Global Developments and Analysis: Weekly Monitor, 30 January - 05 February, 2023

Economic

Washington halts licenses for U.S. tech exports to Huawei

The Biden administration has stopped providing U.S. companies with licenses to export to Huawei as it moves toward imposing a total ban on the sale of American technology to the Chinese telecom equipment giant. Several people familiar with the discussions inside the administration said the Commerce Department had notified some companies that it would no longer grant licenses to any group wanting to export American technology to Huawei. The move marks the latest prong in Washington's campaign to curb the Shenzhen-based tech company, which U.S. security officials believe helps China engage in espionage. Huawei denies any involvement in spying. The Trump administration in 2019 imposed tough restrictions on exporting American technology to Huawei by adding the group to a blacklist called the "entity list." The move was part of a strategy to crack down on Chinese companies that Washington believed posed a risk to U.S. national security. But the Commerce Department continued to grant export licenses for some companies, including Qualcomm and Intel, to provide Huawei with technology that was not related to high-speed 5G telecom networks. Over the past two years, President Joe Biden has taken an even tougher stance on China than Donald Trump did, particularly in the area of cutting-edge technology. In October, he imposed sweeping restrictions on providing advanced semiconductors and chipmaking equipment to Chinese groups. Click here to read... [2]

New China Rule Threatens to Disrupt U.S. Solar Ambitions

A plan by China to restrict exports of key solar manufacturing technology could delay attempts to build up a domestic solar supply chain in the U.S., industry experts say. China’s Ministry of Commerce and Ministry of Science and Technology are considering adding advanced technology used in the production of ingots and wafers, some of the building blocks of solar panels, to a list of technologies that are subject to export controls. China currently accounts for nearly all of solar ingot and wafer production globally, as well as much of the equipment used in the manufacturing process—especially for the large-scale solar panels that increasingly dominate the market, industry experts say. The proposed change was among dozens of potential revisions to China’s export control list that are intended “to strengthen the management of technology import and export,” according to a Chinese government announcement issued in late December. Beijing has solicited public comment on the proposed change but hasn’t said publicly when it would make a decision. The Chinese commerce and technology regulators didn’t respond to requests for comment. If the plan is adopted, Chinese solar manufacturers would be required to obtain a license from their provincial commerce authorities to export such technologies. “China’s proposed export restraints are Exhibit A on the need to rapidly scale American solar manufacturing,” said Abigail Ross Hopper, president and CEO of the U.S. business lobby Solar Energy Industries Association. Click here to read... [3]

Gold snatched up by central banks at fastest pace in 55 years

Gold buying by central banks reached its highest level in 55 years, data released Jan 31 shows, as the freezing of Russia's dollar assets spurred countries to seek alternatives less vulnerable to economic sanctions. Net purchases of the metal by central banks in 2022 totaled 1,135 tonnes in 2022, according to a report from the World Gold Council, an industry group. This was the highest since 1967, when European banks bought gold en masse as U.S. deficits and the devaluation of the British pound began to undermine the link between gold and the dollar. Last year's buying spree is believed to have been sparked by sanctions imposed on Russia over its invasion of Ukraine. Moscow's clash with the West "drove home the point that assets from the 'Western' economic sphere, like dollars, are risky to hold," said financial and precious metals analyst Koichiro Kamei. China was the standout buyer. The year brought its first reported increase in gold reserves in three years, with a total of 62 tonnes added in November and December. Its actual purchases may have been even larger, given the roughly 20% drop in its holdings of U.S. debt over the year through November. This came as Beijing has taken steps to move away from the dollar, including buying oil in yuan. Other central banks that made major gold purchases include inflation-hit Turkey with 148 tonnes; India with 33 tonnes; Qatar with 35 tonnes; and Uzbekistan with 34 tonnes. Click here to read... [4]

China plans industrial zones to lure Chinese diaspora in Asia

China will establish two industrial zones in Fujian province designed to bring in businesses owned by ethnic Chinese entrepreneurs living in Indonesia and the Philippines. Fujian's capital, Fuzhou, will host a China-Indonesia joint demonstration zone for innovation, according to a notice released by the State Council, China's cabinet. The city of Zhangzhou, also in Fujian, will house the China-Philippines joint demonstration zone. The government approved applications for the industrial zones submitted by the Commerce Ministry and Fujian's provincial government. The zones are intended to bolster economic ties with members of the Association of Southeast Asian Nations and help build a supply chain immune to U.S. sanctions. Specifically, companies established by ethnic Chinese will receive support involving customs, financing and securing land, officials say. Southeast Asia is home to many businesspeople who trace their ethnic roots to China. Fujian, on the southeastern coast of China facing Taiwan, is near Southeast Asia. Chinese President Xi Jinping held leadership roles in Fujian during his 30s and 40s. During that formative stint, the Tiananmen Square crackdown occurred in 1989, which soured relations with Japan and Western countries. Xi responded by leading an economic recovery in Fujian centered on investment from diaspora Chinese companies based in Indonesia and other countries. As president, Xi has promoted people who worked under him during his time in Fujian. This "Fujian faction" has been instrumental in achieving the industrial zones initiative. Click here to read... [5]

