Global Developments and Analysis: Weekly Monitor (25-31 December 2023)

Economic

China, Myanmar revive hopes for Bay of Bengal deep water port in Kyaukphyu under Belt and Road Initiative

China and the Myanmar military government have signed a supplementary agreement for the Kyaukphyu deep water port, as both sides seek to get the stalled Belt and Road Initiative project off the ground. The renewed push for the project in Myanmar’s restive western Rakhine state comes amid escalating violence between ethnic rebel groups and the ruling junta, which has prompted repeated security warnings from the Chinese mission. Chinese state-owned Citic Group will, as agreed in 2018, maintain a 70 per cent stake in the port, which is expected to give China access to the Bay of Bengal as an alternative route for oil imports. Top Citic executives, Chinese diplomats and junta officials attended the signing of an addendum to the project concession agreement, in Myanmar’s capital Naypyidaw on Dec 26. The Kyaukphyu deep-sea port is a “major part” of Beijing’s belt and road strategy as well as the China-Myanmar Economic Corridor, and of “great significance to practical cooperation” between the two countries, Citic Group president Xi Guohua said during the ceremony. “Citic Group will make every effort to promote the implementation of the Kyaukphyu project,” Xi pledged, according to a readout from the Chinese embassy in Myanmar. Details of the addendum were not made public, but it is viewed as the latest sign that the key China-backed infrastructure project, which had made little progress, is now back on track. Click here to read... [2]

Xi pledges to strengthen economy in 2024, stresses Taiwan unification

Chinese President Xi Jinping on Dec 31 rallied the country to pursue stable economic growth amid a property downturn that is sapping business confidence. In his annual New Year's address to the nation, televised from his office in Beijing, the 70-year-old leader also reiterated his vow to unify mainland China and Taiwan, about two weeks ahead of the self-governed island's presidential election."We will consolidate and strengthen the momentum of economic recovery, and work to achieve steady and long-term economic development," Xi said, according to an official translation released by state news agency Xinhua. Sitting behind his desk, he pledged to "deepen reform and opening up across the board" and to "further enhance people's confidence in development." Speaking ahead of the 75th anniversary of the People's Republic in 2024, Xi acknowledged at least some of the pressures the world's second-largest economy is experiencing. Recent average estimates point to China's growth slowing to 4.6% in the coming year, down from a predicted 5.2% for 2023, as the slumping real estate market and stagnant consumption take a toll. China's jobless rate among people between the ages of 16 and 24 hit a record high of 21.3% in June, before the monthly release of the figure was discontinued, apparently for fear of a backlash. Click here to read... [3]

Shale Is Keeping the World Awash With Oil as Conflicts Abound

A surprise surge in American oil and gas production and exports is helping to keep the world stocked, blunting the impact of widening conflict in the Middle East that has crimped key shipping lanes. When Iranian-backed Houthi militants began launching missiles and drones at ships crossing the Red Sea near Yemen in October, many feared disruption to the vital shipping lane would drive up energy prices. But oil and gas prices this past month have sunk about 5% and 23%, respectively. That is largely because of record production of U.S. fossil fuels. Shippers in November moved more oil out of the U.S. than what was produced in Iraq, OPEC’s second-largest member, at a record 4.5 million barrels a day. Likewise, U.S. exports of liquefied natural gas, or LNG, are set to hit a record in December, according to market intelligence firm Kpler. European countries have snapped up more U.S. cargoes in recent months, becoming less reliant on shipments through the Suez Canal, a key Red Sea artery. The attacks on vessels, which the Houthis say are in retaliation for the Israeli military operation in Gaza, have intensified in recent days. U.S. officials alleged a Dec. 23 attack drone launched directly from Iran struck a Japanese-owned chemical tanker off the coast of India, though Tehran denied that claim. Click here to read... [4]

Europe Eyes Venezuelan Oil in Diversification Drive

The recent easing of sanctions between the United States and Venezuela, marked by pivotal legal settlements and new commercial arrangements, represents a significant turning point for the global energy industry. These developments, particularly the resolution of disputes involving Petróleos de Venezuela S.A. (PDVSA), signal the reinvigoration of Venezuela's oil and gas sector and hold substantial promise for energy-hungry Europe. The settlement between PDVSA and Refineria di Kòrsou (RdK), navigated by Dentons Europe LLP - led by David Syed, head of their Sovereign Advisory practice - brings to an end a longstanding impasse that had stifled the operational potential of RdK's refinery and oil terminal in Curaçao since 2020. Under this settlement, PDVSA will resume the supply of crude oil to RdK and initiate discussions on long-term gas supply, enabling RdK to recommence its operations. This development is a win for PDVSA and RdK and a strategic move that reopens crucial pathways in the Caribbean energy landscape. Furthermore, the collaboration between PDVSA and Repsol Exploración, S.A. to bolster investment in their joint venture, Petroquiriquire, S.A., heralds a new era of increased production in the Venezuelan oil and gas industry. A similar deal with ENI of Italy is imminently expected. Click here to read... [5]

