Global Developments and Analysis: Weekly Monitor (14-20 August)

Economic

Global household wealth nosedives – report

Total net private wealth across the world decreased by 2.4% to $454.4 trillion at the end of last year, according to a joint report by Credit Suisse and UBS published this week. The decline was the first since the 2008 financial crisis. The research found that much of the $11.3 trillion fall came from the appreciation of the US dollar against numerous other currencies. Financial assets reportedly contributed most to wealth declines in 2022, while non-financial assets such as real estate stayed resilient, despite rapidly rising interest rates. Wealth per adult declined by 3.6% to $84,718, the survey showed. Losses were heavily concentrated in wealthier regions such as North America and Europe, which together shed $10.9 trillion. Asia Pacific recorded a decline of $2.1 trillion, while Latin America was the outlier with a total wealth increase of $2.4 trillion, helped by an average 6% currency appreciation against the US dollar. In country terms, the US headed the list of losses, followed by Japan, China, Canada, and Australia, researchers found. The largest wealth increases were recorded for Russia, Mexico, India, and Brazil. “Wealth evolution proved resilient during the Covid-19 era and grew at a record pace during 2021. But inflation, rising interest rates, and currency depreciation caused a reversal in 2022,” said global head of economics and research at Credit Suisse, Nannette Hechler-Fayd’herbe. Click here to read... [2]

Run It Cold: Why Xi Jinping Is Letting China’s Economy Flail

Xi Jinping’s quest to rewrite the playbook that drove China’s economic miracle for a generation is facing its sternest test yet. The $18 trillion economy is decelerating, consumers are downbeat, exports are struggling, prices are falling and more than one in five young people are out of work. Country Garden Holdings Co., with 3,000 pending property projects up and down the country, is on the cusp of default and protestors have gathered at Zhongzhi Enterprise Group Co., one of the biggest shadow banks, demanding their money as payments are halted.Many of those woes can be traced back to President Xi’s determination to shift away from the debt-fuelled growth model of his predecessors. Even as the real estate crisis deepens, there have been only limited measures to cushion the blow, prompting forecasters such as JPMorgan Chase & Co., Barclays Plc and Morgan Stanley to downgrade their projections for China’s economic growth this year to below the government’s 5% target. Foreign investors are pulling money out, with the central bank boosting efforts to stanch the yuan’s tumble toward the weakest level since 2007. But where Biden has opted to run his economy hot, spending trillions of dollars on household stimulus and infrastructure to goose the economy, Xi is running his cold in a bid to finally break China’s addiction to fuelling growth with speculative apartment construction and low-return projects funded by opaque local borrowing. Click here to read... [3]

China in decline? New US narrative is geared towards 2024 election

Three recent articles in The New York Times have signalled a “new” narrative about China. Once a threat by dint of its inexorable rise, now it poses a threat because it is in decline. US President Joe Biden set the terms of this new narrative. As The New York Times’ Michael D. Shear reports, the White House now worries that “China’s struggles with high unemployment and an aging workforce make the country ‘a ticking time bomb’ at the heart of the world economy”. Biden warned, “When bad folks have problems, they do bad things”, but he did not explain how, exactly, unemployment and an ageing population turn China into a threat. Shear gives another reason for China’s new-found decline: “the president has moved aggressively to contain China’s rise and to restrict its ability to benefit militarily from the use of technologies developed in the United States”. Given the scope of Biden’s new semiconductor restrictions, he might have added “and non-militarily as well”. Meanwhile, Peter S. Goodman, an economics reporter, points to a “slew of developments” supporting the new narrative. These include declining Chinese exports and imports, falling prices “on a range of goods, from food to apartments,” a housing slump, and a real-estate default that has produced losses of US$7.6 billion (a sizeable event, but nothing close to the typical US bank bailout). Click here to read... [4]

China Seeks More Secrecy in Its Energy Sector To Protect National Security

China needs to exercise extreme discretion and protect the secrecy of its energy sector to safeguard its national security against unfriendly foreign forces, a top Chinese energy official said on Aug 16.“It is necessary to increase propaganda around ensuring confidentiality, give full play to the traditions of confidentiality in nuclear, petroleum and other energy industries, organize and hold various activities, actively foster a culture of protecting secrets and extreme discretion,” Zhang Jianhua, the director of China’s National Energy Administration (NEA), wrote Aug 16. The comments of the official were published on the agency’s website and translated by CNBC.China, for example, does not report commercial or strategic oil inventories. Analysts are trying to estimate whether the world’s largest crude oil importer is stockpiling crude or drawing from inventories by using government data to deduct the amount of crude processed by refiners from all available crude coming from imports and domestic production. China’s Zhang also said that secrecy in the energy sector is important to prevent potential leaks of technology. “The energy transition has some contradictions and difficulties — these very often are the focus of foreign hostile forces that want to steal and attack. They are fixed on our country’s energy sector, have increased collection of all kinds of data and information, in order to distort and slander China’s energy strategic planning, transformation, development, and other work, and interfere and influence our hard-won secure and stable environment,” Zhang said, without naming the “foreign hostile forces.” Click here to read... [5]

