Global Developments and Analysis: Weekly Monitor(23-29 September 2024)

Economic

Xi’s Big Stimulus Week Aims to Draw a Line Under Slowdown

For months, President Xi Jinping appeared unfazed by slowing growth as stocks sank, prices fell, and discontent grew around China. This week showed he’s not willing to tolerate any more pain. The People’s Bank of China led the charge to revive sentiment on Sept 24 in a rare, televised press briefing beamed live around the world, opening its war chest to stock markets and making money cheaper to borrow. The next day it kept the positive news flowing by lowering the interest rate on its one-year loans to lenders by the most on record, while the government issued rare cash handouts and floated new subsidies for some jobless graduates. The 24-man Politburo led by Xi followed that on Sept 26 with more pro-growth goodies, vowing to boost fiscal spending and making its first pledge to stop property prices “declining.” It also unveiled a new focus on boosting consumption, saying it was “necessary to respond to the concerns of the masses.” The efforts extended to Sept 27 when the head of the National Development and Reform Commission pledged “full support” to private Chinese firms to help them overcome difficulties, saying such companies and entrepreneurs are “one of our own”. The top leader’s policy pivot gave the nation’s troubled benchmark CSI 300 Index its biggest weekly gain in more than 15 years. Click here to read... [2]

Cash-starved China local governments step up fines with 'grabbing hands'

Earlier this year, an entrepreneur in one of China's most developed provinces was abruptly detained, together with two dozen of his employees. The police, from a less developed northeastern province, asked him to pay a penalty for alleged misconduct to avoid prosecution. The businessman handed over 50 million yuan ($7 million), after which the police released him and his staff, people with direct knowledge of the matter told Nikkei Asia. Cases like this have become increasingly common, insiders say, as Chinese local governments scramble to refill dwindling coffers as the country's property crisis drags on. Land sales, a crucial source of local government income, fell 41.8% on the year in August, the biggest single month drop since June 2015. But as some authorities resort to strong-arm tactics to plug their income gaps, experts say they risk further undermining weak business confidence. Chinese local governments' earnings are mainly composed of public fiscal revenue -- tax and nontax revenue -- along with land-related income. Ideally, local fiscal revenue would mainly come from taxes, reflecting economic vitality. But as many jurisdictions are suffering from declines in both tax and land revenue, they are desperately tapping other sources. This is illustrated by increases in nontax revenue, mainly including penalties and confiscations, revenue from paid use of state resources, operating income of state-owned entities, and administrative charges. Click here to read... [3]

How China’s diversifying overseas investment has swung open doors into the Global South

In hindsight, Hutchison Port Holdings made a prescient call 20 years ago when it invested in Mexico and Indonesia, according to managing director Eric Ip. The international marine services provider’s move eventually proved beneficial in catering to a shift in China’s overseas investments away from North America since 2019, diversifying into regions such as Latin America and Southeast Asia, where seaports were needed to ship Chinese wares, Ip explained. “Because of geopolitics, China has moved a lot of manufacturing enterprises to other countries, and the production lines to those countries,” he said. Chinese companies are expanding in less-developed countries to sell goods in untapped markets as capacity balloons at home, and to take advantage of new infrastructure built or bankrolled by China over the past decade. Their investments in relatively cheaper countries, meanwhile, offer a degree of insulation from China’s own economic-growth slowdown. Outbound non-financial direct investment from the world’s second-largest economy rose in the first seven months of 2024 by an especially steep 16.2 per cent, year on year, to US$83.55 billion, according to Ministry of Commerce data. Of that, the ministry said, US$17.94 billion went to “co-construction” countries participating in China’s Belt and Road Initiative, up 7.7 per cent over the same seven months last year. Click here to read... [4]

Hong Kong overtakes Singapore as Asia’s top financial centre, influential ranking shows

Hong Kong has dethroned Singapore to become Asia’s top financial centre for the first time in two years, according to the latest edition of the semi-annual Global Financial Centres Index released on Sept 24. Globally, Hong Kong ranked third behind New York and London, with Singapore and San Francisco rounding off the top five, according to the study of 121 cities compiled by the China Development Institute in Shenzhen and London think tank Z/Yen Partners. Hong Kong lost the top spot in Asia to Singapore in the September 2022 ranking, after the Southeast Asian city relaxed travel restrictions in April that year. Hong Kong continued to maintain curbs until January 2023. A strong stock market and new listings have lifted the city’s status as the top financial centre in the region. “The Global Financial Centres Index ranked Hong Kong high in many areas, ranging from business environment to fintech and banking to wealth management,” Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said on the sidelines of the 5th Belt and Road Initiative Tax Administration Cooperation Forum. The index shows Hong Kong has made big improvements in many areas as an international financial centre, he added. Click here to read... [5]

