Global Developments and Analysis: Weekly Monitor (29 April- 05 May 2024)

Economic

China to hold key Communist Party plenum in July amid economic pressure

The Chinese Communist Party's central committee will gather in July for a key meeting known as a plenum, the third since the body of elite decision makers was elected in 2022, focusing on reforms amid "challenges" at home and complexities abroad. Plenums are important events on China's political calendar that require the attendance of all of the party's central committee, comprising 205 members and 171 alternate members with President Xi Jinping at the helm. The central committee typically holds seven plenums between party congresses, which are held once every five years. The current central committee members were elected at the last party congress in October 2022. Further deepening reforms and promoting the modernization of China will comprise the main agenda of the third plenum, state-run Xinhua news agency reported on Tuesday, citing the party's elite political bureau, or politburo, during a regular meeting. Third plenums have been typically held in the autumn since the 1990s. The party was widely expected to hold one in either October or November 2023, but it did not. The upcoming third plenum will open amid a subdued economy, with the massively indebted property sector, once accounting for a quarter of gross domestic product, a major drag on household sentiment. Click here to read... [2]

U.S. delays ban on Chinese graphite for EV tax credits

The U.S. Treasury Department on May 03 gave automakers additional flexibility on battery mineral requirements for electric vehicle tax credits on some crucial trace minerals from China, such as graphite. The department said it would give automakers until 2027 to remove some hard-to-trace minerals like graphite contained in anode materials and critical minerals contained in electrolyte salts, binders and additives. New rules took effect on Jan. 1 restricting Chinese content in batteries eligible for EV tax credits of up to $7,500, which sharply cut the number of eligible vehicles. Automakers have since made changes to supply chains and won restored eligibility for many vehicles. Treasury has temporarily exempted graphite and other trace critical minerals from new strict rules barring materials from China and other countries deemed a Foreign Entity of Concern (FEOC), including North Korea, Russia and Iran. John Bozzella, who heads the Alliance for Automotive Innovation, a group representing major automakers, said the new Treasury rules "appear to recognize the realities of the global supply chain by providing some temporary flexibility in terms of where the critical minerals in EV batteries can be sourced." Senate Energy Committee Chair Joe Manchin on May 03 harshly criticized the decision, saying the administration has made clear it "will break the law in pursuit of their goal to flood the market with electric vehicles as quickly as possible." Click here to read... [3]

Yen trips past 160-per-dollar, hits lowest levels since April 1990

The Japanese yen hit its weakest levels since April 1990 on April 29, in trading thinned by a holiday in Japan and attempts by traders to test key levels and stop-loss orders in a nervous, illiquid market. The dollar rose as far as 160.245 yen in a sudden move after the yen traded in a narrow 158.05-158.15 range in early deals. A portfolio manager said “stops” on the pair at the key 160 level had been “taken out,” meaning the yen’s descent had forced those with long yen holdings and stop-loss orders around that big level to square positions, exacerbating its slide. The yen’s move barely affected the euro and sterling, both of which stayed near the bottom of the ranges hit during April 26’s volatile session. Markets are on guard for any intervention by Japanese authorities to contain the yen’s nearly 11 percent fall this year. While the yen had its biggest drop in six months on April 26, it also briefly surged to 154.97 to the dollar, triggering speculation that Japanese authorities may have checked currency rates ahead of likely intervention. It was not immediately clear what caused the move. Japan’s yen was at 159.105 by 0200 GMT, down 0.5 percent. Click here to read... [4]

China, Australia, and Russia Dominate Global Gold Production

Over 3,000 tonnes of gold were produced globally in 2023. Visual Capitalist's Marcus Lu lists the world’s leading countries in terms of gold production. These figures come from the latest USGS publication on gold statistics (published January 2024). China, Australia, and Russia Produced the Most Gold in 2023. China was the top producer in 2023, responsible for over 12% of total global production, followed by Australia and Russia. Gold mines in China are primarily concentrated in eastern provinces such as Shandong, Henan, Fujian, and Liaoning. As of January 2024, China’s gold mine reserves stand at an estimated 3,000 tonnes, representing around 5% of the global total of 59,000 tonnes. In addition to being the top producer, China emerged as the largest buyer of the yellow metal for the year. In fact, the country’s central bank alone bought 225 tonnes of gold in 2023, according to the World Gold Council. Most of the gold produced in 2023 was used in jewelry production, while another significant portion was sold as a store of value, such as in gold bars or coins. Jewelry: 46%, Central Banks and Institutions: 23%, Physical Bars: 16%, Official Coins, Medals, and Imitation Coins: 9%, Electrical and Electronics: 5% and Other: 1%. According to Fitch Solutions, over the medium term (2023-2032), global gold mine production is expected to grow 15%, as high prices encourage investment and output. Click here to read... [5]

