu President Yasunori Yamamoto told a news conference to announce the company’s settlement of accounts in November. “I don’t believe there will be a dramatic rebound leading to a vigorous growth in sales.”At Shimadzu’s aircraft equipment business arm, defense-related sales account for 80 percent of the total. The manufacturer classifies the business arm as one “for reorganization,” where the lowest priority is assigned with regard to the allocation of management resources. The company supplies flight-deck displays for Self-Defense Forces aircraft, among other products. Its proceeds from the defense arm have stalled at around 20 billion yen annually in recent years. Yamamoto said the company will be “considering all options” and is not ruling out a business handover or a tie-up with other companies. Click here to read... [13]

China's Xinjiang obfuscates trade data after U.S. import ban

The local government in China's Xinjiang region has scrubbed detailed data on monthly exports from its customs website after the U.S. slapped a ban on shipments over forced labour concerns. However, the breakdown of shipments can still be accessed through the national government's customs portal. Far-western Xinjiang -- where China stands accused of committing widespread human rights violations against Uyghurs and other ethnic minorities -- is a hub for agricultural staples and raw materials. It is also the country's top cotton producer.Until August, the local government published monthly trade data that included details such as the value and volume of exports from the region with product descriptions and destination countries providing a clear snapshot of where products would be shipped to. Similar specifics about imports into Xinjiang were also made public. The latest data for August showed shipments to the U.S. had doubled to $56 million, a 592% jump from a year earlier. But those comprehensive figures have not been published for the past three months on Xinjiang's local customs website. Data published on the Urumqi Customs website now only reveals total value and forms of shipments, types of trade and whether the companies involved are foreign, state-owned or private. But the central government's customs portal revealed Xinjiang exports to the U.S. dropped in October to $24.7 million. Click here to read... [14]

Japan Inflation Hits Four-Decade High, Pressuring Central Bank in 2023

Japan’s core inflation rose at the fastest pace in nearly 41 years in November, fuelling market speculation that the Bank of Japan would look to tighten monetary policy in 2023. After the central bank’s surprise move Dec 20 to raise its cap on a key interest rate, market watchers are split over whether more is coming next year. But they agree inflation will be a key factor in the decision.Core consumer prices—a measure that covers all prices except fresh food—rose 3.7% from a year earlier in November, the fastest pace since December 1981, government data showed Dec 23. Beneath the headline figure are other signs that Japan has broken out of its decades long rut of near-zero price changes. If so, that would give the Bank of Japan more room to consider fully unwinding the easing framework that Gov. Haruhiko Kuroda has built up after nearly a decade on the job. Mr. Kuroda’s policies include negative short-term rates and a cap on the yield of the 10-year government bond. On Dec 20, the bank raised that cap to 0.5% from 0.25%, driving up interest rates across the board. Daiwa Securities economist Mari Iwashita said the framework could be up for review as soon as next summer under a new BOJ governor. Mr. Kuroda’s term expires in April, after two more policy meetings, and he is expected to step down. Click here to read... [15]

Unionization Stalls at Amazon as Turnover, Company Efforts Stymie Activism

When thousands of workers at an Amazon Inc. warehouse in New York voted to unionize earlier this year, Nannette Plascencia thought her facility east of Los Angeles could be among those to vote next. She spent months organizing with other employees, holding meetings and passing out fliers outside her warehouse in Moreno Valley, Calif. In October, shortly after filing to hold a union election, Ms. Plascencia and other supporters learned they didn’t have enough proof of support for federal officials to call an election. “It’s hard to get to all of our co-workers,” Ms. Plascencia said, referring to the more than 2,000 employees who work at the warehouse, one of several in the area. Labour activists were filled with anticipation after Amazon employees in Staten Island, New York, voted in April to unionize, marking a victory for organizers at one of the country’s most powerful technology companies. The challenges Ms. Plascencia has faced haven’t been unique. Thousands of workers at three other Amazon facilities, two in New York and one in Alabama, have voted against unionization this year, and organizing work at other Amazon facilities has failed to gain traction. In interviews, Amazon workers said that was largely because of high turnover and what some see as relatively good pay and benefits at the tech company’s warehouses compared with similar work elsewhere. Click here to read... [16]

Strategic

Explainer |Ukraine war: what is Zelensky’s 10-point peace plan?