U.S. seeks to ban Chinese software and hardware for connected vehicles

The U.S. looks to ban software and hardware from China and Russia for systems that allow cars to communicate externally or enable autonomous driving capabilities. "Cars today have cameras, microphones, GPS tracking and other technologies connected to the internet," Commerce Secretary Gina Raimondo said. "It doesn't take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens." China and Russia are the only two identified foreign adversaries in the proposed rule. The new proposal issued by President Joe Biden's administration focuses on hardware and software integrated into a vehicle connectivity system (VCS), such as Wi-Fi and Bluetooth technologies that enable cars to communicate to the cloud, and software integrated into an automated driving system (ADS). ADS refers to systems that can operate a car in all circumstances without human intervention. These are usually equipped on Levels 3 to 5 autonomous vehicles, which are the highest levels of self-driving. Most vehicles with autonomous driving capabilities today are at Level 2, which means the driver must remain attentive and ready to take over, such as Tesla's Full Self-Driving (Supervised) system. The proposed ban stems from an executive order issued by former President Donald Trump's administration that declared connected vehicles a national security vulnerability, indicating bipartisan support for tightening scrutiny on Chinese technologies. Click here to read... [6]

Sri Lanka’s Leftist Leader Faces Tough Test to Alter IMF Deal

Sri Lanka’s new president took office with a mandate to bring relief to citizens still burdened by the remnants of the country’s worst-ever economic crisis. Now comes the hard part: Getting the lenders to play along. Anura Kumara Dissanayake has vowed to reopen negotiations with the International Monetary Fund over a $3 billion bailout to ease the burden on the poor following government spending cuts and tax hikes tied to the loan. Investors are worried that drawn out negotiations could delay payments or even threaten the loan program itself. Also uncertain now are separate deals with Sri Lanka’s bondholders and creditor countries to restructure about $20 billion in debt after the nation defaulted for the first time ever in 2022. But the new president may find it a challenge to alter anything but the fine print of the deals already in place, according to analysts, creditors and a former IMF official, given legislation locking in certain benchmarks set by the lending deal, and an eleventh-hour debt restructuring agreement between the previous government and the country’s private creditors. “If both the IMF and bond deal are undone, it is not only bondholders that will lose, but the Sri Lankan people also risk unwinding some of the economic rebound that has been supported,” said Carmen Altenkirch, analyst at Aviva Investors Global Services Ltd. Click here to read... [7]

Pakistan inks $7bn IMF bailout with big concessions; challenges lie ahead

Pakistan's leader is hailing a new $7 billion IMF loan as his country's last bailout, but Islamabad was forced to make major concessions to get the deal done, including scrapping China-backed special economic zones. The Washington-based fund's board approved the 37-month loan on Sept 25, after an unusually long delay that had raised fears over the deal's future, following an initial agreement in July. "We are committed to ensuring this is the last time we seek such financial support from the IMF," Prime Minister Shehbaz Sharif told journalists after the deal was approved. Last year, Pakistan struck a $3 billion loan with the IMF as it grappled with a crisis in its foreign exchange reserves and an economy beset by soaring inflation that hit a record 38% -- one of two dozen bailouts that the South Asian nation has struck over the past six decades. Nathan Porter, the IMF's chief of mission for Pakistan, said economic stability is returning. GDP expanded 2.38% in the fiscal year that ended in June, although it missed the official target of 3.5%. "Growth has resumed. Inflation has declined dramatically," Porter told reporters on Sept 26 evening. "[The] exchange rate has been stable and foreign exchange reserves have more than doubled." Click here to read... [8]

Cambodia hopes a new canal will boost trade. But it risks harming the Mekong that feeds millions.

