Global Developments and Analysis: Weekly Monitor (02-08 Sept 2024)

Economic

China pledges billions in fresh Africa aid despite debt concerns

Chinese President Xi Jinping on Sept 05 promised 360 billion yuan ($50 billion) in financial support to African countries over the next three years, part of a diplomatic blitz that also included an offer to train thousands of military and police personnel. Speaking at the Forum of China-Africa Cooperation in Beijing, Xi made a slew of pledges covering trade, industrial supply chains, infrastructure connectivity, health, people-to-people exchanges and security. The outreach to the continent comes as China seeks to exert greater influence in the emerging economies of the so-called Global South, but the scope is likely to attract scrutiny amid rising concerns over recipient countries' ability to repay debts. "After nearly 70 years of hard work, China-Africa relations are now at the best period in history," Xi told delegations from over 50 African countries attending the triennial meeting, which has been held since 2000 and alternates between China and an African host. As the African Union's Agenda 2063 development blueprint echoes China's long-term development path, Xi said both sides' approach will "surely lead the trend of modernization in the Global South." Of the 360 billion yuan in financing, 210 billion yuan will come in the form of lending, with the balance coming through various assistance, including 70 billion yuan to promote investment by Chinese companies in Africa. Click here to read… [2]

Yuan’s overseas status rising, but nowhere near China’s economic ‘heft’: ex-official

Beijing’s push for the internationalisation of the Chinese yuan is not a plot to dethrone the US dollar’s dominance in worldwide trade and government reserves, or to establish financial hegemony, a prominent former senior official said on Sept 05. It is instead aimed at supporting global supply chain stability, Huang Qifan, the former mayor of the western megacity of Chongqing, told the Bund Summit in Shanghai on Sept 05. Calling increased use of the yuan as something inevitable as the Chinese economy further opens up, Huang noted that conditions would be ripe for the opening up of China’s capital account when the yuan’s global share matches that of the world’s second-largest economy. Huang, known for his often-outspoken insights on the economy and financial markets, expected the yuan’s share in international payments and settlements to edge up by 1 percentage point per year over the next decade to eventually reach parity with the euro. “The yuan’s status abroad is rising, but it’s still nowhere near the global predominance befitting China’s economic and trade heft,” said the politician, who previously oversaw economic and financial development in Shanghai. In June, the yuan retained its fourth-place in the ranking of payment currencies, with its share of global transactions rising to a record high 4.74 per cent from 4.61 per cent in June. Click here to read… [3]

China has the savings to deal with property crisis, with no global spillover: economist

China’s property market remains the biggest downside risk to its economic growth target this year, with policymakers seemingly not in a hurry to make significant changes because its impact is mostly confined to the world’s second-largest economy, according to the chief economist for a global ratings agency. “China has the savings to deal with this. It’s not really spilling over too much to the rest of the world,” said Paul Gruenwald, global chief economist at S&P Global Ratings. “So they’re not going to be forced into dealing with the property excesses by any external or market pressure. They can do it at their own time, but we are not at the bottom yet.” In May, China unveiled wide-ranging measures to stabilise its property sector, which has been in contraction since the debt default by Evergrande Group in 2021, but analysts believe bolder steps are still required to turn the tide. Average prices for new homes across 100 cities rose by just 0.11 per cent in August from July, slowing from the previous month’s 0.13 per cent rise, according to property researcher China Index Academy. And despite China’s growing influence in trade globally, the impact of its local government debt woes and property crisis are still very much isolated from the rest of the world largely because of its investment-heavy development model that counts on state capital, Gruenwald said. “China, by design, is not very dependent on the rest of the world for financing,” he said. Click here to read… [4]

Chinese state shipbuilders plan merger with eye on 'strong military'

Two listed Chinese state-owned shipbuilders announced Sept 02 that they are preparing for a merger, a move that could end competition between them and help them better serve the military, while dealing with global vessel shortages. In separate but virtually identical filings to the Shanghai Stock Exchange on Sept 02 night, China CSSC Holdings and China Shipbuilding Industry (CSICL) said they had signed an agreement of intent to merge earlier that day. Trading of their shares was suspended Sept 04 to avoid irregular movements while they arrange the deal, with the halt expected to last no more than 10 trading days. CSSC Holdings shares closed at 34.90 yuan on Sept 02, while CSICL ended the day at 4.98 yuan. According to the disclosures, the plan would see CSICL absorbed by CSSC Holdings through a stock swap. Based on the latest share prices, CSSC Holdings' market capitalization is 156.08 billion yuan ($22 billion) while CSICL's is 113.55 billion yuan. Both companies said the top goal is to "further focus on major state strategy." That is a strong hint that the move is led and endorsed by the government. "Promoting equipment for a strong military" was also mentioned as a priority. Both companies supply the Chinese armed forces, including the country's homegrown aircraft carriers. Click here to read… [5]