Ukraine’s President Volodymyr Zelensky has been vigorously promoting his 10-point peace plan, discussing it with US President Joe Biden among others, and urging world leaders to hold a Global Peace Summit based on it. What is Zelensky’s 10-point peace plan? Zelensky first announced his peace formula at a November summit of the Group of 20 (G20) major economies. The plan calls for:1. Radiation and nuclear safety, focusing on restoring safety around Europe’s largest nuclear power plant, Zaporizhzhia in Ukraine, which is now-Russian occupied. 2. Food security, including protecting and ensuring Ukraine’s grain exports to the world’s poorest nations. 3. Energy security, with focus on price restrictions on Russian energy resources, as well as aiding Ukraine with restoring its power infrastructure, half of which has been damaged by Russian attacks. 4. Release of all prisoners and deportees, including war prisoners and children deported to Russia. 5. Restoring Ukraine’s territorial integrity and Russia reaffirming it according to the UN Charter, which Zelensky said is “not up to negotiations”. 6. Withdrawal of Russian troops and cessation of hostilities, restoration of Ukraine’s state borders with Russia. 7. Justice, including the establishment of a special tribunal to prosecute Russian war crimes. 8. Ecocide, protection of environment, with focus on demining and restoring water treatment facilities. 9. Prevention of escalation of conflict and building security architecture in the Euro-Atlantic space, including guarantees for Ukraine. 10. Confirmation of the war’s end, including a document signed by the involved parties. Click here to read... [17]

Kremlin assesses Zelensky-Biden meeting

Washington seems intent on waging a proxy war against Russia using Ukraine as a tool, Kremlin spokesperson Dmitry Peskov has said. He added that the main takeaway from Dec 21’s meeting between the two countries’ leaders is that neither the US nor Ukraine is prepared to pay attention to Russia’s concerns. “Of course, we were following this [meeting], we were getting acquainted with all the incoming information,” Peskov told journalists on Dec 22. He added that in Moscow’s eyes, “neither President [Joe] Biden nor President [Vladimir] Zelensky uttered any words that could be construed as, so to speak, potential readiness to take heed of Russia’s concerns.” The Kremlin spokesperson went on to lament the fact that the US president had failed to warn his Ukrainian colleague against shelling residential areas in Donbass. He also said that neither side called for peace. According to Peskov, the US is continuing to wage war against Russia indirectly, “to the last Ukrainian.” He also noted that further weapons deliveries from the US and other countries will only serve to prolong the suffering of the Ukrainian people. On Dec 21, Zelensky arrived in Washington for his first official foreign visit since Russia launched its military operation in Ukraine in late February. During his meeting with Biden at the White House, the US president pledged to back Kiev for “as long as it takes.” Click here to read... [18]

Putin says Russia wants end to war in Ukraine

President Vladimir Putin said on Dec 22 that Russia wants an end to the war in Ukraine and that this would inevitably involve a diplomatic solution. Putin made the comments a day after U.S. President Joe Biden hosted Ukrainian President Volodymyr Zelenskiy in the White House and promised him continued and unwavering U.S. support. "Our goal is not to spin the flywheel of military conflict, but, on the contrary, to end this war," Putin said. "We will strive for an end to this, and the sooner the better, of course." White House spokesman John Kirby said Putin has "shown absolutely zero indication that he's willing to negotiate" an end to the war, which began when Moscow sent troops into Ukraine on Feb. 24. Kirby reiterated that Biden was open to talks with Putin, but only after the Russian leader "showed a seriousness about negotiations" and after consultations with Ukraine and U.S. allies. Russia has persistently said it is open to negotiations, but Ukraine and its allies suspect a ploy to buy time after a series of Russian defeats and retreats that have swung the momentum of the 10-month war in favour of Kyiv."I have said many times: the intensification of hostilities leads to unjustified losses," Putin told reporters. "All armed conflicts end one way or another with some kind of negotiations on the diplomatic track," he added. Click here to read... [19]

