Global Developments and Analysis: Weekly Monitor(20-26 May 2024)

Economic

China offloads record amount of dollar assets – data

China sold a record number of US bonds in the first quarter of this year, highlighting the country’s shift away from dollar assets, the latest data from the US Treasury Department reveals. Beijing has divested a total of $53.3 billion in Treasuries and agency bonds combined in the first three months of the year, while at the same time increasing its purchases of gold and other commodities, data showed. Some analysts have suggested that this reduction in foreign exchange reserves could be part of China’s broader strategy to diversify away from US dollar-denominated assets amid rising geopolitical tensions with the US. Some experts have pointed to the economic impact of Western sanctions on Russia following the Ukraine conflict, saying that China seeks to mitigate similar risks. “The handling of Russian reserves by the US and other G7 countries, including threats of expropriations and sanctions, likely prompted China to reduce its exposure to US Treasury assets to avoid being similarly targeted,” Craig Shapiro, a macroeconomic adviser at LaDuc Trading, told Newsweek on May 18, referring to the seizure of Russian assets. The West has frozen roughly $300 billion in Russian sovereign funds since the start of the Ukraine conflict. The Brussels-based clearinghouse Euroclear, often seen as a custodian of China’s holdings, disposed of $22 billion in US Treasuries during the reporting period, according to Bloomberg. Click here to read… [2]

China foreign investment inflow sinks to lowest since November

China's inbound foreign direct investment fell 27.9% on the year in the first four months of 2024, to 360.2 billion yuan ($49.74 billion), showing a turnaround remains elusive amid the sluggish economy. Only 58.5 billion yuan flowed in for April, down from 86.6 billion yuan in March and the lowest monthly value recorded since November, showed data released by the Commerce Ministry on May 24. Foreign direct investment into China had continued to grow during the COVID-19 years before slumping 8% in 2023. Beijing has been attempting to reverse the trend for some time. In March, China's cabinet unveiled a series of measures to "enhance foreign investors' confidence in investing in China," including expanding market access and relaxing visa rules. But foreign business groups say there have been plenty of promises yet little action from the government in improving the business environment for them. A recent survey by the European Union Chamber of Commerce found that only 15% of respondents considered China the top choice for current investments, while 13% saw it as the top target for future investments. Both figures were historic lows. The same survey found that a slowing Chinese economy was the biggest concern for 39% of the companies that responded. Official data released last week showed soft domestic demand and property woes continue to pose challenges to Beijing's growth target of "around 5%" this year. Click here to read… [3]

Upcoming US-China climate talks will test if cooperation can coexist with new tariffs

Can talks and tariffs go hand in hand? The question looms ahead of the latest round of discussions on climate cooperation between officials representing geopolitical rivals, who also happen to be the world’s two largest greenhouse gas emitters. Next week, provincial and local-level leaders from China and the US will meet at the US-China High-Level Event on Subnational Climate Action in Berkeley, California. The event, on May 29 and May 30, will be hosted by UC Berkeley’s California-China Climate Institute, which was established in 2019 to promote climate action through collaborative research, training and dialogue between California and China. Confirmed attendees include senior Hong Kong officials like Paul Chan Mo-po, the financial secretary, and Wong Chuen-fai, the city’s climate change commissioner. Senior officials and experts from Guangdong province as well as representatives from Los Angeles, Berkeley, San Francisco and other cities are also expected to participate. It follows a visit to China in October by California Governor Gavin Newsom, who signed five climate-cooperation agreements with authorities in Guangdong and Jiangsu provinces and with their counterparts in Beijing and Shanghai. The talks, slated to concentrate on industrial decarbonisation, carbon markets and clean energy deployment – topics pinpointed during Newsom’s visit – will be the first since US President Joe Biden announced substantial tariffs on Chinese electric vehicles, solar panels and lithium-ion batteries. Click here to read… [4]

Xi Jinping meeting underlines China’s economic growth priority, with message ‘clearer than ever’, analysts say

President Xi Jinping’s high-profile meeting with business leaders – the first of its kind in almost four years – was carefully arranged to solicit opinions, but more importantly, to offer assurance and whip up positivity with the Chinese economy at a crucial juncture ahead of a landmark conclave of key leaders in July, analysts said. In the first of such face-to-face meetings since 2020, Xi sat down with entrepreneurs that represented a broad swathe of companies in Jinan, the capital of the eastern Shandong province, on May 23, where the president struck a strong pro-business and pro-growth tone to reassure the business leaders and urge deepened reforms. “Now the signal to the business community at home and abroad is clearer than ever: economic growth is a top priority and Beijing will recommit to reforms … Beijing is also saying ‘I’m all ears’ – to hear what the business sector will have to say,” said Zhu Tian, professor of economics at the China Europe International Business School in Shanghai. “Specific topics discussed will likely be the reform focus of the upcoming third plenum in July.” Other observers also compared this week’s meeting to Xi’s previous interactions with entrepreneurs, as well as the changing economic environment. Click here to read… [5]