How China’s mergers and acquisitions abroad are shifting amid headwinds

China’s cross-border mergers and acquisitions (M&A) continue to face strong headwinds, with a slowing economy and a wave of new Covid-19 cases weighing on the market. Growing foreign market regulation has also affected M&A activity. Late last year, for example, Canadian and British governments, citing national security concerns, ordered several Chinese firms to divest their investments in lithium mining and microchip companies. This heightened regulatory environment has pushed China to pivot its investments from the historically attractive markets of the United States and Europe towards other parts of Asia and the Middle East. As a result, Chinese M&A activity in the US has dropped to its lowest in 17 years, with just US$221 million invested so far this year, compared to US$3.4 billion for the same time last year, according to data from Dealogic. Activity on Datasite’s platform shows this, too, with China deals down 23 per cent year on year in the first seven months of the year, led by fewer consumer, tech, media and telecoms, and industrial deals. By contrast, M&A activity in the Asia-Pacific is up by 42 per cent year on year. The drastic dip in Chinese cross-border M&A activity isn’t attributable to the US alone. Chinese deals in Germany total just US$189 million so far this year, the lowest in more than a decade, according to Dealogic. Click here to read... [6]

U.S. tightens export controls of nuclear power items to China

The Biden administration has tightened controls on the export of materials and components for nuclear power plants to China, saying it would ensure the items were used only for peaceful purposes and not the proliferation of atomic weapons. The steps are among the latest signs of strained relations between Washington and Beijing, which have clashed over spying allegations, human rights, China's industrial policies, and U.S. export bans on advanced technologies. The Bureau of Industry and Security (BIS), an arm of the Commerce Department, now requires exporters to get specific licenses to export certain generators, containers and software intended for use in nuclear plants in China. The Nuclear Regulatory Commission (NRC), the federal agency responsible for nuclear energy safety, also requires exporters to get specific licenses to export special nuclear material and source material. That includes different types of uranium as well as deuterium, a hydrogen isotope that, in large amounts, could be used in reactors to make tritium, a nuclear weapons component. The Biden administration sees the action as "necessary to further the national security interests of the United States and to enhance the common defence and security" the NRC said. A U.S. official said the changes, made on Aug 14, were prompted by general policy toward China. "No action by an exporter or China prompted this action," an NRC spokesperson said. "This is part of a broader U.S. government effort to tighten oversight of certain exports to China." Click here to read... [7]

Big Solar Slapped With Tariffs for Dodging China Duties

The United Commerce Department will finalize a decision on Aug 18 to impose import duties on solar panel manufacturers who made their products in Southeast Asian nations in a bid to avoid tariffs on Chinese-made goods. The Commerce probe found that units of Chinese companies BYD, Trina Solar, Longi Green Energy and Canadian Solar were dodging U.S. tariffs on Chinese solar panels by finishing their products in Cambodia, Malaysia, Thailand and Vietnam before shipping them to the U.S. market. The U.S. has had anti-dumping duties for a decade now on Chinese-made solar products after the government determined that Chinese companies were receiving unfair government subsidies that made it hard for U.S. panel manufacturers to compete. The tariffs will hurt buyers of solar panels that rely on cheap products from China and Asia to make their projects competitive. However, the tariffs are bound to be music in the ears of the small U.S. solar manufacturing industry, which has long struggled to compete with Chinese goods. Meanwhile, the U.S. government is currently scrutinizing Chinese electric-vehicle battery and car parts supply chains for possible links to forced labour. Click here to read... [8]

Wall Street's dismal August drags on with 3rd straight losing week

Wall Street limped to the finish line of its third losing week in a row Aug 18. The SP 500 barely budged as it ended the week with a loss of more than 2 percent, like other U.S. indexes. It edged down by 0.65, or less than 0.1 percent, to 4,369.71. The Dow Jones Industrial Average added 25.83 points, or 0.1 percent, to 34,500.66, and the NASDAQ composite slipped 26.16, or 0.2 percent, to 13,290.78. August has been rough for the stock market, which has given back more than a quarter of the SP 500's torrid gains for the year's first seven months. That's in part because a swift rise in yields has forced investors to reconsider whether stocks got too expensive, particularly after critics warned the market rose too far, too quickly. Stocks held a bit steadier Aug 18 after yields eased a bit. After topping 4.30 percent a day before and nearing its highest level since 2007, the 10-year Treasury yield fell back to 4.24 percent. Stock markets elsewhere in the world sank more sharply, as higher yields globally crank up the pressure. Higher yields mean bonds are paying out more in interest, but they also make investors less willing to pay high prices for stocks and other investments that are less stable than bonds. Click here to read... [9]