Foreign shareholders suspend participation in Russia’s Arctic LNG 2 project—Kommersant

Foreign shareholders suspended participation in the Arctic LNG 2 project due to sanctions, renouncing their responsibilities for financing and for offtake contracts for the new Russian liquefied natural gas (LNG) plant, the daily Kommersant reported on Dec 25. The project, seen as a key element in Russia’s drive to boost its LNG global market share to 20% by 2030 from 8%, was already facing difficulties due to U.S. sanctions over the conflict in Ukraine and a lack of gas carriers. China’s state oil majors CNOOC Ltd and China National Petroleum Corp (CNPC) each have a 10% stake in the project, which is controlled by Novatek, Russia’s largest LNG producer and owner of a 60% stake in the project. Kommersant, citing unnamed sources in the Russian government, said both Chinese companies, together with France’s Total Energies and a consortium of Japan’s Mitsui and Co and JOGMEC - which also have a 10% stake each - declared force majeure on participation in the project. Novatek, CNOOC, JOGMEC,and Total did not immediately respond to requests for comment. CNPC and Mitsui declined to comment. The newspaper said the suspension may lead to Arctic LNG 2 losing its long-term contracts on LNG supplies, while Novatek will have to finance the project by itself and sell the seaborne gas on the spot market. Click here to read... [6]

Western sanctions haven’t affected Russian aviation safety – Kommersant

Western sanctions have had no notable impact on flight safety in Russian civil aviation, the Kommersant newspaper has reported, citing data from the nation’s air safety watchdog over the past five years. According to the Federal Air Transport Agency, there are “no clearly defined negative trends” in the number of annually registered incidents. Russian civil aviation aircraft reportedly deal with some 800 incidents every year, while the number of incidents related to technical and power failures amounted to 485 in 2019–2022. In the first 11 months of the current year, 670 aircraft incidents were recorded in commercial aviation, of which 400 were associated with equipment failures, the regulator said. It added that the figure is directly related to the number of completed flights, which is expected to drop in 2022 and 2023 compared to 2021. The agency’s statistics factor in data from commercial transportation that includes 116 airlines with an air operator’s certificate. Roughly 65% of passengers are carried by the country’s five biggest airlines, including Aeroflot group, S7, and Ural Airlines. Foreign-made aircraft reportedly account for about 95% of passenger turnover. The number of incidents registered by the agency in 2019 amounted to six, including two related to equipment failures. Click here to read... [7]

Share of dollar in global reserves nosedives – IMF

The US dollar’s share of global central bank reserves has continued to decrease, nosediving to 59.2% in the third quarter of 2023, according to the latest data released by the International Monetary Fund (IMF). The decline comes amid the de-dollarization trend gaining momentum across the globe. IMF statistics show the greenback’s share is down from roughly 70% in 2000. The dollar remains the world’s leading reserve currency with the euro coming second, while the latter’s share has slid to 19.6%. The Japanese yen’s proportion of world reserves grew to 5.5% from 5.3% in the previous three-month period. The Chinese yuan, British pound, Canadian dollar and Swiss franc were little changed. Meanwhile, according to data compiled by global financial messaging service SWIFT, the yuan’s share of international payments hit a record high in November, with the renminbi becoming the fourth most used currency worldwide. Cross-border yuan lending has risen as well, while the People’s Bank of China holds over 30 bilateral currency swaps with foreign central banks, including Saudi Arabia and Argentina. The growing share of the yuan in cross-border transactions reflects China’s trend of shifting away from the dollar, as well as Beijing’s efforts to promote the use of the renminbi, according to SWIFT. Click here to read... [8]

Dollar losing share in oil transactions – JP Morgan

Global consumers and exporters of crude are now managing without dollar-denominated trade deals, the Wall Street Journal reported this week, citing the head of global commodities strategy at JPMorgan Chase, Natasha Kaneva. The report comes a day after Iran and Russia, two of the world’s leading oil exporters, said they have finalized an agreement to trade in their national currencies instead of the US dollar. Moreover, the sanction-hit states have found buyers for their commodities in China and India, selling them at a generous discount. “The US dollar is getting some competition in commodities markets,” Kaneva told the journal, emphasizing that the share of the world’s oil traded in other currencies has increased to nearly 20%. The trend is less obvious when it comes to other commodity-selling majors. However, some of them, including Brazil, the UAE, and Saudi Arabia, have taken some steps to prepare the groundwork for trade that bypasses the greenback. According to data tracked by JPMorgan, twelve major commodities contracts have been carried out in non-dollar currencies in 2023 versus just seven last year, and only two scored in 2015 through 2021. The data relates to physical commodity deals rather than futures trading in financial markets. This year, non-dollar contracts were reportedly settled by sellers in Russia, with just one case registered in the UAE. Click here to read... [9]