Trump unveils plan to stop de-dollarization

Republican presidential nominee Donald Trump has claimed that dumping the US dollar will be extremely costly for foreign countries which pursue the policy, adding that they will face unprecedented import taxes for pursuing non-dollar trade. Speaking to his supporters during a campaign rally in Wisconsin on Sept 07, the former US president pledged to maintain the status of the greenback as the world’s reserve currency, emphasizing that it is “under major siege” as a growing number of states have been turning to other ways of settling trades. “You leave the dollar and you’re not doing business with the US, because we are going to put a 100% tariff on your goods” Trump said. A broad trend towards using national currencies instead of the greenback has gained momentum following the massive economic restrictions introduced against Russia by the US and its allies in the wake of the escalation of the Ukrainian conflict in February 2022. After being cut off from the Western financial system, Moscow has turned to alternative options for settlement, with some of Russia’s foreign partners following suit. Last week, Russian President Vladimir Putin said that Russia hadn’t been pursuing a de-dollarization policy but was forced to look for other options after a series of unprecedented measures, including Russia’s central bank being cut off from dollar transactions, a ban on the transfer of US banknotes to the country, and the freezing of the country’s forex reserves. Click here to read… [6]

Record summer temperatures set world on course for hottest year ever

Summer temperatures in the Northern Hemisphere were the highest ever recorded, making it likely that this year could emerge as Earth’s hottest ever, according to the European Union’s climate change monitor. Data from the Copernicus Climate Change Service (C3S) on Sept 06 followed a season of heatwaves around the world that scientists said were intensified by human-driven climate change. “During the past three months of 2024, the globe has experienced the hottest June and August, the hottest day on record, and the hottest boreal summer on record,” said Samantha Burgess, deputy director of C3S. “This string of record temperatures is increasing the likelihood of 2024 being the hottest year on record,” she said. Heat was exacerbated in 2023 and early 2024 by the cyclical weather phenomenon El Nino, which warms the surface waters in the eastern Pacific Ocean, though C3S scientist Julien Nicolas said its effects were not as strong as they sometimes are. Meanwhile, the contrary cyclical cooling phenomenon, known as La Nina, has not yet started, he said. Conversely, moving against the global trend, regions such as Alaska, the eastern United States, parts of South America, Pakistan and the Sahel desert zone in northern Africa had lower-than-average temperatures in August, said the report. The planet’s changing climate continued to drive disasters this summer. Click here to read… [7]

Volkswagen ‘can’t continue’ as before – CEO

Major changes are needed at Volkswagen Group if the German automobile giant is to survive, company CEO Oliver Blume has told the Bild newspaper. Blume's statement follows an announcement earlier this month that the EU’s largest car manufacturer may close at least two factories in Germany as part of a cost-cutting drive. The potential closure would be a first in the car maker’s nearly 90-year history. In an interview with the tabloid on Sunday, Blume defended plans for large-scale cuts. The current economic situation is “so serious that we can’t simply continue as we were,” the CEO admitted. The car maker’s operating profit dropped by 20% in the first quarter of 2024 compared to the same period a year earlier. In the second quarter of this year, earnings were down a further 2.4% on last year. Moving ahead with the job cuts would save Volkswagen €4 billion ($4.25 billion), Blume claimed. The Volkswagen Group board was working on “further measures” to survive a slump in car sales, he added. Volkswagen employs around 120,000 workers in Germany. According to Blum, the major challenges facing the European auto industry stem from the pandemic four years ago and Asian competitors entering the market. Click here to read… [8]

EU shifting back towards Russian energy – Welt

Russia has overtaken the US to once again become the second-largest supplier of natural gas to the EU, Die Welt reported on Sept 01, citing analysis. The German newspaper added that the symbolism of the development is “huge.” Brussels declared the elimination of its reliance on Russian energy as one of its key priorities after hostilities in the Ukraine conflict broke out in February 2022. Expensive US liquified natural gas (LNG) filled up a large portion of the market, exacerbating economic crises throughout the EU. In the second quarter of 2024, Russian gas accounted for roughly 17% of all EU imports, just ahead of supplies from the US, Welt noted, citing the Brussels-based think-tank Bruegel. According to its figures, European customers received 12.27 billion cubic meters of US LNG over that period or time, while Russia delivered 12.73 billion cubic meters to the bloc. The Russian supplies include both LNG and pipeline gas, which flows to the EU via Belarus and Ukraine and through the Turk Stream undersea gas pipeline. Kiev, which receives transit fees for fuel delivered through its territory, has threatened to suspend operations after the current contract expires at the end of 2024. However, it has indicated that it is open to third nations, such as Azerbaijan, stepping up their use of Soviet-built infrastructure. Click here to read… [9]