Vietnam's energy plan delayed for 2 years, risking blackouts

Vietnam's government is more than two years behind schedule on deciding a 10-year energy plan through 2030, as skyrocketing costs of liquefied natural gas leave officials scrambling for an affordable path to carbon neutrality. "I didn't think it would be delayed this much," said an employee of a foreign power-related company, summoning up the sentiment among expats here. The energy plan needed to be approved by the end of 2020, but more than two years into the new decade, officials are still at odds over the correct strategy. Vietnam implements economic policies based on plans decided by the government or the Communist Party. As a general rule, authorities do not allow companies to make necessary investments for a plan until it is approved. Planned investments in power facilities, originally slated for completion in 2020, have been delayed, resulting in blackouts in Hanoi and other areas during a heat wave in 2022. The challenge for the government is to find a way to move the country away from fossil fuels while keeping power prices low. Electricity demand has increased by around 10% a year on the back of high economic growth. Demand is expected to double from the current level by 2030 and quintuple by 2050. While the plan was already being delayed due to change in leadership, Prime Minister Pham Minh Chinh threw a wrench in the discussions by promising to reach carbon neutrality by 2050 at the COP26 U.N. climate conference in 2021. Click here to read... [6]

Europe’s Answer to Biden’s Climate Bill Is Still Murky Green

The European Union says the era of cheap fossil fuels is over and that a subsidy race has begun in green energy. But its plan to join the fray isn’t as decisive as Washington’s. On Feb 01, the European Commission launched its Green Deal Industrial Plan, a hotly anticipated response to the $369 billion of clean-energy funding in President Biden’s Inflation Reduction Act. The law, itself a response to Chinese industrial policy, provides generous tax breaks that should stimulate local manufacturing of green-energy technology and build out domestic infrastructure for renewables. Politicians in Europe are nervous that the handouts will lure companies stateside. Brussels also doesn’t want to miss out on a slice of the growing net-zero technology industry, which may be worth $650 billion a year at the end of the decade, more than three times its current size. Add the war in Ukraine and it seems more critical than ever for Europe to keep green-energy champions at home so it can wean itself off fossil fuels. But it isn’t clear yet that the new plan can match what is on offer in America. The Commission will loosen state aid rules that make it hard for governments to hand out subsidies. For now, there are several pots of cash available to fund the energy transition, including close to €270 billion ($293.4 billion) of unused Covid recovery funds. Click here to read... [7]

35% of goods may not get delivered in Japan in 2030

Japan is headed for a crisis in the distribution of freight across the country due to a projected shortage of truck drivers brought about by revised regulations on the number of hours they can work. Nomura Research Institute Ltd. said Jan. 19 that as much as 35 percent of all freight across Japan will not be shipped in 2030. It estimated that the ratio of undeliverable cargo will be especially acute in the northeastern Tohoku region, as well as Shikoku and other non-urban regions, due to what is being labeled as the 2024 issue. This refers to revised working regulations for truck drivers that will take effect in April next year that will place a further cap on their operating hours. The move is expected to trigger a serious labor crunch in the industry. The institute suggested that delivery fees in certain areas will increase dramatically, and in some cases, match those set for remote islands unless improvements are made in transport efficiency. It projected the potential effect on freight distribution due to tightened restrictions based on the anticipated volume of goods to be shipped in the future. The outcomes suggested the undeliverable cargo rate will be highest in Tohoku at 41 percent, followed by Shikoku at 40 percent. In Hokkaido and Kyushu, 39 percent of goods will probably fail to reach their destinations, it said. Click here to read... [8]

Russia continues to boost forex reserves

Russian foreign exchange reserves surged by $3.1 billion last week, the Bank of Russia revealed on Feb 02. The holdings amounted to $597.7 billion, having increased by 0.5% during the week ending January 27, driven by a positive revaluation of currencies, the central bank reported in its regular update. As of January 20, Russia’s forex reserves totaled $594.6 billion. Russia’s international reserves, which are highly liquid foreign assets held by the Bank of Russia and the country’s government, consist of monetary gold, Special Drawing Rights (SDR) with the IMF, and foreign currency held within the country. Roughly half of the holdings were frozen by Western central banks in early March as part of anti-Russia sanctions over the Ukraine conflict. In addition to freezing the funds, Western countries banned operations related to their management. The remaining holdings consist of gold and foreign currency held within the country, as well as Chinese yuan assets. Prior to the conflict, Russia’s forex reserves had reached a historical high of $643.2 billion. Click here to read... [9]

