Global Developments and Analysis: Weekly Monitor (11-17 December 2023)

Economic

Israel-Gaza war: Houthi attacks push shipping giants to pause Red Sea voyages

Spiralling attacks on merchant ships by Houthi militants off the coast of Yemen have prompted widespread trade disruption with some of the world’s biggest vessel owners evaluating whether it’s safe to send crews through the Red Sea. Two of the world’s largest container shipping lines said on Dec 15 that they were pausing transits through the Red Sea after their vessels were attacked. Two oil tanker companies have now said they are insisting on a clause in charters that will allow them to send their ships around Africa if they deem the waters off Yemen unsafe. The moves will pile pressure on the US and its allies to improve security along one of the world’s most important trade corridors to avoid undermining the global economic recovery. An international trade group called for more military support to end the attacks. Houthi militants have been attacking more merchant ships in the Red Sea – especially vessels that they claim are connected to Israel – in response to the war in Gaza. A.P. Moller-Maersk A/S, the world’s second-largest owner of container ships, said in a statement on Dec 15 that it has instructed its vessels heading for the southern entrance of the Red Sea to pause their voyages. Its vessel Maersk Gibraltar was attacked. Click here to read… [2]

Panama Canal drought hampering global trade

Reduced water levels along the Panama Canal are disrupting global trade, forcing shippers to sail longer routes and pay higher freight costs, Reuters reported on Dec 11. The man-made waterway in Central America, which provides a much cheaper route for ships to move between the Pacific and Atlantic Oceans, and handles about 5% of international seaborne trade, has been hit by severe drought in recent years. A lack of water has created expensive challenges for companies as vessels have faced wait times of up to three weeks to pass through the canal. Container ships, which transport consumer goods, typically reserve passage well in advance, and have not faced long delays. But vessels carrying bulk commodities generally don’t book passage. The shipping snarl comes at the peak season for American crop exports, and the higher costs are threatening to dent demand for US corn and soy suppliers, who have already ceded market share to Brazil in recent years, the outlet said. A number of US grain exporters were forced to reroute their crop shipments to Asia from Gulf Coast ports to Pacific Northwest ports. But that came at a higher cost as those facilities source grain mostly via rail as opposed to the cheaper barge-delivered loads supplying Gulf Coast exporters. Click here to read… [3]

Final COP28 Deal References Transition Away From Fossil Fuels

The COP28 climate summit, which ran one day into extra time amid heated debates on the future of fossil fuel use and production, ended early on Dec 13 with a compromise text referencing for the first time a call to all parties to transition away from fossil fuels. The summit host, the United Arab Emirates, which is also one of OPEC’s top producers and exporters, hailed “the UAE consensus” as a historic deal to reduce emissions. The final text adopted by the countries references for the first time in such summit declarations an explicit call for transitioning away from fossil fuels. But the final agreement is watered down compared to any references to phasing out or phasing down of fossil fuels, as objections from many oil exporting countries – led by Saudi Arabia – held back talks in the final days and sent the conference into overtime on Dec 13, a day later than its planned end early on Dec 12. The Conference of the Parties “Further recognizes the need for deep, rapid and sustained reductions in greenhouse gas emissions in line with 1.5 °C pathways and calls on Parties to contribute to the following global efforts, in a nationally determined manner, taking into account the Paris Agreement and their different national circumstances, pathways and approaches,” the text reads. Click here to read… [4]

UN warns of massive funding shortfall as global crises mount

The United Nations has called for $46bn in funding for 2024 as it scrambles to get aid to millions hit by humanitarian crises around the globe. Noting the situations in the Palestinian territories, Sudan and Ukraine, the UN Office for the Coordination of Humanitarian Affairs (OCHA) said in its Global Humanitarian Overview for 2024 that funding shortages mean it will only be able to provide aid to just over half of the nearly 300 million people that will require it next year. OCHA called the humanitarian outlook for 2024 “bleak,” warning that conflict, climate emergencies and collapsing economies are “wreaking havoc” on the most vulnerable people around the world. And as the number and scale of crises mounts, the humanitarian aid system is facing a major funding crisis, OCHA said. “In 2023, we received just over one-third of the $57 billion required,” UN aid chief Martin Griffiths wrote in a statement. “This is the worst funding shortfall in years. Yet, we still managed to deliver life-saving assistance and protection to 128 million people around the world.” “I think the Middle East as a whole, and Gaza and West Bank, is probably going to be the area of greatest need,” Griffiths said. “But Ukraine is going through desperate times and a war that will restart in full swing next year. It will need a lot of attention.” Click here to read… [5]