Japan’s manpower-light defense strategy is a flawed ‘paper plan,’ officers say

Japan’s plan to undertake its biggest military build-up since World War Two without increasing headcount is flawed, former and serving officers told Reuters, casting doubt over the country’s efforts to deter regional rivals China and North Korea. The five-year plan unveiled on Dec 23 will double Japan’s defense spending and add new capabilities, including long-range missiles and an expanded cyber warfare unit. It will not, however, boost the size of its military, called the Self-Defense Forces (SDF), above a ceiling of 247,000 people set more than a decade ago. Instead, it will retire attack helicopters, search-and-rescue planes and old warships in favour of drones and vessels that require fewer sailors, while also relying on civilian contractors for training and some limited support operations. “It is just a paper plan and that should be corrected,” said Yoji Koda, a retired navy admiral, who commanded the Japanese fleet in 2007-2008. “Manpower is the real issue for Japan to defend against China and North Korea,” he added. Koda said the plan would limit Japan’s ability to fight in situations such as land invasions and sea battles, giving its foes an advantage. Some serving officers also doubt the practicalities of the plan. While pivoting to drones could avoid casualties in combat, such a move would take years and require more staff to maintain and operate them, one senior officer in Japan’s air force told Reuters, requesting anonymity because he is not authorized to talk to the media. Click here to read... [20]

Australian minister in China after long break in relations

Australia’s foreign minister is in China for talks seeking to mend a long break in high-level ties that have prompted trade sanctions and political frictions. On arriving in Beijing, Penny Wong thanked China for the invitation, which comes on the anniversary of 50 years of official diplomatic relations between the nations. Wong said she looked forward to meetings “discussing many of the issues that are important to us.” She was due to meet with Chinese Foreign Minister Wang Yi later Dec 21. Wong’s visit is the first by an Australian foreign minister to China in four years and is raising hopes that Australia will make progress on ending China’s blocks on Australian commodity imports and freeing two Australian citizens detained in China. Wong said she would continue to advocate for detained Australians, without giving details. Wong’s trip furthers a tentative thaw in relations between the two nations since Australian Prime Minister Anthony Albanese won an election victory in May, replacing the more conservative Scott Morrison in the top role. Albanese and Chinese President Xi Jinping met on the sidelines of the Group of 20 summit last month in Bali, the first such formal meeting between the leaders of the two nations in six years. Relations between Australia and China have been poor since China imposed trade barriers and refused high-level exchanges in response to Australia enacting rules targeting foreign interference in its domestic politics and calling for an independent inquiry into the COVID-19 pandemic. Click here to read... [21]

PLA drills around Taiwan break August record targeting US move

The joint drills by the Chinese People's Liberation Army (PLA) around the island of Taiwan on Dec 25 in response to the recent escalation in the US-Taiwan collusion were record-breaking, surpassing even the peak number observed in the large-scale PLA drills held in August following US House Speaker Nancy Pelosi's provocative visit to Taiwan, as the PLA again demonstrated its capabilities in blockading the island and shutting down all external interference attempts, experts said on Dec 26. After announcing the cross-service joint combat alert patrols and joint fire strike exercises in maritime and aerial areas around the island of Taiwan on Dec 25, the PLA Eastern Theatre Command on Dec 26 released a video documenting the operation. Fighter jets, bombers and warships took part in the drills, and the warplanes were close enough to the island of Taiwan to see the island's Central Mountain Range with the naked eye, according to the video. "Taiwan is an inalienable part of China, and our operation aims to safeguard peace and stability in the Taiwan Straits. We will take any necessary countermeasure," a naval officer said in a radio broadcast on board a warship, the video shows.The armed forces on the island of Taiwan were able to detect 71 PLA warplanes, and seven PLA warships were observed around the island from 6 am on Dec 25 to 6 am on Dec 26, according to a press release on Dec 26 by the island's defense authority. Click here to read... [22]