Russian Urals Traded At $49.48 in January, But The Kremlin Isn’t Worried

Russian Urals crude traded at $49.48 per barrel in January, with rising transportation costs compounding a discount that has seen the country’s flagship crude price drop by 42% year-on-year, according to Russian Finance Ministry figures cited by Turkey’s Anadolu Agency. Official figures released on Feb 01 showed a drastic decline from $85.64 in January 2021 to this year’s price of under $49.5 per barrel, Anadolu Agency reported. While slightly different from the Russian Finance Ministry figures, Platts (part of S&P Global Commodity Insights) on January 30th assessed Russian Urals at $45.86 per barrel, which at the time represented a discount to Dated Brent of $38.77. S&P Global notes that prior to Putin’s invasion of Ukraine, Urals was trading at a ~$10 discount to Dated Brent. Western sanctions, including an EU ban on Russian seaborne crude, which went into effect on December 5th, and a G7 price cap of $60 on Russian oil imports has resulted in a redirection of trade in Urals, mostly to India and China. On Feb 01, Russian Deputy Prime Minister Alexander Novak told Russian media that the country’s oil production and export situation remained stable despite Western attempts to derail oil revenues. Novak said the Urals price was acceptable. Click here to read... [10]

Libyan Oil Ministry Rejects $8 Billion Gas Deal With Eni

Libya’s Oil Ministry has rejected the huge $8-billion deal that the Italian energy giant signed with the Libyan National Oil Corporation (NOC) this weekend, saying that the agreement violated legislation and was not approved by the ministry prior to the signing. Eni’s chief executive Claudio Descalzi and the CEO of the National Oil Corporation of Libya, Farhat Bengdara, agreed on Jan 28 on the development of “Structures A&E”, a strategic project aimed at increasing gas production to supply the Libyan domestic market as well as to ensure export to Europe. The agreement was signed in the presence of the Prime Minister of Italy, Giorgia Meloni, and the Prime Minister of the Libyan Government of National Unity, Abdul Hamid Al-Dbeibah. Under the deal, the combined gas production from the two structures will start in 2026 and reach a plateau of 750 million standard gas cubic feet per day, Eni said in a statement. The overall investment is estimated at $8 billion, with a significant impact on the industry and the associated supply chain, allowing a significant contribution to the Libyan economy, the Italian group said. However, Mohamed Aoun, Libya’s Oil and Gas Minister in the Tripoli-based government led by Al-Dbeibah, rejected the deal because, he says, it bypassed his oil ministry and cabinet approval and changed a previous deal signed in 2008. Aoun and his supporter Fathi Bashagha, the rival eastern-based prime minister appointed by Libya’s Parliament, have now rejected the deal. Click here to read... [11]

Here’s Why Qatar Is about to make a Big Move on Iraqi Oil & Gas

Prior to the unwitting boost that Russia’s ongoing failure in Ukraine has given the U.S., NATO, and Europe, Washington’s intentions regarding Iraq were mixed. On the one hand, the reasons why the U.S. invaded Iraq – to secure oil supplies that would lessen its reliance on Saudi Arabia, to control the centre ground in the Middle East, and to counteract Iran’s growing influence in Iraq and in the region – still stood. On the other, though, it had long been clear in Iraq, Afghanistan and indeed Saudi Arabia, among many others, that Islamic countries did not want an ongoing Western Christian presence in their countries. It may be that Qatar’s move to buy a 30 percent stake in four US$27 billion projects in Iraq that were set to be managed entirely by France’s TotalEnergies are in line with the U.S.’s new strategy for Baghdad. The four projects are essential to Iraq’s future as a truly independent country. The first of them is the completion of the Common Seawater Supply Project (CSSP), which remains crucial in enabling Iraq to reach crude oil production targets of 7 million barrels per day (bpd), then 9 million bpd and perhaps even 12 million bpd, as anahttps://oilprice.com/Energy/Energy-General/Heres-Why-Qatar-Is-About-To-Make-A-Big-Move-On-Iraqi-Oil-Gas.htmllysed in depth in my last book on the global oil markets. Click here to read... [12]

Big Labor Can’t Quit Shrinking

Union members made up only 10.1% of the workforce last year, down from 10.3% in 2021, according to data released recently by the Labor Department. For a long time the prototypical union shop hasn’t been a private steel plant but a public school, yet the unionized share of government employees also fell. Though the annual changes look small, they add up: The workforce in 2012 was 11.3% unionized, and in 2002 it was 13.3%. Organized labor hasn’t been able to stop the trend, despite frantic unionization drives, including many aimed at nontraditional members, such as the university graduate students who march under the United Auto Workers banner. Private workers are 6% unionized, down from 8.6% two decades ago. For public workers, it’s 33.1%, down from 37.3%. Some of this has to do with improvements in public policy. More states have passed right-to-work laws, guaranteeing their residents the ability to choose freely whether to belong to unions. The Supreme Court’s 2018 ruling in Janus v. Afscme said that public workers who opt out can’t be billed union fees anyway. This has reduced the incentive for reluctant workers to go along and get along, since real money from their paychecks is on the line. Click here to read... [13]