China's latest AI chatbot is trained on President Xi Jinping's political ideology

China’s latest artificial intelligence chatbot is trained on President Xi Jinping’s doctrine, in a stark reminder of the ideological parameters that Chinese AI models should abide by. China’s cyberspace academy earlier this week announced the chatbot trained on Xi Jinping Thought, a doctrine which promotes “socialism with Chinese characteristics." The chatbot was trained on seven databases, six of which were mostly related to information technologies provided by China’s internet watchdog, the Cyberspace Administration of China, or CAC. Xi Jinping Thought was the seventh database that the chatbot was trained on, according to a WeChat messaging service post by CAC’s magazine about the AI model. The Xi-trained large language model is the latest effort by authorities to spread the Chinese leader's ideology and ideas. Students have had to take classes on Xi Jinping Thought in schools, and an app called Study Xi Strong Nation was also rolled out in 2019 to allow users to learn and take quizzes about his ideologies. Xi Jinping Thought — also known as “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” — is made up of 14 principles, including ensuring the absolute power of the Chinese Communist Party, strengthening national security and socialist values, as well as improving people’s livelihoods and well-being. Click here to read… [6]

Putin lays groundwork for confiscation of US assets

Moscow could move to seize property owned by US-linked entities and citizens in Russia, should Washington attempt to confiscate Russian assets being held abroad, according to a decree signed by President Vladimir Putin on May 23. The US and its allies are presently devising ways to use funds generated by some $300 billion in Russian sovereign assets frozen in the West to help Ukraine’s war effort against Moscow. The document released by the Kremlin outlines a future mechanism that would allow any damages caused by the US to be offset by property owned by the US itself or associated entities. The Russian government and central bank would be empowered to seek redress for such losses through a Russian court. Those who could face potential action against their assets include US citizens or those who reside in the country, or those do most of their business or generate most of their profits in Russia. The property of people “under the control” of such individuals will also be liable, regardless of their nationality and residency. The court will be able to grant compensation in the form of property physically present in Russia, shares in Russia-registered businesses and property rights. A governmental commission will be responsible for compiling the list of those who could be targeted for compensation. Click here to read… [7]

EU Approves Plan to Use Profits From Frozen Russian Assets

European Union member states on May 21 approved a plan to use the profits generated by frozen Russian sovereign assets to support Ukraine’s recovery and military defense. This move will provide Ukraine as much as €3 billion ($3.3 billion) this year, 90% of which will go to Ukraine’s military, Czech Foreign Minister Jan Lipavsky wrote on the social media platform X. About $280 billion in assets have been immobilized by the Group of Seven nations since Russia’s 2022 invasion of Ukraine, with more than two-thirds of those held in the EU. The vast majority of the funds has been held through the Belgium-based settlement giant Euroclear, where they have generated about €3.9 billion in net profit since last year. The US has been pushing a separate plan that would leverage the future revenue of the frozen assets to back a $50 billion loan to Ukraine. Should the G-7 reach an agreement on this accord, it would replace the EU initiative. Bloomberg reported earlier May 21 that Germany is now ready to support the American plan. Under the EU’s plan, Ukraine would receive the net profits from Feb. 15 onwards. Some €159 billion of frozen Russian assets have generated a net profit of €557 million from that date, according to Euroclear’s first quarter financial results. Click here to read… [8]

Putin Meets Military Plant Chiefs, Asks to Speed Up War Economy

President Vladimir Putin urged the heads of manufacturers of military hardware to ramp up output and make Russia’s war economy more effective. “It is important to build an effective economy of the armed forces,” Putin said May 25 at Tactical Missiles Corp. JSC, a key producer of weapons, including missiles. “We must always be one step ahead, be ahead of the enemy. Then victory will be guaranteed.” The meeting in Korolev, near Moscow, was attended by Defense Minister Andrey Belousov, an economist who this month replaced long-time Putin ally Sergei Shoigu in the role. Finance Minister Anton Siluanov was also present. Russia’s spending on defense and national security is projected to reach 8.7% of gross domestic product this year, compared with 13% in the mid-1980s during Soviet times, according to the Kremlin. With Russia’s invasion of Ukraine well into its third year and Kremlin forces on the offensive in Ukraine’s northeastern Kharkiv region, Putin appointed Belousov to make sure higher defense spending is used “wisely and efficiently,” he said this month. Click here to read… [9]