Xi-Medvedev meeting highlights bilateral ties; could promote ‘more profound and actual progress of peace talks’

Chinese President Xi Jinping, also the general secretary of the Communist Party of China (CPC) Central Committee, on Dec 21 met with Chairman of the United Russia party Dmitry Medvedev, who visited China at the invitation of the CPC. The two sides highlighted the high level of China-Russia relations and discussed the Ukraine crisis, with experts expecting the move could promote progress in peace talks. The meeting also took place coincidently at a time when the two countries' navies kicked off a joint exercise, which analysts said reflects the two countries' mutual trust and will contribute to peace and stability. While requesting Medvedev convey kind regards and best wishes to Russian President Vladimir Putin, Xi said the institutionalized exchanges between the CPC and the United Russia party over the long term have become a unique channel and platform for the two countries to consolidate political mutual trust, promote mutually beneficial cooperation, and demonstrate strategic coordination. Xi noted that over the past decade, China-Russia relations have withstood the test of international changes and maintained sound, steady and high-level development. He said that developing a China-Russia comprehensive strategic partnership of coordination for a new era is a long-term strategic choice that the two sides have made based on their respective national conditions. China is ready to work with Russia to push forward China-Russia relations in the new era and make global governance more just and equitable, Xi said. Click here to read... [23]

US Space Force practices for war in Europe

The US Space Force has conducted joint drills with UK, Canada and Australia – the largest such exercises in its history – to hone its readiness for a hypothetical war in Europe, according to a statement by the Space Training and Readiness Command (STAR). Three so-called Space Flag 23-1 drills, each lasting two days, were conducted earlier this month at Schriever Space Force Base in Colorado. The exercises enabled participants to practice “orbital warfare techniques, our electronic warfare techniques, our space-domain-awareness techniques and intelligence command,” Space Force Lieutenant Colonel Albert Harris said. “This Space Flag focused on a US European Command scenario, so we wanted to present the problem in that theatre and exercise our ability to win it based off of various problems that we presented to the team,” Harris added. The event marked the first Space Force drills that practiced for European war and just happened to come amid escalating tensions between Washington and Moscow over the Russia-Ukraine conflict. Harris said planning for the exercises began in February, the same month in which Russia began its military operation in Ukraine. Troops were given Europe-specific problems to solve during mission planning and practiced procedures to increase their readiness to win a conflict on the continent, but the exact scenarios remain a mystery. Colonel Jason Schramm said the drills enabled US forces and coalition partners to practice their space combat tactics. Click here to read... [24]

Iran and EU signal continued work on nuclear deal in Jordan

The top foreign policy representatives of Iran and the European Union have signalled that efforts to restore the country’s 2015 nuclear deal will continue, after they held a meeting in Jordan. Iran’s Foreign Minister Hossein Amirabdollahian and the bloc’s foreign policy chief Josep Borrell sat down on the sidelines of the second meeting of the Baghdad Conference for Cooperation and Partnership hosted by Jordan’s King Abdullah on Dec 20. Iran’s top negotiator in the nuclear talks, Ali Bagheri Kani, and the bloc’s coordinator, Enrique Mora, were also present. Borrell wrote on Twitter following the meeting that it was a “necessary” talk amid “deteriorating Iran-EU relations”. “Stressed need to immediately stop military support to Russia and internal repression in Iran” he wrote, adding that the two sides agreed to keep talking with the aim of restoring the Joint Comprehensive Plan of Action (JCPOA), as the nuclear deal is formally known. Talks in Vienna to restore the deal that the United States unilaterally abandoned in 2018 began in April 2021 and have faced a deadlock since early September, when Western officials claim Tehran presented demands beyond the deal – something Iran denies.Protests that erupted in mid-September and the new sanctions the EU and the US have since imposed on Tehran over a “brutal suppression” of protesters, in addition to those levelled to punish Tehran’s alleged supply of drones to Russia for the war in Ukraine, have made prospects of actual progress unlikely. Click here to read... [25]