U.S. Companies Are Finding It Hard to Avoid China

American companies, under heavy pressure to reduce their exposure to China, are increasingly turning to factories in places such as Vietnam, Indonesia and Mexico. Many are finding it hard to avoid China, however. Trade data, corporate announcements and new academic research show that a large portion of the products shipped to the U.S. from places such as Southeast Asia and Mexico are being made in factories owned by Chinese companies, which are expanding overseas, in part to avoid U.S. tariffs. Many other goods finished in smaller countries are being made with key inputs from Chinese suppliers, meaning they wouldn’t get produced at all without Chinese involvement. Those realities underscore the challenge for policy makers and companies seeking to disentangle the U.S. from China’s colossal manufacturing machine. Far from decoupling, some supply chains connecting the U.S. and China have merely added another link or two, increasing the complexity and cost. A study published by the Bank for International Settlements in October found that supply chains between China and the U.S. have turned more complicated since 2021 as more trade gets rerouted through other places. Yet many goods supplied to the U.S. still originate from China, implying limited progress with diversification. Click here to read… [6]

Move China to ‘new tariff column’ and ease entry for allies’ hi-tech workers, US House panel urges

The US House select committee on China released its first set of economic policy recommendations on Dec 12, urging China be moved to a “new tariff column” and that hi-tech workers from allied countries gain easier entry to the US. Adopted by voice vote, the sweeping report comprising almost 150 recommendations reflected efforts to reset terms of the bilateral economic relationship, curb the flow of US capital into China and invest in America’s technological leadership. The recommendations intended to strike “a balanced approach that adopts a more assertive posture to protect the American economy and our national security when it comes to [China’s Communist Party] and a more collaborative approach when it comes to economic cooperation with our key allies and partners”, said Mike Gallagher, a Wisconsin Republican and the committee’s chair. The panel, whose formal name is the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, was formed in January and has no authority to draft or amend laws. Instead, it is tasked with making recommendations to permanent legislative committees. Its members – 13 Republicans and 11 Democrats – sit on various House committees with jurisdiction over the recommendations, including financial services. Click here to read… [7]

China vows to beef up supply chains in 2024 for economic security

China will further fortify its supply chains, Communist Party leaders said at a key policy-setting meeting ended Dec 12, indicating that economic security is a priority amid escalating tensions with the U.S. over advanced chip and other technology. President Xi Jinping and other Communist Party leaders discussed economic priorities for 2024 at the two-day annual Central Economic Work Conference. Leaders pledged to pursue a proactive fiscal policy and be more flexible around monetary easing while gauging the economy's strength, according to state media. They will also promote large capital investments and urge consumer spending to achieve steady growth. They pledged to address the significant risks tied to real estate, local government debt and smaller financial institutions, which threaten the stability of the economy and society, according to state media. Leaders also vowed to resolve the property crisis that has put real estate companies deep in a sustained slump, promising to meet reasonable funding demand of firms -- regardless of whether they are state-owned or private. The conference reportedly discussed the gross domestic product target for 2024. China is expected to meet the government's growth target of around 5% for this year. Economic watchers are weighing in on next year's growth target, with President Liu Yuanchun of Shanghai University of Finance and Economics saying that a goal of "4.5% to 5% would be ideal" for 2024. Click here to read… [8]

Thai PM seeks foreign investment to complement fiscal expansion

Thai Prime Minister Srettha Thavisin is soliciting foreign investment to help boost Thailand's economy while sticking to an expansive fiscal policy at home to ease public discontent and strengthen his position. "We hope that Japanese companies will participate in the land bridge project to connect the Gulf of Thailand to the Andaman Sea," Srettha said on Dec 15 at an investment forum in Tokyo. The $28-billion program was initiated by a previous government and is ongoing. The Thai prime minister arrived in Japan the day before for the ASEAN-Japan summit and a bilateral meeting with his Japanese counterpart, Fumio Kishida. Srettha, who took office in late August, has long called for foreign investment in Thailand. The businessman-turned-politician accompanied business delegations to the U.S. in September and to China in October. In the U.S., for example, he met executives from Goldman Sachs, BlackRock, Google and Microsoft. In Tokyo, he urged Japanese companies to continue investing in the auto sector. "The Japanese auto industry has contributed to the Thai economy for over 50 years. Our government will support the Japanese auto industry as it transitions to new technologies and continues to grow," he said. While many leaders seek foreign investment, the issue is especially pressing for Srettha. His coalition government is composed of a party backed by former Prime Minister Thaksin Shinawatra and pro-military parties, and it is pursuing a populist fiscal policy against a backdrop of public criticism. Click here to read… [9]