The U.S. Tightens the Screw Again on Russia’s Vital LNG Sector

The US Treasury and State departments ramped up the pressure on Russia’s critical liquefied natural gas (LNG) sector again last week, the day before the 24 August commemoration day of Ukraine’s Declaration of Independence in 1991. A slew of new sanctions were introduced targeting individuals, companies, projects, and trading and delivery mechanisms that are vital to Moscow’s LNG operations. This aligns with comments earlier this year from the U.S. Assistant Secretary of State for Energy Resources Geoffrey Pyatt that: “We’re going to keep tightening the screws [on Russia’s major LNG sector projects such as Arctic LNG 2]. We’re going to continue to designate a broad range of entities involved in development of other key energy projects, future energy projects as well, and associated infrastructure including the Vostok Oil Project, the Ust Luga LNG Terminal, and the Yakutia Gas Project.” One of the principal reasons for this focus of the U.S. and its allies on effectively destroying Russia’s ship-borne LNG sector is that it now acts as a key source of revenue for the funding of the war against Ukraine, following the decline in pipelined gas and oil exports into Europe after Russia’s invasion of the country on 24 February 2022. Click here to read… [10]

Egypt's Ambitions to Become a Gas Hub Hindered by Mounting Debt Challenges

Five years ago, Egypt was one of the promising new regional and potentially global gas hubs. Following the massive Zohr discovery about a decade ago, the promise was justified. Now, Egypt has been forced to borrow to keep the lights on. The Zohr field, which Italy’s Eni discovered in 2015, began production three years later, ramping up very quickly to 2 billion cu ft daily in September from 350 million cu ft daily at the start of the year. Production rose further to 3.2 billion ft in 2019. After that, it began to decline, falling to 1.9 billion cu ft in the first half of this year. It has not been enough to cover local energy demand. So, Egypt has been forced to import gas. The country was already a sizable importer of natural gas from neighbour Israel. This summer, however, Egypt had to reach out to its friends in the Gulf to keep the lights on, with Saudi Arabia and Libya both paying for LNG cargos to be delivered to Egypt, according to a new Reuters report. The report said that Libya’s National Oil Corporation bought one LNG cargo for $50 million in July, while Saudi Arabia paid for three cargos for a total of $150 million, unnamed sources told Reuters. Click here to read… [11]

Israel Finance Minister Commits to Cutbacks to Help Fund War

Speaking to journalists in Jerusalem on Sept 03, he declined to give full details, saying he still needs to present his plans to Prime Minister Benjamin Netanyahu and other ministers. Still, he cited the need for substantial cuts in the public sector and pay freezes for ministers, politicians and state employees. The war against Hamas in Gaza and hostilities with Hezbollah, a Lebanese militant group, have caused Israel’s expenditure to soar and strained the economy. Israel’s 12-month trailing deficit rose to 8.1% of gross domestic product as of July and the government’s suffered its first-ever ratings downgrades. Smotrich reiterated the government’s plan to get the deficit to 6.6% for 2024 as a whole, though that would still be one of the widest gaps Israel’s recorded this century. The 2025 budget will be approved in Israel’s parliament by the end of the year, Smotrich said, a deadline, technocrats have warned is unrealistic given the structural work still necessary and the lengthy legislation process. Delays have unnerved investors and business leaders, who have warned a hiatus will cloud Israel’s economic prospects and elevate the already-high risk premium on its assets. Smotrich said Israel could hit its budget goals for this year unless there were unexpected expenses from the conflict against Hamas or the skirmishes against Hezbollah worsened. Click here to read… [12]