US Fed unveils smaller rate hike but signals inflation fight not over

America's Federal Reserve slowed its pace of interest rate hikes Feb 01, tempering an aggressive campaign to rein in costs as inflation cools while signaling the battle is not yet over. The U.S. central bank announced a quarter-point hike to the benchmark lending rate at the end of its two-day policy meeting, taking the rate to a target range of 4.50-4.75 percent. "Inflation has eased somewhat but remains elevated," said the Fed's policy-setting Federal Open Market Committee (FOMC) in a statement. Officials will need "substantially more evidence" to be confident that inflation is on a sustained downward path, Fed Chair Jerome Powell told a press briefing. According to the FOMC statement, "the committee anticipates that ongoing increases in the target range will be appropriate" to bring inflation back to policymakers' two percent target over time. The Fed has cranked up interest rates eight times since March 2022, including four consecutive 0.75 percentage point increases, lifting borrowing costs in hopes of dampening demand. The aim is to rein in inflation, which surged to its fastest pace in decades last year but has since come off a peak. On Feb 01, the Fed acknowledged that recent indicators "point to modest growth in spending and production" as economic activity eases. The 0.25 percentage point rise marks a step down from December's half-point hike and the series of bigger spikes last year. But the FOMC statement suggests that rate increases will continue. Click here to read... [14]

‘Made in China’ is not enough, Beijing says, vowing ‘substantial improvement’ in quality of goods

China has rolled out comprehensive guidelines to build itself into a world power of quality products and services, in its latest bid to cement its footing in the global supply chain. The world’s second-largest economy is aiming to become a leader in high-value goods as it shifts focus towards quality of growth in a new era of “technological revolution and deepening industrial transformation” across the globe, according to a directive issued by the State Council on Jan 06. The broad but vaguely worded plan says the country aspires to see “substantial improvement” in the quality of what it produces, and in the influence of Chinese brands, by 2025. And by 2035, good quality should be seen as a cultural value in China, it said. Conceding that overall quality levels “still lag behind economic and social development”, the State Council said China “must base its growth on the improvement of quality and efficiency”. Therefore, changes are in order – “from made-in-China to made-by-China, from Chinese speed to Chinese quality, and from Chinese products to Chinese brands”. Chinese leadership and prominent economists have repeatedly stressed in recent years the importance of redefining China as a high-end manufacturing power in the face of growing economic and tech containment from the US and its allies. President Xi Jinping first brought up the notion of building China into a “quality power” in his report to the 19th National Congress of the Communist Party in 2017. Click here to read... [15]

Stymied by the West, Russia is getting critical semiconductors from mainland China, Hong Kong

Russia boosted its trade with mainland China and Hong Kong last year as Moscow made a tactical pivot to the two markets for chip imports while diversifying away from allies of the United States amid sanctions following the invasion of Ukraine, according to a US-based trade group for the global financial services industry. China, Hong Kong and Turkey have supplanted countries in the European Union as Russia’s top trading partners, the Institute of International Finance (IIF) said on Feb 01. As the war in Ukraine approaches the one-year mark, the resulting shock waves continue to ripple through global markets for commodities, energy and food, and the world’s supply chain has seen a drastic realignment. Washington and its allies have responded to Russia’s aggression by imposing sweeping restrictions to block its access to advanced semiconductors, aerospace products and luxury goods since last year. “Russian authorities countered sanctions with swift macroeconomic measures preventing a financial sector collapse, increasing government spending and limiting access to statistics, including trade,” the IIF said. “Importantly, Russia focused on rebuilding value chains severed by sanctions.” Despite export controls, Russia has increased imports of semiconductors and electronic circuits, with purchases totalling US$2.45 billion between January and September 2022 – up from US$1.8 billion a year earlier, the IIF said. Click here to read... [16]

Strategic

Major earthquakes kill thousands of people in Turkey and Syria

Powerful earthquakes and aftershocks killed thousands of people and injured thousands more in Turkey and Syria, triggering frantic searches for survivors in the rubble of collapsed buildings. An initial magnitude 7.8 earthquake hit near the southeastern Turkish city of Gaziantep at 4:17am local time (01:17 GMT) on Feb 06, as people were sleeping, at a depth of about 17.9km (11 miles). It was also felt as far as Cyprus, Egypt and Lebanon. There were fears the death toll would rise significantly. The Turkish government has declared a level 4 state of emergency, which includes a call for international assistance as well as the mobilisation of all national forces. Rescuers used heavy equipment and their bare hands to peel back rubble in search of survivors, who they could in some cases hear begging for help under the debris. The rescue was being hampered by a winter blizzard that covered major roads in ice and snow. Turkish officials said the quake made three major airports in the area inoperable, further complicating deliveries of vital aid. Authorities urged people not to enter damaged buildings due to the risks.“Our priority is to bring out people trapped under ruined buildings and to transfer them to hospitals,” Interior Minister Suleyman Soylu said. Videos shared on social media showed harrowing images of buildings reduced to piles of rubble in several cities in Turkey’s southeast. Click here to read... [17]