Australia plans to halve migrant intake, tighten student visa rules

Australia on Dec 11 said it would tighten visa rules for international students and low-skilled workers that could halve its migrant intake over the next two years as the government looks to overhaul what it said was a "broken" migration system. The decision comes after net immigration was expected to have peaked at a record 510,000 in 2022-23. Official data showed it was forecast to fall to about a quarter of a million in 2024-25 and 2025-26, roughly in line with pre-COVID levels. “We’ve worked around the clock to strike the best balance in Australia's migration system," Home Affairs Minister Clare O'Neil said in a statement ahead of the formal release of the government's new migration strategy later on Dec 11. "The government's targeted reforms are already putting downward pressure on net overseas migration, and will further contribute to this expected decline," O'Neil said. O'Neil said the increase in net overseas migration in 2022-23 was mostly driven by international students. Australia boosted its annual migration numbers last year to help key businesses recruit staff to fill shortages after the COVID-19 pandemic brought tighter border controls, and kept foreign students and workers out of the country for nearly two years. Prime Minister Anthony Albanese over the weekend said Australia's migration numbers needed to be wound back to a "sustainable level," adding that "the system is broken." Click here to read… [10]

Global law enforcement targets Southeast Asian cyberscam gangs

International pressure is intensifying on the cyberscam industry in Southeast Asia, with the United Kingdom sanctioning actors in Cambodia, Myanmar and Laos, Interpol coordinating a multicountry operation and China issuing arrest warrants for major players. On Dec 15, the U.K. announced sanctions that for the first time globally target people and companies tied to scam compounds where victims lured by offers of high-paying jobs are instead forced, under threat of violence and torture, to defraud people online. Such operations have taken root in recent years in Cambodia, Myanmar and Laos, where they flourish amid endemic corruption and weak law enforcement. Pressure to tackle them is growing. The U.K. sanctioned nine people and five entities for "links to forced labor schemes" trafficking people into "online scam farms" across the three countries. The measures -- part of a broader program of global sanctions by the U.K., U.S. and Canada -- prevent British citizens and companies from any dealings with the designated people and entities. Sanctioned individuals are also banned from traveling to the U.K. Jason Tower, an expert on Southeast Asian transnational crime and security issues, said the sanctions were a promising first step, with the U.S. expected to follow suit. Click here to read… [11]

Russia can expect decade of ‘big projects’ – Putin

The coming decade will see Russia greatly expanding its infrastructure, particularly in railroad transport, President Vladimir Putin told a major industry gathering in Moscow on Dec 15. The planned projects will have an impact not only on Russia's logistics network but across the entire Eurasian continent, the president added. Russia has been actively developing economic and trade ties with nations in Asia and elsewhere, amid unprecedented sanctions from the US and its Western allies, over Moscow’s ongoing military conflict with Ukraine. According to the Russian Federal Customs Service (FTS), trade with Asia accounted for around 70% of Russia’s total trade turnover between January and September 2023.“The upcoming decade will become a decade of major construction [works], big projects, including in the field of railroad transport,” the president told the gathering. Russia plans to modernize its key railway lines – including the 9,289-kilometer-long Trans-Siberian railway. The country also plans to expand transport infrastructure in its ports on the Azov, Black, and Caspian Seas, he said. The nation is aiming at developing a “globally competitive transport services market” and building continent-wide transport corridors, Putin announced, adding that Moscow was actively cooperating with its foreign partners, including China, India, and Mongolia. Click here to read… [12]

German Bundestag Backs Suspension of Debt Limit Again This Year

German lawmakers backed the government’s move to suspend a constitutional limit on net new borrowing in 2023 for a fourth straight year. Chancellor Olaf Scholz’s ruling alliance was forced to overhaul its finance planning by last month’s judgment by the country’s top court that curtailed the use of special funds outside the regular federal budget. After revising this year’s finance plan, the government agreed this week to restore the restriction on new borrowing — known as the debt brake — next year for the first time since 2019. At the same time, Scholz and senior ministers made it clear that they might ultimately be forced to suspend the mechanism again, in part to keep aid flowing to Ukraine. The revised 2024 budget won’t be approved as planned by the end of this year and instead will likely get final backing in the upper house at the beginning of February. While setting aside the fiscal restrictions again in 2023 doesn’t mean that Germany is adding to its debt burden, it does lift the figure for net new borrowing by €25 billion ($27.4 billion) to €70.6 billion. In the original plan approved at the end of last year, it was €45.6 billion. Click here to read… [13]