Why Sri Lanka Election Puts IMF Bailout Deal in Spotlight

Two years after an economic meltdown almost doubled the rate of poverty in Sri Lanka, the island nation is holding an election to choose a new president. The Sept. 21 vote is shaping up to be a referendum on painful austerity measures that were imposed under a $3 billion bailout from the International Monetary Fund. The race could be tight, with incumbent Ranil Wickremesinghe facing off against two rivals who want to open fresh talks with the IMF. In late 2019, newly elected President Gotabaya Rajapaksa carried out tax cuts that slashed state revenues just months before the pandemic devastated the economy, with international flights grounded and successive lockdowns ordered. Remittances from Sri Lankans working overseas dried up as many lost their jobs. The result was a historic debt default, a sharp economic contraction and runaway inflation that reached 70%. The crisis spawned a protest movement aimed at curbing the powers of the presidency, eradicating graft and bringing Rajapaksa’s family to task for its role in bankrupting the country. Wickremesinghe took power in 2022 after the protests forced Rajapaksa’s resignation. Wickremesinghe’s government agreed in 2023 to the IMF bailout, with the funds to be disbursed in tranches over 48 months. As part of the program, the government raised taxes, hiked utility bills and put some state enterprises up for sale. Click here to read… [13]

Iraqi Banks Used U.S.-Created System to Funnel Funds to Iran

Audits of Ghulam’s banks completed in May, reviewed by The Wall Street Journal, reveal extraordinary details of overseas dollar transactions that auditors said raised money-laundering concerns. Ghulam, in interviews, denied the allegations. Among Iraqi banks overall, as much as 80% of the more than $250 million in dollar wire transfers flowing through them on some days were untraceable and some portion of that amount went secretly to Iran’s Islamic Revolutionary Guard Corps and the anti-U.S. militias it supports, according to U.S. officials. A top U.S. Treasury official told Iraqi officials at a Baghdad meeting in January that Iraqi banks “deliberately exploited” their access to U.S. dollars to support the Quds Force, a paramilitary arm of the IRGC, and also the militia groups operating in Iraq that the Iranian government backs, according to U.S. officials familiar with the discussions. The militias were involved in “ongoing attacks” on U.S. forces, including some that have caused casualties, Brian Nelson, under-secretary of the Treasury for terrorism and financial intelligence, told Central Bank of Iraq officials at the meeting, the officials familiar with the discussions said. The U.S. has taken action to block the suspected Iraqi banks from using the Fed system to transfer dollars, Nelson told the Journal in an interview. “It’s been important for Treasury to ensure those funds are not diverted in support of the Iranian regime.” Click here to read… [14]

Iran slaps Pakistan with 'final notice' over unfinished gas pipeline

Iran has slapped Pakistan with a final notice to finish its part of a cross-border gas pipeline or face international arbitration, and possibly billions of dollars in fines. Tehran's warning is the neighbours’ latest flare-up over the long-delayed 1,900-kilometer (1,180-mile) pipeline, a project seen as critical to Pakistan's energy needs as its own proven gas reserves are set to run dry in a little over a decade. Iran has said it spent $2 billion building its 1,150-kilometer share of the pipeline, inaugurated in 2013, but Pakistan's portion remains unbuilt due to U.S. sanctions against Tehran over its nuclear program. Last year, Islamabad invoked a force majeure clause to suspend its contractual obligations, citing factors beyond its control. Tehran immediately rejected the move. Then, in February, Pakistan announced it was starting construction on the 80-kilometer first phase of the pipeline within its borders. The following month, Donald Lu, the U.S. assistant secretary of state for South and Central Asian Affairs, cautioned Pakistan against importing gas from Iran, which has some of the world's biggest reserves. Since then, no further work has been done on Pakistan's share of the pipeline. Now, Iran is threatening to take its case to the International Court of Arbitration if Pakistan doesn't meet a looming deadline to finish the pipeline. Pakistan had in 2014 asked for a 10-year extension to build the pipeline, which expires this month. Click here to read… [15]

Pakistan installs firewall in censorship drive, hitting businesses

The internet speed in Pakistan plummeted by 30% to 40% in mid-August, according to industry body Wireless and Internet Service Providers Association, creating chaos for businesses and individuals who rely heavily on fast and reliable connectivity. While WhatsApp has resumed service as normal, overall internet speed is still slow. A Pakistan Telecommunication Authority (PTA) spokesperson told Nikkei Asia, "The ongoing internet slowdown across the country is mainly due to a fault in two of the seven international submarine cables connecting Pakistan internationally." In late August, the cabinet told Parliament that it had installed a web management system (WMS), which allows the local authority to block content, monitor and control internet traffic at a gateway level on national security grounds. The government has allocated more than $108 million for the acquisition and installation of this filtering system, according to local media reports. Digital rights activists and industry and government sources called the installation a form of censorship. "The old method to block websites in Pakistan was primitive and not scalable to block a large number of websites," a representative of the broadband sector told Nikkei on condition of anonymity. "That's why the government has installed [WMS] to block websites and services en masse." Click here to read… [16]