Turkmenistan Tops Russia in Gas Export Earnings to China

Russia’s energy behemoth Gazprom announced with great fanfare in early 2024 that it had overtaken Turkmenistan as China’s largest supplier of natural gas in terms of volume. But when it comes to export earnings, Ashgabat still tops Moscow. The Turkmen portal, Oil & Gas, reports that during the first quarter of this year, Ashgabat generated $2.4 billion in income from gas exports to China. That figure was confirmed by Daryo, Uzbekistan’s most popular news website. The Daryo report noted that Russia earned $2 billion from its gas sales to Beijing during the same period. The reason for the volume-earnings differential is that China is hoovering up Russian gas at bargain basement prices. The Kremlin’s need for cash to keep the country afloat while maintaining its war effort in Ukraine has deprived Russia of most of its negotiating leverage in its dealings with Beijing. Russia’s edge in export volume may last only as long as the steep pricing discounts continue. An independent outlet, The Chronicle of Turkmenistan, reported that the capacity of Russia’s Power of Siberia gas pipeline to China is projected to be 38 billion cubic meters (bcm) in 2025. Meanwhile, the collective capacity of three pipelines connecting Turkmenistan and China totals 55 bcm. Turkmen state-affiliated media outlets have cast some shade on the Kremlin’s exports: in reports about Ashgabat’s gas earnings from China they have omitted mention of Russia. Click here to read... [6]

G7 Pledge to Exit Coal by 2035 Could Include Exceptions for Germany and Japan

The G7 group of the world’s most industrialized nations is set to announce later on April 30 a pledge to phase out coal-fired power generation by 2035 but could include some leeway to Germany and Japan, Reuters reports, citing diplomatic sources. The energy, climate, and environment ministers of the G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – are meeting between April 28-30 at a palace near Turin to discuss ways to address climate change. Phasing out coal-fired electricity is top of the agenda, and a tentative agreement has been reportedly reached. The ministers agreed on April 29 on phasing out coal-fired electricity between 2030 and 2035 and are expected to announce it officially later on April 30, Reuters’s sources said. However, Germany and Japan could be given more time to shut down coal-fired power generation by including in the final communique wording that G7 countries could pick a date to exit coal that is consistent with keeping a limit of 1.5 C global temperature rise within reach, according to Reuters’s sources. Germany aims for coal phase-out by 2030, but its official end date is 2038. Japan, for its part, hasn’t set any end date for exiting coal-fired electricity. Click here to read... [7]

Turkey says it halts trade with Israel over Gaza aid access

Turkey has halted exports and imports to and from Israel, the Turkish Ministry of Trade says, citing the “worsening humanitarian tragedy” in Gaza. “Export and import transactions related to Israel have been stopped, covering all products,” the ministry said in a statement on May 02.“Turkey will strictly and decisively implement these new measures until the Israeli Government allows an uninterrupted and sufficient flow of humanitarian aid to Gaza.” The announcement came after Israel’s foreign minister said Turkish President Recep Tayyip Erdogan was breaking agreements by blocking ports from handling Israeli imports and exports. “This is how a dictator behaves, disregarding the interests of the Turkish people and businessmen, and ignoring international trade agreements,” Israel Katz posted on X.Katz said he instructed the Ministry of Foreign Affairs to work to create alternatives for trade with Turkey, focusing on local production and imports from other countries. The two countries had a trade volume of $6.8bn in 2023. Turkey last month-imposed trade restrictions on Israel over what it said was Israel’s refusal to allow Ankara to take part in airdrops of aid for Gaza and for Israel’s war on the enclave. Asked about Turkey’s ongoing trade with Israel despite the harsh rhetoric from Ankara, Erdogan said last month that Turkey no longer continued “intense trade” with Israel, adding, “That is done.” He did not indicate Ankara had cut off all trade with Israel, however. Click here to read... [8]

Ukraine’s creditors want their money back – WSJ

A group of foreign bondholders have taken steps to force Ukraine to begin repaying its debts as soon as next year, the Wall Street Journal reported on May 05. If they succeed, Kiev could hemorrhage $500 million every year on interest payments alone. The group, which includes investment giants Blackrock and Pimco, granted Kiev a two-year debt holiday in 2022, gambling that the conflict with Russia would have concluded by now. With no end to the fighting in sight, the lenders have now hired lawyers at Weil Gotshal & Manges and bankers from PJT Partners to meet with Ukrainian officials and strike a deal whereby Ukraine would resume making interest payments next year in exchange for having a significant chunk of its debt written off, anonymous sources told the Wall Street Journal. The group holds around a fifth of Ukraine’s $20 billion in outstanding Eurobonds, the newspaper reported. While this figure represents a fraction of Ukraine’s total external debt of $161.5 billion, servicing the interest on these bonds would cost the country $500 million annually, the bondholders said. Should the bondholders fail to strike a deal with Kiev by August, Ukraine could default. This would damage the country’s credit rating and restrict its ability to borrow even more money in the future. Click here to read... [9]

