Global Developments and Analysis: Weekly Monitor (17-23 July)

Economic

Over 50 countries close to debt default – UN

The UN Development Programme (UNDP) has issued an alarm about the plight of developing countries as a key meeting of G20 ministers in India stalls on the subject of debt relief. This follows a report last week from the UN detailing the threat of public debt to half the globe. G20 representatives met on July 17 in Gandhinagar, Gujarat but made little to no progress in discussions about restructuring the debt held by developing nations, AP reported. “I think the bottom line is, as of [July] 2023, the issue of debt restructuring is really not advancing at all on a scale that is called for and needed,” UNDP administrator Achim Steiner told Reuters, calling the situation a “grave concern.” Last week, UN Secretary General Antonio Guterres warned that 52 countries had no way to reduce their debt burden and were approaching default. Promoting a UN Conference on Trade and Development (UNCTAD) report on the growing problem of debt, Guterres said that 3.3 billion people lived in countries that were spending more on interest payments than on health or education. “This is more than a systemic risk – it’s a systemic failure,” Guterres said July 12. UNCTAD specified that at least 19 developing nations spent more on interest than on education, and in another 45 it amounted to more than spending on healthcare. Click here to read... [2]

Heatwaves set more records across Europe, Asia and US

The intense heatwave across the world has shown no signs of abating. Residents across Asia, Europe and North America scramble to find some relief from unforgiving temperatures. Extreme heat was forecast across the globe on July 19 as firefighters battled blazes in parts of Greece and the Canary Islands while authorities from California to China warned of the health dangers brought by searing temperatures, urging people to drink water and shelter from the sun. Here is a quick look at the places affected the most so far by scorching temperatures: China. Tourists flocked to a giant thermometer in China showing surface temperatures of 80 degrees Celsius (176 degrees Fahrenheit) on July 19, the latest extreme weather sparking havoc and curiosity around the world. On July 18, the capital, Beijing, logged its 27th day of temperatures of more than 35C (95F), setting a new record for the most number of high-temperature days in a year. On July 16, a remote township in the Turpan Depression registered a maximum temperature of 52.2C (126F), smashing China’s national record of 50.3C (122.5F) that was also set in the basin in 2015. Greece. Wildfires burned for a third day west of the Greek capital, Athens, with air water bombers resuming operations at first light and firefighters working throughout the night to keep flames away from a complex of coastal refineries. Click here to read... [3]

Chinese cities brace for floods as heat scorches inland regions

Beijing and other cities braced for severe flooding on July 21 as summer storms rolled across many parts of China, while inland regions baked in intense heat, threatening to shrink the country’s biggest freshwater lake. Wild weather swings have gripped China since April, causing deaths, damaging infrastructure and wilting crops as well as raising fears of its ability to cope with climate change. Historically, China enters its peak rainy season in late July, but extreme weather has made storms more intense and unpredictable, exposing heavily built-up megacities with poor or insufficient drainage to potentially deadly floods. In Beijing, authorities have deployed this week over 2,600 people to drain dozens of pumping stations in advance and clear thousands of water drainage outlets along roads. Several bus routes plying the suburbs and mountainous areas were halted. Authorities in the neighbouring city of Tianjin also ramped up flood control efforts in the Hai basin, a major northern drainage system. By contrast, scant rainfall in Jiangxi province has resulted in Poyang Lake, the country’s largest body of fresh water, ebbing to its lowest level for this time of the year since records began in 1951. Poyang Lake, known as the kidneys of China due to the role it plays in regulating the flow of the Yangtze River, normally swells in summer due to rain and retreats in winter. Last year, it also unexpectedly shrank due to drought. Click here to read... [4]

Divide grows in Washington over US-China trade, as hawkish bipartisanship starts to crack

US lawmakers’ debate over how best to handle the US-China economic relationship was on full view at a congressional hearing on July 20, with many Republicans arguing for a complete decoupling while some Democrats contended such a move would weaken American companies. Representative Blaine Luetkemeyer, a Missouri Republican, took aim at Thea Rozman Kendler, assistant secretary of commerce for export administration, during her testimony before the House select committee on China. Luetkemeyer suggested that approvals for exports to Chinese companies including Huawei Technologies, along with the long-running US trade deficit with China, helped Beijing “build detention camps against their own people, subsidise their industries against ours and build up their military”. “We’ve got to stop everything going to China,” Luetkemeyer said. “If we don’t, they use everything against us, and your willingness to continue to play games with them and be a partner with them endangers us down the road. “When they overtake us [economically], we’re done,” he added, citing a Goldman Sachs estimate that China “will finally be able to overtake the United States within the next 10 years”.“They will be able to dictate all sorts of things to all their economic partners around the world.” Kendler contended that the Commerce Department had taken “a litany of steps … to make sure that the Chinese government” did not gain “technology that they can use to threaten US national security interests”. Click here to read... [5]