Russian central bank announces major interest rate hike

The Bank of Russia raised interest rates by 350 basis points to 12% at an emergency meeting on Aug 15 in a bid to halt the rapid depreciation of the ruble against world currencies. “Inflationary pressure is building up… The decision is aimed at limiting price stability risks,” the regulator said in a statement. The central bank added that demand in the economy has exceeded the country's ability to expand output, increasing inflation and affecting “the rouble’s exchange rate dynamics through elevated demand for imports.” “Consequently, the pass-through of the rouble’s depreciation to prices is gaining momentum and inflation expectations are on the rise,” it noted. On Aug 14, the ruble sank to a 16-month low against the dollar and euro, reaching 101 versus the greenback, and 111 against the European single currency. The ruble strengthened early on Aug 15 ahead of the regulator’s statement, but later slid back, and was trading around 98 to the dollar and 107 to the euro at 11:44am local time in Moscow. The Bank of Russia announced an extraordinary meeting shortly after the sharp depreciation to reassess the key interest rate, which previously stood at 8.5%. The regulator also said on Aug 15 that the key rate may be hiked again, in the event of increased pro-inflationary risks. Click here to read... [10]

Bangladesh's looming debt bills to China, Russia fuel forex fears

Bangladesh's public finances are coming under increasing strain as mounting loan repayments for Chinese, Russian and other infrastructure projects are poised to put a deeper dent in the country's foreign exchange reserves. The South Asian country is to begin repaying two China-funded megaprojects, the Karnaphuli river tunnel and the Padma bridge rail link, in November and December, respectively, according to officials. Payments on a portion of two large Russian loans, totalling $11.88 billion, for construction of the Rooppur Nuclear Power Plant began earlier this year, although the money is currently being held in an escrow account. Experts and officials note that arrangements with bilateral lenders -- and the types of loans Bangladesh has been taking in general since graduating to "lower middle-income country" status in 2015 -- are starting to put more pressure on Dhaka's foreign reserves, exacerbated by its weak currency, the taka. While the country is generally thought to have more breathing room than neighbours like Pakistan and bankrupt Sri Lanka, many say it now faces a crucial period for preserving its coffers. "If we fail to manage it properly, the macroeconomic stability may be jeopardized," said Mustafa Kamal Mujeri, a former chief economist at Bangladesh's central bank. Click here to read... [11]

Pensioners' share of spending hits nearly 40% of total in Japan

As Japan looks to stimulate consumer spending through pay hikes, a glaring problem has emerged: Pay increases do not benefit pensioners much. Given Japan's high proportion of retirees, encouraging older people to spend will be crucial if Japan is to escape its deflationary doldrums. "I hesitate to spend boldly when I think about my future," said a man his 70s in Yokohama, south of Tokyo. Although he is willing to spend on things like gifts for his grandchildren, he tends to avoid big purchases. The elderly account for a growing share of personal consumption in Japan. Monthly spending by households headed by people 65 and older averaged 211,780 yen ($1,450) in 2022, accounting for about 39% the national total. That is nearly double their share of around 23% in 2002. As Japan greys, the share of spending by the elderly has trended higher. According to an estimate by Takuya Hoshino, an economist at Dai-ichi Life Research Institute, a third of Japan's total consumption last year took place among households headed by unemployed seniors averaging 74.5 years old and considered pensioners. Private consumption contributes to about 50% of Japan's nominal gross domestic product, which amounted to 556 trillion yen ($3.8 trillion at the current exchange rate) in 2022. Some 15% of Japan's GDP is thus attributable to consumption by households headed by pensioners. Click here to read... [12]

Kenya reinstates fuel subsidy after months of violent protests

Kenya has reinstated a small subsidy to stabilise retail fuel prices for the next 30 days, the energy regulator says, in a reversal of government policy after public anger over the high cost of living. After taking office in September, President William Ruto removed fuel and maize flour subsidies put in place by his predecessor, saying he preferred subsidising production rather than consumption. The move was also aimed at cutting government spending as the government seeks to get a handle on debt repayments that have forced it to deny market speculation about a possible default. But the subsidy cuts as well as recent tax hikes have increased living costs and contributed to violent anti-government protests in recent months. The Energy and Petroleum Regulatory Authority (EPRA) said late on Aug 14 that the maximum retail price of a litre (0.26gal) of petrol would remain constant at 194.68 shillings ($1.35), shielding consumers from an increase of 7.33 shillings ($0.05), which the government will shoulder through a price stabilisation fund. Retail fuel prices are set in the middle of each month. The government also applied small subsidies on kerosene and diesel, EPRA said. The regulator did not provide an explanation for the government’s decision. Officials from EPRA, the Ministry of Energy, and the National Treasury and Economic Planning did not immediately respond to requests for comment. Click here to read... [13]