India's IPO fundraising in 2023 looks poised to top last year's levels

After a gush of initial public offerings in 2021 and a sudden lull in 2022, India's primary market fundraising picked up steam once again in the latter half of 2023. Many high-profile IPOs have lit up the bourses in recent months. Tata Technologies and Idea Forge were among the 50 IPOs in India this year -- the highest globally. In 2022, 40 companies raised 599.39 billion rupees ($7.2 billion), a far cry from the 1.2 trillion rupees raised by 63 companies in 2021, according to market data provider Chittorgarh. Fast forward to 2023, and 50 companies have already raised 449.59 billion rupees from their IPOs so far. By the end of the year, more than 60 companies will have raised close to 720 billion rupees, Chittorgarh estimated. The fall in the IPO market in 2022 from the highs of 2021 was, in no small part, due to the lacklustre performance of the new-age technology companies that debuted on the Indian bourses two years ago. Take Paytm, for instance. The Vijay Shekhar Sharma-founded company, which introduced Indians to online payments and digital wallets, raised 183 billion rupees in November 2021 at a valuation that most analysts agreed was expensive, given its lack of a clear path to profitability. Click here to read... [10]

Japan could relax immigration policy as Abe faction wanes in LDP

A political fundraising scandal in Japan has hit the ruling Liberal Democratic Party hard, particularly its largest intra-party faction once led by the late Prime Minister Shinzo Abe, potentially creating room for the government to relax its cautious immigration policy. Ministers of Prime Minister Fumio Kishida's cabinet and executive members of the LDP who belong to the faction have lost their posts. Now that the faction, which has produced Abe and multiple other prime ministers, has come to a point where its grip on the LDP may weaken, the governing party may well change its policy direction. One of policy areas which may create room for changes is policy toward foreign workers on which Abe used to hold a cautious stance. Japan's dwindling work force was already a key policy issue when Abe was in office as prime minister. But Abe emphasized, "We have no intention of adopting a so-called immigration policy." Abe, a leading figure among the conservative politicians, explained at that time, "We do not intend to adopt a policy of sustaining the nation by accepting foreigners and families of a certain size relative to the national population for an unspecified period of time."In 2021, Abe stepped down as prime minister and took the helm of the faction. Click here to read... [11]

China Surpasses Russia as Top Trade Partner in Central Asia

China has eclipsed Russia as the main trade partner of all five Central Asian states, according to official statistics. Kazakhstan is the most recent Central Asian country to see Beijing pass Moscow in terms of annual trade turnover. For the first nine months of 2023, China accounted for a 21.3 percent share (valued at $21.7 billion) of Kazakhstan’s total foreign trade, according to statistics compiled by Kazakhstan’s National Statistics Bureau. Russia’s trade turnover share amounted to 18.6 percent ($18.9 billion). Raw materials and natural resources accounted for the bulk of Kazakh exports to China, while Beijing’s trade comprised primarily of finished goods, including household wares, clothing, and autos. The Energy Prom news outlet characterized Kazakhstan’s trade relationship with China as “one step forward, and two steps back,” citing flat energy prices and “the predominance of raw materials” in Kazakhstan’s exports. Chinese figures for bilateral trade differ markedly from Kazakhstan’s. According to Beijing’s envoy to Kazakhstan, Zhang Xiao, bilateral trade turnover for the first 10 months of 2023 amounted to $32.7 billion, marking a 28.5 percent increase in the value of trade over the same period the previous year. Kazakh media report that the figure for the period was $24.3 billion. Click here to read... [12]

US eyes reports Iran has accelerated uranium enrichment

The United States has expressed deep concern over reports that Iran has accelerated its production of weapons-grade uranium. The comments from a White House National Security Council spokesperson came late on Dec 26 in response to a report issued by the International Atomic Energy Agency (IAEA) that warned that Tehran has accelerated production of the high-grade material. “Iran’s nuclear escalation is all the more concerning at a time when Iran-backed proxies continue their dangerous and destabilising activities in the region, including the recent deadly drone attack and other attempted attacks in Iraq and Syria and the Houthi attacks against commercial shipping vessels in the Red Sea,” the US spokesperson said.The United Nations atomic watchdog’s report to member states said that Iran has increased the rate at which it is producing near weapons-grade uranium in recent weeks, reversing a previous slowdown that started in in mid-2023. Iran had previously slowed the rate at which it was enriching uranium – the process of raising the level of uranium-235, the isotope used in nuclear fission – to 60 percent purity. Uranium enriched at 60 percent is just a step away from weapons-grade levels of 90 percent. Nuclear power stations require 3.67 percent. The IAEA said its inspectors had verified the increased rate of production since the end of November at facilities in Natanz and Fordow to about 9kg (20lb) per month. Click here to read... [13]