US chip lobby presses Biden to refrain from further China curbs

The U.S.-based Semiconductor Industry Association trade group on July 17 called on the Biden administration to "refrain from further restrictions" on chip sales to China as chief executives from the biggest U.S. semiconductor firms planned to visit Washington this week to press their views on China policy. The statement came as the Biden administration considers updating a sweeping set of rules imposed in October to hobble China's chip industry and a new executive order restricting some outbound investment. Reuters reported last week that the chief executives of Intel Corp and Qualcomm Inc planned to meet with government officials to discuss their views on China policy. The statement also comes after China moved to restrict exports of raw materials such as gallium and germanium that are used in making chips. The industry group said that further rule-tightening by U.S. officials risks "disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China." The industry group said it wants "the administration to refrain from further restrictions until it engages more extensively with industry and experts to assess the impact of current and potential restrictions to determine whether they are narrow and clearly defined, consistently applied, and fully coordinated with allies." A spokesperson for the U.S. National Security Council said the rules have been designed to ensure that U.S. technologies are not used in ways that undermine the country's national security. Click here to read... [6]

Chinese Money Flees the Western World

Just a few years ago, Chinese money was rippling across the rich world. Chinese investors were making blockbuster deals and snapping up trophy assets, from luxury homes and five-star hotels in New York to a Swiss chemical company and a German robotics giant. That era is over. Chinese investment is retreating from the West as hostility to Chinese capital has grown. Increasingly, Chinese companies are instead spending money on factories in Southeast Asia and mining and energy projects in Asia, the Middle East and South America, as Beijing seeks to cement alliances in those places and secure access to critical resources. The biggest recipient of Chinese investment so far this year is nickel-rich Indonesia, according to a preliminary estimate of Chinese investments compiled by the American Enterprise Institute, a conservative think tank, and viewed by The Wall Street Journal. Nickel is a key component in many of the batteries used to power electric vehicles. The shift in investment flows shows how China is responding to souring relations with the U.S.-led West, and is strengthening trade and investment links with other parts of the world, in ways that could create new fault lines in the global economy. The retreat of Chinese money in the West could lead to less job creation in some countries, while also reducing the pool of capital into which entrepreneurs in places such as Silicon Valley can tap. Click here to read... [7]

Why the Fed Isn’t Ready to Declare Victory on Inflation

Uncertainty over the path of inflation later this summer makes it hard to predict the Federal Reserve’s next steps following a likely quarter-percentage point increase in interest rates this week. Some Fed policy makers and economists are concerned that the easing in inflation will be temporary. They see inflation’s slowdown as long overdue after the fading of pandemic-related shocks that pushed up rents and the prices of transportation and cars. And they worry underlying price pressures could persist, requiring the Fed to lift rates higher and hold them there for longer. Other economists say that thinking ignores signs of current economic slowing that will gradually subdue price pressures. They also argue inflation will slow enough to push “real” or inflation-adjusted interest rates higher in the coming months. That would provide additional monetary restraint even if this week’s rate increase is the last of the current tightening cycle. The Fed last month held its benchmark federal-funds rate steady in a range between 5% and 5.25%, its first pause after 10 consecutive increases since March 2022, when officials raised it from near zero. Interest-rate increases slow the economy through financial markets by lowering asset prices and raising the cost of borrowing. Inflation cooled last month to its slowest pace in two years. The consumer-price index climbed 3% in June from a year earlier, sharply below the recent peak of 9.1% in June 2022. Click here to read... [8]

G20 draft tweaked to reflect dissent on cutting 'unabated' fossil fuels

A draft statement by Group of 20 energy officials was edited on July 22 to reflect concerns from some members on phasing down "unabated" fossil fuels, according to documents reviewed by Reuters and two people familiar with the matter. Major fossil fuel producers Saudi Arabia and Russia have opposed a proposal to triple G20 countries' renewable energy capacity in long debates at a ministers' meeting in India working on a statement for the G20 summit in the capital New Delhi in September. A draft late on July 21 read: "The importance of making efforts towards phase down of unabated fossil fuels, in line with different national circumstances was emphasized." On July 22, the draft added: "Others had different views on the matter that abatement and removal technologies will address such concerns." The phrase "abatement and removal technologies" refers to carbon capture and removal technologies, one source said. It was not immediately clear who expressed concerns about the earlier language. The India delegation did not immediately respond to a request for comment. G20 chair statements are typically edited multiple times before a final version is presented at the end of a conference. The draft for the meeting in the western state of Goa was still being edited, a third source said, declining to elaborate. Click here to read... [9]