Strategic

The Philadelphi Corridor, and Other Disputes Holding Up an Israel-Hamas Ceasefire

The killing of six Israelis held hostage by Hamas has underscored the urgency of international efforts to negotiate a winding down of the war between Israel and the militant Palestinian group that erupted in October 2023. A plan unveiled on May 31 by US President Joe Biden for an initial cease-fire and eventual end to hostilities set off several rounds of shuttle diplomacy and the drafting of a follow-up bridging proposal. There have been doubts about how motivated the two sides are to sign up to a truce. Positions set out by Israeli Prime Minister Benjamin Netanyahu have stoked suspicion among Israelis that he is stalling on concessions to Hamas that could anger his far-right political allies and threaten his governing coalition. As for Hamas, Biden has said the proposed cease-fire would eventually end its 17-year rule over Gaza, a Palestinian territory on the Mediterranean coast. The two sides appear to be stuck over a number of issues. The question of Israel’s hold on what it calls the Philadelphi Corridor has pitted Netanyahu’s government not just against Hamas but also Egypt and the US. The strip of land is roughly 100 meters wide and 14 kilometres (9 miles) long and runs the length of the border between Gaza and Egypt. Click here to read… [17]

Strike raises pressure on Israeli PM as US prepares ‘final’ ceasefire deal

A general strike has disrupted industry, services and education across parts of Israel as demands for the government to agree a ceasefire deal and bring remaining captives home from Gaza grow. Sept 02’s general strike, called by the country’s largest labour union Histadrut – the first since the start of the war in Gaza in October – was aimed at disrupting sectors of the economy including banking and healthcare, and shutting down the country’s main airport and education institutions. The action was prompted by the discovery on Sept 01 of the bodies of six of the 250 or so captives taken by Hamas on October 7. About 100 were released under a truce in November while several have since died. Huge rallies were held on Sept 01 calling on Prime Minister Benjamin Netanyahu to secure a ceasefire deal that would bring the remaining captives home. Both Israel and Hamas claim that the other side is blocking an agreement. US President Joe Biden is reported to be working on what US sources have branded a “final” proposed deal, in another apparent effort to raise the pressure. Arnon Bar-David from Histadrut, which represents hundreds of thousands of workers, called the strike, which was backed by Israel’s main manufacturers and entrepreneurs in the high-tech sector. “We must reach a deal,” Bar-David told a news conference on Sept 01. Click here to read… [18]

China offers more military aid and training to Africa as it seeks to boost security ties

China has offered to provide more military aid and training to African countries as it seeks to strengthen its security contacts in the face of multiple challenges across the continent. President Xi Jinping made the offer – which includes 1 billion yuan (US$140.5 million) in military aid and training for 6,000 military personnel and 1,000 police officers – in a speech to mark the opening of the Forum on China-Africa Cooperation (FOCAC) Summit on Sept 05. Beijing will also invite 500 young military officers to China and take part in exercises and patrols with African counterparts, as well as helping to clear landmines – a major concern for some countries. Details of the package and which countries will benefit have yet to be announced, but the commitment contained more detail than the pledge made during a previous summit in 2021, which included an offer to take part in security projects and joint anti-terrorism and peacekeeping training exercises. However, unlike 2021, Xi did not mention efforts to control the spread of small arms. China has stepped up its military engagement with African countries in recent years as it competes for influence with the United States. Last year its military diplomacy put Africa in second place, behind only Southeast Asia, for the number of “senior-level” meetings, according to the think tank Asia Society Policy Institute. Click here to read… [19]

Zelensky purges Ukrainian ministers

Ukraine’s Vladimir Zelensky has initiated an apparent purge of senior officials, sacking the deputy head of his office on Sept 03 and accepting resignation letters from three ministers, as well as the country’s deputy prime minister. Zelensky’s deputy head of office, Rostislav Shurma, was fired on Sept 03, according to a decree posted on the office’s website. No reason was given for his dismissal. Writing on Facebook shortly afterwards, the speaker of Ukraine’s parliament, Ruslan Stefanchuk, said that Vice Prime Minister for European Integration Olga Stefanishina, Minister for Strategic Industries Aleksandr Kamyshin, Minister of Justice Denis Maliuski, and Minister of Environmental Protection Ruslan Strilets had all handed in resignation letters. Zelensky is also considering firing Foreign Minister Dmitry Kuleba and multiple other officials, Ukrainian media reported, citing anonymous sources. Since the conflict with Russia began in 2022, Zelensky has periodically purged senior military and political officials. The former commander-in-chief of Ukraine’s armed forces, Valery Zaluzhny, was fired earlier this year after Ukraine lost – according to Russia – roughly 160,000 men in last summer’s disastrous counteroffensive. Last September, Defense Minister Aleksey Reznikov was sacked over his alleged role in major corruption scandals that was believed to have hindered the offensive. In a more recent round of firings, Zelensky sacked several senior officials described by the Washington Post as “reformists…who appeared especially close to Washington.” Click here to read… [20]