The Mekong River is a lifeline for millions in the six countries it traverses on its way from its headwaters to the sea, sustaining the world’s largest inland fishery and abundant rice paddies on Vietnam’s Mekong Delta. Cambodia’s plan to build a massive canal linking the Mekong to a port on on its own coast on the Gulf of Thailand is raising alarm that the project could devastate the river’s natural flood systems, worsening droughts and depriving farmers on the delta of the nutrient-rich silt that has made Vietnam the world’s third-largest rice exporter. Cambodia hopes that the $1.7 billion Funan Techo canal, being built with Chinese help, will support its ambition to export directly from factories along the Mekong without relying on Vietnam, connecting the capital Phnom Penh with Kep province on Cambodia’s southern coast. At an Aug. 5 groundbreaking ceremony, Cambodian Prime Minister Hun Manet said the canal will be built “no matter what the cost.” By reducing costs of shipping to Cambodia’s only deep-sea port, at Sihanoukville, the canal will promote, “national prestige, the territorial integrity and the development of Cambodia,” he said. Along with those promises comes peril. Here is a closer look. The river already has been disrupted by dams built upstream in Laos and China that restrict the amount of water flowing downstream, while rising seas are gnawing away at the southern edges of the climate-vulnerable Mekong Delta. Click here to read... [9]

French Premier Eyes Business Taxes, Warns Debt in ‘Grave’ State

French Prime Minister Michel Barnier said his new government could increase taxes for big business and the wealthiest as it seeks to repair runaway budget deficits and keep the faith of bond markets. “Our country is in a very grave situation — €3 trillion ($3.3 trillion) of debt and €50 billion in interest to pay a year,” Barnier said on France 2 television Sept 22. The French premier said that as part of a necessary “national effort” he would not raise taxes on the middle class and workers but doesn’t exclude making the richest people in France contribute or the biggest, multinational companies. Barnier also said a collective effort is needed to cut spending and more can be done to make the state more efficient. “A lot of our debt is on international markets — we must preserve France’s credibility,” Barnier said. Click here to read... [10]

Safety costs for nuclear plants in Japan now stand at 6 trillion yen

Costs for anti-terrorism and other safety measures to restart idle reactors in the aftermath of the 2011 Fukushima nuclear disaster now stand at more than 6 trillion yen ($41 billion), an Asahi Shimbun survey found. The outlays incurred by the nation’s 11 utilities have significantly undermined the cost advantage of nuclear power generation, experts say. Some sites face situations that are peculiar to them alone, which ramped up the overall total. The Asahi Shimbun has maintained an annual check on outlays for safety measures since 2013. Revised regulatory standards drawn up by the nation’s nuclear watchdog after the 2011 disaster obliged the 11 utilities to take steps at their facilities against earthquakes and tsunami and guard against terrorist attacks. The results of an Asahi questionnaire in July showed that total costs borne by utilities reached 6.15 trillion yen. The eye-watering sum was in part due to increased expenditures by Chugoku Electric Power Co. and Hokkaido Electric Power Co. compared with the previous year. Chugoku Electric is planning to restart the No. 2 reactor at its Shimane nuclear power plant in Matsue in December. In addition, the No. 3 reactor now under construction at the facility is undergoing screening by the Nuclear Regulation Authority. For these reasons, the utility’s safety costs increased by 220 billion yen to 900 billion from a year earlier. Click here to read... [11]

EU’s Joint Natural Gas Purchases Scheme Fails to Gain Traction

The European Union’s joint natural gas purchase mechanism, AggregateEU, has not turned into a game-changer for Europe’s gas market or supply of the fuel, according to sources familiar with the confidential data quoted by the Financial Times. At the height of the energy crisis, the EU launched the so-called AggregateEU to enable demand aggregation and joint gas purchasing at the European level, in a bid to boost the EU’s energy security. The mechanism aims to collect and pool gas demand from companies established in the EU or in Energy Community countries and match it with the most competitive supply offers in time for the next storage filling season. However, this mechanism and the platform for pooling and matching demand and supply have resulted in gas contracts for just 2% of the potential demand, sources with knowledge of the data told FT. The EU has hailed the joint gas purchase mechanism as a success. In May 2023, the EU announced the successful outcome of the first-ever international tender for joint purchasing of EU gas supplies. “This is a remarkable success for an instrument that did not exist some five months ago,” European Commission Vice-President Maroš Šefčovič said at the time. “The Commission has played its role as aggregator and matchmaker, and now it is for the respective parties to conclude their agreements.” Click here to read... [12]