Blinken postpones China trip over spy balloon incident

The U.S. has postponed Secretary of State Antony Blinken's planned trip to Beijing, the State Department said Feb 03, after what Washington called a Chinese surveillance balloon was detected in American airspace. The State Department revealed in a statement that Blinken told Wang Yi, director of the Communist Party's Central Foreign Affairs Office, that he would not go to China as planned. Blinken said that "in light of this ongoing issue, it would not be appropriate to visit Beijing at this time," according to the statement. The statement said that Blinken noted Beijing's statement of regret regarding the balloon but "conveyed that this is an irresponsible act and a clear violation of U.S. sovereignty and international law that undermined the purpose of the trip." Blinken, later at a news conference, mentioned his talk with Wang and said China's "decision to take this action on the eve of my planned visit is detrimental to the substantive discussions that we were prepared to have." He added, "I plan to visit Beijing when conditions allow." Earlier in the day, a spokesperson for China's Foreign Ministry said that the balloon is a "civilian airship used for research, mainly meteorological, purposes" and that the Chinese side "regrets the unintended entry of the airship into U.S. airspace." Click here to read... [18]

US gets access to 4 more Philippine bases amid China military moves

The United States and the Philippines announced a deal on Feb 02 to give US troops access to another four bases in the Southeast Asian nation, as the long-time allies seek to counter China’s military rise. The agreement to expand cooperation in “strategic areas of the country” was made during a visit by US Defence Secretary Lloyd Austin. It comes as the countries seek to repair ties that were fractured in recent years -- previous Philippine president Rodrigo Duterte favoured China over his country’s former colonial master, but the new administration of President Ferdinand Marcos Jnr has been keen to reverse that. Beijing’s growing assertiveness on Taiwan and its claims over the disputed South China Sea have given fresh impetus to Washington and Manila to strengthen their partnership. Given its proximity to Taiwan and its surrounding waters, the Philippines’ cooperation would be key in the event of a conflict with China, which a four-star US Air Force general has warned could happen as early as 2025. “The Philippines and the United States are proud to announce their plans to accelerate the full implementation of the Enhanced Defence Cooperation Agreement (EDCA) with the agreement to designate four new Agreed Locations in strategic areas of the country,” defence officials said in a joint statement. Talks were ongoing for a potential fifth base, a senior Philippine official said earlier. Click here to read... [19]

US test launches unarmed intercontinental ballistic missile

An unarmed intercontinental ballistic missile was launched from California last week to test America's defense system, according to the U.S. Air Force Global Strike Command. The Minuteman III missile lifted off from Vandenberg Space Force Base at 11:01 p.m. Feb 02 and its reentry vehicle traveled about 4,200 miles (6,800 kilometers) over the Pacific Ocean to the Kwajalein Atoll in the Marshall Islands, an Air Force statement said. While the test occurred amid U.S. concerns about North Korea's missile tests and the transit of a Chinese spy balloon across the United States, the Air Force said the launch was routine. ''Such tests have occurred over 300 times before, and this test is not the result of current world events,'' the statement said. The Minuteman III system has been in service for decades. The Air Force plans to replace it with a new missile called the Sentinel. ''Until full capability is achieved in the mid-2030s, the Air Force is committed to ensuring Minuteman III remains a viable deterrent,'' the service said. Click here to read... [20]

Chinese military announces YJ-21 missile abilities in social media post read as warning to US amid tension in Taiwan Strait

For the first time, the PLA has officially revealed the performance of its advanced anti-ship hypersonic missile, sending a warning to the US amid high tensions in the Taiwan Strait, Chinese analysts said. China’s YJ-21, or Eagle Strike-21, has a terminal speed of Mach 10, cannot be intercepted by any anti-missile weapons system in the world and can launch lethal strikes towards enemy ships, according to an article posted by the official Weibo account of the People’s Liberation Army Strategic Support Force on Jan 30. The public debut of the missile at a leading air show in November shows that “the Chinese navy has begun to establish a more destructive combat system in the offshore defence system, which has brought its denial combat capability to a higher level”, the article reads. The PLA navy released video footage of the YJ-21 being launched in April from a Type 055, the People’s Liberation Army’s largest and most advanced destroyer. The article declares that the missile travels six times the speed of sound all the way, and has a terminal speed of 10 times the speed of sound, meaning a speed of 3,400 metres per second (11,155 feet per second) when it hits the target. “Such a terminal speed cannot be intercepted by any anti-missile weapon system at this stage. Even if it is dropped directly at this terrifying speed [hitting the target] without an explosion it will cause a fatal strike to the enemy ship,” the article stated. Click here to read... [21]