China commerce ministry bans trading by some U.S. companies

China's Commerce Ministry said on May 20 that it will prohibit some U.S. firms from importing and exporting activities related to China, including one selling arms to Taiwan, and forbid them from making new investments in China. The ministry put General Atomics Aeronautical Systems on its unreliable entities list, saying it sold arms to Taiwan, according to a statement. It also included General Dynamics Land Systems. According to state media, Boeing Defense, Space & Security was also placed on the list. Senior executives of all three companies are prohibited from entering China, while their work permits will be revoked, along with their visitor and residential status, and the related applications they submit will not be approved, said the ministry's announcement, according to Xinhua news. Click here to read… [10]

Pakistan moves to sell national airline in test case for privatization drive

"I do my best to avoid taking a PIA flight," said finance professional Asif Waleed, who regularly takes the two-hour trip between the coastal commercial hub and Pakistan's capital Islamabad. "I have a high degree of confidence that [their] flights never operate on time." The airline, which lost over $3.6 billion in the past 20 years, has been thrust into the spotlight this month as a test case for the government's ambitious plan to sell off more than 80 of Pakistan's state-owned enterprises. From power plants and utilities to a women-focused bank and even a hotel in New York, assets owned by Pakistan are scheduled to be offloaded as the country seeks a multi-billion-dollar package from the International Monetary Fund (IMF) to bail out an economy that has crashed into a high-debt, low-growth crisis. Ahead of an original May 4 deadline, 10 companies submitted bids to buy a majority stake in PIA, including Pakistani tycoon Arif Habib, domestic aviation services firm Gerry's Group and three of the nation's private airlines, according to local media reports. That deadline for bids was subsequently extended to May 18. A successful sale of PIA -- two years after the privatization of neighboring India's national carrier -- could be critical to a $6 billion to $8 billion bailout that the country is seeking from the IMF. Click here to read… [11]

Japan picks Tokyo, Osaka, Fukuoka, Sapporo as special finance zones

Japan is assigning four cities -- Tokyo, Osaka, Fukuoka and Sapporo -- as special financial business zones to attract investment managers and startups from abroad with simplified administrative procedures, Nikkei has learned. The heads of the four cities are set to meet with Prime Minister Fumio Kishida at his office on May 31 to discuss the new "special zones for financial and asset management businesses." The Japanese government will then decide in early June on the details of the zones and support measures for them. It is expected that the zones will allow for administrative procedures to be completed purely in English and simplify some of the procedures for foreign investors to apply for visas. The creation of the special zones was included in a plan, set out by the government at the end of 2023, to turn the country into an "asset management nation" through deregulation in order to attract foreign financial institutions and investments. Tokyo, Osaka and Fukuoka are already designated as National Strategic Special Zones, with Sapporo expected to be a new addition to this category. The four cities, and the prefectures in which they are located, are proposing a list of support measures to the government in order to attract foreign financial institutions, startups, investors and industry talent. Click here to read… [12]

Myanmar quietly announces plans to study controversial Chinese dam project suspended 13 years ago

Myanmar’s military government appears to be considering reviving a massive China-backed hydroelectric dam project, work on which was suspended more than a decade ago after protests over its possible impact on the environment. A notice from the Information Ministry, published online in the latest issue of the government gazette on May 21, announced a new leadership team for the Myitsone hydropower project, which was put on hold in 2011 by Myanmar’s military-backed former president, Thein Sein. The $3.6 billion project in the northern state of Kachin, along the country’s Irrawaddy River, was supposed to export about 90% of the electricity it generated to China, Myanmar’s northern neighbour. China had considered the dam an important part of a national strategy to reduce its reliance on fossil fuels and meet its targets to cut pollution. It lobbied strongly for its construction to resume, even after the suspension. Environmental activists have said the dam would displace countless villagers and upset the ecology of the Irrawaddy River, one of the country’s most vital national resources, Other opponents questioned the arrangement in which China would take 90% of the dam’s power, while nearly 70% of Myanmar at that time had no access to electricity, according to the World Bank. Click here to read… [13]

Philippines Seeks Asia Logistics Hub Status, Banking on US Ties

The Philippines is setting its sights on becoming the next manufacturing and logistics hub in Asia, President Ferdinand Marcos Jr. said, as Manila capitalizes on its growing ties with Washington. Under Marcos’s administration, the Southeast Asian nation has increased defense and economic engagements with Washington. The U.S. last month pledged to help accelerate investments in transport infrastructure, clean energy and semiconductor supply chains in the Philippines through the Luzon Economic Corridor. “These initiatives will enhance freight transport services, mobility and access to key economic zones, ensuring business continuity and positioning the Philippines as a regional hub for agribusiness and logistics in the Asia Pacific,” Marcos said at the 6th Indo-Pacific Business Forum in Manila on May 21. Marcos said the country’s infrastructure program that includes 185 priority projects worth 9.5 trillion pesos ($163 billion) would help the nation become the next logistics center in Asia. This aspiration puts the Philippines in competition with neighbors that have deepened their push in these areas like Vietnam and Indonesia. Southeast Asian countries, with its pool of skilled and affordable talent, are racing to get a slice of the billions of dollars of investment that may spread out in the region as part of de-risking efforts by the US and its allies away from China. Click here to read… [14]