Myanmar Overtakes Afghanistan as World’s Top Opium Producer

Myanmar has surpassed Afghanistan to become the world’s largest producer of opium, after the Taliban outlawed poppy cultivation and the production of drugs, according to a United Nations report. Opium production in the Southeast nation, wrecked by an increasingly bitter civil war, shot up by 36% to 1,080 metric tons this year, the highest since 2001, the United Nations Office on Drugs and Crime said in a report Dec 12. Poppy cultivation in Myanmar declined between 2014 and 2020 but has increased 33% since the military overthrew the democratically elected government in Feb. 2021. “Worsening stability and security since then have coincided with greater levels of poppy cultivation and opium production,” the report says. About 47,000 hectares of land are currently under poppy production, up 18% from last year, the report adds. Afghanistan, which had historically been the world leader in opium production, has seen a 95% drop in output since the country’s Taliban rulers imposed a strict ban last year, the report says. The significant reduction in opium production could boost the Taliban’s attempts to gain international recognition for their regime after they ousted a US-backed government and retook power in Aug. 2021. The militants had relied, in part, on opium production to fund a two-decade insurgency against the US and NATO forces. Click here to read… [14]

How a Plan to End Poor Countries’ Debt Crises Created a New One

Ghana in 2022 spent a third of its revenue paying interest on its local debt, as interest rates on three-month local treasury bills ballooned to 36%. Interest payments on its domestic debt were three times what it paid on a similar stock of external debt, and more than it budgeted for education and healthcare combined. In Pakistan, interest payments on local-currency debt are expected to eat up more than half the government’s revenue this year, seven times what it will spend on its dollar debt. The high cost of local-currency borrowings is complicating discussions on how to provide debt relief for some of the world’s poorest countries. China, which has lent heavily to developing countries, has joined with holders of dollar bonds to pressure governments to restructure domestic borrowings when they default on foreign debts, causing steep losses for the local banks and pension funds that hold the bulk of these local-currency bonds. The resulting strain has also created disagreement between the World Bank and the International Monetary Fund, two agencies that have spent much of the past two decades encouraging poor countries to build up their domestic debt markets. The shift toward local-currency borrowing can be traced back to the earlier debt crises that swept through Latin America and Asia. Click here to read… [15]

The Battle for Australia’s Lithium Reserves

Australia holds one of the biggest lithium reserves in the world and will be a key mining area for the green transition. The country is no stranger to mining, with major gold, nickel, and iron ore reserves already contributing to the green energy and clean technology industries. And there are several mining billionaires operating in Australia, that want to keep mining activities Australian-owned by deterring major multinationals from entering the market. However, this may not be the only concern for Australia, as new U.S. restrictions on metals and minerals mined or processed with China’s involvement could mean companies are ineligible for subsidies needed to expand operations. In 2017, Australia recorded proven and probable lithium reserves of 1,662 kilotonnes, an increase of 22 percent from the previous year’s figures and almost 100 percent more than in 2015. Its lithium industry has grown rapidly and powerfully. It is thought to hold the third most lithium in the world, after Chile and China. These three countries, along with Argentina, hold around 76 percent of the world’s lithium reserves. Australia also accounted for the highest production of lithium in 2022, at around 61,000 metric tonnes. Australia is the largest global producer of spodumene - the base material for lithium hydroxide and lithium carbonate. Click here to read… [16]

Strategic

Xi Vows Greater Focus on Vietnam as China Aims to Check US

Chinese President Xi Jinping pledged to prioritize diplomacy with Vietnam during a trip to the Asian nation, which is forging closer ties with the US and its allies. The partnership between the two countries should be deepened, Xi told Vietnam’s Communist Party chief, Nguyen Phu Trong, in Hanoi on Dec 12, according to state broadcaster China Central Television. China is also willing to build a “community of common destiny” that includes Vietnam, Xi said. The two nations signed 37 agreements, including China funding a cross-border railway and holding joint maritime patrols. The neighbors also agreed on a three-year plan to boost trade. Xi’s two-day trip comes just months after US President Joe Biden declared “enormous” opportunity with Vietnam on his first jaunt to the Asian nation. That trip yielded sweeping agreements on everything from semiconductors to security, as part of the US’s Indo-Pacific strategy aimed at checking China’s influence in the region. Xi, who has declared he does not seek spheres of influence, earlier reiterated his foreign policy vision for a “global community of shared future.” That vision starts in Asia, the Chinese leader said in a letter published by Vietnam’s communist party newspaper ahead of his visit. “Asia is our common home,” he wrote. “Neighboring countries cannot be moved away. Helping one’s neighbor is helping oneself.” Click here to read… [17]