Laws, school bans and Sam Altman drama: the big developments in AI in 2023

The artificial intelligence (AI) industry began 2023 with a bang as schools and universities struggled with students using OpenAI’s ChatGPT to help them with homework and essay writing. Less than a week into the year, New York City Public Schools banned ChatGPT – released weeks earlier to enormous fanfare – a move that would set the stage for much of the discussion around generative AI in 2023. As the buzz grew around Microsoft-backed ChatGPT and rivals like Google’s Bard AI, Baidu’s Ernie Chatbot and Meta’s LLaMA, so did questions about how to handle a powerful new technology that had become accessible to the public overnight. While AI-generated images, music, videos and computer code created by platforms such as Stability AI’s Stable Diffusion or OpenAI’s DALL-E opened up exciting new possibilities, they also fuelled concerns about misinformation, targeted harassment and copyright infringement. In March, a group of more than 1,000 signatories, including Apple co-founder Steve Wozniak and billionaire tech entrepreneur Elon Musk, called for a pause in the development of more advanced AI in light of its “profound risks to society and humanity”. While a pause did not happen, governments and regulatory authorities began rolling out new laws and regulations to set guardrails on the development and use of AI. Click here to read... [14]

Huawei Expects 9% Revenue Growth This Year

Huawei Technologies projected that its revenue grew about 9% in 2023, reflecting the company’s return to a more normal course after years of dealing with U.S. sanctions.The Chinese hardware giant said in a note Dec 29 that it expects annual revenue of 700 billion yuan, or approximately $98 billion, up from CNY642 billion in 2022. The company’s rotating chairman, Ken Hu, said in the note that its telecom-infrastructure business remained solid and the devices business, which includes smartphones, surpassed expectations as it resumed large-scale shipments of smart devices. In August, Huawei resumed selling smartphones with its home grown chips making possible ultrafast data connections. The company had been suffering in that sector because of U.S. export controls that restricted its access to advanced chips and other technologies. For the coming year, Hu called for stepped-up efforts in the premium device segment in which it competes with Apple, the current premium-smartphone leader in China. Click here to read... [15]

China’s economic, social development under 14th 5-year plan on track despite ‘extremely unusual’ time

Beijing’s top economic planner has sent out an upbeat message about China’s growth prospects in an assessment of a key economic plan amid growing calls to lift expectations for expansion. The world’s second-largest economy has advanced as expected in most aspects outlined in its 14th five-year plan covering economic and social development for 2021-25, according to a midterm assessment from the National Development and Reform Commission (NDRC). Despite several challenges, including technological chokepoints, 16 of the 20 major goals included in the plan are within expectation or better than anticipated, NDRC head Zheng Shanjie said in his report to the country’s top legislature on Dec 26. The evaluation followed the central economic work conference earlier this month, when the top leadership set development as a political priority and ordered officials to strengthen public opinion guidance and “trumpet the bright prospects of the Chinese economy”. Calling the past couple of years “extremely unusual”, Zheng said China has “basically met expectations” in terms of gross domestic product (GDP) growth and residents’ income despite Western-led containment efforts and shocks from the coronavirus pandemic. However, energy consumption, carbon emission, air quality and childcare service goals, which are high on the agenda for China’s green transition and efforts to counter demographic challenges, are lagging, the report added. Click here to read... [16]

Strategic

Israel Reshuffles Forces, Prepares for Long-Term Conflict in Gaza

Israel began preparations for prolonged fighting in the Gaza Strip, reshuffling forces as it weighs how to sustain lower-intensity fighting over the long term. Israel’s top general said that it would take at least several more months to destroy Hamas’s military capabilities in the enclave. On Jan 01, Israel said it would adjust its ground-force composition in Gaza, with plans to rotate five brigades—estimated to be thousands of troops—out of the Gaza Strip this week, some of which might be replaced. The military has also recalibrated the types of troops required, now relying more heavily on commando and combat-engineering forces, as Israel increasingly tries to penetrate subterranean tunnel infrastructure and hunt down senior Hamas leadership. “These adaptations are designed to ensure planning and preparation for 2024,” Daniel Hagari, the Israeli military’s chief spokesperson, said Dec 31 night. “The war’s goals require prolonged fighting, and we are preparing accordingly.” The prospect of an extended period of hostilities in Gaza comes amid friction between Israel and the U.S., its main ally, which has been pushing the government of Prime Minister Benjamin Netanyahu to begin winding down a war that has devastated the enclave and killed thousands. One U.S. official said that Israel’s decision to change the composition of its forces in Gaza appears to be in line with a broader shift the Biden administration has been advocating toward the more discriminate use of force on the part of Israel’s military. Click here to read... [17]