U.S. Set to Secure Critical Domestic Rare Earths Supply Chain by 2027

The United States is on track to meet its goal to have by 2027 a domestic supply chain of rare earth elements for its defense needs, according to a senior official at the Department of Defense. The U.S. looks to cut its reliance on Chinese rare earth materials and has classified close allies Australia, Canada, and the UK as a ‘domestic’ source of critical mineral supply. “We are on track to meet our goal of a sustainable mine to magnet supply chain capable of supporting U.S. defence requirements by 2027,” Laura Taylor-Kale, U.S. Assistant Secretary of Defense for Industrial Base Policy, said at a mining industry conference in Australia on May 22, as carried by Reuters. The U.S. has already backed several Australian miners to set up projects to mine rare earth minerals and establish supply chains. Earlier this year, Australian Strategic Materials received a non-binding and conditional Letter of Interest (LoI) from the Export-Import Bank of the United States (US EXIM) to provide a debt funding package of up to US$600 million for the construction and execution phase of the rare earths and critical minerals Dubbo Project in New South Wales. EXIM is also supporting Australia-listed Meteoric Resources for its Caldeira Rare Earth Ionic Clay Project in Brazil. Separately, the U.S. DoD is backing with funding the construction of a rare earths processing facility in Texas of Australia’s Lynas Rare Earths. Click here to read… [15]

Iran President’s Crash Highlights Struggle to Upgrade an Aging Fleet

In July, the commander of Iran’s air force used a set of public remarks to offer some offhand praise for the country’s chopper armada. “Today, the Iranian Army Aviation functions as the largest and strongest helicopter fleet in West Asia,” Brigadier General Yousef Ghorbani said at a press conference. The crash that killed Iranian President Ebrahim Raisi and his foreign minister this past weekend tells a different story: They died aboard a decades-old U.S.-made helicopter, part of an aging fleet that has been starved of spare parts by Western sanctions. Iranian authorities say they are still investigating what caused the crash. So far, they are attributing it to a technical failure amid mountainous terrain and foggy weather, according to Iran’s state media. A number of prominent voices inside and outside the country have blamed U.S. sanctions targeting Iran’s nuclear program, which Tehran says is peaceful. Washington’s restrictions on Iran not only prohibit the purchase of American aircraft and spare parts but also threaten to cut off companies from the U.S. banking system if they trade with Iran. For what was to be his last trip, Raisi boarded a Bell helicopter, according to state media reports and official footage of his visit to Iran’s northwestern border with Azerbaijan. Iranian state media named the model that crashed as the dual-rotor Bell 212, first produced in 1968, and deployed by the U.S. military during its war in Vietnam. The last Bell 212 was made in 1998. Click here to read… [16]

Strategic

Mainland China kicks off PLA blockade around Taiwan, 3 days after William Lai speech

The People’s Liberation Army has launched a two-day exercise around Taiwan in a practice run for a blockade of the self-ruled island. The drills – which include mainland Chinese army, navy, air force and rocket forces – were announced on May 23 by the PLA’s Eastern Theatre Command, three days after William Lai Ching-te was sworn in as Taiwanese leader. The drills are taking place to the north, south and east of Taiwan’s main island and in the Taiwan Strait, as well as near its outlying islands. The exercise is a strong “punishment” for the Taiwanese separatist forces seeking “independence” and a serious “warning” against interference and provocation by external forces, the command said. Zhang Chi, an associate professor at the National Defence University on the mainland, told state broadcaster CCTV on Thursday morning that the PLA forces are practising the blockade of Taiwan. “Once it is besieged and blocked, it can easily lead to economic collapse and become a dead island. This time, the PLA’s exercise focused on practising the new model of blockade,” he said. Zhang added that conducting drills in the northern part of Taiwan was “a deterrent to important political and military targets in Taipei”, while the exercises in the south are targeting the city of Kaohsiung – the island’s largest port and home to its naval garrison. “The exercise has the intention to strangle Kaohsiung port, Taiwan’s maritime gateway, and it could be a heavy blow to Taiwan’s foreign trade.” Click here to read… [17]