The Race to Avert an Oil Spill That Could Cost $20 Billion to Fix

For years, as Yemen was ravaged by civil war, another catastrophe has loomed off the country’s Red Sea coast, where a rusting tanker is threatening to break apart and spill more than a million barrels of oil into the fragile ecosystem. International organizations and experts watched with alarm as the FSO Safer—left stranded 5 miles off the Yemeni shore since 2015—began to fall apart. If it ruptures or explodes, it could disgorge four times the amount of oil spilled in the 1989 Exxon Valdez disaster in Alaska, disrupting one of the world’s busiest shipping lanes and closing off ports bringing humanitarian aid into the war-torn country. A cleanup would cost more than $20 billion, and would never be fully complete, the United Nations estimated. Early this week, a U.N.-led team of international experts is scheduled to begin an audacious operation to siphon out the entirety of the Safer’s volatile cargo. The plan is fraught with danger. It involves lining up a very large crude carrier, purchased by the U.N. as the Nautica and now renamed Yemen, alongside the FSO Safer. The tanks on the two vessels will be connected by pipes and the oil will be shifted using hydraulic pumps. The Safer will then be cleaned of sludge, constituting an estimated 5% of the original cargo, and towed away to eventually be sold for scrap. Click here to read... [10]

Erdogan ends Gulf tour in UAE with agreements worth $50bn

Turkish President RecepTayyip Erdogan wrapped up a three-leg Gulf tour on July 19 with 13 deals worth an estimated $50.7 billion signed in the United Arab Emirates, following his visits to Saudi Arabia and Qatar. The size of the agreements and memorandums of understanding announced by both states offers a big boost to Turkey's economy, which faces additional stress since the devastating earthquakes in February that have cost the country more than $100 billion. Erdogan and UAE President Sheikh Mohamed bin Zayed Al Nahyan witnessed the agreements being signed by officials of both countries in Abu Dhabi. These included financing up to $8.5 billion for earthquake relief bonds and extending $3 billion in loan facilities to support Turkish exports. Other agreements covered energy, defence and industry. "With the joint agreement we will sign, we will elevate our relations to the level of strategic partnership," Erdogan said prior to the ceremony of exchanging signed agreements. "We want to strengthen the legal infrastructure in areas such as investment promotion, security, renewable energy and transportation." The two countries signed a memorandum of understanding on strategic cooperation in the field of defense industries, a move that follows Turkey's massive sale of armed drones and local production agreements with Saudi Arabia on July 17. Click here to read... [11]

Iran’s plan to connect to Russian power grid moving forward – minister

Iran will soon start exchanging electricity with Russia once its plan to connect the two national power grids via Azerbaijan is complete, Energy Minister Ali Akbar Mehrabian has said. Mehrabian did not offer a specific timeline but confirmed that Tehran will also move forward with an alternative path through Armenia and Georgia. The Iranian and Armenian power grids are already connected. Iran supplies natural gas to its northern neighbor to fuel power plants there and receives electricity in return, with Armenia keeping a share as compensation. The two nations agreed last year to double the capacity of the scheme by 2023.“We are trying to connect Iran’s electricity network to all regional countries. This makes the network more stable and provides more electricity during different times of the year,” Mehrabian explained. The project to link Iran’s energy grid with that of Russia’s was given impetus in 2016 after the signing of the Joint Comprehensive Plan of Action (JCPOA), which focused on Tehran’s nuclear industry and saw international sanctions lifted from the Middle Eastern country. Azerbaijan was reportedly initially reluctant to serve as a transit nation between Russia and Iran due to Tehran’s energy cooperation with Armenia. Baku and Yerevan have a long-standing conflict over the disputed area of Nagorno-Karabakh. For optimal flexibility, Iran would need to match its power grid parameters with Russian ones. Click here to read... [12]

EU trade deal with South America ‘within reach’ – von der Leyen

A free trade deal between the EU and the Mercosur bloc of South American economies, comprising Argentina, Brazil, Paraguay, and Uruguay, may be finalized by the end of the year, European Commission President Ursula von der Leyen said on July 17. At a meeting with President Luiz Inacio Lula da Silva of Brazil, the largest of the Mercosur member states, she said the deal was “within reach,” and that the parties are currently working to sort out the remaining differences. “What we want to discuss today is how to further connect our people and our businesses, how to reduce risks and strengthen and diversify our supply chains, and how to modernize our economies in a way that reduces inequalities and benefits all,” von der Leyen stated. “All of this is within our reach if we get the EU-Mercosur agreement over the finish line, and we are committed to resolving any remaining differences as soon as possible.” She noted that Brussels has committed to investing up to €45 billion ($50.6 billion) in Latin America and countries in the Caribbean by 2027, including in the green energy sector. The Brazilian president said his country is committed to finalizing the trade deal, but noted that he expects the agreement to be “balanced” and without “unreasonable” environmental demands. Click here to read... [13]