G20 members lobby EU against seizing Russian assets – FT

The confiscation of frozen Russian assets could set a dangerous precedent in international law, Indonesia and Saudi Arabia warned the EU at a recent meeting of G20 finance ministers, the Financial Times reported on May 03. The US and its allies have blocked around $300 billion in Russian central bank assets as part of sanctions imposed on Moscow over the Ukraine conflict. Most of the funds are held in the EU and, while Washington has insisted that international law allows for the appropriation of the funds, some EU members, including Germany and France, have been reluctant to take that step. Concerns were raised again during the recent G20 finance ministers’ meeting in Brazil, the FT reported, citing EU officials. Saudi Arabia’s Minister of Finance Mohammed al-Jadaan and his Indonesian counterpart Sri Mulyani Indrawati, were reportedly among those particularly alarmed by the potential seizure of Russian funds. Both nations are “very worried” about the future of their own reserves held within the West, an unnamed European official told the outlet, adding that the main concern was whether their money was “still safe” there. While the US has been pressing its allies to seek ways of tapping into frozen Russian reserves, opponents claim that such a move, risks setting a dangerous precedent in international law, with far-reaching implications. Click here to read... [10]

Russian gas giant posts first loss since 1990s

Russian energy major Gazprom reported its first annual loss since 1999 on May 02, in the wake of dwindling gas exports due to Western sanctions pressure. According to the state-owned company’s earnings report, Gazprom Group posted a net loss of 629 billion rubles ($6.7 billion) in 2023, its first annual loss in 25 years. The result comes in contrast to a net profit of $13.2 billion in 2022. The firm’s total revenue fell to $92 billion in 2023 from $126 billion in the previous year. According to the report, revenue from gas sales fell by 40% to $47.4 billion while revenue from oil business increased by 4%, to $38 billion. Sales at its power utilities business increased by nearly 9% to $6.6 billion. Gazprom’s shares plunged more than 4% following May 02’s earnings report. Russian gas exports to its traditional markets in the EU have dwindled due to sanctions related to the Ukraine conflict and to the sabotage of the Nord Stream pipelines, previously Russia’s major gas route to the region. According to Reuters’ calculations, Gazprom’s natural gas supplies to Europe plummeted 55.6% to 28.3 billion cubic meters (bcm) in 2023. Exports dropped to their lowest level since the early 1970s, according to International Energy Agency estimates. However, Gazprom has reoriented its energy trade to Asia, with China emerging as one of its largest buyers. Click here to read... [11]

US Sanctions Firms in China, UAE for Support of Russia’s War

The US on May 01 announced sanctions on nearly 300 companies and individuals, including in China and the United Arab Emirates, for alleged support of Russia’s invasion of Ukraine. According to the US Treasury Department, the Chinese firms include Hong Kong-based Finder Technology Ltd., which is accused of exporting 293 shipments of drone parts and other electronics, Juhang Aviation Technology Shenzhen Co., which is accused of providing Russia with drone propellers, signal jammers, sensors and engines; and Zhongcheng Heavy Equipment Defense Technology Group Co. Ltd., which is accused of supplying the paramilitary Wagner Group. Treasury also targeted for the first-time manufacturers and suppliers of cotton cellulose and nitrocellulose, which are precursors for making gunpowder, rocket propellant and other explosives. A combination of Russian and Chinese companies were sanctioned for being involved in the trade of those materials. The move comes shortly after Treasury Secretary Janet Yellen warned Chinese officials the US would take action against any firms that helped Russia’s military procurement efforts. Yellen said in a statement May 01that the sanctions, along with recently enacted additional funding for Ukraine, mean that the country has a “critical leg-up on the battlefield.” She had foreshadowed parts of May 01’s announcement in remarks April 8 in Beijing, when she said that “companies, including those in the PRC, must not provide material support for Russia’s war and that they will face significant consequences if they do.” Click here to read... [12]

Senate Passes Russian Uranium Import Ban, Sending to Biden

The Senate voted April 30 evening to approve legislation banning the import of enriched uranium from Russia, sending the measure to the president. President Joe Biden plans to sign it into law soon, according to the White House. The Prohibiting Russian Uranium Imports Act, approved by unanimous consent, would bar US imports 90 days after enactment while allowing temporary waivers until January 2028. North American uranium mining stocks rose early May 01 on the vote. NexGen Energy Ltd. gained as much as 9.7% and Cameco Corp. as much as 5.5%. The Global X Uranium ETF climbed as much as 5.4% and shares of other miners including Uranium Energy Corp. and Energy Fuels Inc. also rose. Russia provided almost a quarter of the enriched uranium used to fuel America’s fleet of more than 90 commercial reactors, making it the No. 1 foreign supplier, according to US Energy Department data. Those sales provide an estimated $1 billion a year to Russia but replacing that supply could be a challenge and risks raising the costs of enriched uranium by about 20%. The White House had called for a “long-term ban” on Russian imports, which is needed to unlock some $2.7 billion to stand up a domestic uranium industry made available by Congress earlier this year, contingent on there being limits on the import of Russian uranium in place. Click here to read... [13]