Myanmar extends state of emergency, likely pushing back polls

Myanmar's military regime on Feb 01 announced that it will extend the nationwide state of emergency for another six months, likely delaying general elections that had been expected by August. The announcement, made public through a report from state-owned media, came a day after the National Defense and Security Council, consisting of senior members of the military and government, met in the capital, Naypyitaw, and issued a statement blaming pro-democracy, anti-military groups that are "committing killings of innocent people, blowing up public places, imposing armed intimidation and coercion on the people." The groups, it said, include the National Unity Government, the parallel government formed by exiled lawmakers and others who declared armed resistance in September 2021. A state-owned TV network also reported Feb 01 that the decision was made at the meeting on Jan 31, where Senior Gen. Min Aung Hlaing himself said that time would be needed to restore public order for the polls. It also said that the constitutional court had judged that "the extension of the state of emergency is constitutional." Min Aung Hlaing reportedly recommended the extension for two reasons: The general election must be held in at least half of all electoral districts, and the review of voter rolls must be completed. Click here to read... [22]

U.S. to increase weapons deployment to counter North Korea

U.S. Defense Secretary Lloyd Austin on Jan 31 said the United States will increase its deployment of advanced weapons such as fighter jets and bombers to the Korean Peninsula as it strengthens joint training and operational planning with South Korea in response to a growing North Korean nuclear threat. Austin made the comments in Seoul after he and South Korean Defense Minister Lee Jong-Sup agreed to further expand their combined military exercises, including a resumption of live-fire demonstrations, and continue a “timely and coordinated” deployment of U.S. strategic assets to the region, according to their offices. Austin and Lee also discussed preparations for a simulated exercise between the allies in February aimed at sharpening their response if North Korea uses nuclear weapons. Austin’s trip comes as South Korea seeks stronger assurances that the United States will swiftly and decisively use its nuclear capabilities to protect its ally in face of a North Korean nuclear attack. South Korea’s security jitters have risen since North Korea test-fired dozens of missiles in 2022, including potentially nuclear-capable ones designed to strike targets in South Korea and the U.S. mainland. South Korea and the United States have also been strengthening their security cooperation with Japan, which has included trilateral missile defense and anti-submarine warfare exercises in past months amid the provocative run in North Korean weapons tests. Click here to read... [23]

Japan, China agree to hold talks 'at all levels' to improve ties

The foreign ministers of Japan and China agreed Feb 02 that the two nations will maintain close communication "at all levels," the Japanese government said, as they have been exploring how to mend bilateral ties that often become tense. Foreign Minister Yoshimasa Hayashi also aired "serious concern" over intensifying Chinese military activities near Japan, including those with Russia, during 50-minute phone talks with his Chinese counterpart Qin Gang, adding that Japanese public opinion on Beijing is "extremely severe," according to the Foreign Ministry. It was the first conversation between the two foreign ministers since Qin, a former ambassador to the United States, took the post in late December, succeeding Wang Yi. Hayashi and Qin pledged to work together toward the realization of "constructive and stable relations," the ministry said, at a time when the bilateral relationship remains precarious over issues such as the Senkaku Islands in the East China Sea. The Tokyo-controlled, Beijing-claimed uninhabited islets are called Diaoyu by China. The Japanese minister underscored "the importance of peace and stability of the Taiwan Strait" while requesting that China soon lift its import ban on Japanese food items imposed after the 2011 Fukushima nuclear crisis, the ministry said. Qin said he hopes that the Japanese side will be "cautious" in its words and deeds regarding major issues such as bilateral history and Taiwan, and stop provocations by right-wing forces on the issue of Diaoyu, according to the Chinese Foreign Ministry. Click here to read... [24]

NATO chief wants more ‘friends’ as Russia, China move closer

China's growing assertiveness and collaboration with Russia poses a threat not only to Asia but also to Europe, NATO Secretary-General Jens Stoltenberg said Feb 01 as he sought stronger cooperation and more “friends” for NATO in the Indo-Pacific region. Stoltenberg said China is increasingly investing in nuclear weapons and long-range missiles without providing transparency or engaging in meaningful dialogue on arms control for atomic weapons, while escalating coercion of its neighbors and threats against Taiwan, the self-ruled island it claims as its own territory. “The fact that Russia and China are coming closer and the significant investments by China and new advanced military capabilities just underlines that China poses a threat, poses a challenge also to NATO allies,” Stoltenberg told an audience at Keio University in Tokyo. “Security is not regional but global." “NATO needs to make sure we have friends,” he said. “It is important to work more closely with our partners in the Indo-Pacific.” China is increasingly working with Russia and they lead an “authoritarian pushback” against the rules-based, open and democratic international order, he said. Stoltenberg said NATO does not regard China as an adversary or seek confrontation, and that the alliance will continue to engage with China in areas of common interest, such as climate change. Chinese Foreign Ministry spokesperson Mao Ning defended China as “a force for regional and global peace and stability” and criticized NATO for labeling China a threat and for expanding its military ties to Asia. Click here to read... [25]