Egypt sets out ambitious Israel-Gaza ceasefire plan

Egypt has presented what is described as an ambitious plan to end the war in Gaza with a ceasefire. The proposal, which was presented to Israel, Hamas, the United States and European governments on Dec 25 would see Israel fully withdraw from the Gaza Strip, all captives held by Hamas, and many Palestinian prisoners, freed, and a united technocratic Palestinian government installed in the enclave.The proposal, developed with the Gulf state of Qatar, includes several rounds of captive and prisoner exchanges, reports Al Jazeera’s Bernard Smith from Tel Aviv. In the first phase, Hamas would free all civilian captives in return for the release of Palestinian prisoners over a truce of 7-10 days. During the second stage, Hamas would release all female Israeli soldiers in return for more Palestinian prisoners, taking place during another weeklong truce. In the final phase, the warring parties would engage in “a month of negotiations to discuss the release of all military personnel held by Hamas in exchange for a lot more [Palestinian] prisoners and Israel pulling back to Gaza’s borders”, said Smith. Close to 8,000 Palestinians are held by Israel on security-related charges or convictions, according to Palestinian figures. Throughout the ceasefire, Egypt would also lead talks to reunite Palestinian factions Hamas and the Palestinian Authority, who would then jointly appoint a government of experts to run the West Bank and Gaza, ahead of future elections, reports The Times of Israel. Click here to read... [18]

US launches airstrikes in Iraq

US forces have carried out airstrikes targeting Kataib Hezbollah militants in Iraq after blaming the group for a drone attack that injured three American soldiers in the country’s Kurdish region. The airstrikes were launched on Dec 25 night against three facilities used by the Hezbollah affiliate, the US Central Command (CENTCOM) said in a statement. The operation came in response to multiple attacks against US troops in Iraq and Syria, including a drone strike earlier on Dec 25 at the Iraqi Kurdish region’s Erbil Air Base. “Early assessments indicate that these US airstrikes destroyed the targeted facilities and likely killed a number of Kataib Hezbollah militants,” CENTCOM said. “There are no indications that any civilian lives were affected. The US military will continue to evaluate the effectiveness of these strikes.” However, the Iraqi government reported 19 casualties, including civilians who were injured and a security service member who was killed. The office of Prime Minister Mohammed Shia al-Sudani condemned the airstrikes as a “clearly hostile, unconstructive act that does not serve the interests of long-term common interests.” It added that the strikes “infringe upon Iraq’s sovereignty and are deemed unacceptable under any circumstances or justification.”American targets in Iraq and the US forces illegally occupying Syria have come under multiple drone and rocket attacks since the Israel-Hamas war began in October. Click here to read... [19]

China names top navy commander as defense minister

China's top legislative body on Dec 29 named a top navy commander as the country's defense minister, filling the post left vacant after the removal of Li Shangfu in October. The National People's Congress Standing Committee selected Dong Jun for the post, as part of a cabinet shake-up that also put Lu Zhiyuan in charge of the Ministry of Civil Affairs and Sun Yeli at the helm of the Ministry of Culture and Tourism. President Xi Jinping authorized the reshuffle, the second since March, state news agency Xinhua reported. Before his appointment, Dong served as admiral. This makes him the first top navy commander to take the defense portfolio since the founding of the People's Republic in 1949, according to Caixin News. The pick comes amid rising military tensions in key maritime areas -- the Taiwan Strait and the South China Sea. Dong reportedly oversaw China's involvement in some of the largest military exercises with Pakistan and Russia in recent years. Prior to Dec 29’s appointments, Xi on Dec 25 promoted two officers from the People's Liberation Army to general, the highest rank within the military. One of them is Hu Zhongming, who replaced Dong and is a decorated officer known for leading the navy's submarine unit and its first global expedition, according to local media. Click here to read... [20]

China Ousts Nine Military Lawmakers as Defense Purge Widens

China abruptly ousted nine military figures from its national parliament without explanation, as a major purge of personnel in the upper echelons of the nation’s defense universe casts its net wider. The nation’s top legislative body revoked the lawmakers’ membership during a Dec 29 meeting, the official Xinhua News Agency reported. Their ouster adds to a series of recent removals that are raising questions about how such turmoil will affect the smooth operations of China’s military. Five of those cut came from the nation’s secretive Rocket Force, including former commander Li Yuchao who was earlier reported to be subject to a corruption investigation. At least two hailed from the Equipment Development Department, which this summer opened a corruption investigation into hardware purchases going back to 2017. The dates of that inquiry overlapped with former defense minister Li Shangfu’s tenure leading the procurement department. Ding Laihang, a former commander of the Air Force, was also ousted on Dec 29, while the ninth person was from the navy. Their removal marked the first time those branches of the military have been implicated by the recent personnel swings. The body didn’t specify a reason for removing the men. The People’s Liberation Army hasn’t published any information about a disciplinary probe. Click here to read... [21]