Why Taiwan Lawmakers Moved to Curb President’s Powers

Taiwan’s capital witnessed its largest protests in years after the island’s lawmakers joined forces in May to pass a bill that expands their powers and makes it harder for new President Lai Ching-te to govern. The changes tightened parliament’s oversight of Lai’s government by strengthening lawmakers’ powers to summon people from a range of backgrounds, including the president, to answer their questions. Individuals could be subject to fines and criminal punishment if they are found in contempt of the legislature. Lai’s Democratic Progressive Party fought the changes, saying they would undermine the constitution and disrupt government. The opposition Kuomintang, China’s preferred negotiating partner in Taiwan, said the bill ushered in badly needed reforms. If the DPP is right, the changes could impair Lai’s ability to enact policies during his four years in office, such as upgrading the island’s defenses — a move suggested by Taiwan’s main military backer, the US. Why did the opposition push for the changes? Lai’s political rivals said reform was needed to create a better balance of power between the president and the legislature, and that the measures were in line with previous proposals by the DPP. The KMT and its opposition partner, the Taiwan People’s Party, said the bill would create more transparency and make the government more accountable. Click here to read… [18]

World reacts to ICC prosecutor seeking Israel, Hamas arrest warrants

The chief prosecutor of the International Criminal Court (ICC) has applied for arrest warrants against top Israeli and Hamas leaders for alleged war crimes. ICC Prosecutor Karim Khan said on May 20 that his office had applied for arrest warrants for Israeli and Hamas leaders for alleged crimes committed during the Hamas-led October 7 attack on southern Israel and Israel’s subsequent war on Gaza. Khan announced his office had “reasonable grounds” to believe that Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant bear “criminal responsibility” for “war crimes and crimes against humanity”. Khan also applied for arrest warrants for three Hamas leaders – Yahya Sinwar, Ismail Haniyeh, and Mohammed Diab Ibrahim al-Masri (also known as Deif) – for war crimes and crimes against humanity. Here are some reactions to the announcement: Netanyahu said the ICC decision was a disgrace and an attack on Israel. Herzog said that “any attempt to draw parallels between these atrocious terrorists and a democratically elected government of Israel – working to fulfil its duty to defend and protect its citizens entirely in adherence to the principles of international law – is outrageous and cannot be accepted by anyone”. Smotrich likened the announcement by the ICC prosecutor on seeking arrest warrants for top Israeli officials to Nazi propaganda. Click here to read… [19]

Vessels supporting US-built Gaza aid pier wash away in heavy seas

Waves have swept away vessels supporting the United States-built pier installed to transfer aid to Gaza, the US Central Command (CENTCOM) has said. In a statement on March 25, CENTCOM noted that during the transportation of humanitarian aid, the US floating dock was disconnected from the small boat tugging it and the vessels broke free from their moorings with two of them now anchored on the beach near the pier. Part of the dock later drifted towards Israel’s Ashdod shore, while the third and fourth vessels have beached on the coast of Israel near Ashkelon, CENTCOM added. No injuries have been reported so far and efforts to recover the vessels are under way with assistance from the Israeli and US navies. Reporting from Washington DC, Al Jazeera’s Heidi Zhou-Castro said that the Pentagon has stressed that the pier still remained fully functional. “They [the Department of Defense] emphasised that throughout this operation, no US personnel will enter Gaza,” she added. The construction of the $320m floating pier was completed in mid-May to provide aid to the Gaza Strip. The pier has been criticised as a complicated and costly alternative that tries to deflect attention from demanding a much simpler solution – for Israel to fully open all land crossings to Gaza and to secure aid trucks going in. Click here to read… [20]

Leaders at Raisi Funeral Highlight Iran’s Work to Repair Arab Ties

The list of foreign dignitaries who attended Iranian President Ebrahim Raisi’s funeral on May 22 underscored how Tehran’s efforts to blunt US sanctions and mend ties with its neighbors have paid off. Few other occasions could have brought the foreign ministers of Saudi Arabia, the United Arab Emirates and Bahrain into close quarters with the leaders of US-designated terrorist groups Hamas and Hezbollah. Alongside them were representatives from Yemen’s Houthi militant group and Afghanistan’s Taliban, as well as a former aide to Russian President Vladimir Putin. The emir of Qatar, which hosts the biggest US military base in the Middle East, was also there. The guest list showed just how hard Iran has worked to repair ties with major Arab countries even if they remain vital US allies that have normalized ties with Israel or are considering do so. Raisi’s ceremony even included a Tunisian president’s first visit to Iran since the Islamic Revolution in 1979 and rare appearances by the foreign ministers of Jordan and Egypt. Hezbollah, based in Lebanon and whose militants are exchanging fire with Israel almost every day, is Iran’s strongest proxy group. Hezbollah’s Deputy Chief Sheikh Naim Qasem stood behind Iran’s Supreme Leader Ayatollah Ali Khamenei as the latter lead the funeral prayers. He was the only Arab to have such a prominent presence there. Click here to read… [21]