Pakistan Suicide Bombing Death Toll Rises to at Least 100

The death toll in a suicide bombing in northwestern Pakistan climbed to at least 100 on Jan 31 as rescuers pulled bodies out of the rubble of a mosque hit by one of the country’s deadliest terrorist attacks. Emergency crews worked through the night to pull the dead and injured from the debris of the mosque in a large police compound in the city of Peshawar. The compound included police offices and housing. Interior Minister Rana Sanaullah Khan said that 97 of the dead were police personnel, along with three civilians. In addition, 220 people were injured, of which 27 were in critical condition, he said. Moazzam Jah Ansari, the provincial police chief, said he believed the attack was carried out by a faction of the Pakistani Taliban, also known as Tehreek-e-Taliban Pakistan or TTP. The Pakistani Taliban, which is separate from the Afghan Taliban, has unleashed a renewed campaign of violence since late November, when peace talks with the Pakistani authorities broke down. Jan 30’s attack was by far the deadliest in the current spree of attacks. The Pakistani Taliban, formed in 2007 under the influence of al Qaeda, denied authorizing Jan 30’s attack, but a faction of the group claimed responsibility on Twitter. The group has focused in recent years on attacking police and military personnel, rather than the mass casualty civilian bombings that marked its earlier years. Click here to read... [26]

Fears of Losing Out to China Put U.S. Under Pressure Over Kenya Base

Kenya is asking the U.S. to pay for the expansion of a joint counterterrorism base, raising concerns in Washington that the East African country could turn to China if the Americans balk, according to U.S. officials. The Kenyan military has drawn up plans for a new runway long enough to handle jet fighters at Manda Bay Airfield, a hub for U.S. and Kenyan operations against al-Shabaab, al Qaeda’s affiliate in neighboring Somalia, the U.S. officials said. American officials left talks with the Kenyans worried that they might bring a state-owned Chinese construction firm into a U.S. special-operations base if the Pentagon opts out of the project, which could cost roughly $50 million, including support buildings. “Will they be watching what we do?” a senior U.S. military official said of the Chinese workers. “It poses a strategic dilemma for us.” The Biden administration has so far resisted Kenya’s request that the U.S. pick up the bill for the upgrade, but the issue isn’t settled. U.S. service members in Manda Bay. Kenya’s aspirations for the facility could mark a new skirmish in U.S.-Chinese competition for influence in Africa. Kenya is a key U.S. ally in one of the longest wars in American history, the 16-year, low-visibility campaign against al-Shabaab, which the U.S. military considers al Qaeda’s most-active franchise worldwide. Some 3,000 Kenyan troops are part of an 18,500-strong African Union force fighting al-Shabaab in Somalia. Click here to read... [27]

Somalia hosts regional summit to discuss fighting al-Shabab

Somalia is hosting a summit of leaders from several neighbouring countries in the Horn of Africa to discuss the fight against al-Shabab, as a wide-ranging offensive against the armed group gathers pace. The meeting in the capital, Mogadishu, drew leaders from three “brotherly neighbouring countries”, the Somali presidency said, posting pictures of the arrival of Kenya’s William Ruto, Djibouti’s Ismail Omar Guelleh and Ethiopian Prime Minister Abiy Ahmed. Somali leader Hassan Sheikh Mohamud and his counterparts are due to discuss a coordinated military offensive against the al-Qaeda-linked group, which has been waging a fight in the Horn of Africa nation for more than 15 years. Security was beefed up in the city with movement restrictions and military patrols. Commercial flights have also been suspended. “The major roads and streets in the city are closed today and there is no civilian movement allowed,” Abdulahi Hassan, a member of the national security agency, told AFP news agency. The armed group earlier this month claimed responsibility for the deadly bombing and storming of a government building in Mogadishu that injured 16 people. Six members of the group were killed by security forces. After taking office in May last year, Mohamud declared an “all-out war” on the fighters, rallying Somalis to help flush out members of the armed group he described as “bedbugs”. In recent months, the army and local clan militias have retaken chunks of territory in an operation backed by US air raids and an African Union (AU) force known as ATMIS. Click here to read... [28]

The U.S. Is Facing A Major Challenge As Petrodollar Loses Force

On January 17, the Saudi minister of finance, Mohammed Al-Jadaan, announced that the Saudi state is open to selling oil in currencies other than the dollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan told Bloomberg TV. If the Saudi regime does indeed embrace substantial trade in currencies other than the dollar as part of its oil-export business, this would signal a shift away from the dollar as the dominant currency in global oil payments. Or measured another way, this would signal the end of the so-called petrodollar. But how large of a shift is this? With the increasingly frequent Saudi comments about trading in nondollar currencies, we’ve also seen an increasing number of pundits announcing the “collapse” of the dollar or the imminent implosion of the dollar’s currently outsized global power. Will a shift away from the dollar in the global oil trade really lead to a big relative decline in the dollar? Probably and eventually. But a number of other dominoes would need to fall first, most especially the domino we call “Eurodollars.” On the other hand, it would be foolish to simply dismiss the potential end of the Saudi preference for the dollar with hand-waving. Click here to read... [29]

Why is Pope Francis visiting DRC and South Sudan?