The Exodus of China’s Wealthy to Japan

Frustrations with Beijing’s autocratic political system, which flared during abrupt pandemic-era lockdowns and have only grown since then, have helped drive the wave, according to real-estate agents and others watching the exodus. China’s economic slowdown and its struggling stock market are also motivating wealthy people to leave the country, they say. Hayashi, who like many Chinese buyers avoids discussing politics back home, said the move to Tokyo was a challenge. “But we like Japan—food, culture, education and safety,” he said. Japan isn’t the only haven for Chinese people seeking a Plan B. The U.S., Canada and Singapore are among the countries drawing Chinese migrants, while Hong Kong residents often head to the U.K. But Japanese cities that are just a few hours’ flight from China are a leading choice for better-off Chinese people. Japan’s real-estate prices are low for foreigners thanks to the weak yen and it is fairly easy for them to purchase property. And the Japanese writing system uses Chinese characters in part, so new arrivals can more easily find their way around. A report last June by Henley & Partners that tracks worldwide migration trends estimated that a net total of 13,500 high-net-worth Chinese people would migrate overseas during the year, making China the biggest worldwide loser in that category. Click here to read... [14]

China Launches Moon Mission in Base Race With U.S.

Across China and among the global scientific community, May 03’s launch of a Chinese mission to collect samples from the moon’s far side has been hailed for its potential for a scientific breakthrough. But in the U.S., lawmakers and the National Aeronautics and Space Administration are closely watching the expedition with trepidation: as a milestone in a rival’s campaign to build a base on the moon’s most strategic location. The latest frontier of the U.S.-China technological Cold War orbits 240,000 miles above us. Though lacking the specter of nuclear war from the U.S.-Soviet space race six decades ago, this new rivalry puts this century’s superpowers on track to spar over lunar real estate, extraterrestrial weaponry and national pride. The lunar territory that both countries covet is the south pole. It contains resources that could sustain a crewed base, so supplies wouldn’t have to be brought from Earth. It has ice, which can be turned into water and oxygen for humans, and into hydrogen for rocket fuel. Some south-pole regions enjoy round-the-clock sunlight, a potential source of solar power. “My concern is if China got there first and suddenly said, ‘OK, this is our territory. You stay out,’” NASA Administrator Bill Nelson told a congressional hearing last month. Nelson said China’s aggressive territorial claims in the South China Sea offer a clue as to how Beijing would handle a potential lunar dispute. Click here to read... [15]

BMW Plans $2.8 Billion China Factory Update to Boost EV Production

BMW will invest $2.76 billion to adapt one of its major Chinese factories to produce more electric vehicles, part of plans to roll out its newest full-electric offerings in the world’s largest EV market. The German automaker will spend 20 billion yuan ($2.76 billion) on its plant in Shenyang, China, to ready it to produce its coming Neue Klasse series electric-vehicle models, with production targeted for 2026. BMW, which partners with state-run Brilliance China Automotive to make and sell its cars in China, didn’t say which models under the series would be produced at the Shenyang plant. BMW has flagged the Neue Klasse series for several years as advanced architecture for a new generation of EVs, saying it plans to debut the series in 2025 and eventually produce at least six models. Like other traditional automakers, BMW is seeking to adapt to the rising popularity of EVs—especially in China, where EV demand this month outpaced that of traditional vehicles for the first time. Last year, BMW’s auto deliveries in China rose 4.1% to 826,257 units, most of which were combustion-engine vehicles. EVs made up 15% of its total deliveries globally in 2023, up from 9.0% a year earlier. The Neue Klasse series was launched in the 1960s, marking the company’s successful attempt to survive its financial crisis and compete with rivals like Volkswagen and Mercedes-Benz Group. Click here to read... [16]

Strategic

Xi Is on a Mission to Drive a Wedge Between US and Europe

Chinese President Xi Jinping is heading to the European Union for the first time in five years with a clear message: Beijing offers much more of an economic opportunity for the bloc than the US wants to admit. The Chinese leader will begin his five-day trip to France, Serbia and Hungary on May 5, according to the Foreign Ministry in Beijing. Those nations are seeking investment from China, despite a litany of EU probes into Beijing’s industrial policy and the warnings from officials in Washington about the risks. Xi’s trip comes as the EU is steadily forging a more unified voice with Washington in opposing China’s capacity for cheap exports and perceived national security risks. After years of serving as a buffer between the world’s superpowers, distrust in Brussels is growing. Germany last week arrested four alleged Chinese spies, the latest in a spate of such cases, while EU diplomats are reportedly mulling more curbs on Chinese companies for their support of Russia’s war machine. “I think it’s part of an attempt to persuade the Europeans that there are better options, that better relations are possible,” Duncan Freeman, a lecturer on China-Europe relations at the Brussels Management School in Belgium, said ahead of Xi’s trip. “We’re not yet in the last chance saloon, but I think even the Chinese would agree the relationship is far from ideal.” Click here to read... [17]