Iranian Government Relies on Loyal Supporters as Bulwark against Protests

When Revolutionary Guard member Mohammed Zareh Mowaydi was killed fighting Iranian protesters last month, the military broadcast footage of his body, with a cleric holding up the dead man’s right hand—rough from years as a farmer. “Show us your palms,” the cleric shouted, addressing protest supporters. “You, who claim to free our people, are your palms covered in calluses, too?” Mr. Mowaydi was among thousands of staunch Islamic Republic supporters that the government is counting on to stop a three-month-old protest movement. From the Islamic Revolutionary Guard Corps, or IRGC, to less formal militias, these loyalists have fought demonstrators in the streets, stood up for the Islamic Republic’s values and in some cases, died for them. About one in five Iranians say they support the current system, according to polls carried out in the country by the Group for Analyzing and Measuring Attitudes in Iran, a non-profit research foundation in the Netherlands. The government empowers this minority—often from economically humble, socially conservative backgrounds—with perks, jobs and guns, making it a force for maintaining the status quo. “There is a thin but hard-core infrastructure that is deeply loyal,” said Sanam Vakil, deputy director of the Middle East North Africa program at Britain’s Royal Institute of International Affairs, or Chatham House. Without these supporters, she said, “the regime would fracture.” Click here to read... [26]

Iran Moves to Consolidate Its Grip on Iraq’s Oil Sector

Iran has long held enormous political, economic, and military sway over neighbouring Iraq through its various military and political proxies, and since the discovery of vast reservoirs of oil in Iran first in the early 1900s and shortly after in Iraq, Tehran has an added incentive to retain this influence and to enhance it. With Iran’s longstanding former superpower ally, Russia, now looking to build out its remaining influence south of Europe, there is another reason for Iran to strengthen its ties with Iraq. In precisely this context, the last few weeks have seen a flurry of activity from Iran directed to doing just this, ranging from repeated military attacks against the semi-autonomous region of Kurdistan in the north of Iraq to Iran’s Petroleum Ministry setting up a fully-fledged office in downtown Baghdad. At the same time as the office was being set up, Iraq’s Ministry of Oil issued a circular to all Iraqi companies announcing the readiness of Iranian specialised companies to participate in Iraq’s oil and gas projects. Much more is to come. Two factors surrounding the several recent missile and drone attacks by Iran on the Kurdistan region of Iraq (KRI) are apposite to note. The first is the attacks have been roundly condemned by the U.S. on each occasion. The second is that Iran has justified the attacks as a response to terrorist acts being carried out by dissidents attempting to undermine the Islamic regime in Iran. Click here to read... [27]

Turkey, Saudi Arabia condemn Taliban’s university ban for women

Turkey and Saudi Arabia have strongly condemned the Taliban’s nationwide ban on women attending private and public universities. Turkish Foreign Minister Mevlut Cavusoglu said on Dec 22 that the ban was “neither Islamic nor humane”. Speaking at a joint news conference with his Yemeni counterpart, Cavusoglu urged the Taliban to reverse the decision. “What harm is there in women’s education? What harm does it do to Afghanistan?” Cavusoglu said. “Is there an Islamic explanation? On the contrary, our religion, Islam, is not against education; on the contrary, it encourages education and science.” The Saudi foreign ministry expressed “astonishment and regret” at Afghan women being denied a university education. In a statement late on Dec 21, the ministry said the decision was “astonishing in all Islamic countries”. They became the latest Muslim-majority countries to do so after Qatar, which has served as a mediator between the United States and the Taliban, criticised the decision. There has also been domestic opposition to the ban, with a dozen women staging a protest in the streets of Afghanistan’s capital, Kabul, on Dec 22, chanting for freedom and equality. “All or none, Don’t be afraid. We are together,” they chanted. The Taliban retook control of the country in August 2021 after being removed from power by a US-led military coalition two decades earlier. Click here to read... [28]