Tug-of-War At The IMO: Proposed Maritime Levy Faces Backlash

The International Maritime Organisation (IMO) hopes to introduce a levy on shipping companies that do not reduce their greenhouse gas (GHG) emissions in line with expectations. Several maritime nations are in support of this effort, including Denmark and the Marshall Islands. Funds from the levy could support countries trying to tackle climate change and could encourage companies in the maritime sector to cut emissions. The shipping industry transports approximately 90 percent of global trade and contributes around 3 percent of global CO2 emissions. Because shipping is an international industry, crossing various water borders to carry out business, its GHG emissions have been difficult. Member states of the UN IMO held a meeting in early July to discuss the potential for an agreement on the levy. Proposals were submitted from several EU countries, the Marshall Islands, Solomon Islands and others on how the levy might be shaped. The representatives were expected to discuss aspects such as the price of carbon dioxide and how money from the levy should be spent. Several European countries, including France, have been garnering support for the levy with their trade partners. Pacific Island nations have proposed a $100 per-tonne-of-CO2 charge to shipping companies starting in 2025. They suggested that the revenues should be used for countries facing extreme weather events due to climate change, as well as low-carbon shipping technologies. Click here to read... [14]

More foreign tourists, worker shortages fuel tourism troubles in Japan

The return of crowds of foreign tourists to Japan coupled with a chronic personnel shortage in the hotel and transportation industries are creating various problems for an increasingly overwhelmed tourism sector. The Japan National Tourism Organization said July 19 that foreign tourists in June topped 2 million for the first time since January 2020, when the novel coronavirus pandemic began spreading around the world. Foreign tourists are flocking to hotels designed especially for them, such as the Mimaru Suites in Tokyo’s Asakusa district. The hotel opened in December with a design like a traditional Japanese home. It is one of 26 facilities that Cosmos Hotel Management Co. manages around Japan. In April, 90 percent of the company’s guests were from abroad. During the COVID-19 pandemic, only about 15 percent of the company’s rooms were occupied, forcing the company to slash room rates to as low as 15,000 yen ($108). But with about 70 percent of the rooms now occupied, the average rate has risen to about 32,000 yen. “Because consumer prices are rising around the world and due to the effects of a weak yen, foreigners probably don’t think the prices are too high,” said a company official.Seibu Holdings Inc. operates the Prince Hotel chain. In May, the average room rate for its domestic hotels increased by 23.8 percent compared to May 2019. Click here to read... [15]

China’s 31-point plan vows private firms, like state brethren, will be ‘bigger, better and stronger’

In perhaps its strongest message ever to China’s private sector, Beijing has offered up solid political backing while vowing to create a favourable environment to unleash entrepreneurship that leadership sees as critical in curbing downward risks in economic recovery. And with Beijing trying to appear more proactive in tackling downward risks and persistent headwinds in China’s economic recovery, they pledged to build the private economy “bigger, better and stronger” – a backing that state-owned enterprises have enjoyed for years. The commitments were among those unveiled on July 19 in a new 31-point action plan that aims to shore up the ailing private sector that underpins economic growth, jobs and technological innovation, and to invigorate the national economy. Beijing’s move came after the nation’s second-quarter gross domestic product (GDP) grew by just 0.8 per cent, compared with the first quarter. The outcome has fanned fears that the national economy is losing steam, while making the market more anxious over policy solutions by top leadership, who will convene a quarterly economic analysis conference in late July.For now, however, this new action plan is the most comprehensive one released since President Xi Jinping started his third presidential term in March, and it touches on a raft of widely concerning issues such as market entry, fair competition, financing support, payment defaults, intellectual property rights and legal protection. Click here to read... [16]

Strategic

Russian military issues maritime warning for Black Sea

The Russian military issued a new navigational warning for the Black Sea on July 19, declaring certain areas in its international waters to be “temporarily unsafe” for vessels. Apart from that, the military advised seafarers against attempting to reach Ukraine’s ports, stating that all vessels heading there will be treated as potential carriers of war goods starting from July 20. Therefore, the flag state of a ship attempting to reach the Ukrainian Black Sea ports will be deemed as “taking part in the Ukrainian conflict on the side of the Kiev regime,” the Russian Defense ministry said in a statement. The military said it also declared certain areas in the international waters of the Black Sea to be “temporarily unsafe” for navigation. The areas are located in the north-west and south-east of the waterway, the military noted, adding that all the necessary navigational warnings have already been published as required under existing procedures. “With the termination of the Black Sea Initiative and the abolition of the maritime humanitarian corridor, from 00:00 Moscow time on July 20, 2023, all ships en route to Ukrainian ports in the Black Sea will be considered potential carriers of military cargo,” the military insisted.The new restrictions de-facto re-impose the Russian naval blockade on Ukraine, lifted under the so-called Black Sea grain deal in July 2022. Click here to read... [17]