U.S. will focus on preventing escalation with China in 2024: Yellen

The U.S. will continue to manage a challenging economic relationship with China next year through "durable" communication and prevent tensions from escalating, Treasury Secretary Janet Yellen says in a prepared policy speech. "We aim to make our communication resilient so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm," Yellen says in excerpts of a speech that will be delivered at the U.S.-China Business Council on Dec 14 evening local time. The excerpts were released ahead of the speech by the Treasury Department. Yellen plans to visit China next year to further strengthen communication, marking her second trip since July, according to the excerpts. The U.S. and China have established working groups that meet at regular intervals to discuss economic and financial concerns. This arrangement forms the centerpiece of the "durable communication channels that can withstand challenging circumstances," Yellen said. Washington is pressuring Beijing to correct unfair trade practices, and the Biden administration has imposed export and investment restrictions against China. "We seek not to resolve all our disagreements nor avoid all shocks," Yellen said. "This is in no way realistic." Yellen plans to press China for clarity on economic policies, such as what Beijing plans to do about local government debt and real estate market woes. Click here to read… [18]

US Mulls Missile Notification Plans With China, Nikkei Says

The US is weighing a proposal to exchange missile launch notifications with China, Nikkei Asia reported on Dec 11, citing a senior State Department official it didn’t identify. The senior official said launch notification is one of the concrete measures being considered within the US government as Washington looks to hold arms-control talks with China early next year, according to Nikkei. The two countries agreed to repair their strained ties last month when President Joe Biden and his Chinese counterpart Xi Jinping met on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco. Among other agreements, the two powers said they would restore high-level military contacts China halted last year to protest then House Speaker Nancy Pelosi’s trip to Taiwan. Ahead of that meeting, US and Chinese officials held rare talks regarding nuclear arms control described by the US as “constructive,” the State Department said then. The US Embassy in Beijing didn’t immediately respond to a request for comment. Click here to read… [19]

Hong Kongers shun 'patriots only' polls as turnout plummets to 27.5%

Hong Kong residents shunned the city's district council election on Dec 10, with voter turnout sharply dropping despite relentless efforts by the government to boost the numbers. Among various levels of elections in the territory, the district council used to be the most democratic. But as with the selection of the chief executive and the legislative council, the system has been drastically altered since Beijing imposed its national security law three years ago, to ensure that only "patriots" can participate. All candidates were screened, leaving a lineup filled with Beijing loyalists and no one from the pro-democracy camp. The question was how residents would respond and whether they would bother to cast ballots. The answer: Despite voting hours being extended for 1.5 hours due to last-minute technical glitches, turnout ended up at 27.54% with 1,193,193 out of 4.3 million eligible voters taking part, the city's Electoral Affairs Commission said on Dec 11. The figures are significantly lower than the previous district council election held in November 2019, when the turnout rate was 71.23%, as 2.94 million people voted. Four years ago, young voters had been instrumental in a landslide victory by the pro-democracy camp, which won over 80% of the total seats in 18 districts and took an absolute majority in all district councils. Click here to read… [20]

The Ugly Politics of Migration Is Everywhere

It’s created a fresh headache for Emmanuel Macron. Rishi Sunak, too. Joe Biden might wish it would go away. Immigration is making life especially hard for political leaders right now. In the UK this week, Sunak pushed through legislation aimed at allowing the deportation of asylum seekers to Rwanda against opposition from members of his Conservative Party demanding tougher measures still. Sunak survives, for now, but the rebels are merely biding their time, and immigration is the stick with which they’ll beat a prime minister they distrust. In France, President Macron’s planned immigration overhaul was rejected by lawmakers on Dec 11. It would have facilitated the expulsion of illegal migrants while creating a path to legal status for others, but succeeded in pleasing nobody. Biden’s military aid for Ukraine and Israel is meanwhile held hostage to Republican demands for more money to secure the southern border. Immigration has been a hot-button issue for generations. But it suddenly seems to be everywhere, increasingly defining the political right and dragging the left onto the same ground. Australia’s Labor government is moving to curb record migration amid a voter backlash over a system Prime Minister Anthony Albanese acknowledges is “broken.” In Germany, where the far right is polling at a record, Social Democratic Chancellor Olaf Scholz is curtailing benefit payments and helping local authorities straining under the burden of refugees from Ukraine, Syria and elsewhere. Click here to read… [21]