Top China Political Advisory Body Ousts Three Defense Executives

China’s top political advisory body removed three senior leaders at missile-making firms from its national committee, the latest sign of turmoil within the upper echelons of the nation’s military. The Chinese People’s Political Consultative Conference revoked the membership of the executives during a Dec 27 meeting, state broadcaster China Central Television reported. The body didn’t specify a reason for ousting the men, who all work at state-owned firms. Its constitution states members can be removed for “serious violations” of its rules. Ministry of Defense spokesman Wu Qian avoided a question on the executives’ removal when asked at a regular press briefing in Beijing on Dec 28. President Xi Jinping has overhauled his nation’s military leadership this year. Beijing ousted Li Shangfu as defense minister without explanation in October, months after replacing two top leaders of its secretive rocket force. The PLA unveiled a new navy commander this week, amid rising tensions in the South China Sea. “This move represents further evidence the party is conducting a significant investigation into corruption in military procurement for the rocket force,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. All three held senior posts at major defense contractors during the period Li headed the military’s procurement department, which is now under probe for dates overlapping with his tenure. Click here to read... [22]

American Spies Confront a New, Formidable China

Beijing’s spy catchers all but blinded the U.S. in China a decade ago when they systematically rounded up a network of Chinese agents working for the CIA. As many as two dozen assets providing information to the U.S. were executed or imprisoned, among them high-ranking Chinese officials. The CIA is still struggling to rebuild its human espionage capabilities in China, the agency’s top intelligence target, according to interviews with current and former U.S. officials. The gaps leave the U.S. with limited understanding of secret deliberations among Chinese leader Xi Jinping and his inner circle on key security issues such as Taiwan and other topics, the officials said. “We have no real insight into leadership plans and intentions in China at all,” said a former senior intelligence official who until recently read classified reporting. Strengthening the human spy network targeted on China is one goal of a titanic, but mostly secret, shift at the CIA and its sister U.S. spy agencies. It comes amid a larger transformation in U.S. security policy away from fighting insurgencies around the world and toward preparing for a possible “great power” conflict with China and Russia. After two decades of hunting terrorists, the $100 billion-a-year U.S. intelligence community is retraining personnel, redirecting billions in budgets and retooling expensive spy machinery to focus on those potential adversaries. Click here to read... [23]

Taliban supreme leader's existence remains a mystery

In the 29 months since the Taliban seized power in Afghanistan, Mullah Hibatullah Akhundzada, the militant group's leader, has neither been photographed in public nor delivered a live video speech. Instead, he communicates through written media statements or the occasional audio message. The world only knows what he looks like from one photo taken years ago for his Afghan identity card -- well before he was appointed supreme leader, Taliban spokesman Zabihullah Mujahid told Nikkei in an interview. Mujahid said his leader has appeared in public in many places on numerous occasions but avoids being photographed or videotaped. "Like many other religious scholars, he holds the belief that taking pictures or videos is forbidden in Islam," Mujahid said. "That's why he chooses not to do so.” The last public record of Hibatullah notes that he was at a cabinet meeting on Nov. 20-21 in the city of Kandahar, according to a Taliban news release. But some opponents of the Taliban inside and outside the country say Hibatullah is dead and that a doppelganger takes excursions in his name. Mirwais Afghan, an Afghan analyst based in London, says that ever since the Taliban regained control many people have suspected the leader is no longer alive. "I have held the view since 2018," Afghan said. "The genuine Mullah Hibatullah was killed and replaced by his duplicates." Click here to read... [24]

India and Russia inch closer to jointly producing weapons

Russia and India discussed plans and made progress in talks toward jointly producing military equipment, Russian Foreign Minister Sergey Lavrov said in Moscow on Dec 27 after holding talks with visiting Indian counterpart S. Jaishankar. At a joint press briefing with the Indian minister, whose five-day Russia visit began on Dec 25, Lavrov said the two talked about the prospects of military and technical cooperation, including the manufacturing of modern weaponry. "We also have [taken] specific steps in this area," Lavrov said. He added that their cooperation was of a strategic nature, which "corresponds to the national interests of our states, the interest of maintaining security in the Eurasian continent." "We are respectful of the aspirations of our Indian colleagues to diversify their military and technical links. We also understand and we are ready to support their initiative to produce military products as part of the 'Make in India' program," Lavrov said, referring to India's plan to transform itself into a manufacturing hub. Late on Dec 27, Jaishankar met President Vladimir Putin, who invited Indian Prime Minister Narendra Modi to visit Russia. "We will be happy to see our friend Prime Minister Modi in Russia," Putin told the Indian minister, saying that the two sides "have to cover a lot of ground," according to Russia's Ministry of Foreign Affairs. Click here to read... [25]