Russia seeks more military conscripts as war in Ukraine grinds on

Russia is seeking to widen the pool of soldiers it can potentially draw on to fight in Ukraine. The lower house of parliament on July 25 approved a law raising the upper age limit for military conscripts from 27 to 30 years under rules that would come into effect in 2024 after being endorsed by the upper house and signed into law by President Vladimir Putin. “This law was drafted for a big war, for general mobilisation and this already smacks of a big war,” Andrei Kartapolov, head of the lower chamber’s defence committee, said in a broadcast debate before the vote. While Russia has said it won’t send conscripts to fight in Ukraine, they can be mobilised once they finish their draft. The changes would mean would mean an extra 2.4 million potential conscripts will become liable for 12-month military service, according to Igor Yefremov, a researcher and specialist in demographics at the Gaidar Institute in Moscow. The extra recruits may help Putin to wage the conflict for longer and bolster the army elsewhere. Russia has struggled to make progress after failing to capture the Ukrainian capital Kyiv early in the war and focusing its attention on the southeast of the country. While a Ukrainian counteroffensive currently under way so far hasn’t achieved a major breakthrough, Ukraine’s US and European allies are ratcheting up weapons supplies. Click here to read... [18]

Demining Ukraine will take 757 years – WaPo

The conflict with Russia has turned Ukraine into the “most mined country” in the world, the Washington Post reported on July 23, citing data from the nation’s government and several non-governmental humanitarian mine clearance groups. Almost one-third of Ukraine’s territory has been affected by heavy fighting and will likely require intense demining operations, the media outlet said, adding that over 67,000 square miles (173,529 square kilometers) have been contaminated with unexploded ordnance, according to Slovakia-based think tank GLOBSEC. That’s more than the size of Florida and roughly equivalent to Uruguay.“The sheer quantity of ordnance in Ukraine is just unprecedented in the last 30 years. There’s nothing like it,” Greg Crowther, the director of programs at British NGO Mines Advisory Group, told the Washington Post.According to UN data, almost 300 civilians, including 22 children, died in Ukraine in incidents linked to unexploded ordnance between February 2022 and July 2023, the Post reported. Mines and other unexploded munitions also resulted in 632 civilian injuries over the same period, it added. Both sides of the conflict actively use mines in their operations, the media outlet noted. The US also contributed to the mining of Ukrainian territory by supplying Kiev with 155-millimeter artillery rounds that create temporary minefields, although their submunitions are technically supposed to self-destruct, the Washington Post reported. Click here to read... [19]

Ukraine’s Stalled Offensive Puts Biden in Uneasy Political Position

The slow pace of Ukraine’s counteroffensive against entrenched Russian invaders is dimming hopes that negotiations for an end to the fighting could come this year and raising the spectre of an open-ended conflict, according to Western officials. A potential stalemate would test President Biden’s stated strategy of pouring billions of dollars in military aid into Ukraine, to enable Kyiv to negotiate with Russia from a position of strength. It could also challenge the West’s continuing ability to supply weaponry that is already in short supply, and provide political fodder to those opposing U.S. support for the war. “Obviously it’s easier to provide more support when things are going well,” said John Herbst, a former U.S. ambassador to Ukraine and an advocate of expanding military assistance to Kyiv. But the Biden administration doesn’t have much choice other than to continue providing weapons, he said. Backing away from Ukraine and allowing even a partial Russian victory “would be the signature failure of Biden foreign policy that would dwarf the Afghan withdrawal,” added Herbst, who is now at the Washington-based Atlantic Council think tank. The U.S. stay-the-course strategy holds some risks, however. Biden has staked his foreign policy credentials on a conflict that he describes as a battle between democracy and authoritarianism. He has directed more than $43 billion in security assistance to Kyiv, but is facing challenges in Congress from some members of the Republican Party. Click here to read... [20]

PLA rolls out longer-range missiles near Taiwan: military experts

The Chinese military has expanded its missile force over the past decade and rolled out modern missiles allowing it to target Taiwan and its allies in the event of a cross-strait war, according to military analysts. According to a report released earlier this month by Decker Eveleth, a researcher at the Middlebury Institute of International Studies, the People’s Liberation Army Rocket Force is widely deploying DF-17 medium-range ballistic missiles near Taiwan. Rocket force brigades in south-eastern provinces near Taiwan have been upgrading their short-range ballistic missiles, defined as those capable of striking targets within 1,000km (620 miles), according to the report, which is based in large part on publicly available satellite images from rocket force bases. The PLA has not said how it intends to use its missiles. But the rocket force, which only became a full service branch in 2016, played a major role in Beijing’s live-fire drills targeting Taiwan last August and its simulated assault on the self-ruled island in April. Kapil Kajal, a land warfare reporter at the defence intelligence firm Janes Asia-Pacific, said the modern DF-17 ballistic missiles had gradually been replacing the short-range missiles.“With the deployment of the DF-17 in the 61st Base [of the rocket force], the PLA seeks to acquire the capability to strike foreign military bases and fleets in the Western Pacific,” he said. Click here to read... [21]