North Korea Elevates Kim Jong Un’s Portrait to Make Big Three Personality Cult

North Korea’s cult of personality entered a new phase by elevating the portrait of Kim Jong Un next to that of his grandfather and father, showing him in a similar status as its two former leaders regarded as demigods at home. Photos released by the official media May 22 showed Kim speaking to officials at a classroom of the new Central Cadres Training School under the portraits of himself, state founder Kim Il Sung and his father Kim Jong Il. The school will serve as the “highest institute” for training cadres of the ruling Workers’ Party, the Korean Central News Agency said. “It marks the first time that the North Korean official media has shown portraits of the three leaders hung together,” South Korea’s Unification Ministry, which manages relations with Pyongyang, said in a statement. It was not immediately clear if the three portraits were being displayed side by side in other places, such as in homes nationwide. “Kim Jong Un’s portrait hung alongside those of Kim Il Sung and Kim Jong Il is a clear message to the wider domestic public that he is now on the same level as the two late leaders,” said Rachel Minyoung Lee, a senior fellow with the 38 North Program at the Stimson Center in the US. Click here to read… [22]

Biden to shun Zelensky ‘peace conference’ – Bloomberg

US President Joe Biden will skip the peace summit promoted by Ukraine’s Vladimir Zelensky in Switzerland next month. Biden has chosen to attend a fundraising event in Los Angeles with George Clooney and Julia Roberts instead, Bloomberg reported onMay 23. The Ukraine conference is scheduled to take place on June 15-16 at the Burgenstock Resort near Lucerne. However, Biden is scheduled to attend the fundraiser on June 15, and will travel straight to Los Angeles from the G7 summit in Italy that day, the news outlet reported, citing “people familiar with the matter.” Vice President Kamala Harris will not attend in Biden’s stead, Bloomberg added. Despite being billed as a ‘peace conference’, the Swiss summit will not involve talks between Russia and Ukraine. Over 160 countries were invited to the meeting, with the notable exception of Russia. Around 70 countries are expected to take part in the conference in some way, with German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau among the heads of state confirming their attendance. China will not participate, however. Foreign Minister Wang Yi and Brazilian presidential adviser Celso Amorim published a joint letter on May 23 explaining that they would prefer a conference “held at a proper time that is recognized by both Russia and Ukraine, with equal participation of all parties as well as fair discussion of all peace plans.” Click here to read… [23]

Zelensky’s legitimacy has expired – Putin

Russia must be absolutely sure it’s dealing with the legitimate Ukrainian authorities before it can engage in meaningful and legally binding talks to conclude the conflict between the two nations, Russian President Vladimir Putin said on May 24. He noted that Vladimir Zelensky’s term in office has expired. The president made the remarks in Minsk on May 24 during a joint press conference with his Belarusian counterpart Alexander Lukashenko. Putin was asked for comment on Zelensky’s presidential term running out earlier this month and the impact of this development on potential talks. Putin reiterated Russia’s readiness to engage in talks with Ukraine to end the hostilities, stating that negotiations must be based on “common sense” and acknowledge “realties on the ground,” while using the preliminary agreement reached in the early days of the conflict as the foundation. “But with whom to negotiate. That’s a peculiar question, I agree. We realize that the legitimacy of the incumbent head of the [Ukrainian] state has expired,” the Russian leader stated. The upcoming “peace summit,” scheduled to take place in Switzerland next month and actively promoted by Kiev is designed, among other things, to prop up Zelensky in his role, Putin said. “I think one of the goals of this conference for the Western community, the sponsors of today’s Kiev regime is to confirm the legitimacy of the current – albeit no longer valid – head of state,” he suggested, adding that “such PR moves are meaningless for legal documents.” Click here to read… [24]

NATO won’t put missile shield over Ukraine – Stoltenberg

NATO does not intend to use its air defenses to provide cover for Ukraine, the military bloc’s Secretary General Jens Stoltenberg has insisted. His comment comes days after Ukraine’s Vladimir Zelensky urged the US and its allies to shoot down Russian missiles. Speaking to the New York Times on May 27, Zelensky stated that he sees no problem with such NATO involvement, arguing that it would not be tantamount to an “attack on Russia.” “Are you shooting down Russian planes and killing Russian pilots? No,” he argued. Zelensky also pointed out that the US and the UK had shot down incoming Iranian missiles and drones over Israel last month. Both Washington and London have, however, argued that the two scenarios are not comparable. In an interview with Germany’s Welt am Sonntag published on May 25, Stoltenberg said: “While we are increasing our support for Ukraine’s self defense, there are no plans to send NATO troops to Ukraine or to extend NATO’s air-defense shield to Ukraine.” “NATO will not become part of the conflict,” the military bloc’s chief insisted. He also suggested that Kiev could still regain the upper hand, despite Russia currently appearing to have it. To ensure this, he reasoned, NATO member states should “send more weapons and ammunition to Ukraine, which includes air-defense systems and long-range weapons.” Click here to read… [25]