BlackRock Sees AI Driving a 50% Jump in Asian Energy Demand

BlackRock expects the AI boom and data centers to drive a 50% jump in energy consumption in the Asia Pacific region over the next decade, a senior executive at the world’s largest asset manager said on Sept 25. “The need for data centers over the next five years is going to be double what is currently in the markets,” Brad Kim, BlackRock’s Asia Pacific managing director for global infrastructure funds, told a media briefing, as carried by Bloomberg. “[O]verall energy consumption will increase by about 50% in the next 10 years across Asia Pacific,” the executive added. Technology giants have already started to secure long-term power contracts in Asia, where electricity and overall energy demand are rising and will rise more than previously expected, due to the demand for data centers and AI development. Last month, Microsoft signed a deal to buy all the solar power from a project in Singapore as the tech giant seeks to achieve its goal of having 100% of its electricity consumption, 100% of the time, matched by zero-carbon energy purchases by 2030. Microsoft has signed an agreement with EDP Renewables, a Spain-based company, to buy 100% percent of the renewable energy exported to the grid from EDP Renewables’ SolarNova 8 project in Singapore. Asia will present huge opportunities for investment in infrastructure, including in energy infrastructure, as the AI boom unfolds, BlackRock says. Click here to read... [13]

As Exxon Pumps Guyana’s Oil, China Is Winning Battle for Influence

More than 100 miles off the coast of Guyana, Exxon Mobil is pumping hundreds of thousands of barrels every day from a gargantuan oil discovery that is transforming the sparsely populated South American country. Back onshore, much of the transformation is being undertaken by China. Chinese companies are building waterside hotels, bridges, roads and shopping centers. They mine for bauxite and manganese in the remote areas of the country’s Amazon region. The main international airport was renovated with a $150 million loan from China’s Export-Import Bank. Outside of the oil project, Chinese companies are edging Western rivals out of major projects with aggressive terms and ushering in large groups of Chinese workers. Shipping containers turned into makeshift lodging for Chinese laborers are sprouting up at new construction sites across the country. “The Chinese are slowly owning this country, through and through,” said cabdriver Raphael Singh, echoing a popular refrain from Guyanese citizens. That trend has some U.S. diplomats and lawmakers concerned that China’s investments—which go back more than five decades—are translating into political clout in the resource-rich country, as it has in other parts of South America. “We need to show up,” said Geoff Pyatt, the U.S. assistant secretary of state for energy resources. Pyatt has visited Guyana twice since taking the role and said the U.S. is closely watching China’s activity in Guyana. Click here to read... [14]

World’s Top Banks Back Nuclear Energy

More than a dozen of the largest banks in the world are pledging their support to nuclear power, supporting the goal of the COP28 summit to triple nuclear capacity by 2050, the Financial Times reports. Goldman Sachs, Bank of America, Barclays, BNP Paribas, Citi, Morgan Stanley, Société Générale, Crédit Agricole CIB, Abu Dhabi Commercial Bank, Ares Management, Brookfield, Guggenheim Securities, Rothschild & Co, and Segra Capital Management are set to pledge at a New York event on Sept 23 their support to boosting global nuclear power capacity and generation as a means to achieving net-zero. At the COP28 climate summit in Dubai at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacity by 2050, saying incorporating more nuclear power in their energy mix is critical for achieving their net zero goals in the coming decades. The United States, alongside Britain, France, Canada, Sweden, South Korea, Ghana, and the United Arab Emirates (UAE), among others, signed the declaration at the COP28 climate summit. The world’s biggest banks are not expected to go into details about what they would do in regard to the pledge, but analysts tell FT that the mere fact that they are now publicly supporting nuclear energy would be an important recognition that nuclear will play a crucial role in the decarbonization of the global energy systems. Click here to read... [15]

The High-Stakes Spat Over How Much Oil the World Really Needs

What’s 1.1 million barrels between adversaries? The Organization of the Petroleum Exporting Countries and the International Energy Agency don’t see eye to eye on much. The latter was basically founded as an anti-OPEC 50 years ago to represent energy consumers a year after that cartel’s oil embargo quadrupled global crude prices. But now the gulf between their forecasts of how much oil the world will need in 2024 is oddly wide, especially for this late in the year. The IEA thinks an additional 900,000 barrels of oil a day will be needed by consumers in 2024. OPEC is far more bullish and expects two million extra barrels will be required. It isn’t unusual for there to be a gap between the two organizations’ annual demand estimates when they are first released. But as economic data rolls in throughout the year, their forecasts have tended to converge as one side or the other concedes it has been too optimistic or pessimistic. Other than modest adjustments, that hasn’t happened in 2024. Stripping out 2020 to 2022, when pandemic lockdowns made it especially hard to forecast oil demand, the two organizations’ estimates have never been more than 350,000 barrels apart by September any year since 2010. Click here to read... [16]

Strategic

What changes is Russia making to its nuclear doctrine?