Southeast Asia nations boosting submarine orders amid US-China rivalry

Southeast Asian nations increasingly view submarine development as a necessity for their security amid changing geopolitical realities, but while some analysts say the move is “logical and necessary”, others have questioned the usefulness of the vessels due to exorbitant costs and the disadvantages of manoeuvring through regional waters. Within the region, Indonesia, Malaysia, Singapore, Vietnam and Myanmar currently have submarines, while Thailand and the Philippines are in the process of acquiring them. Earlier this month, Singapore embarked on its next phase of submarine development with the newly built Invincible-class submarines made in Germany. Singapore Prime Minister Lee Hsien Loong said during the launch that given the island state’s status as a maritime nation, its navy had a crucial mission of ensuring its survival and keeping open its sea lines of communication. Aristyo Darmawan, lecturer in international law at the University of Indonesia, said the growing acquisition of submarines by Southeast Asian countries was driven by the geopolitical rivalry between the United States and China. The US has some 66 submarines, including more than 50 nuclear-powered attack submarines, according to the non-profit Nuclear Threat Initiative. China is said to possess six nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines and 46 diesel-powered attack submarines, according to a US Defence report issued last year. Click here to read... [29]

Indonesia and Vietnam agree on EEZ boundaries in South China Sea

Indonesia and Vietnam have concluded talks to demarcate the boundaries of their exclusive economic zones in the South China Sea, Indonesia's presidential office said Dec 22. The zones declared by the two countries were among the topics discussed as Indonesian President Joko "Jokowi" Widodo welcomed visiting Vietnamese President Nguyen Xuan Phuc for a summit at the Bogor presidential palace in West Java."After carrying out intensive negotiations for 12 years, Indonesia and Vietnam have finally been able to conclude negotiations regarding the EEZ boundary lines of the two countries," Widodo said after the meeting. Indonesia and Vietnam had claimed overlapping EEZ boundaries in the South China Sea, causing political tension for both nations. Indonesia's coast guard has been cracking down on Vietnamese fishing vessels operating in the area claimed by Jakarta surrounding the Natuna Islands. Both countries also are engaged in separate standoffs against China, which is building island bases in the South China Sea as part of its expansionist activities in the region. Vietnam is locked in a territorial dispute with China while Indonesia is at odds with Beijing over natural resources around Natuna. Settling their differences over EEZ borders, Jakarta and Hanoi aim to coordinate their engagement with China. Click here to read... [30]

ASEAN's Myanmar rift highlighted as key members skip meeting

Foreign ministers from five of ASEAN's 10 members met in Thailand Dec 22 to discuss recent developments in Myanmar, even as the rest skipped the meeting amid differing stances on the country's military rule. Thailand, whose armed forces have strong ties to their counterparts in Myanmar, hosted the unofficial gathering with Myanmar's military-appointed Foreign Minister Wunna Maung Lwin. Cambodia, Vietnam and Laos also attended. Thailand, Cambodia, Vietnam and Laos are all close neighbours to Myanmar and have taken a conciliatory stance toward it even after the military took control in February 2021. The other five members of the Association of Southeast Asian Nations -- Indonesia, Malaysia, Singapore, the Philippines and Brunei -- were invited to Dec 22's meeting but did not attend. In April 2021, ASEAN put forth a "five-point consensus" on the situation in Myanmar, including a call for an immediate end to violence. But Myanmar's military has made little progress on its implementation -- and that October, ASEAN blocked representatives from the military government from key meetings. Myanmar may face stronger headwinds within the region after Indonesia, which has continued to urge the country to implement the consensus, takes over as ASEAN's rotating chair from Cambodia in January. Malaysia said Dec 22 that it "welcomes" the resolution adopted by the United Nations Security Council the day before urging an end to violence in Myanmar and a return to democracy. Click here to read... [31]