China vows countermeasures after CIA chief William Burns says agency is working to rebuild spy network

Beijing has vowed to take “all necessary” countermeasures following comments by CIA director William Burns that the agency has “made progress” in rebuilding its spy networks in China. Foreign ministry spokeswoman Mao Ning on July 24 said that the Chinese government had taken note of the comments. “China will take all necessary measures to firmly safeguard our national security,” she told a press conference. Burns, CIA director since 2021, said last week that his agency has been working to rebuild its networks after the Chinese government caught some of its agents a decade ago. “We’ve made progress and we’re working very hard over recent years to ensure that we have strong human intelligence capability to complement what we can acquire through other methods,” he told the Aspen Security Forum. He also said the CIA is working to ensure it can provide early warnings about any plans to attack Taiwan “if that day ever comes”. The New York Times reported in 2017 that US intelligence operations had suffered a heavy blow between 2010 and 2012 in China with dozens of sources being killed or disappearing.Mao criticised the US for accusing Beijing of engaging in espionage activities on the one hand but spying in China on the other. Click here to read... [22]

Xi meets Kissinger

Chinese President Xi Jinping welcomed former US secretary of state Henry Kissinger to Beijing, saying their two countries are currently at a critical juncture for the future of their relations. The veteran American diplomat, who recently turned 100, had earlier met with Chinese Defense Minister Li Shangfu. Addressing his guest on July 20, Xi said that “once again, China and the US are at a crossroads of where to go from here, and once again, both sides need to make a choice.” Xi added that the “Chinese people never forget their old friends, and Sino-US relations will always be linked with the name of Henry Kissinger.” Beijing was willing to explore ways of peaceful coexistence between the two global powers, the Chinese head of state said. Kissinger, who served under Presidents Richard Nixon and Gerald Ford in the 1970s as secretary of state and national security adviser, remarked that Sino-American relations were a “matter of world peace and the progress of human society.” He played a key role in the talks that put an end to the Vietnam War, as well as the normalization of relations between Washington and Beijing with an eye to pitting China against the Soviet Union during the Cold War. During his meeting with Defense Minister Li Shangfu on July 18, Kissinger urged both nations to reverse their current confrontational course. Click here to read... [23]

Kissinger, Chinese defense minister discuss Sino-U.S. relations

The U.S. should exercise sound strategic judgment in dealing with China, Chinese Defense Minister Li Shangfu said while meeting veteran U.S. diplomat Henry Kissinger in Beijing on July 18. China has been committed to building stable, predictable and constructive Sino-U.S. relations and hopes the U.S. can work with it to promote the healthy development of relations between their two militaries, the Defense Ministry quoted Li as saying.Li's remarks followed recent visits to China by senior U.S. officials, including Secretary of State Antony Blinken and Treasury Secretary Janet Yellen, which aimed to smooth over tensions between the two superpowers. The talks took place as high-level defense dialogue between China and the U.S. remains frozen and military deployments across East Asia intensify. Li's meeting with Kissinger expounded on Sino-U.S. relations. He said "some people on the U.S. side have failed to move in the same direction as the Chinese side, resulting in China-United States relations hovering at a low point since the establishment of diplomatic relations," according to a statement from China's Defense Ministry. "We have always been committed to building stable, predictable and constructive Sino-U.S. relations, and we hope that the U.S. will work with China to implement the consensus of the heads of State of the two countries and jointly promote the healthy and stable development of the relationship between the two militaries." Click here to read... [24]

U.S. nuclear missile sub visits South Korea as allies launch talks

For the first time since the 1980s a U.S. nuclear-armed ballistic missile submarine (SSBN) visited South Korea on July 18, as the allies launched talks to coordinate their responses in the event of a nuclear war with North Korea. White House Indo-Pacific coordinator Kurt Campbell confirmed the rare visit, which had been expected after it was announced in a joint declaration during a summit between South Korean President Yoon Suk Yeol and U.S. President Joe Biden in Washington in April. "As we speak, an American nuclear submarine is making port in Busan today. That's the first visit of (an) American nuclear submarine in decades," Campbell told reporters at a briefing in Seoul, where he was attending the first Nuclear Consultative Group (NCG) discussion with South Korean officials. The group, aimed at better coordinating an allied nuclear response in the event of a war with North Korea, was also announced during the April summit amid growing calls in South Korea for its own nuclear weapons, a step Washington opposes. North Korea, which test fired an intercontinental ballistic missile (ICBM) last week, condemned the NCG on July 17 for "openly discussing the use of nukes" and warned against allied plans to increase displays of military force, including the submarine visit.Campbell did not identify the submarine, but said its visit is a manifestation of American commitment to South Korea's defence. Click here to read... [25]