China’s Biggest Carrier Starts Sea Trial in Show of Power

China’s largest and most advanced warship has begun its first sea trial, paving the way for the country to enhance its navy’s capability to project power amid US concerns of Beijing’s assertiveness in the Indo-Pacific region. The Fujian, which is China’s third aircraft carrier, tested waters May 01, according to the state broadcaster CCTV. The ship was launched and officially named in June 2022. The province is across the strait from Taiwan, which the Chinese Communist Party has pledged to take — even if by force. The 316-meter (1037-foot) carrier is fitted with three electromagnetic catapults to launch fighter jets, which is similar to the advanced system used by the latest US carrier, the 337-meter-long USS Gerald R. Ford. But unlike America’s fleet of nuclear-powered aircraft carriers, the Fujian is conventionally powered, which could limit its range and duration of its deployments. The first sea trial will mainly focus on the reliability and stability of the propulsion and power systems, according to Chinese state media. The Fujian needs to go through the trials to test its performance including for its engine and weapon systems, before it’s delivered to the navy. The sea trial marks a milestone for the Fujian, a key piece of the puzzle in President Xi Jinping’s ambitious plan to improve the military. Click here to read... [18]

Ukraine on brink – top spy

A Ukrainian military victory over Russia is unfeasible, a senior military intelligence official in Kiev has predicted. Peace talks with Moscow are nonetheless unlikely before 2025, he claimed. Vadim Skibitsky, the deputy head of Ukraine’s GUR military intelligence agency, shared his grim perception of the frontline situation in an interview with The Economist published on May 02. He expects Russia to launch a major offensive by the end of May or the beginning of June, with Kiev’s forces badly positioned to prevent it. “Our problem is very simple: we have no weapons,” Skibitsky explained. Kiev’s armament woes will not be addressed anytime soon, even after the US approved an additional $60 billion in Ukraine-related spending, the British magazine reported, saying it will be weeks before new aid filters through to the front line. A lack of willing draftees is also undermining Kiev’s war effort, including those recruited under draconian new rules, the report stated. Skibitsky reiterated Kiev’s claims that Moscow intends to capture the Donbass city of Chasov Yar by May 9, when Russia celebrates victory over Nazi Germany in World War II. The Ukrainian military leadership announced the purported deadline in mid-April and has recently boasted about depriving Moscow of its supposed wish. Click here to read... [19]

No Saudi defense pact without Israel deal – White House

The US will not enter into a defense agreement with Saudi Arabia unless the kingdom recognizes the state of Israel, US National Security Adviser Jake Sullivan has said. However, Riyadh has made any recognition deal contingent on the Israelis agreeing to work toward the formal establishment of an independent Palestinian state. Media reports last week suggested that Washington and Riyadh were drawing closer to signing a bilateral security pact, even as progress toward a Saudi-Israel normalization deal remained stalled. According to Reuters, the pact would see the US enter into a formal alliance with Saudi Arabia and help with its civilian nuclear program in exchange for Riyadh cutting some economic ties with China. Speaking at a Financial Times event in London on May 04, Sullivan insisted that no deal will be possible without Saudi Arabia recognizing Israel. “The integrated vision is a bilateral understanding between the US and Saudi Arabia combined with normalization between Israel and Saudi Arabia, combined with meaningful steps on behalf of the Palestinian people,” he told attendees. “All of that has to come together…you can’t disentangle one piece from the others.” Brokering a Saudi-Israeli normalization deal was a key foreign policy goal of former US President Donald Trump, whose 2020 ‘Abraham Accords’ saw Bahrain, Morocco, Sudan, and the United Arab Emirates open diplomatic and trade links with West Jerusalem. Click here to read... [20]

Switzerland Invites More Than 160 States to Ukraine Conference

Switzerland has invited more than 160 countries to a planned conference on Ukraine’s peace blueprint but didn’t include Russia on the guest list. Heads of state and government from the Group of Seven, the Group of 20, the European Union and the so-called BRICS bloc were invited to the gathering set to take place on June 15 and 16 near Lucerne, the ministry said on its website on May 02. Russia stated, “publicly that it has no interest in participating in this first summit” and wasn’t offered a place, according to the statement. Invitations were also extended to the United Nations, the Organization for Security and Co-operation in Europe, the Council of Europe and to the Vatican as well as to the Patriarch of Constantinople. A full list of invitations wasn’t disclosed. “The summit will serve as a platform for dialog on ways to achieve a comprehensive, just, and lasting peace for Ukraine in accordance with the UN Charter and the norms of international law,” Ukrainian President Volodymyr Zelenskiy said in a statement on his website. “All the invited parties have confirmed their respect for these principles.” It remains unclear whether national leaders will indeed participate in the conference or whether countries will send lower-level officials. Another open question remains whether, and at what level, China will attend. Swiss officials have said that Beijing has reacted positively to the initiative on diplomatic channels. Click here to read... [21]