Russia targets Poltava military training centre with devastating strike – Kiev

Russian Iskander ballistic missiles have struck a training centre in the Ukrainian city of Poltava, according to the government in Kiev, which has estimated the death toll at 50. The School of Military Communications and Information Technology on the north side of Poltava was home to the 179th Training Center of Ukrainian signalmen, including radar and strike drone operators. It was destroyed by two missiles on Sept 03 morning, local authorities have said. The Ukrainian Defense Ministry has put the number of deaths at 49, with 219 injured. Rescue crews managed to save 25 people, of which 11 were pulled from the rubble, according to the military. Poltava Governor Filip Pronin later updated the casualty toll to 50 dead, more than 235 wounded and 15 missing. Ukrainian leader Vladimir Zelensky used the occasion to demand more air defence systems and missiles, as well as permission from his Western backers to launch “long-range strikes” into Russia. “This is a stunning tragedy for all of Ukraine,” Zelensky’s wife Elena wrote on X, accusing Russia of striking “an educational institution and a hospital,” even though no hospitals are nearby. According to local media in Poltava, area hospitals are overwhelmed with wounded. Social media posts soliciting blood donations spoke of “190 dead defenders” and many more at risk from their injuries. Click here to read… [21]

Japan’s departing Kishida sends signal to successor with South Korea summit

When Japan’s outgoing Prime Minister Fumio Kishida holds a final summit this week with South Korean President Yoon Suk Yeol, he will be sending a signal of support not only to the neighbouring nation, but his would-be successors as well. Prodded by U.S. President Joe Biden, the two leaders orchestrated an about-face in ties that had sunk to their lowest level in decades amid acrimonious diplomatic and trade disputes over Japan’s occupation of Korea from 1910 to 1945. But the strength of their new partnership is set to be tested by Kishida’s imminent departure and the prospect of a shake-up in the White House with November’s presidential election. “Prime Minister Kishida may have to show that what he did with President Yoon is the right direction and he expects whoever succeeds him to follow the current direction of the Japan-Korea relationship,” said Tetsuo Kotani, a senior fellow at the Japan Institute of International Affairs. As Kishida’s response to Yoon’s overtures had spurred pushback from Japan’s political right, his successor could face pressure from conservatives to take a harder line, Kotani added. “We know that in the past, that when Japan and Korea have found their way to rapprochement, political change has sometimes contributed to setback, or set the conditions for setback,” a senior U.S. administration official said. “ Click here to read… [22]

Pacific leaders’ summit erases mention of Taiwan after Chinese anger, fracturing a shaky accord

Turmoil over China’s push for influence in the South Pacific has overshadowed the region’s most important diplomatic summit after a Pacific island leader apparently pledged to erase an affirmation of Taiwan’s involvement in the meeting from its closing statement, at Beijing’s behest. The Pacific Islands Forum — a group of 18 island nations, plus Australia and New Zealand — initially included a reassertion of the standing of self-governing Taiwan, which China claims as its own territory, in a public communique Sept 06 outlining leaders’ agreements after their weeklong annual meeting. But it was then removed on Sept 07. Officials at the summit in Nuku’alofa, Tonga, did not explain why the statement had changed. But video posted by a news outlet late on Sept 08 appeared to show a Pacific leader assuring China’s special envoy to the Pacific, Qian Bo, that the reference to Taiwan would be removed after Qian demanded it in remarks to reporters. The document row highlights a fraught, largely private regional debate about China’s role in the region that Pacific nations had sought to publicly quash ahead of the meeting. The chaotic end to the annual summit — at which member nations had emphasized regional unity and rejected major powers’ jostling for influence in their affairs — shows how difficult it is for some of the world’s tiniest nations to balance the demands of larger countries who see them as geopolitical pawns, analysts said. Click here to read… [23]