Russian President Vladimir Putin has announced a series of updates to the national strategy for using nuclear weapons, intended to address the changing military and political situation and emergence of new threats. The matter was brought up at the session of the Russian Security Council on Sept 25, attended by the ministers of Defense and Finance and the heads of the SVR, FSB, Roscosmos and Rosatom. “Today, the nuclear triad remains the most important guarantee of the security of our state and citizens, an instrument for maintaining strategic parity and the balance of power in the world,” Putin said. The first proposed update to the state policy “expands the category of states and military alliances” to which nuclear deterrence applies, and “supplements the list of military threats” intended to be neutralized by the deterrent. This would treat “aggression against Russia by any non-nuclear state, but with the participation or support of a nuclear state” as their “joint attack,” crossing the nuclear threshold. While no countries have been named, as written, this would clearly apply to Ukraine striking Russian territory with weapons supplied by the US or its nuclear NATO allies. Putin has previously said that such strikes would require active participation of foreign military personnel and assets, bringing them into direct conflict with Russia. Click here to read... [17]

‘Friends of Peace’ issue Russia-Ukraine statement

China, Brazil, and more than a dozen other members of the ‘Friends of Peace’ group have called for an immediate end to the conflict between Ukraine and Russia, with Beijing’s top diplomat declaring that peace “is the only realistic option” for the two nations. Convened by Chinese Foreign Minister Wang Yi and Brazilian presidential adviser Celso Amorim, the Friends of Peace initiative held its first ministerial meeting on the sidelines of the UN General Assembly in New York on Sept 27. Described by Wang as a forum for “objective and rational” dialogue on the conflict, the meeting was attended by 18 countries, mostly from the Global South. Hungary and Türkiye were the only NATO members to send diplomats to the conference. In a joint communique signed by China, Brazil, and 11 other attendees, the group called for a “comprehensive and lasting settlement by the parties to the conflict through inclusive diplomacy and political means based on the UN Charter.” This settlement should be achieved by following a six-point plan published by China and Brazil earlier this year, the communique recommended. The plan calls for both sides to refrain from escalation or provocation, increase humanitarian assistance and prisoner of war exchanges, refrain from nuclear threats and attacks on energy infrastructure, and attend an international peace conference in which all peace proposals will receive a “fair discussion.” Click here to read... [18]

Ishiba wins LDP presidential election in runoff over Takaichi

Shigeru Ishiba was elected president of the ruling Liberal Democratic Party on Sept. 27, reaching the top of the ladder in what he had said would be his “final political battle.” Ishiba, 67, a former LDP secretary-general, gained 215 votes in a runoff vote in the party’s election, compared with 194 for Sanae Takaichi, 63, the economic security minister. Takaichi won 181 votes in the first round of the election, but the number fell short of a majority. That forced a runoff against second-place Ishiba, who got 154. In the runoff, he gained 189 votes from Diet members, compared with Takaichi’s 173, and also secured 26 from the 47 prefectural chapters to win the elusive post. “We must believe in the people and speak the truth with courage and sincerity,” Ishiba, the 28th LDP president, said to the party after his victory was declared. “I will do my utmost to make Japan a safe and secure country where everyone can live with a smile on their face once again.” Given the ruling coalition’s dominance in the Diet, Ishiba will be formally voted in as the 102nd prime minister in an extraordinary Diet session to be convened on Oct. 1. He faces the immediate challenge of renewing the image of the LDP, whose popularity has waned due to a political funding scandal involving party factions. Click here to read... [19]

US calls for ‘regular’ missile launch notification process after China’s ICBM test