South Korea explores defense tech cooperation with AUKUS

South Korea is considering collaborating on military technology with the U.S., Australia and the U.K. through the AUKUS defense framework, Seoul's defense minister said May 01. "Korea's defense science and technology capabilities will contribute to the peace and stability of the development of AUKUS Pillar Two and regional peace," South Korean Defense Minister Shin Won-sik said after taking part in a two-plus-two meeting in Melbourne among South Korean and Australian defense and foreign ministers. Pillar Two refers to the second set of cooperative activities in the AUKUS pact among Australia, the U.S. and the U.K. where participants conduct research on advanced defense technology, such as those that use artificial intelligence and quantum tech. Pillar One centers on the U.S. and the U.K. providing support for Australia's deployment of nuclear submarines. "Korea is obviously a country with deeply impressive technology, where we do have shared values," said Australian Defense Minister Richard Marles. "I think there will be opportunities in the future." South Korean Foreign Minister Cho Tae-yul and Australian Foreign Minister Penny Wong also sat in the two-plus-two, which was the sixth such meeting between the countries and the first since September 2021. Last month, the U.S., Britain and Australia announced they would consider cooperation with Japan on AUKUS Pillar Two tech projects. Click here to read... [22]

China woos Argentina, Bolivia and Peru to advance Belt and Road

Chinese Foreign Minister Wang Yi has met with counterparts from Argentina, Peru and Bolivia in the past week, as Beijing intensifies efforts to court Latin American countries through its Belt and Road infrastructure-building initiative. Wang met with Argentine Foreign Minister Diana Mondino in Beijing on April 30, the Chinese Foreign Ministry reported. This is the first trip by Argentina's top diplomat to China since President Javier Milei took office in December. Wang urged greater aerospace and maritime cooperation and bilateral trade to advance the international Belt and Road Initiative. China supports Argentina's efforts to maintain economic and financial stability and is willing to continue providing assistance within its capacity, he said. Amid protracted tensions with the U.S., China looks to diversify its partners in trade and investment. U.S. President Joe Biden's administration has raised concern over excess production of electric vehicles in China and is weighing additional trade tariffs. Milei, who is a libertarian, said during his 2023 campaign that he would not work with communists, signaling that he intended to keep a distance from China. After taking office, he withdrew Argentina's planned entry into the BRICS club of nations, made up of Brazil, Russia, India, China and South Africa. But Argentina relies heavily on China economically. Around 20% of Argentine imports in 2023 came from China, more than from any other country except neighboring Brazil. China was also Argentina's third-largest destination for exports. Click here to read... [23]

France, Japan to start talks on reciprocal troops pact

France and Japan agreed on May 02 to start formal talks on a reciprocal troop access deal, strengthening military cooperation in amid rising maritime tensions in the Indo-Pacific region and the war in Ukraine. The G7 allies have held numerous joint military exercises in recent years, bilaterally and as part of a wider group. Paris has been pushing for more than a year to begin talks on a reciprocal access agreement (RAA). RAAs create frameworks to facilitate military cooperation, such as making the entry of foreign personnel and equipment easier for the visiting force. "They agreed to start negotiations," a Japanese government official said, as Prime Minister Fumio Kishida and President Emmanuel Macron met in Paris. "Given the accumulation of cooperation and (military) exercises, we consider this important." A Japanese government statement confirmed that the agreement to move forward with talks. The French presidency said in a statement that concluding the RAA would promote interoperability between the two militaries. In December 2023, Japan announced its biggest military build-up since World War Two in a step away from its post-war pacifism. It has already signed RAAs with Australia and the United Kingdom and is negotiating a third with the Philippines. Tokyo, which spent about two years negotiating the agreement with Australia and one year negotiating the one with Britain, hosts the biggest concentration of U.S. forces abroad. Click here to read... [24]

U.S. Navy to identify which Indo-Pacific shipyards it can use in wartime

The U.S. military will carry out maintenance work on as many as six American naval ships at international shipyards next fiscal year if approved by Congress, aiming to keep up with China's naval capacity. If the military's request is authorized later this year, it would expand the use of foreign shipyards for such work on U.S. Navy ships and lead to certifying shipyards that match U.S. standards. "If we should have to go to war, we will then have full knowledge of which shipyards and what countries we could actually send these ships to be able to do the damage repair that's going to be necessary," Navy Secretary Carlos Del Toro told a House Armed Services Committee hearing on the fiscal 2025 budget on May 01. Under the current structure, if there were a conflict in the Taiwan Strait, the U.S. would have to return damaged ships to Guam, Hawaii or the U.S. West Coast to conduct repairs. By doing the repairs in shipyards closer to the action, the U.S. would be able to return them quickly to the battlespace. Maintenance activities would take under 90 days, Del Toro said. The Pentagon's fiscal 2025 runs from October 2024 to September 2025. The Navy has experimented with small-scale repairs at shipyards of U.S. allies and partners in recent years. Click here to read... [25]

Powerful ethnic armed group in western Myanmar claims to capture base and hundreds of soldiers