Pope Francis is visiting the Democratic Republic of the Congo and South Sudan this week to deliver a message of peace and reconciliation to two countries hit by conflict. The pontiff will start his trip on Jan 31 in the Congolese capital Kinshasa, where he will stay until Feb 03 before heading to Juba, the capital of South Sudan. The leaders of the Anglican Church and the Church of Scotland will join the pope on the second leg of the trip. The six-day trip was originally planned for July 2022 but was postponed after Francis suffered problems with his knee, which have recently forced him to use a wheelchair. The trip will be Francis’s 40th abroad since he was elected the head of the Catholic Church in 2013. It will be his fifth visit to Africa. Why is the pope visiting the DRC? The Vatican’s envoy to the Democratic Republic of the Congo has said the trip will remind the world not to ignore decades-long conflicts. For years, the Central African country has struggled with instability and poverty despite its vast mineral wealth. “Congo also embodies social injustice, the scandal of underdevelopment and poverty,” said Samuel Pommeret from the nongovernmental organisation CCFD-Terre Solidaire. It has been a battleground for more than 100 armed groups fighting for control of territory there or using it as a base to launch attacks into some of the DRC’s neighbours, such as Angola, Burundi, the Central African Republic, Rwanda and Uganda. Click here to read... [30]

Erdogan says Turkey may accept Finland in NATO, but block Sweden

Turkish President Recep Tayyip Erdogan has signalled that Ankara could accept Finland into NATO before taking any action on the membership of its Nordic neighbour Sweden. Erdogan was speaking just days after Ankara suspended NATO accession talks with the two countries after a protest in Stockholm in which a far-right politician burned a copy of the Quran. “We may deliver Finland a different message [on their NATO application] and Sweden would be shocked when they see our message. But Finland should not make the same mistake Sweden did,” Erdogan said in a televised speech aired on Jan 29. Sweden and Finland applied last year to join NATO after Russia’s invasion of Ukraine, dropping their longstanding military nonalignment. Every member of the 30-nation alliance needs to approve their membership, and Turkey and Hungary are the only countries yet to have done so. The Hungarian parliament is expected to approve the bids in February. Erdogan’s main complaint has been with Sweden’s refusal to extradite dozens of people that Ankara has linked to the banned Kurdistan Workers’ Party (PKK) and a failed 2016 coup attempt. He is facing an election in May and has dug in his heels over Sweden’s NATO membership as he tries to energise his conservative and nationalist supporters. Click here to read... [31]

Health

COVID still emergency but nearing 'inflection' point: WHO

The coronavirus remains a global health emergency, the World Health Organization chief said Jan 30, after a key advisory panel found the pandemic may be nearing an "inflexion point" where higher levels of immunity can lower virus-related deaths. Speaking at the opening of WHO's annual executive board meeting, WHO Director-General Tedros Adhanom Ghebreyesus said "there is no doubt that we're in a far better situation now" than a year ago ― when the highly transmissible Omicron variant was at its peak. But Tedros warned that in the last eight weeks, at least 170,000 people have died around the world in connection with the coronavirus. He called for at-risk groups to be fully vaccinated, an increase in testing and early use of antivirals, an expansion of lab networks, and a fight against "misinformation" about the pandemic. "We remain hopeful that in the coming year, the world will transition to a new phase in which we reduce hospitalizations and deaths to the lowest possible level," he said. Tedros' comments came moments after WHO released findings of its emergency committee on the pandemic which reported that some 13.1 billion doses of COVID-19 vaccines have been administered ― with nearly 90% percent of health workers and more than four in five people over 60 years of age having completed the first series of jabs. Click here to read... [32]

Scientists sound alarm over bird flu mutations

Health officials from Europe and the US are calling for international action to tackle the spread of avian influenza as fears grow that the virus could mutate and spread among humans. A number of mammals have been found to be carrying a mutated version of the pathogen amid the largest ever outbreak of bird flu. The H5N1 virus has already killed some 208 million birds around the world. But the latest figures show there have also been at least 200 recorded cases of mammals contracting the disease. In the UK, the Animal and Plant Health Agency (APHA) reportedly found nine otters and foxes that tested positive for the highly pathogenic H5N1 virus. In the US, the disease was found in skunks, bears, a raccoon and a red fox. In France, the virus had spread to a cat and also caused an outbreak on a Spanish mink farm. The bird flu has also been detected in seals and dolphins. Researchers believe these animals contracted the virus by feeding on dead or sick birds that had been infected with the disease. It’s noted that the virus found in these animals showed signs of a mutation that allowed it to infect mammals more easily. However, scientists say they have not yet seen any evidence to suggest the virus is capable of jumping between mammals. Click here to read... [33]