Turkey set to recycle quake debris covering 'two Manhattans'

Japan and the U.N.'s development agency signed an agreement Aug 16 to build two "state of the art" rubble recycling facilities to help tackle mountains of debris left by Turkey's devastating February earthquakes. The pilot projects will be built in southern Hatay and Kahramanmaras, two of the hardest hit cities among nearly a dozen shaken by a disaster that killed more than 50,000 people in Turkey and neighbouring Syria, and saw over 300,000 structures destroyed or left uninhabitable due to severe damage. The United Nations Development Programme (UNDP) says the more than 200 million tonnes of debris produced by the 7.8 magnitude temblor "dwarfs almost all previous natural disasters in the world," including Japan's 2011 quake and tsunami disaster, which generated about 31 million tonnes of rubble. Turkey's quake debris was "enough to cover the entire island of Manhattan -- twice -- in a meter-high layer of rubble," the agency said in a statement. The new recycling facilities, the first of their kind built in the quake-hit region, will safely remove asbestos and other hazardous waste from the rubble, separate out scrap metal and other recyclable materials and crush cement for reuse as paving and building material. Previous disasters show up that to 90% of building rubble can be recycled, while Japan reused about 81% of the debris left after the 2011 disaster, the UNDP said. Click here to read... [14]

UAE says not flouting ally sanctions as its economy warms to Russia

The United Arab Emirates has said it is careful not to violate sanctions imposed by its Western allies on Russia over the war in Ukraine, after a Wall Street Journal (WSJ) report claimed the country was aiding Moscow by providing an outlet for Russian money. A UAE official, however, said the country has a robust process to deal with sanctioned people and companies, and is in close contact with the United States and the European Union about the war’s implications for the global economy. The official, quoted by the outlet, added that Emirati banks monitor compliance with sanctions imposed on Russia to prevent violations of international law. “The ongoing global climate has led to financial and investment inflows to the UAE, given the country’s reputation as a stable global investment hub,” the official said. “We will continue to take these responsibilities extremely seriously, especially given the current geopolitical landscape.” The WSJ said an influx of Russians pouring into the UAE has attracted the attention of some of the Gulf country’s main banks, including Emirates NBD, Dubai’s main government-owned bank, which is recruiting Russian bankers to set up a unit dedicated to managing money from wealthy Russians. It also reported that local banks have opened thousands of accounts for Russians, although Emirati officials have said local banks avoid sanctioned individuals in order to maintain correspondent banking relations with US banks that clear dollar transactions. Click here to read... [15]

The Electric-Vehicle Bubble Starts to Deflate- WSJ Editorial

It’s ironic, to say the least, that the U.S. is seeking to imitate China’s economic model at the moment that its industrial policy fractures. Look no further than its collapsing electric-vehicle bubble, which is a lesson in how industries built by government often also fail because of government. Tesla last week slashed its prices in China to boost sales in an oversaturated EV market. In July Tesla and other auto makers in China agreed to stop their EV price war, only to scrap the cease-fire days later owing to government antitrust concerns. While lower prices may benefit consumers, auto makers in China are bleeding red ink and going bust. A plethora of Chinese EV start-ups launched in the past decade and fuelled by government support, including consumer incentives and direct financing. Auto makers churned out EVs to suck up subsidies. Giant property developer Evergrande Group launched an EV unit as its real-estate empire began to implode, but now the EV unit is foundering too. About 400 Chinese electric-car makers have failed in the past several years as Beijing reduced industry subsidies while ramping up production mandates. Scrap-yards around China are littered with EVs whose technology has become outdated, redolent of its unoccupied housing developments created by government-driven investment. Click here to read... [16]

Strategic

U.S. nuclear boss says China's arms programme not slowing down

U.S. Strategic Command, the department responsible for America's nuclear weapons programme, is monitoring China's nuclear development "day in and day out," its chief said this week. What they observe from the command's headquarters at Offutt Air Force Base, Nebraska, is Beijing's determination to establish a full-fledged nuclear triad of land-, sea- and air-based delivery platforms. "We're not seeing any indication that they're slowing down," Gen. Anthony Cotton told a media roundtable Aug 16 on the sidelines of the 2023 U.S. Strategic Command Deterrence Symposium held in Omaha. "As you recall, this past February, I had to notify Congress to let them know that their ground-based systems -- that includes both road mobiles and silo-based -- actually exceed the numbers that we have," Cotton said. He was referring to a letter he sent to Congress earlier in the year, in which he informed lawmakers that while the number of intercontinental ballistic missiles in China's active inventory had not overtaken those of the U.S., the number of land-based fixed and mobile ICBM launchers had. Silo-based systems are fixed in place and hard to conceal but less destructible than mobile ones. At a March congressional hearing, Cotton testified that within the past three years, China has built hundreds of new ICBM silos -- a move inconsistent with Beijing's long-professed stance of maintaining a "minimum" deterrence posture. Click here to read... [17]