The United States and France have said they were given advance notification of China’s intercontinental ballistic missile test this week while other countries, including Japan, Australia and New Zealand, have asked for an explanation from China. The US said the warning had helped to “avoid miscalculation” and was “step in the right direction”, but it wanted a more regular arrangement to give advance notice of future missile and space launches. The People’s Liberation Army launch was China’s first known ICBM test in 44 years. On Sept 26, China’s military released images of the missile but did not say what its trajectory had been or where it landed in the Pacific. However, France has confirmed that it landed near French Polynesia’s exclusive economic zone. French Polynesia President Moetai Brotherson told Agence France-Presse the missile “fell not far from … the Marquesas Islands” and that Beijing had notified the French authorities before the launch. Pentagon deputy spokeswoman Sabrina Singh told a press briefing: “We did receive some advance notification of this ICBM test. And we believe that was a good thing. That was a step in the right direction, and it does lead to preventing any misperception or miscalculation.” Singh added the US had also pressed China for “a more regular bilateral notification arrangement when it comes to ballistic missile and space launches”. Click here to read... [20]

PLA encounters in South China Sea mostly ‘safe’, interceptions triggered by ‘4 breaches’

Encounters with the Chinese military in the South China Sea are largely “safe and professional”, and the People’s Liberation Army will only intercept foreign forces in the disputed waters under four specific conditions, an influential Chinese think tank says. The South China Sea Strategic Situation Probing Initiative (SCSPI) on Sept 27 released its report on navigation and overflight situations in the vast, resource-rich waterway. The region sees more than 10 encounters daily and thousands annually, according to the report. Frictions primarily develop when foreign forces approach the Chinese mainland or its territorial waters and airspace, or “enter within 12 nautical miles (22km) of Chinese-controlled features in the Spratly Islands and Scarborough Shoal”, the report said. The PLA also “issues warnings and conducts expulsions when US forces enter the territorial waters and airspace of the Paracel Islands for so-called ‘freedom of navigation operations’”. The final condition for friction is when foreign forces “excessively approach or intrude into PLA military exercises, including live-fire drills”. Presenting the report in Beijing, SCSPI director Hu Bo said: “Apart from these four conditions, there has been no hindrance [caused by PLA] to foreign military vessels and aircraft activities, even within disputed waters and Chinese exclusive economic zones (EEZs).” Click here to read... [21]

Sri Lankan outsider leftist Dissanayake wins presidential election

Leftist antiestablishment lawmaker Anura Kumara Dissanayake won Sept 21's presidential election in Sri Lanka, shocking a political elite that has dominated power in the South Asian nation for nearly eight decades. "This achievement is not the result of any single person's work, but the collective efforts of thousands of you," he said, on the verge of becoming the ninth executive president of Sri Lanka. Dissanayake is to be sworn in as president on Sept 23 at a ceremony in Colombo, the commercial capital. The Election Commission of Sri Lanka announced the victory of the 55-year-old leader of the small opposition National People's Power (NPP) alliance on Sept 22. More than 13 million out of 17 million eligible voters cast ballots. Dissanayake's triumph signals a sea change in the national mood toward the NPP, which has never led a government. The alliance has benefited from public rage over widespread political corruption and the country's woes in the wake of an economic crisis that erupted in 2022. During campaigning, Dissanayake promised to "revisit" reforms laid out by the International Monetary Fund in its conditions for a $3 billion bailout, hoping to ease the burden on millions of impoverished Sri Lankans. Dissanayake's victory contrasts sharply with poor showings by both him and his alliance in previous parliamentary and presidential elections. Click here to read... [22]

British army is too small – report

The British military does not have enough troops to fight a modern war and is “unprepared” for a potential conflict with Russia, a report compiled by the House of Lords has concluded. The report is the latest in a long line of publications and statements casting doubt on Britain’s ability to engage in warfare. The British Army currently fields 72,500 active-duty troops, down from a peak of more than 163,000 in the early 1980s. This downsizing was deliberate, and was based on the belief that “the use of advanced technology” would compensate for fewer personnel in uniform, the House of Lords International Relations and Defence Committee stated in a report published on Sept 26. “The war in Ukraine, however, has shown that in a conflict between two technologically capable states, technology is not a magic bullet that can swiftly end a war,” the report warned. Sheer numbers still matter, and despite the use of drones and electronic warfare, whichever side fields “small, lean, boutique forces” will find that these forces “get chewed up over time,” the committee wrote. “The UK has a well-trained and well-equipped force,” the committee added, before noting that “it is too small and inadequately set up for large, prolonged conflicts like the one in Ukraine.” No British government has announced plans to reverse the downsizing of the army since the conflict in Ukraine broke out in 2022. Click here to read... [23]