Foreign fighters training anti-regime forces in Myanmar

Three years after Myanmar's military seized power in February 2021 and arrested its democratically elected leaders, foreign fighters have made their first known appearance with anti-regime forces in several parts of the country, giving a small boost to battle training and aiming to enhance the capabilities of resistance forces. About a dozen foreigners are thought to have taken up arms against the regime, not as mercenaries but as adventurers receiving rations and accommodation at most. That estimate is based on interviews with resistance sources and foreign fighters and is small in comparison to large conflicts elsewhere. Analysts told Nikkei Asia that they are unlikely to have a significant impact on Myanmar's broader battlefield dynamics. But international volunteer fighters who spoke with Nikkei Asia hope their fighting experience can benefit established ethnic armed groups and newer resistance forces pushing back the regime in what analysts describe as a potentially decisive year for the spiraling, nationwide conflict. The world of foreign fighters in Myanmar is secretive and murky, with the rare few who do agree to speak insisting on anonymity. Jason, in his early 30s, is one. He served in the British army from 2009 for four years as an infantryman, including combat duties in Afghanistan, which led him to question the U.K.'s role in the conflict. Seeing an opportunity to support the underdog, he fought for Ukraine after Russia's invasion. Click here to read… [26]

Economic woes push Japan, China, South Korea to restart 3-way summit

A summit among Japan, China and South Korea will address economic and security concerns in East Asia at a time when all three countries face lackluster growth and shrinking populations. Japanese Prime Minister Fumio Kishida, Chinese Premier Li Qiang and South Korean President Yoon Suk Yeol are to meet in Seoul on May 26 and May 27, marking the first three-way summit since 2019. The countries are grappling with the challenge of declining birthrates and aging populations. Despite differences in population with Japan at 120 million people, China at 1.4 billion and South Korea at roughly 50 million, all three are shrinking. Japan's population began to decline in 2011, followed by South Korea in 2021 and China in 2022. According to World Bank statistics, the fertility rate in Japan came to 1.3 in 2021, with China at 1.16 and South Korea at 0.81. The figure represents the average number of children a woman is expected to have in her lifetime. The latest surveys conducted in each country show further declines. The resulting contraction in the working population raises concerns about each country's ability to maintain their existing economic bases. With more than 30 million people traveling between the three countries each year, increasing such exchanges to boost each other's economies will be among the main topics of discussion at the summit. Click here to read… [27]

Vatican makes fresh overture to China, reaffirms that Catholic Church is no threat to sovereignty

The Vatican made another big overture to China on May 21, reaffirming the Catholic Church poses no threat to Beijing’s sovereignty and admitting that Western missionaries had made “errors” in past centuries in their zeal to convert the Chinese faithful. The Vatican hosted the head of China’s bishops conference for an unprecedented, high-level commemoration of a landmark 1924 meeting in Shanghai that affirmed the need for foreign missionaries in China to give way to local church leaders. The presence of Shanghai Bishop Joseph Shen Bin alongside the Vatican secretary of state, Cardinal Pietro Parolin, at the Pontifical Urbaniana University was in itself noteworthy. It marked the first time in memory that a mainland bishop has been allowed by Beijing to participate in a public Vatican event as the keynote speaker. It was also significant given the controversy over Shen’s 2023 appointment. Pope Francis in July was forced to recognize China’s unilateral appointment of Shen as bishop of Shanghai. The appointment seemingly violated the Holy See’s 2018 accord with Beijing over bishop appointments. Francis opened the conference with a video message in which he made no mention of recent troubles but instead pointed to the 1924 meeting in Shanghai as a turning point for Vatican-China relations. The first and only Chinese church council, he said, recognized that the church in China must “increasingly have a Chinese face.” Click here to read… [28]

UK PM Sunak calls snap general election

UK Prime Minister Rishi Sunak has called a surprise early general election for July. May 22nd’s announcement sets the scene for a contest that will see Labour’s Keir Starmer attempt to take power after 14 years of Conservative-led government. Sunak announced the election outside his Downing Street residence on May 22. The prime minister said that his decision to call a vote was primarily motivated by economic factors, stating that “things are not easy” for many Britons. “For so many of us it is easy to forget the scale of what we have been through,” he said, citing the Covid-19 pandemic and the Ukraine conflict as reasons for Britain’s stubbornly high inflation rate and rising cost of living. Sunak had previously said that his “working assumption” was that an election would be held in the second half of the year. British pundits had reported that the vote would likely be held in autumn, after an expected boost from tax cuts in the forthcoming budget. However, government sources told The Guardian that Sunak was persuaded to press ahead with a July election as the country’s economic condition is unlikely to improve over the coming months. Earlier on May 22, the Office for National Statistics revealed that inflation had fallen from 3.2% in March to 2.3% in April, missing the Bank of England’s target of 2%. Click here to read… [29]