U.S., Japan, South Korea agree to hold annual talks after Camp David summit

The leaders of the U.S., Japan and South Korea agreed on Aug 18 to hold at least one trilateral meeting each year as they pledged broad cooperation on security and economic challenges facing their nations. The U.S. and its two East Asian allies would increase their defence cooperation to "unprecedented levels," U.S. President Joe Biden told a news conference alongside Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol at the Camp David presidential retreat in the state of Maryland, just outside the American capital. Aug 18's summit, the first standalone meeting between leaders of the three nations, came amid a rapprochement between Japan and South Korea as well as rising tensions between the U.S. and China. Kishida, who earlier said the talks marked a "new era" in cooperation between the three countries, said these times demand that they realize "the potential of our strategic partnership." The leaders' joint statement, titled "The Spirit of Camp David," said the three nations "will hold trilateral meetings between our leaders, foreign ministers, defence ministers, and national security advisors at least annually, complementing existing trilateral meetings between our respective foreign and defence ministries." Click here to read... [18]

Chinese military launches drills around Taiwan as a 'warning' after a top island official went to US

The Chinese military launched drills around Taiwan on Aug 19 as a “stern warning” over what it called collusion between “separatists and foreign forces,” its defence ministry said, days after the island's vice president stopped over in the United States. Taiwanese Vice President William Lai's recent trip to Paraguay to reinforce relations with his government's last diplomatic partner in South America included stops in San Francisco and New York City. The mainland’s ruling Communist Party claims democratic Taiwan as part of its territory and says it has no right to conduct foreign relations.A spokesperson for China’s Eastern Theatre Command said in a brief statement that the military exercises involved the coordination of vessels and planes and their ability to seize control of air and sea spaces. It was also testing the forces' “actual combat capabilities," Shi Yi said. The drills in the waters and airspace to the north and southwest of Taiwan were a warning over provocations from pro-Taiwan independence forces and foreign forces, he added. The command released footage of the drills online that showed soldiers running, as well as military boats and planes. State media CCTV reported that missile-equipped boats and fighter jets were involved in the operation and that units worked together to simulate the surrounding of Taiwan. Click here to read... [19]

Exclusive | Signs of Chinese President Xi Jinping delegating more to hand-picked deputies at start of third term

Chinese leader Xi Jinping appears to be delegating more responsibilities to his chosen deputies, with fewer reported appearances at top-level meetings in the first stage of his unprecedented third term. While Chinese politics is opaque, meetings are the main platform for the leader to voice specific goals and policy points, reflecting how deeply involved he is in those areas. According to publicly available information, Xi had chaired 38 domestic meetings between the end of the Communist Party’s 20th national congress in October – the start of his third five-year term as the party’s leader – and the annual summer break that ended last week. The total was fewer than the 59 he chaired five years earlier and the 50 meetings he directly oversaw at the start of his first term after taking over from predecessor Hu Jintao. While the Covid-19 pandemic may have been a contributing factor overall, all zero-Covid restrictions were abandoned after the “two sessions”, the annual legislative gatherings, in March, when he installed allies in all key government positions. Since then, Xi has presided over 19 meetings on domestic affairs. He chaired 26 meetings in the same period five years ago, and 22 a decade ago.For example, Xi left it to He Weidong, Politburo member and Central Military Commission vice-chairman, to oversee a two-day meeting on military party affairs in July. Xi attended the same gathering in person in 2018. Click here to read... [20]

China’s defence chief Li Shangfu heads to Russia, Belarus on 6-day trip

Chinese Defence Minister General Li Shangfu began a trip to Russia and Belarus on Aug 14, as Beijing and Moscow continue to strengthen their military ties despite pressure from the West. Li will attend the Moscow Conference on International Security and will also travel to Belarus during the six-day trip, according to defence ministry spokesman Colonel Wu Qian. He said Li would give a speech at the Moscow conference and meet the Russian and other countries’ defence chiefs. “During his visit to Belarus, he will meet and hold talks with Belarusian state and military leaders, and visit Belarusian military units,” Wu said. It is Li’s second visit to Russia since he became defence minister in March. He will meet his Russian counterpart, Sergei Shoigu, for the third time – the pair met twice in April, in Moscow and New Delhi. In Moscow, Li and Shoigu pledged to promote cooperation between the two armed forces, including on military technology, and to support each nation’s “core interests”. Li also met Russian navy chief Nikolai Yevmenov in Beijing last month, discussing naval cooperation between the two countries. The Chinese defence chief has yet to officially meet his US counterpart Lloyd Austin. China and Russia have held at least 45 joint military drills in the decade from 2012 – the highest number yet. Twenty of them were bilateral exercises. Click here to read... [21]