AUKUS defense chiefs meet in London for first time

Defense ministers of the U.S., U.K. and Australia will meet as part of the AUKUS trilateral security arrangement in London on Sept 26 to discuss license-free exports of advanced sciences and technology to each other. The meeting comes as the U.K. and Australia begin negotiations on a treaty that would focus on the delivery of the SSN-AUKUS, a planned fleet of nuclear-powered submarines. Facilitating the SSN-AUKUS build in Australia will allow the U.K. to export billions of pounds worth of submarine components, according to the British Defence Ministry. The AUKUS submarine program will employ more than 21,000 people at its U.K. sites and generate 7,000 new jobs. "As AUKUS partners, we stand shoulder-to-shoulder in an increasingly unstable world," U.K. Defence Secretary John Healey said in a statement. "This is a partnership that will boost jobs, growth and prosperity across our three nations, as well as strengthening our collective security." U.K. companies Amiosec, Roke Manor Research and Autonomous Devices, as well as the University of Liverpool, have been selected by the U.K.'s Defence and Security Accelerator to receive 2 million pounds ($2.67 million) of funding to develop solutions in electromagnetic targeting and protection. Australia is working toward operating its own fleet of nuclear-powered submarines from the early 2030s, as part of the first pillar of the AUKUS agreement. Click here to read... [24]

Netanyahu Ratchets Up Challenge to Iran With Nasrallah Death

Israel had been looking for a chance to kill the leader of Hezbollah. Its intelligence had long tracked Hassan Nasrallah, and it recently learned he planned to move, which would have closed the window of opportunity, according to a senior official who asked not to be identified discussing confidential matters. Prime Minister Benjamin Netanyahu gave the order Sept 27 from his hotel room in New York, just before giving a fiery speech to the United Nations General Assembly that rejected a US-backed push for a cease-fire in Lebanon. Washington, Israel’s closest ally, got only a last-minute heads up as its latest bid to stop the violence failed. Sept 27’s strike in southern Beirut was another in a series of dramatic Israeli attacks — from exploding pagers to sweeping air raids — that have left Iran’s main proxy severely debilitated and now leaderless. After a week of appeals from world leaders at the UN to avoid the risk of all-out war in the Middle East, Israel seems to be doing just the opposite, its warplanes demolishing what Iran and Hezbollah had long set as red lines. Still, judging by supreme leader Ayatollah Ali Khamenei’s first reaction, Iran is in no rush to escalate. President Masoud Pezeshkian also stopped short of pledging a direct and immediate attack on Israel — and in his international debut at the UN he struck a relatively restrained note. Click here to read... [25]

Israel Bombs Yemen and Kills Hamas Leader in Lebanon as War Expands

Israel has carried out air strikes on targets in Yemen and has also killed the leader of Hamas in Lebanon in the latest escalation in the Middle East war. According to official Israeli statements, the strikes in Yemen targeted the port city of Hodeidah in response to the recent Houthi attacks on Israeli targets. Meanwhile, Hamas says Fateh Sherif Abu el-Amin, the group's leader in Lebanon, was killed in a strike "on his home in the Al-Bass camp in south Lebanon". In Yemen, the city of Ras Isa was also a target, the BBC reported, noting the Israeli strikes targeted power plants in the country. The Yemeni health ministry said four people had died in the Israeli strikes and 29 were wounded. Israel continues to pound Lebanon with airstrikes, after it killed the leader of Hezbollah last week, along with other senior officials in the organization, it has now killed the leader of Hamas in the country. These attacks have been seen as a possible catalyst for more direct Iranian involvement in the war, potentially leading to an oil supply disruption. On Sept 29, Israel also hit an apartment building in the middle of Beirut, killing three leaders of The Popular Front for the Liberation of Palestine. Lebanese authorities say at least 105 people were killed and 359 people were injured from Israel’s attacks on Sept 29. Click here to read... [26]