Putin outlines objectives for Russia’s BRICS presidency

Russia has assumed the one-year rotating presidency of BRICS following its groundbreaking expansion in 2023. President Vladimir Putin has vowed that Moscow will do its best to promote cooperation within the economic bloc.In a statement released by the Kremlin on Jan 01 – the first in 2024 – Putin hailed the expansion of BRICS, calling it “a strong indication of the growing authority of the association and its role in international affairs.” In August, the bloc, which at the time included Brazil, Russia, India, China, and South Africa, agreed to admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates, while leaving the door open to accepting new members. Argentina, however, officially declined the invitation after its newly-elected president, Javier Milei, opposed the move, promising that the country would not “ally with communists” on his watch. The Russian leader stressed that Moscow’s chairmanship, with the motto ‘Strengthening Multilateralism for Equitable Global Development and Security’, will “focus on positive and constructive cooperation.” According to Putin, Moscow intends to enhance partnership in politics and security, economic and financial matters, and cultural and humanitarian contacts, while providing “effective responses to the challenges and threats to international and regional security and stability.” “Our priorities include promoting cooperation in science, high technology, healthcare, environmental protection, culture, sports, youth exchanges, and civil society,” he added. Click here to read... [26]

Pakistan Blocks Khan’s Bid to Contest Polls from Two Seats

Pakistan’s election panel said it has rejected former Prime Minister Imran Khan’s bid to contest the 2024 elections from two constituencies. Khan’s nomination papers to contest from his hometown Mianwali, as well as Lahore were rejected, the Election Commission of Pakistan’s Secretary Omar Hamid Khan said in text message on Dec 31. Khan has also sought to contest from capital Islamabad, according to his lawyer Naeem Haider Panjutha. While the status of his nomination from Islamabad is not clear, the poll panel’s decision to turn down his bid to contest from the other two seats can be challenged in a court. Khan’s political party, Pakistan Tehreek-e-Insaf, in a post on X, said that almost 90% of the nomination papers of key leaders, including Khan, were rejected while all of the nomination papers of other parties were accepted. “We are going to stay in the election race, we are not going to step out, we are not going to back off,” said Raoof Hassan, PTI’s central information secretary. “We are going to use our constitutional, legal and political options.” The Times of India newspaper had earlier reported that Khan’s nomination papers from Lahore was rejected as he isn’t a registered voter in that constituency, and has been convicted and disqualified from running for office. Click here to read... [27]

Leader of Sudan’s RSF visits Ethiopia in rare foreign trip as war rages

The leader of Sudan’s paramilitary Rapid Support Forces (RSF), General Mohamed Hamdan Dagalo, has visited neighbouring Ethiopia, where he has had discussions on the end of the war between the RSF and Sudan’s army. Dagalo, known as “Hemedti”, landed in Ethiopia’s capital, Addis Ababa, on Dec 28 in the second stop of his first known public foreign trip since the war erupted on April 15. The trip comes weeks after RSF fighters captured the country’s second-largest city, Wad Madani, once a hub for hundreds of thousands of people displaced by the eight-month war. Dec 28’s meeting was preceded by Hemedti’s meeting with Ugandan President Yoweri Museveni at Museveni’s country home on Wednesday. Ethiopian Prime Minister Abiy Ahmed said he had received the RSF leader and his delegation “for a discussion on securing peace and stability in Sudan”, posting pictures of them seated around a restaurant table. Hemedti was received by Deputy Prime Minister and Foreign Minister Demeke Mekonnen at the airport in Addis Ababa. Hemedti posted pictures of his arrival and a meeting with Demeke on X. “We discussed the need to bring a swift end to this war, the historical crisis in Sudan and how to best alleviate the hardships of the Sudanese people,” Hemedti wrote. Click here to read... [28]

China Confronts a New Political Reality in Taiwan: No Friends

A drawing of Taiwan at the presidential campaign headquarters of the island’s ruling party shows strikingly little concern for north and south. Instead, the island is shown turned on its side, with China and the Taiwan Strait conspicuously absent. The drawing reflects the worldview of the Democratic Progressive Party, which over the past eight years has sought to carve out an identity for the self-ruled island that is separate from mainland China. But it also represents a broader change in Taiwan that sits uneasily with Communist Party leaders 1,000 miles to the northwest in Beijing. With voters set to cast their ballots for a new leader in a volatile three-way election next month, Taiwanese politics has shifted decisively, and perhaps irrevocably, away from China. The change in mood is evident in public-opinion polls—and even in the campaign of the opposition Nationalist Party, or Kuomintang. Once an aggressive promoter of closer political and economic ties with Beijing, the KMT is striking a markedly different tone these days. “I’ve never had an unrealistic idea about mainland China’s attitude toward us,” the party’s presidential candidate, Hou Yu-ih, said in an interview, one of three that The Wall Street Journal recently conducted with the leading candidates. “The most important thing is to handle our defense and economy in a way that at least prevents the other side from casually launching a war.” Click here to read... [29]

‘Fighting spirit’: Xi Jinping reveals China’s push for global power after rare foreign policy meeting