Ukrainian leadership split over counteroffensive – Newsweek

Ukraine’s failure to break through Russian defences has driven a wedge between top officials in Kiev, with heated debates underway over whether the country should press ahead with, or abort, its much-hyped counteroffensive, Newsweek reported on Aug 16. Describing the dilemma facing Ukrainian President Vladimir Zelensky, the outlet has claimed that he must now decide “whether to go all-in and risk a costly failure, or to cut Ukraine’s losses and accept a politically damaging defeat.” The Ukrainian leadership has therefore split into two camps. One group insists that Kiev should pull back and wait for an anticipated Russian offensive in the fall and spring. The second group, which includes army Chief Valery Zaluzhny, wishes to continue the counteroffensive while dismissing any criticism as “impatience rooted in misunderstanding,” according to the article. “There definitely are some differences among the Ukrainian leadership about the military strategy,” an unnamed source “close to the Ukrainian government” told Newsweek. Ukraine’s slow progress on the battlefield has also led to rumblings among civilian officials, with “a blame game …. brewing in Kiev,” the outlet wrote. “There’s a sense that they were misled by the military in terms of how well this counteroffensive would go, that they were provided with overly rosy assessments from the military side. They’re unhappy about that,” the source said, adding that he would not rule out possible changes in the country’s military command. Click here to read... [22]

Japan to Release Water from Fukushima Nuclear Plant Into Pacific This Week

The Japanese government said it planned to begin the discharge of slightly radioactive wastewater from the Fukushima Daiichi nuclear plant on Aug 17, rejecting calls for a delay from some people in neighbouring countries. The announcement on Aug 15 came after the International Atomic Energy Agency, a United Nations body, gave the green light to the plan to release more than 1.3 million tons of water with small quantities of radioactive tritium over three to four decades. The agency said in early July that Japan’s plan was in line with international nuclear safety standards and that its impact on people and the environment would be negligible. An earthquake and tsunami knocked out power at the Fukushima nuclear plant on March 11, 2011, causing meltdowns at three reactors. Water used to cool reactor cores as well as rainwater and groundwater that flowed into or near the plant have been contaminated with radioactive substances. Plant operator Tokyo Electric Power, or Tepco, has stored the water in more than 1,000 tanks at the facility but says it is running out of room. Tepco says it will reduce the concentration of nearly all radioactive substances in the wastewater to a safe level with the exception of tritium, an isotope of hydrogen. The water will then get diluted with seawater so the concentration of tritium is also reduced to a safe level before the discharge, according to Tepco. Click here to read... [23]

Iran’s top diplomat extends Saudi trip, meets Crown Prince MBS

Iran’s foreign minister has met Saudi Arabia’s crown prince during his first visit to the kingdom since the Middle East rivals announced a surprise rapprochement, officials said. Hossein Amir-Abdollahian held talks with Crown Prince Mohammed bin Salman (MBS) in Jeddah on Aug 18, the Saudi Ministry of Foreign Affaris announced. After the meeting, Iran’s semi-official news agency Tasnim reported Amir-Abdollahian as saying the de facto Saudi ruler had accepted his invitation to visit Tehran. “Discussions were frank, beneficial and productive,” Amir-Abdollahian said in a social media post after the meeting. The state-run Saudi Press Agency offered few substantive details of their conversation, saying merely that they reviewed relations and “future opportunities for cooperation”. In a statement posted on social media, the Saudi Foreign Ministry said the two officials are looking for ways to develop bilateral relations, as well as “discussing developments in the situation on the regional and international arenas”. Iran’s official IRNA news agency said it was the first time a senior Iranian official had met with MBS, 37, who has ushered in a series of reforms, but has also clamped down on dissent in the country. “The meeting … is a great sign of ties between Iran and Saudi Arabia warming and expanding,” said Iran’s state-run Press TV correspondent Gisoo Misha Ahmadi from Jeddah. Click here to read... [24]