Thai Political Star Is Blocked From Power, Thwarting Democracy Movement

Two months ago when Pita Limjaroenrat’s upstart party handily defeated its military-backed opponents in national elections, the results were widely seen as a leap forward for democracy in a country whose powerful army and its royalist backers have long resisted change. It has become clear in recent days that, despite his electoral success, the 42-year-old youth icon won’t run Thailand’s new government. Last week, an army-appointed senate blocked Pita’s first bid to become prime minister. On July 19, his quest to lead the country all but ended as a court suspended him from parliament and lawmakers decided against allowing him the chance to stand in a second parliamentary vote for the top job. Pita’s challenges show the persistent obstacles that democracy faces in Southeast Asia, where countries such as Myanmar, Cambodia, Vietnam and Laos are ruled by authoritarian regimes. The struggle has been particularly volatile in Thailand, where the military has staged more than a dozen coups over the past century and, in recent years, sought to crush a youth-led movement that has more openly questioned its authority than ever before. On July 19, hundreds of Pita’s supporters protested outside parliament and in central Bangkok, a glimpse of broader turmoil that may lie ahead. Click here to read... [26]

Israel recognizes Morocco’s claim to Western Sahara

Israel has recognized Moroccan sovereignty over the disputed territory of Western Sahara, Prime Minister Benjamin Netanyahu’s office announced on July 17. The statement followed a proclamation by Morocco’s Foreign Ministry that King Mohammed VI had received a letter from Netanyahu affirming Moroccan ownership of the territory. Netanyahu revealed Israel is considering the “opening of a consulate in the town of Dakhla,” as demanded by Morocco when the two countries normalized relations in 2020. Israel is only the second nation, after the US, to back up Morocco’s claim to Western Sahara, a former Spanish colony it annexed in 1975. The Polisario Front rejected Rabat’s claim and fought for independence up until a UN-brokered cease-fire in 1991.While the region’s fate is supposed to be decided by a UN referendum, the competing factions have been unable to agree on who is eligible to vote, and fighting broke out again for the first time in 29 years in 2020. While sparsely populated, Western Sahara contains some valuable resources, including phosphate deposits and rich fishing waters, and is believed to have significant untapped offshore oil deposits as well. Israel and Morocco reestablished diplomatic ties under the US-backed Abraham Accords after Washington essentially bribed Rabat with the recognition of its claim to Western Sahara. This has strained Morocco’s already-tense relationship with its neighbor, Algeria, which backs the Polisario Front. Click here to read... [27]

Israel prays for ties with Saudi Arabia, Herzog tells US Congress

Israeli President Isaac Herzog has lauded the United States’ push to broker formal diplomatic ties between his country and Saudi Arabia, saying that a normalisation agreement would be transformative. In a speech to Congress on July 18, Herzog — who serves in a largely ceremonial role — effusively praised the US-Israel relationship and called it “absolutely unbreakable” despite current challenges. “Israel thanks the United States for working towards establishing peaceful relations between Israel and the Kingdom of Saudi Arabia — a leading nation in the region and in the Muslim world. We pray for this moment to come,” Herzog said. “This would be a huge sea change in the course of history in the Middle East and the world at large.” Herzog’s remarks signal that Israel sees normalisation with Saudi Arabia as a geopolitical prize: one that the administration of President Joe Biden is trying to deliver for the right-wing government of Prime Minister Benjamin Netanyahu. Last month, US Secretary of State Antony Blinken declared Saudi-Israeli normalisation a “real national security interest” for Washington. The top US diplomat visited the kingdom in June but has since said that establishing official ties between the two countries remains “difficult”. Few Arabs states have recognised Israel — a key US ally in the region — since its establishment in 1948, but former President Donald Trump’s administration helped secure agreements for formal relations between Israel and the United Arab Emirates, Bahrain and Morocco in 2020. Click here to read... [28]

Taliban rejects Iran claim leaders of ISIL sent to Afghanistan

The Taliban has rejected a claim by Iran’s foreign minister that the leaders of the ISIL (ISIS) armed group had been sent to Afghanistan.“If Iran has any intelligence that Daesh members have been transferred to Afghanistan, we hope [they] share it so the Afghan security forces can take the necessary steps,” Abdul Qahar Balkhi, a spokesman for the foreign ministry, said on Twitter on Saturday using a common Arabic name for the ISIL group.“The Islamic Emirate of Afghanistan has meticulously fought against Daesh both during & after the end of the occupation,” he added. Balkhi also urged Iranian authorities to take a constructive stance on economic, political, and social issues. Moreover, Balkhi asserted the Taliban government would “not allow anyone” to threaten the security of the country, “or use our territory against others”.Iranian Foreign Minister Hossein Amirabdollahian told state television in an interview last week that the leaders of ISIL had been sent to Afghanistan from Iraq, Syria, and Libya in recent months. “This is one of the challenges facing the Taliban,” he added.An affiliate of ISIL – Islamic State in Khorasan Province, ISKP (ISIS-K) – has been posing the biggest threat to the Taliban’s authority, claiming responsibility for several attacks. Hundreds of people have been killed and wounded, including foreigners and members of the minority Hazara community, in attacks carried out by the ISKP in a bid to undermine the Taliban government. Click here to read... [29]