Ukraine still ‘very far’ from EU membership – Macron

The EU will need to substantially reform its rules before Ukraine can join, French President Emmanuel Macron told reporters on Dec 15. Macron backs Kiev’s accession to the bloc, but warned that Ukraine must not be allowed to undercut EU industry. The European Council agreed on Dec 14 to open accession negotiations with Ukraine and Moldova, after Hungarian Prime Minister Viktor Orban – who opposes Ukraine’s membership – abstained from voting on the decision. Council President Charles Michel hailed the decision as “a very powerful political signal,” but Orban and other skeptics like Slovakian Prime Minister Robert Fico have argued that the move has little practical significance. Macron echoed their statements on Dec 15, telling reporters that Ukraine is still “very far from” joining the bloc. During a press conference, Macron was asked whether the admission of Ukraine would threaten the livelihoods of French farmers, who would be massively undercut by cheaper produce from their Ukrainian counterparts. "We are very far from effective enlargement to Ukraine and, in any case, enlargement, whatever it may be, will require an in-depth reform of our rules,” he said. Poland, Hungary, and Slovakia have already banned Ukrainian grain imports, defying an EU policy put in place after the conflict broke out in order to give Ukrainian farmers a market for their produce. Click here to read… [22]

US lawmakers pass $886 billion defense bill with Ukraine aid

The US House and Senate have passed a sweeping military spending bill worth more than $886 billion; it includes $300 million in additional aid for Ukraine, a tiny percentage of what was originally sought for Kiev by the White House. President Joe Biden is expected to sign the measure into law. Congress voted 310 to 118 to approve the 2024 National Defense Authorization Act (NDAA) on Dec 14, which also passed through the Senate in a 87-13 vote. The bill authorizes a wide range of military spending, from pay raises for troops to funds for new weapons, and represents a 3% increase in the US defense budget compared to last year. While legislators are still working out a separate $105 billion bill that would devote yet more military assistance to Ukraine and Israel, the new NDAA includes just $300 million for the Ukraine Security Assistance Initiative through the year 2026, which will be used to purchase arms for Kiev directly from defense contractors. The program was almost fully depleted following dozens of prior aid packages since last year, with $1 billion remaining as of Dec 14 afternoon. The largest military spending authorization in US history, the bill was passed separately in the Senate and the House earlier this year, but faced lengthy negotiations as lawmakers struggled to reconcile a final version to send to President Biden’s desk. Click here to read… [23]

Myanmar military meets rebel groups with China's help, regime says

Representatives from Myanmar's ruling military have held talks, facilitated by China, with three armed rebel groups leading an anti-regime offensive, state media reported a military government spokesperson as saying on Dec 11. Myanmar's military is battling armed opponents on several fronts, in the fiercest challenge to its grip on the Southeast Asian country since it seized power from an elected government in 2021. Rebel groups aligned with a pro-democracy parallel government launched a coordinated offensive in late October, taking control of several military posts and towns near the border with China in the north and in western states. "Myanmar's National Unity and Peacemaking Coordination Committee met with representatives of MNDAA, TNLA and AA with the help of China," said Zaw Min Tun, according to MRTV's Telegram channel, referring to the armed ethnic groups spearheading the offensive. "Based on the development of the conversation, there will likely be another meeting at the end of this month." It was unclear when or where the meeting took place, and Zaw Min Tun did not elaborate on what was discussed. Representatives of the three rebel groups did not immediately respond to Reuters' request for comment. Chinese officials could not immediately be reached for comment. Click here to read… [24]

Alarm Grows Over Weakened Militaries and Empty Arsenals in Europe

The British military—the leading U.S. military ally and Europe’s biggest defense spender—has only around 150 deployable tanks and perhaps a dozen serviceable long-range artillery pieces. So bare was the cupboard that last year the British military considered sourcing multiple rocket launchers from museums to upgrade and donate to Ukraine, an idea that was dropped. France, the next biggest spender, has fewer than 90 heavy artillery pieces, equivalent to what Russia loses roughly every month on the Ukraine battlefield. Denmark has no heavy artillery, submarines or air-defense systems. Germany’s army has enough ammunition for two days of battle. In the decades since the end of the Cold War, weakened European armies were tolerated by governments across the West because an engaged America, with its vast military muscle, underpinned the North Atlantic Treaty Organization and defense policy in Europe. The U.S. accounted for nearly 70% of NATO’s defense spending last year. But alarm has grown as America has moved toward a more isolationist stance, and as the understanding of a potential threat to Europe from Russia re-emerges, after nearly two years of bloody fighting in Ukraine. There is no immediate military danger to Europe from Russia, and Western military and political leaders think that Russia is for now contained by its war of attrition in Ukraine. But if Russia ultimately wins in Ukraine, few doubt Moscow’s capacity to rearm completely within three to four years and cause trouble elsewhere. Click here to read… [25]