Israel produces ‘first-ever’ national intelligence estimate report – media

The Israeli Ministry of Intelligence has prepared a report warning that the world is standing on the precipice of a transition to a new global arrangement, the Jerusalem Post newspaper revealed on Dec 19. The document is being touted as Israel’s first ever national intelligence estimate report. The world will soon face “a series of crises striking simultaneously [that] will reorder the planet’s geopolitics, the place of technology, the economic order and a variety of other disciplines from health to energy,” according to the document. Among Israel’s advantages, the ministry reportedly listed the county’s newfound energy resilience, thanks to the discovery of large offshore natural gas deposits. A team of eight experts formulated recommendations on how the Israeli government could steer the nation through the turmoil and pursue its strategic geopolitical goals, the Post said. Israel will need to carefully balance good relations with the US, with ties to Russia and China, which Washington treats as rivals, the experts are said to have warned.The US accuses the two other nations of undermining the so-called “rules-based order” and wants all of its allies onboard with its strategy for opposing Moscow and Beijing. Israel, despite having a decades-old alliance with Washington, has not been as enthusiastic as some other nations. Click here to read... [32]

Health

Packed ICUs, crowded crematoriums: COVID roils Chinese towns

As China grapples with its first-ever national COVID wave, emergency wards in small cities and towns southwest of Beijing are overwhelmed. Intensive care units are turning away ambulances, relatives of sick people are searching for open beds, and patients are slumped on benches in hospital corridors and lying on floors for a lack of beds. Over two days, AP journalists visited five hospitals and two crematoriums in towns and small cities in Baoding and Langfang prefectures, in central Hebei province. The area was the epicentre of one of China’s first outbreaks after the state loosened COVID controls in November and December. For weeks, the region went quiet, as people fell ill and stayed home. Many have now recovered. Today, markets are bustling, diners pack restaurants and cars are honking in snarling traffic, even as the virus is spreading in other parts of China. In recent days, headlines in state media said the area is “starting to resume normal life.” But life in central Hebei’s emergency wards and crematoriums is anything but normal. Even as the young go back to work and lines at fever clinics shrink, many of Hebei’s elderly are falling into critical condition. It could be a harbinger of what's to come for the rest of China.The Chinese government has reported only seven COVID deaths since restrictions were loosened dramatically on Dec. 7, bringing the country’s total toll to 5,241. On Dec 20, a Chinese health official said that China only counts deaths from pneumonia or respiratory failure in its official COVID-19 death toll. Click here to read... [33]

Chinese localities distribute free drugs to the public, split packages to meet surging demand amid COVID-19 flare-ups

With the continuous optimization and adjustment of China's epidemic prevention and control policy, many cities across the country have begun to distribute free drugs including cold and fever medicines to the public and implemented open package dispensing, in a bid to meet spiking demand. The market regulator in Sanya, South China's Hainan Province organized a total of 18 pharmacies and called for more pharmacies to join the free distribution of fever-reducing drugs. From Dec 21, the administration distributed the first batch of 73,030 fever-reducing pills to local residents, with those in need able to access medication at a nearby pharmacy. Dongguan in South China's Guangdong Province said that a total of 100,000 ibuprofen tablets had arrived in the city, and will be distributed to 41 state drug stores before Dec 22 this week, before being made available free of charge for those in need. In addition, a number of cities including Zhengzhou, Shangqiu and Zhoukou also handed out anti-epidemic drugs to the market. The department of epidemic prevention and control in Zhoukou has purchased a batch of ibuprofen tablets, saying that from Dec 21, they have entrusted a number of pharmacies with the free distribution of 130,000 tablets, and residents who present an ID card are eligible for 10 tables per day. Click here to read... [34]