A powerful ethnic minority armed group battling Myanmar’s army in the country’s west claimed May 06 to have taken hundreds of government soldiers prisoner when it captured a major command post. The Arakan Army, the well-trained and well-armed military wing of the Rakhine ethnic minority movement, has been on the offensive against army outposts in the western state of Rakhine — its home ground — for about six months. The group said in a video statement posted on the Telegram messaging app that soldiers belonging to the military government’s Operational Command No. 15 headquarters in Rakhine’s Buthidaung township surrendered after a siege. Buthidaung is about 385 kilometers (240 miles) southwest of Mandalay, Myanmar’s second-largest city. The reported capture of the base could not be independently confirmed. Myanmar’s military government made no immediate comment, and the spokesperson of the Arakan Army did not respond to questions sent by The Associated Press. The fight in Rakhine is part of the nationwide conflict in Myanmar that began after the army ousted the elected government of Aung San Suu Kyi in February 2021 and suppressed widespread nonviolent protests that sought a return to democratic rule. Despite its advantages in arms and manpower, Myanmar’s army has been on the defensive since October, when an alliance of three ethnic rebel groups launched an offensive in the country’s northeast. Click here to read... [26]

Russia proposes U.N. resolution on banning weapons in space, after vetoing similar U.S.-Japan draft

Russia has circulated a U.N. resolution calling on all countries to take urgent action to prevent putting weapons in outer space “for all time” a week after it vetoed a U.S.-Japan resolution to stop an arms race in space. The Russian draft resolution, obtained May 01 by The Associated Press, goes further than the U.S.-Japan proposal, not only calling for efforts to stop weapons from being deployed in outer space but for preventing “the threat or use of force in outer space,” also “for all time.” It says this should include deploying weapons “from space against Earth, and from Earth against objects in outer space.” Russia’s U.N. Ambassador Vassily Nebenzia told the Security Council when he vetoed the U,S.-Japan draft that it didn’t go far enough in banning all types of weapons in space. The vetoed resolution focused solely on weapons of mass destruction including nuclear arms and made no mention of other weapons in space. It would have called on all countries not to develop or deploy nuclear arms or other weapons of mass destruction in space, as banned under a 1967 international treaty that the U.S. and Russia ratified, and to agree to the need to verify compliance. Click here to read... [27]

Northern Gaza in ‘full-blown famine’, UN food agency chief says

Northern Gaza is experiencing a “full-blown famine”, the head of the United Nations World Food Programme (WFP) has said and warned that it is “moving its way south”. In an interview with NBC News set to air on April 28, Cindy McCain said that her remarks are based on what the WFP has seen and experienced on the ground. UN officials and aid agencies have for months warned of such a scenario. “It’s horror. It’s so hard to look at and it’s so hard to hear,” McCain told the US broadcaster’s Meet the Press programme. “What we are asking for and what we continually ask for is a ceasefire and the ability to have unfettered access, to get in safe through the various ports and gate crossings,” she said, according to a video clip of the interview. On May 04, a delegation from Palestinian group Hamas was in Egypt to continue negotiations on a ceasefire amid an uptick in international pressure for a deal to be reached. Hamas’s spokesman Osama Hamdan said there had been “some forward steps”. Yet Israel has threatened to launch its ground invasion of Rafah in the southernmost tip of the enclave, which is home to more than 1.4 million displaced Palestinians who have fled the Israeli military’s relentless bombardment in other parts of the Gaza Strip. Click here to read... [28]

Kenya, Tanzania brace for Cyclone Hidaya as flood death toll rises

Kenya and Tanzania have been bracing for a cyclone on the heels of torrential rains and floods that have devastated East Africa, killing nearly 400 people and forcing tens of thousands from their homes. Cyclone Hidaya is inching closer to the eastern coast of Tanzania, with an expected landfall later on May 03, according to the latest weather forecast. It is also likely to bring more rain to neighbouring Kenya, including in the major coastal city of Mombasa, just north of the eye of the cyclone. “Crucially, the coastal region is likely to experience Cyclone Hidaya, which will result in heavy rainfall, large waves and strong winds that could affect marine activities in the Indian Ocean,” the office of Kenyan President William Ruto said. Floods in Kenya have already claimed at least 210 lives since March, according to updated tolls from the Ministry of Interior and National Administration on May 03. It said 125 people have been injured, 90 are missing, and 165,500 people are displaced. Ahead of the expected cyclone, Ruto’s government also ordered mandatory evacuations for residents near 178 dams and water reservoirs in 33 counties, and the government warned citizens to remain on alert. The rains have been amplified by the El Nino weather pattern – a naturally occurring climate phenomenon typically associated with increased heat worldwide, leading to drought in some parts of the world and heavy downpours elsewhere. Click here to read... [29]