Kenya President Ruto Visits White House in First African State Visit in 16 Years

An American president will host a state visit for an African leader for the first time in 16 years, as the world’s biggest economy struggles to build influence on a continent forging closer relations beyond Washington’s top competitors China and Russia. Kenyan President William Ruto’s visit to the White House on May 23 comes as President Joe Biden commitment to engage with African countries is being drained by wars in Ukraine and Gaza and the aggressive economic competition with China. Filling that vacuum, middle powers including Turkey, the United Arab Emirates and Saudi Arabia are jostling to expand their geopolitical clout. At the same time, Russia is growing closer to juntas that seized power across West and Central Africa, while China has taken a dominant position mining critical minerals. African countries “want to benefit from all parties, and resent being forced to pick between them,” Nic Cheeseman, professor of democracy at the University of Birmingham in the UK, said by telephone, highlighting Biden’s challenge to woo the continent’s leaders. The last state visit to the US by an African leader was in 2008, when then Ghanaian President John Kufuor was welcomed by George W. Bush. Since then, engagement from countries such as the UAE, China and France have overshadowed the US, which for years has been focused on security agreements and humanitarian aid. Click here to read… [30]

Israel’s Rafah Offensive Puts Egypt in a Dangerous Bind

Israel’s offensive in the Gaza Strip city of Rafah has heaped pressure on Egyptian President Abdel Fattah Al Sisi to respond more forcefully to a former adversary that Egypt has long held a cold peace with, but also viewed with deep suspicion. Since Israel began deploying troops along Gaza’s southern border in recent weeks, the Egyptian military has issued instructions to soldiers at the border to return fire if fired upon, Egyptian officials say. Egypt has warned Israel that it won’t hesitate to respond militarily if its security is threatened, they added. With Israeli forces saying this week that they now control the roughly 9-mile border, Israeli troops are just a few hundred yards away from Egyptian soldiers holding positions on the other side of the Gaza fence. The chances of a miscalculation are high. On May 27, those fears were realized when a rare clash on the border left two Egyptian soldiers dead, according to officials and a family member, and sparked outrage in the Arab country. This week’s events have put a spotlight on two of the Sisi government’s worst fears: that the fighting could spill into Egypt, and that the Gaza war could stir up a popular revolt in the Middle East’s most populous country. Already, a series of small pro-Palestinian demonstrations in Egypt have heightened fears among security officials that the public discontent could eventually turn against the government. Click here to read… [31]

Health

US has more daily pot smokers than alcohol drinkers

Marijuana use has become so mainstream in the US that the number of Americans who smoke the drug on a daily basis has surpassed the number who consume liquor with the same frequency, a new study has revealed. An estimated 17.7 million Americans used cannabis daily or almost daily in 2022, exceeding the 14.7 million comparable alcohol drinkers, according to an analysis by Carnegie Mellon University. The report, which was published on May 22 in the Addiction medical journal, was based on data from the US government’s National Survey on Drug Use and Health. Daily marijuana use had never before exceeded daily liquor consumption, said Carnegie Mellon researcher Jonathan Caulkins, the study’s author. Alcohol is still more widely used, but not on a daily basis. “A good 40% of current cannabis users are using it daily or near daily, a pattern that is more associated with tobacco use than typical alcohol use,” the researcher said. The surge in regular cannabis use has come amid increasing legalization of the drug across the US. Nearly half of US states have approved recreational marijuana use, starting with Washington and Colorado in 2012. Most other states have allowed medical use of the drug, while cannabis possession for personal use has been decriminalized in some other jurisdictions. Click here to read… [32]

Infected Blood Probe Slams UK State Over ‘Chilling’ Cover-Up

An inquiry into the UK’s decades-long contaminated blood scandal found evidence of a “chilling” cover-up by the British establishment, a watershed moment that will finally trigger billions in compensation for the worst treatment disaster in the history of the revered National Health Service. “The scale of what happened is horrifying,” Brian Langstaff, chairman of the official Infected Blood Inquiry, said in a report published on May 20 that blamed systemic, ethical and both individual and collective failures for a “calamity.” The cover-up was “chilling in its implications,” he said. “To save face and to save expense, there has been a hiding of much of the truth.” Prime Minister Rishi Sunak called the report’s publication “a day of shame for the British state” as he issued an official apology in the House of Commons. He said the government would set out a “comprehensive compensation” program for victims and relatives on May 21. That is expected to total over £10 billion. “The result of this inquiry should shake our nation to its core,” Sunak said. More than 30,000 people were infected with HIV and Hepatitis C in the UK in the 1970s and 1980s after receiving treatments with contaminated blood products. Victims and their families have spent decades fighting for justice and compensation, yet a public inquiry was only announced in 2017. Langstaff said there was enough information to warrant one as early as 1986. Click here to read… [33]