Beijing has vowed to seize “strategic opportunities” and further raise its “international influence, appeal and power” to shape a rapidly changing world by strengthening Communist Party control of foreign affairs and standing firm against “bullying” and “hegemonism” from the West. At a rare closed-door party meeting about China’s future foreign policy direction that concluded on Dec 28, President Xi Jinping also urged the country’s diplomats and cadres to “break new ground”, “rally the overwhelming majority” of the world and adhere to the “fighting spirit”. The two-day Central Conference on Foreign Affairs Work, which was last held in 2018, was attended by top party leaders such as Politburo members, senior government officials and diplomats, including dozens of Chinese ambassadors, state media reported. Analysts said the timing of the meeting was of particular significance amid signs of socioeconomic headwinds at home and growing international scrutiny and resistance, despite Beijing’s recent efforts to dial down its rancorous rivalry with the US-led West.In his speech, Xi touted China as a “responsible” global power rising under his head-of-state diplomacy since he took power in 2012 and said China had overcome “various difficulties and challenges” in its external work in the past decade. But he also warned of “high winds and choppy waters” ahead because the world had “entered a new period of turbulence and transformation” – a thinly veiled reference to China’s feud with the US and its allies over ideological and geopolitical differences. Click here to read... [30]

Korean unification ‘impossible’ – Kim

North Korean leader Kim Jong-un has said it is impossible to achieve reunification between Pyongyang and Seoul because South Korea’s principles are directly opposed to those of his country. Addressing a meeting of the ruling Workers Party, Kim said the two states’ relations had become “hostile to each other” and no longer “consanguineous or homogeneous,” the Korean Central News Agency (KCNA) reported on Dec 31. Kim declared Pyongyang’s approach to national reunification based on “one nation and one state with two systems” to be in sharp contradiction with Seoul’s “unification by absorption” and “unification under liberal democracy.” South Korea is currently a “colonial subordinate state” whose politics are “completely out of order” and whose defense and security are totally dependent on the US, the agency said, citing Kim. Kim said Washington had turned Seoul into its military base and nuclear arsenal, and that the number of joint military exercises between the US, South Korea and Japan in 2023 had doubled from last year. He said this fact “clearly shows” that the US is aiming for military confrontation. Kim argued that “war may break out” on the Korean Peninsula at any time due to the “enemies’ reckless moves.” If Washington and Seoul attempt a military confrontation with Pyongyang, its “nuclear war deterrence will go over to a grave action without hesitation,” Kim stressed. Click here to read... [31]

Health

US scientists warn ‘zombie deer disease’ could spread to humans

Researchers in the US have sounded the alarm over a spike in cases of Chronic Wasting Disease (CWD) among wildlife across North America, warning that the deadly virus could spread to humans. CWD, also known as ‘zombie deer disease’, is caused by prions – abnormal transmissible pathogenic agents which alter their host’s brain and nervous systems, and leave the infected animal drooling, lethargic, stumbling, and with a blank stare.Experts described the disease as a “slow-moving disaster” in a recent report by The Guardian. Dr. Cory Anderson, a CWD researcher at the University of Minnesota, explained that the illness is “invariably fatal, incurable, and highly contagious,” warning it is nearly impossible to eradicate once it infects an environment. Scientists have also noted that CWD is resistant to disinfectants, formaldehyde, radiation, and incineration at 600C, and can persist in dirt or on surfaces for years. Last year, the disease was reportedly detected in some 800 samples collected from deer, elk, and moose across the state of Wyoming, according to Breanna Ball of the state’s Game and Fish Department. She told The Guardian that the infection rate was an increase on previous years. Scientists are particularly concerned that the disease has apparently made its way to Yellowstone National Park in recent months. Click here to read... [32]

China braces for Covid surge as JN.1 variant spreads around the world

Chinese health authorities are calling for vigilance over the holidays as the country braces for a rise of Covid-19 cases caused by JN.1, a new variant of the coronavirus dominating in the United States and spreading rapidly elsewhere. The US Centres for Disease Control and Prevention said earlier this month that JN.1 was first detected in the US in September and although it was likely to be more transmissible than other variants, it did not appear to cause more severe illnesses. In China, the most prevalent variant is EG.5 but health authorities are expecting a rise in JN.1 because of an increase in imported cases, as well as mass travel over the Lunar New Year holidays in early February. “Due to continued stream of imported cases of JN.1 and the mass movement of people before and after the Lunar New Year, the JN.1 variant is likely to become a prevailing variant in the country, and that will cause an increase in Covid-19 cases,” Li Zhengmao, from the National Administration of Disease Prevention and Control, said on Dec 29.Li added that China was bracing for an uptick in multiple respiratory diseases during the winter. “[The rise in JN.1 cases] will increase the risks of severe cases and deaths among elderly and vulnerable people with underlying diseases. It will also create pressure on the health system in rural areas as they are less able to treat the infected,” he added. Click here to read... [33]