China launches first of 8 advanced stealth submarines for Pakistan Navy

China has launched the first of eight advanced Hangor-class submarines being developed for Pakistan, in a sign of strengthening military cooperation between the two countries, the Pakistan Navy has said. A launch ceremony for the vessel, attended by high-ranking officials from Pakistan and China, was held on April 26 at Wuchang Shipbuilding Industry Group’s Shuangliu Base in the central Chinese city of Wuhan, according to a Pakistan Navy statement. The contract for the submarines was signed between the Pakistan government and China Shipbuilding & Offshore International Company Ltd (CSOC) during a visit to Pakistan by Chinese President Xi Jinping in 2015, the statement said. The submarines will play a pivotal role in maintaining peace and stability in the region, Admiral Naveed Ashraf, the Pakistani chief of naval staff, said during the ceremony. The construction contract for the submarines would “add a new dimension to the ever-tested Pakistan-China friendship”, he added. Under the contract, which includes an agreement to transfer technology, four of the submarines will be built in China and the other four will be built in Pakistan. The stealth vessels would be fitted with state-of-the-art weapons and sensors, the statement said. China is Pakistan’s top supplier of weapons, according to the Stockholm International Peace Research Institute (SIPRI), which tracks global arms sales. Click here to read... [30]

China-Russia military exercises near Taiwan force US to revise plans, intelligence chiefs say

China’s joint military exercises with Russian forces near Taiwan have prompted new US defence planning, two top US intelligence officials told Congress on May 02. The admission came during testimony before the Senate Armed Services Committee in which they also discussed Beijing’s evolving support for Moscow and what they called the two nations’ “pre-positioning” of vulnerabilities in US military and infrastructure assets. US Air Force Lieutenant General Jeffrey Kruse, director of the Pentagon’s Defence Intelligence Agency, told the committee that the Chinese-Russian operations, “seen over the last two years, have caused the department to relook at its analysis and become even more concerned about what are our joint-force requirements” in the region. “Even if Russia and China in a military force are not interoperable, they would certainly be cooperative, and we would need to take that into account in force structure and planning,” Kruse said. “We are in the middle of that revision today.” Director of National Intelligence Avril Haines, who testified alongside Kruse, said that the joint exercises show that “China definitely wants Russia to be working with them and we see no reason why [Russia] wouldn’t”. The exercises, she said, indicate “this increasing cooperation in the ‘no limits partnership’ … just across really every sector of society – political, economic, military, technological and so on – and so that is something that our understanding is prompting new planning across the government in many respects.” Click here to read... [31]

Health

Measles outbreak kills at least 42 people in northeast Nigeria

At least 42 people have died from a measles outbreak in a little more than a week in Nigeria’s northeastern state of Adamawa, the state’s health commissioner says. Felix Tangwami said on May 03 that the measles outbreak had mostly affected two local government areas where nearly 200 suspected cases were identified. “Measles vaccines have been released to those areas and our field teams are containing the situation,” he said at a media briefing. Measles is a highly contagious, airborne virus that mostly affects children under the age of five. It can be prevented by two doses of vaccine. Its early symptoms include high fever, cough and runny nose. It also often causes rashes and bumps all over the body of the patient. More than 50 million measles deaths have been averted through vaccinations since 2000, according to the World Health Organization. Widespread insecurity in many northern Nigerian states is often blamed for disruptions in vaccination campaigns, leaving children particularly vulnerable. Since the armed group Boko Haram started launching attacks in Nigeria in 2009, more than two million people have been displaced from their homes, spawning one of the world’s worst ongoing humanitarian crises. Criminal gangs have further deepened security woes in northwestern Nigeria. The COVID-19 pandemic has also disrupted the health system and vaccination programmes in parts of the country, according to Doctors Without Borders, known by its French initials MSF. Click here to read... [32]

Cancer ‘is our new Covid’ – Pfizer CEO

American drug manufacturer Pfizer has its sights set on the cancer treatment market now that the Covid-19 pandemic is over and global demand for its vaccines and coronavirus drugs is falling, CEO Albert Bourla told Fox Business on May 1. The company expects to score big on “blockbuster” cancer drugs, Bourla said, as the pharma giant seeks to reverse its post-Covid business decline. The pandemic brought record revenue to the company. In 2022 alone, Pfizer’s total sales amounted to $157 billion, with its Covid vaccine accounting for $37.8 billion and its antiviral treatment pill, Paxlovid, bringing in another $18.9 billion. In 2023, sales were down by more than half and accounted for $71 billion. The company’s shares have fallen by 42% since the end of 2022 amid the rapid decline in demand for its Covid-related products. This led to a major cost-cutting campaign, including hundreds of layoffs at its UK, US, and Irish facilities. In his interview with Fox Business, Bourla praised the measures as a “very good cost containment” campaign, crediting it for the “very good results” his company showed in early 2024. Pfizer is also on the verge of striking gold again with its new strategy, he said. “Oncology, it is our new Covid,” the Pfizer CEO said. “We did what we did with Covid. We are very proud to have saved the world, but it is behind us now. We want to do [it] once more and I think oncology is our best chance to do it.” Click here to read... [33]