U.S. Presses Israel to Begin Winding Down Gaza War

National security adviser Jake Sullivan pressed Israeli leaders to shift from a reliance on airstrikes and ground assaults in Gaza toward targeted military operations and warned that a protracted conflict would make the Palestinian territory harder to govern after the war, U.S. officials said. Sullivan’s meetings with Israeli political and military leaders Dec 14 seemed to have made little headway addressing the growing rift between the U.S. and Israel over civilian casualties, the length of the conflict, flagging international support for Israel’s campaign, and the future governance of the Gaza Strip. The U.S. is undertaking a full-court press in the region for the Israelis to begin to wrap up the conflict. U.S. officials have said privately the U.S. wants to see the fight end in weeks, not months, though the Biden administration continues to support Israel’s campaign to destroy Hamas’s ability to wage military operations or govern Gaza. “I want them to be focused on how to save civilian lives,” Biden said Dec 14 afternoon, “not stop going after Hamas, but be more careful.” U.S. officials on Dec 14 were keen to cast the visit as an opportunity to discuss the next phase of Israel’s fight with Hamas, with the hope that it moves quickly into a lower-intensity conflict. But U.S. officials were eager to avoid appearing as though Sullivan had presented the Israelis with an ultimatum. Click here to read… [26]

Israel’s Netanyahu hints new deal under way to release Gaza hostages

Israeli Prime Minister Benjamin Netanyahu has made comments, suggesting that new negotiations were under way to recover hostages held by Hamas. In a televised press conference on Dec 16, Netanyahu called the conflict an “existential war” that must be fought until victory, despite pressure and costs, and said Gaza would be demilitarised and under Israeli security control. His statements came a day after Israeli forces mistakenly killed three of more than 100 captives. Netanyahu said Israel’s offensive in Gaza had helped clinch a partial hostage-release deal in November and promised to maintain intense military pressure on Hamas. “The instruction I am giving the negotiating team is predicated on this pressure, without which we have nothing,” he said. Netanyahu’s comments came after the chief of Mossad, the Israeli intelligence agency, met the prime minister of Qatar, a country mediating between Israel and Hamas, and whose efforts resulted in a seven-day truce and exchange of hostages last month. Earlier on Dec 16, Qatar confirmed that talks were under way for a possible new truce. Netanyahu sidestepped a question about the meeting reportedly held in Europe, but confirmed he had given instructions to the negotiating team. “We have serious criticisms of Qatar … but right now we are trying to complete the recovery of our hostages,” he said. Click here to read… [27]

House Republicans Authorize Biden Impeachment Inquiry

Republicans in the US House voted Dec 13 to formally authorize an impeachment inquiry into President Joe Biden, escalating a probe that has been underway for several months. The 221 to 212 party-line vote sets up a high-profile clash between Congress and the White House as the 2024 election approaches. Republican presidential front-runner Donald Trump has urged GOP lawmakers to step up the impeachment inquiry against Biden. The investigation has focused on Biden family finances and business dealings of the president’s son, Hunter, and other relatives. Biden immediately denounced the inquiry as a “baseless” attack. “Instead of doing their job on the urgent work that needs to be done, they are choosing to waste time on this baseless political stunt that even Republicans in Congress admit is not supported by facts,” Biden said of Republicans. The resolution establishes the investigation’s procedures and powers, but doesn’t set a deadline or lay out any specific impeachable offenses. “It’s time to get the American people answers,” said House Speaker Mike Johnson, who argues the formal approval will give congressional committees investigating Biden and his family greater legal authority to enforce subpoenas. The White House and many congressional Democrats say the inquiry is merely an effort to distract attention from Trump’s criminal trials. Click here to read… [28]

Biden’s U-turn on Delhi trip won’t mar US-India ties amid ‘stable’ shared interests

US President Joe Biden’s U-turn on a New Delhi visit and the resulting uncertainty over a regional diplomatic alliance has raised concern whether an alleged Indian assassination attempt on an American citizen on US soil led to lingering tensions. Biden is reportedly set to back out of plans to accept an invitation by Indian Prime Minister Narendra Modi during the country’s Republic Day celebrations on January 26. The development also throws into uncertainty the timing for a Quad meeting, which was expected during Biden’s visit. With India, the United States, Australia and Japan as members, the Quad is a security network focused on providing an alternative to countering Chinese military and economic influence on other nations. “It is most likely because of the whole [assassination attempt] issue that is coming up between India and the US,” said Manoj Joshi, a distinguished fellow at the Observer Research Foundation in Delhi. The US had accused India in November of trying to kill Gurpatwant Singh Pannun, a Sikh separatist leader who is an American citizen. Delhi subsequently set up a high-level probe into the allegations. Pannun is the general counsel for Sikhs for Justice, a New York-based organisation that supports the broader Khalistan movement, which calls for an independent homeland for Sikhs in India. Click here to read… [29]

Xi Jinping is relying more on his lieutenants to forge ties with China’s political elites