Brics Nations at Odds over Adding to Their Number

China and Russia are pushing to expand membership in the Brics bloc of emerging economies to counterbalance Western influence, while others in the group are reluctant to admit new entrants, such as Iran and Cuba, for fear of alienating Washington. The debate among the Brics nations—Brazil, Russia, India, China and South Africa—about whether and how to expand will likely feature prominently during the group’s first in-person leaders’ summit since the pandemic. The presidents of Brazil, China and South Africa, as well as the Indian prime minister, are set to attend the gathering here starting Aug 22. Russian President Vladimir Putin was originally slated to attend, but a warrant for his arrest by the International Criminal Court for alleged war crimes in Ukraine would have obliged South Africa, an ICC member, to arrest him had he shown up. Russian Foreign Minister Sergei Lavrov will attend instead. Putin is expected to address the summit virtually. Bracketed together originally by the clip of their economic growth, the Brics nations now account for more than a quarter of the global economy and some 42% of the world’s population. But the group’s size is matched by the scale of its disunity on political and security issues—including relations with the U.S. The five countries also represent vastly different governing systems and ideologies. Click here to read... [25]

China apparently building airstrip on disputed South China Sea isle

China appears to be constructing an airstrip on a disputed South China Sea island that is also claimed by Vietnam and Taiwan, according to satellite photos analyzed by The Associated Press. The work on Triton Island in the Paracel group mirrors construction on seven human-made islands in the Spratly group to the east that have been equipped with airstrips, docks and military systems, although it currently appears to be somewhat more modest in scale. China claims virtually the entire South China Sea as its own, denying the claims of others and defying an international ruling invalidating its assertion. Satellite photos from Planet Labs PBC analyzed by the AP show construction on the airstrip first visible in early August. News website The Drive first reported on the satellite images Aug 15. The runway, as currently laid out, would be more than 600 meters (2,000 feet) in length, long enough to accommodate turboprop aircraft and drones, but not fighter jets or bombers. Also visible are large numbers of vehicle tracks running across much of the island, along with what appear to be containers and construction equipment. Triton is one of the major islands in the Paracels, which is roughly equidistant from the coast of Vietnam and China's island province of Hainan. Click here to read... [26]

Singapore Approves Three Presidential Contenders. Here’s Who They Are.

Singapore will head for its first contested presidential election in over a decade in an exercise seen to weigh public sentiment at a time when the city-state had been rocked by controversies. Singaporeans will vote on Sept. 1 for just the third time since a constitutional amendment in 1991 transformed the post into a publicly elected one. Three met the strict criteria to contest, the Elections Department said Aug 18. They have to be officially nominated on Aug. 22. There were a total of six applications for the city-state’s largely ceremonial post of president. Six years ago, incumbent HalimahYacob got the job in an uncontested exercise. Unlike in the 2017 election when only Malay candidates were allowed to seek the presidency, the poll is open to all races this time.The president has the ability to veto any government move to draw on its foreign currency reserves and instruct the anti-graft agency to continue an investigation even if the prime minister objects. The results will be closely watched to gauge how Singaporeans’ perceive the ruling party ahead of a general election that must be called by 2025. The People’s Action Party has been hit by a series of scandals in recent weeks, putting its reputation to test. “The election will be an important indicator of sentiments on the ground towards the ruling party’s role in Singapore politics.” said Nydia Ngiow, managing director at strategic business consultancy firm Bower Group Asia. Click here to read... [27]

Myanmar military regime to withdraw from chairing ASEAN in 2026

Myanmar's military government will withdraw from chairing the Association of Southeast Asian Nations in 2026, according to diplomatic sources in the bloc, as the country's prolonged political crisis strains the regional grouping. With major ASEAN member states refusing to allow the military regime to participate in summits and other meetings, the leadership in Naypyitaw is understood to have decided that it would not be able to act as chair. The military ousted the elected government led by Aung San Suu Kyi in February 2021 and has resisted the bloc's efforts to resolve the crisis. The ASEAN chairmanship, in principle, rotates annually among the 10 member countries in alphabetical order. Indonesia holds the seat this year, followed by Laos in 2024 and Malaysia in 2025. Skipping Myanmar's turn, the Philippines is now expected to chair the bloc in 2026. Myanmar joined ASEAN in 1997. It was scheduled to assume the chairmanship in 2006, when the country was under a former military regime. But it announced the year before that it would stand aside in response to opposition from Europe, the U.S. and other countries. Myanmar assumed its first chairmanship in 2014 after a short-lived transition to civilian rule. Since ASEAN's chair country also hosts the East Asia Summit and other meetings involving countries outside the bloc -- including the U.S., China and Japan -- Myanmar's looming chairmanship has raised concerns about diplomatic confusion and tensions. Click here to read... [28]

Australia’s Aukus deal safe for now, but split within Labour reveals ‘grave problems ahead’