Myanmar junta announces census for promised 2025 election

Myanmar’s military government will conduct a nationwide population and household census in October, state media said on Sept 02, paving the way for a promised election next year amid raging conflict across swathes of the country. The census data collected between Oct. 1-15 will be used to hold a general election next year, junta chief Min Aung Hlaing told a meeting on Sept 01, state media reported. “The census can be used in compilation of correct and accurate voter lists which is a basic need for successfully holding a free and fair multi-party democratic general election,” Min Aung Hlaing said separately in a televised speech on Sept 01. The proposed election has already been widely derided as a sham and the outcome is unlikely to be recognized by western countries, with dozens of parties disbanded for not registering to run, including the dominant National League for Democracy (NLD), whose government the junta toppled. The country of 55 million people has been in turmoil since February 2021 when the military ousted the popular administration of Nobel laureate and NLD leader Aung San Suu Kyi, citing fraud in an election it won two months earlier by a landslide. Many NLD politicians including Suu Kyi were arrested, while those who fled said the junta’s allegations of fraud over voter lists were baseless and trumped-up to justify the coup. Click here to read… [24]

Malaysia says it won’t bow to China’s demands to halt oil exploration in the South China Sea

Prime Minister Anwar Ibrahim said Sept 05 that Malaysia will not bow to demands by China to stop its oil and gas exploration in the South China Sea as the activities are within the country’s waters. Anwar said Malaysia would continue to explain its stance following China’s accusations in a protest note in February to the Malaysian Embassy in Beijing that Kuala Lumpur had infringed on its territory. Malaysia’s Foreign Ministry said Wednesday it was investigating the leak of the diplomatic protest note that was published by a Filipino media outlet on Aug. 29. “We have never intended in any way to be intentionally provocative, unnecessarily hostile. China is a great friend, but of course we have to operate in our waters and secure economic advantage, including drilling for oil in our territory,” Anwar said in a televised news conference from Russia, where he is on an official visit. The Philippine Daily Inquirer published the diplomatic note in which Beijing reportedly demanded that Malaysia immediately halt all activities in an oil-rich maritime area off Sarawak state on Borneo island. The report said China had accused Malaysia of encroaching on areas covered by its 10-dash line, Beijing’s controversial map showing its claims to sovereignty in the South China Sea. The diplomatic note also expressed Beijing’s displeasure over Malaysia’s oil and gas exploration activities near the Luconia Shoals, which is near to Sarawak, it said. Click here to read… [25]

U.S. wants to deploy midrange-missile launcher to Japan via drills

The U.S. has conveyed to Japan that Washington would like to deploy midrange missiles there as part of its military exercises, bolstering deterrence against China, according to a senior American defence official. Secretary of the Army Christine Wormuth told the Defense News Conference event in Virginia on Sept 04 that the issue was brought up on her visit to Tokyo in early August, a trip that included a meeting with Japanese Defense Minister Minoru Kihara. "We'd be very interested, obviously, in seeing" the Multi-Domain Task Force operate out of Japan through exercises, Wormuth said, referring to the Army's new unit that hosts the Mid-Range Capability missile system, also known as the Typhon. "We've made our interest in this clear with the Japanese Self-Defense Forces," she said, and noted that the U.S. sees "a lot of potential" in being able to move equipment and soldiers to Japan's Southwest Islands. The islands are a stone's throw away from Taiwan, a democratically self-governed island that China views as its own. Any deployment would be done at a pace that Japan is comfortable with, Wormuth said. Midrange missiles have not previously been sent to Japan before. In April, the U.S. Army's 1st Multi-Domain Task Force in Washington state sent a Typhon missile launcher to the Philippines as part of Exercise Salaknib 24. Click here to read… [26]

Philippines Spots 200 China Ships, Most This Year, Amid Tensions

The Philippines said it has monitored the highest number of Chinese ships in the South China Sea this year, as Beijing projects its naval power amid renewed tensions with Manila. Some 203 Chinese vessels were spotted near nine Philippine outposts and other key areas in the contested waterway in the past seven days, higher than the 163 ships tracked the week prior, according to the Philippine Navy. The surge can be attributed to the recent attention on Sabina Shoal, Philippine Navy spokesperson Rear Admiral Roy Vincent Trinidad told reporters Sept 03. Other areas with increased Chinese presence include Pag-asa Islands and Iroquois Reef, according to the Navy. “The increase in numbers will not justify their illegal presence,” Trinidad said. Beijing has maintained that its presence in the South China Sea — which it claims almost in its entirety — is lawful. Chinese and Philippine coast guard ships collided again at Sabina Shoal over the weekend, an incident that shows the two nations’ maritime dispute has opened a new flashpoint. Click here to read… [27]