Among those at the very top of Chinese politics, President Xi Jinping has a smaller share of direct links with members of the Central Committee than he did five years ago, an analysis by the South China Morning Post has found. That means he must rely more on his lieutenants on the all-powerful Politburo Standing Committee to forge ties with the political elites of the ruling Communist Party. The findings are based on an iterative databank the Post has compiled since the 20th party congress last year. The databank includes a relationship network to show how each of the seven top political leaders is connected to the party’s 20th Central Committee – the pool from which they were drawn. It also shows where they crossed paths based on their official work history. Collectively, the seven members of the Politburo Standing Committee, including Xi, have more links with the 376 full and alternate members of the decision-making Central Committee than previously – a clear indicator of the concentration of power within the party. But direct associations with Xi – widely regarded as the most powerful Chinese leader in decades – have dropped in percentage terms from five years ago. The Post tally shows 49 new Central Committee members have direct links with Xi through either work or education, making up 22 per cent of the total connections with Politburo Standing Committee members. Click here to read… [30]

N. Korea fires ballistic missile as S. Korea, U.S. step up deterrence plans

North Korea on Dec 17 fired a short-range ballistic missile into the sea, South Korea said, in a possible display of defiance against the latest steps by Washington and Seoul to tighten their nuclear deterrence plans against North Korean threats. South Korea’s Joint Chiefs of Staff said the missile was fired from an area near the North Korean capital of Pyongyang at around 10:38 p.m. and flew 570 kilometers (354 miles) before landing in the sea. The South Korean military said it was sharing the launch information with the United States and Japan to further analyze the details while maintaining readiness against the possibility of additional North Korean military activities. It criticized the launch as a “clear violation” of U.N. Security Council resolutions that ban North Korea from using ballistic technologies. Tensions on the Korean Peninsula are at their highest in years, with North Korean leader Kim Jong Un accelerating the expansion of his nuclear and missile program, and flaunting an escalatory nuclear doctrine that authorizes the preemptive use of nuclear weapons. The United States, South Korea and Japan have responded by increasing the visibility of their trilateral partnership in the region, and strengthening their combined military exercises, which Kim condemns as invasion rehearsals. North Korea’s latest launch followed high-level security talks between American and South Korean officials in Washington over the weekend. Click here to read… [31]

Health

Why the UK Is Probing Its Covid Response and What It Will Achieve

The UK’s official Covid-19 inquiry, one of the biggest and likely most expensive investigations in British history, has heard how former Prime Minister Boris Johnson was ill-suited to the crisis and oversaw a damaging culture that involved drinks parties in his offices while the public were told to stay at home. It could also herald danger for current premier Rishi Sunak, who has tried to distance himself from Johnson’s administration ahead of a general election expected next year but cannot escape the fact he was Chancellor of the Exchequer at the height of the pandemic. What is the aim of the Covid inquiry? Led by retired judge and crossbench peer Heather Hallett, the probe aims to scrutinize and learn lessons from key aspects of the UK’s pandemic response. Ultimately, its goal is to lead to improvements in public institutions in case of a future crisis. It is also seen as hugely important and cathartic for the families of more than 230,000 people who have so far died with Covid in Britain. Why has the UK government faced criticism? While Britain was praised for a relatively fast vaccine roll-out, there were early problems with testing for and tracing the virus, and the National Health Service was already lagging behind European peers in numbers of hospital beds and medical technology. Click here to read… [32]

Blood supplies running low across China as cold weather and surge in respiratory illnesses take toll

China is facing a shortage of blood – a problem blamed on the current spike in respiratory illness, the cold snap and a fall in the number of donors. Local authorities and blood centres in several of the biggest provinces, including Henan, Shandong, Fujian, Hubei and Shanxi, have warned of a sharp drop in the number of donations and appealed for people to contribute. According to state-controlled news outlet ThePaper.cn, blood stocks in Xinxiang, a city in Henan province, were running so low that they threatened the supply for operations and other hospital needs. The city’s publicity department and local Red Cross Society issued an urgent appeal on Dec 15, saying demand was surging but fewer people were donating because it was winter. Yuncheng, a city in the central province of Shanxi, issued a similar appeal for donors, saying donations had fallen dramatically after temperatures “dropped off a cliff” while respiratory illnesses surged. “The number of people choosing to have surgery has greatly increased ... and clinical blood consumption has been running at a high level, resulting in severe difficulties and challenges in meeting the blood demand,” the centre told ThePaper. China relies on voluntary donors for blood supplies and had a similar shortage crisis a year ago when Covid-19 cases soared following an abrupt end to most pandemic controls. That prompted the authorities to relax the guidelines on giving blood. Click here to read… [33]