A fiery debate about Australia’s purchase of nuclear-powered submarines at a key party conference has revealed a much deeper disapproval within the Labour Party of the Aukus alliance than expected, political observers have said. Opposition about Aukus from the party’s rank-and-file, anti-war groups and affiliated unions has been building up for months, eventually forcing a debate on the deal at the Labour Party’s triennial conference on Aug 18. Both Prime Minister Anthony Albanese and former leader Scott Morrison – who first agreed to the deal – have been criticised for taking on the expensive taxpayer-funded A$368 billion (US$237.2 billion) pact, without much parliamentary or public consultation. The debate on Aug 18 is the first time it has been openly discussed. But attempts to remove Aukus from Labour’s policy platform on Aug 18 did not succeed given most in the party supported Aukus, although MP Josh Wilson broke ranks to openly oppose the deal, while there were interjections of disagreements throughout the debate. Wilson said the decision to acquire the submarines was not justified and posed many risks, including harming Australia’s commitments to the non-proliferation of nuclear weapons. “We must continue to bring that kind of searching and sometimes difficult debate to these matters, which more than some other topics frankly require greater scrutiny rather than less, and should never ever be advanced on the basis that they are the decision-making preserve of some defence and security establishment,” he said. Click here to read... [29]

ECOWAS defence chiefs agree ‘D-day’ for Niger military intervention

West Africa’s main bloc has agreed on a “D-day” for possible military intervention to restore democracy in Niger after generals toppled and detained President Mohamed Bazoum last month. The Economic Community of West African States (ECOWAS) agreed on Aug 18 to activate a standby force as a last resort if diplomatic efforts fail, a senior official said without disclosing when that is. “We are ready to go any time the order is given,” ECOWAS Commissioner for Political Affairs, Peace and Security Abdel-Fatau Musah said during the closing ceremony of a two-day meeting of West African army chiefs in Ghana’s capital, Accra. “The D-day is also decided. We’ve already agreed and fine-tuned what will be required for the intervention,” he said, emphasising that ECOWAS was still seeking to engage peacefully with Niger’s military leaders. “As we speak, we are still readying [a] mediation mission into the country, so we have not shut any door.” The defence chiefs met to fine-tune details of the potential military operation to restore Bazoum if ongoing negotiations with the coup leaders fail. “Let no one be in doubt that if everything else fails, the valiant forces of West Africa, both the military and the civilian components, are ready to answer to the call of duty,” Musah said. Military officers deposed Bazoum on July 26 and have defied calls from the United Nations, ECOWAS and others to reinstate him. Click here to read... [30]

What does the future hold for the Muslim Brotherhood?

A decade on from the Rabaa massacre, when at least 900 protesters were killed demonstrating against the overthrow of President Mohamed Morsi in a military coup, current President Abdel Fattah el-Sisi – the man who removed Morsi – has little domestic opposition to worry about. As for the Muslim Brotherhood (MB), the group that Morsi was a member of when he assumed the presidency for a year in 2012, they still appear politically weak, with divisions over what the next steps should be. Even the space outside Egypt for exiled members of the MB to operate has gotten smaller, with a rapprochement between Turkey and Egypt meaning that Ankara is less welcoming to its territory being used as a base for anti-Sisi campaigns. It is a far cry from the MB’s electoral victories in the immediate aftermath of Egypt’s 2011 revolution, which overthrew long-time President Hosni Mubarak. Ultimately, this has led to questions being posed about the organisation’s continuing legacy as a political force. “Things are looking rather bleak for the MB right now, but they have overcome similar crises before,” Joas Wagemakers, an associate professor of Islamic and Arabic studies at Utrecht University and an MB specialist, told Al Jazeera. Wagemakers believes the MB is still relevant – even though it has less space to operate in the changing politics of the Middle East, he says, it can always expand operations in Western countries. Click here to read... [31]

Health

WHO, US health authorities tracking new COVID-19 variant

The World Health Organization and U.S. health authorities said Aug 18 they are closely monitoring a new variant of COVID-19, although the potential impact of BA.2.86 is currently unknown. The WHO classified the new variant as one under surveillance "due to the large number (more than 30) of spike gene mutations it carries," it wrote in a bulletin about the pandemic late Aug 17. So far, the variant has only been detected in Israel, Denmark and the United States. The U.S. Centers for Disease Control (CDC) confirmed it is also closely monitoring the variant, in a message on the social platform X, formerly known as Twitter. There are only four known sequences of the variant, the WHO has said. "The potential impact of the BA.2.86 mutations are presently unknown and undergoing careful assessment," the WHO said. Francois Balloux, professor of computational systems biology at University College London, said the attention attracted by the new variant was warranted. "BA.2.86 is the most striking SARS-CoV-2 strain the world has witnessed since the emergence of Omicron," he said in a comment published Aug 18, referring to the variant that exploded onto the global stage in the winter of 2022, causing a surge in COVID cases. Click here to read... [32]