Sudan’s Army Rejects UN Proposal of Peacekeepers as War Rages

Sudan’s army-led government rejected a proposal by a United Nations fact-finding mission for an independent peacekeeping force in the North African country that’s being torn apart by a 17-month civil war. The Foreign Ministry said protecting civilians “remained a top priority,” and strongly criticized the mission’s other recommendation — for an arms embargo that would affect both Sudan’s military and the Rapid Support Forces militia it’s battling. The conflict in the mineral-rich country on the Red Sea has increasingly drawn in outside powers and sparked the world’s biggest displacement crisis and largest hunger crisis. The UN mission on Sept 06 blamed Sudan’s military and the RSF for “large-scale violations, including indiscriminate and direct attacks,” and advised the deployment of “an independent and impartial force” to safeguard civilians. A global force could be deployed via a UN resolution allowing for internationally funded peacekeeping operations to be assembled and led by the African Union, according to two officials briefed on the matter. Sudanese military leader Abdel Fattah al-Burhan met Chinese President Xi Jinping in Beijing last week, and the two countries announced agreements in energy, manufacturing and port development. While the war makes any immediate enactments doubtful, the visit may be a boost for al-Burhan’s efforts to build global legitimacy as he fights RSF leader Mohamed Hamdan Dagalo to lead the nation. Click here to read… [28]

Chevron Wants the Oil to Keep Flowing in Venezuela After Disputed Election

Days after Venezuela’s Nicolás Maduro declared electoral victory and began cracking down on dissenters, Chevron offered U.S. officials its stance: It is critical Chevron be allowed to continue pumping oil there. Two years ago, the Biden administration scaled down Trump-era sanctions to let Chevron resume operations in Venezuela as part of an effort to persuade Maduro’s authoritarian government to hold free and fair elections. As chaos erupted on the streets of Caracas following this year’s election, the State Department said all evidence showed Maduro’s opponent, Edmundo González, had won by a landslide. In meetings with White House and State Department officials, days after the election, Chevron executives said its presence in Venezuela bolsters global oil supplies and U.S. energy security, according to people familiar with the talks. The executives said Chevron also serves U.S. interests as a bulwark there against geopolitical adversaries gaining additional footholds in the country. Maduro has since rounded up hundreds of dissidents, testing whether the Biden administration will reimpose stricter sanctions, including on the oil sector, the country’s most important industry. Chevron was careful not to advocate specific policies, according to a person familiar with the talks. But its message—that its oil production should continue in Venezuela—has carried weight with the administration, say people familiar with the matter. The U.S. has condemned the electoral crackdown but is so far eschewing severe reprisals. Click here to read… [29]

China honours WWII Flying Tiger aircrews in push to improve people-to-people ties with US

China has paid tribute to American “Flying Tiger” aircrew members in a ceremony commemorating the end of World War II, in the latest push to foster people-to-people relations between the two nations. For the first time, the names of more than 2,500 personnel who died fighting the Japanese on behalf of China have been published. At a ceremony in Nanjing, in eastern China’s Jiangsu province, on Sept 03, Chinese ambassador to the United States Xie Feng said the Flying Tiger spirit “will forever be a great treasure”. He said the aircrews represented the keeping of justice and peace, as well as friendship. “During China’s greatest hour of need in the war against Japanese aggression, a batch of US air personnel travelled thousands of miles without regard for their own lives … to fight with the Chinese army and people, to fight for peace,” he said. The Flying Tigers were founded in 1941 as the First American Volunteer Group and became part of the newly activated 14th Air Force in 1943. They not only engaged in air combat against Japanese forces but also ensured transport across the Himalayas from what was then British India to China’s southwestern provinces, the base of the resistance government. Click here to read… [30]

After 30 years, China’s Bei Dou is a GPS rival. Will the world enter its orbit?

In the more than 30 years since the Chinese ship Yinhe was stranded in international waters, its global positioning system (GPS) jammed by the United States, the world's second-largest economy has developed its own satellite navigation network to capture a share of the lucrative, highly technological market – and ensure such an incident can never be repeated. As the reach of its indigenous system grows and begins to match that of its American rival, so too do Beijing’s ambitions. It wants Bei Dou – named for the seven bright stars in the northern sky used for guidance in pre-satellite times – to appeal to enough international users that the system can chip away at the US-run GPS network’s decades-long dominance. With slick pitches of the service to international bodies, plans to amplify signal strength overseas and a flurry of investments, subsidies and donations incentivising Bei Dou’s adoption by the developing world, China’s promotion of its system has only been dwarfed by the network’s own coverage levels. Numerous hurdles stand in the way of such a sea change, analysts said. But by pouring billions into Bei Dou’s development and offering it as a free service, Beijing is making a long-term investment in the system – and its value in the broader geopolitical context. Click here to read… [31]