China and Russia Kick Off Joint Military Exercises In Sea Of Japan

China and Russia have kicked off their anticipated joint military exercises in the Sea of Japan on July 20. Chinese state television has described the purpose as ensuring security of "strategic passage at sea". Bloomberg noted of regional reporting that China and Russia are "testing their joint combat capability via the exercise" - but there's been no specification of how long the exercise is expected to last, which involves land, air, and sea military assets. In reality, China and Russia are 'answering' recent US-Japan drills with provocative military exercises of their own in regional waters, at a moment Beijing has warned Japan over its deepening cooperation with NATO. China's defence ministry over the weekend confirmed that PLA naval vessels had set sail in preparation for new exercises with Russia. This included Beijing sending five Chinese warships, among them a guided-missile destroyer, to participate - but without specifying an exact location within the Sea of Japan. Last month both countries conducted joint air patrol over the Seas of Japan and East China, demonstrating their deepened ties, also amid the war in Ukraine which Beijing has yet to outright condemn, to the frustration of the West. China has considered itself 'neutral' concerning the Ukraine conflict while at the same time highlighting the dangers of NATO expansion east. For this reason Washington has accused it of quietly supporting Moscow. Click here to read... [30]

Cambodia holds lopsided election ahead of historic transfer of power

Cambodia holds a one-sided election on July 23 that is certain to prolong the ruling party’s dominance of politics, clearing the path for a historic leadership transition and the end of the reign of one of the world’s longest-serving premiers. The contest is effectively a one-horse race, with Prime Minister Hun Sen’s Cambodian People’s Party (CPP), a political behemoth with a vast war chest, facing no viable opponent after a ruthless, years-long crackdown on its rivals. Former Khmer Rouge guerrilla Hun Sen, 70, has led Cambodia for 38 years and has brushed off Western concern about the election’s credibility, determined to prevent any obstacle in his carefully calibrated transition to anoint his eldest son, Hun Manet, successor. No timeframe had been given for the handover until July 20, when Hun Sen signalled his son “could be” prime minister in three or four weeks, depending on “whether Hun Manet will be able to do it or not”. Hun Manet, 45, needs to win a National Assembly seat to become prime minister, which he is expected to do in Sunday’s general election. Analysts had expected the transition to come mid-term, giving time for Hun Manet to earn legitimacy with the public and political elite. Click here to read... [31]

Health

Deadly dengue sweeps Bangladesh, risks deepening economic pain

Lying on a mattress, 6-year-old Tawheed-E-Elahi was crying his lungs out while his mother held him tightly. A nurse tried to reassure him that, this time, the injection would not hurt much. Mugda Medical College & Hospital in Dhaka is inundated with patients suffering from dengue, like Tawheed. The number of cases this year surpassed 28,000 as of July 21, with 156 deaths so far. July 19 was the deadliest single day yet, with 19 lives lost. At Mugda Medical College & Hospital, acting director Mohammad Niatuzzaman said on July 19 that the facility was treating over 500 dengue patients. Since all the beds were taken, many were lying on mattresses on the floor. "Most of them have symptoms like high fever, severe pain, and other complications which cannot be treated at home," Niatuzzaman said. "Our resources are limited but still, we can't say no to any patients, we are trying to accommodate them all." The spread of the mosquito-borne disease is severely straining the medical system in a South Asian country already grappling with low foreign currency reserves, frequent power blackouts and political tensions ahead of next year's election. Bangladesh's dengue crisis has also spawned a debate over who or what is responsible -- from allegedly lax mosquito eradication efforts to climate change. Click here to read... [32]

U.S. suspends federal funding to Wuhan lab over non-compliance

The U.S. has suspended federal funding to China’s Wuhan Institute of Virology (WIV) for failing to provide documentation related to concerns over biosafety protocol violations at the facility that has faced questions for years over the origins of the COVID-19 pandemic. The U.S. Department of Health and Human Services (HHS) also said it wants to bar the Chinese research body from participating in government procurement and non-procurement programs going forward. WIV has not received federal funding from the National Institutes of Health (NIH), the U.S. medical research agency, since July 2020, according to an HHS statement on July 19. The action was taken on July 17 following a months-long review that led the HHS to find that “WIV is not compliant with federal regulations and is not presently responsible”, according to a memo from the department. “The move was undertaken due to WIV’s failure to provide documentation on WIV’s research requested by NIH related to concerns that WIV violated NIH’s biosafety protocols,” an HHS spokesperson said in a statement. The institute could not immediately be reached outside of regular business hours. The origins of the coronavirus pandemic have been a matter of furious debate around the world almost since the first human cases were reported in Wuhan in late 2019. Click here to read... [33]