Iran’s President Says He’s Prepared to Ease Tensions With Israel

Iran is prepared to de-escalate tensions with Israel as long as it sees the same level of commitment on the other side, President Masoud Pezeshkian said. “We’re willing to put all our weapons aside so long as Israel is willing to do the same,” Pezeshkian told reporters Sept 23 ahead of the UN General Assembly in New York. “We’re not seeking to destabilize the region.” Pezeshkian is in the US for his first appearance at the UN’s annual gathering, where he’s scheduled to speak on Sept 24. Israeli Prime Minister Benjamin Netanyahu is expected to address the same summit two days later, though his travel itinerary hasn’t been finalized. The Iranian president commented as tensions between Iran and Israel reach new heights after Tehran blamed Israel for being behind a large-scale explosion of pagers and walkie talkies that saw several killed and thousands of people injured in Lebanon — including Iran’s ambassador to Beirut. Iran has threatened to retaliate. The attack — for which Israel has not confirmed or denied responsibility — was aimed at members of the Hezbollah militant group, which is backed by Iran. The Islamic Republic also sponsors Hamas, which is fighting Israel in Gaza. Both are considered terrorist organizations by the US. In Yemen, Houthi rebels, also backed by Tehran, have been carrying out attacks against commercial ships in the Red Sea since last year. Click here to read... [27]

Myanmar Junta Seeks Peace Talks After Losing Ground in Conflict

Myanmar’s generals are asking ethnic armed groups to take part in peace talks and elections in an attempt to stem losses from a simmering conflict that erupted after a military coup in 2021. The fighting has led to the loss of lives and property as some armed organizations, including the People’s Defence Force, or PDF, did not want to resolve issues by political means, according to the State Administration Council led by junta chief Min Aung Hlaing. “Ethnic armed organizations and the PDF terrorists fighting against the state are invited to resolve the political issues through party politics or electoral processes,” the State Administration Council said in a statement on Sept 26. The rare overture comes as the military leadership struggles to stem a widespread rebellion, which according to some reports, has led to the junta losing control of townships covering about 86% of the country. This has raised questions over how long the generals can retain power, especially as ethnic armed groups make gains in the north and the west and the economy is in a tailspin. Several opponents of the military rejected the offer. The shadow National Unity Government, made up of allies of deposed leader Aung San Suu Kyi and who controls the PDF, said the generals were dishonest as they started the conflict in Myanmar in the first place. Click here to read... [28]

Sudan military denies targeting UAE diplomatic post in Khartoum

Sudan’s military government has refuted accusations from the United Arab Emirates (UAE) that its forces have bombed its ambassador’s residence in Khartoum, pointing instead at the rival paramilitary Rapid Support Forces (RSF). The UAE earlier on Sept 30 said the diplomatic post was attacked by a Sudanese military aircraft, condemning it as a “heinous attack”. The government in Khartoum, which is in the midst of a new push to retake the capital, has previously accused the UAE of supporting the RSF, with which it has been entangled in war for more than a year. “The UAE has called on the army to assume full responsibility for this cowardly act,” the Middle Eastern state’s Ministry of Foreign Affairs said in a statement. Describing the attack as a “flagrant violation of the fundamental principle of the inviolability of diplomatic premises”, the ministry said the attack had caused extensive damage to the building. It added that it would send complaints to the League of Arab States, the African Union and the United Nations. In reply, the Sudanese military released a statement blaming the RSF for carrying out these “shameful and cowardly acts”. Click here to read... [29]

Russia and China Defy the West Deep in the Arctic

Nestled high above the Arctic Circle, the Norwegian archipelago of Svalbard is home to hundreds of polar bears and boasts prime views of the Northern Lights. Now the territory of fewer than 3,000 people is emerging as a front line in Russia and China’s attempts to dominate the Arctic’s trade routes and expand their military presence in the region at the expense of the West. Formally part of Norway, Svalbard—a collection of mountains, glaciers and fjords about the size of West Virginia—has an unusual status. A treaty signed in 1920 granted the Norwegians sovereignty but allowed signatory states, including the Soviet Union, to exploit resources and conduct research. But in recent years this quirk has provided a way for Moscow and Beijing to strengthen their foothold in the Arctic as tensions with the West worsened over the invasion of Ukraine, unsettling Norway and its allies in NATO. In one recent example, a Chinese delegation last month travelled to Svalbard to meet Russian officials. On the agenda: an abandoned Russian settlement on the archipelago called Pyramiden. Once a bustling Soviet coal mining community, Pyramiden is now a ghost town, its empty streets patrolled by white Arctic foxes. Now Russia wants to revive it by building a research center with China and by attracting tourists to what one local Russian employee called a “Soviet Disneyland.” Click here to read... [30]

US, Canada to Negotiate Boundary to Potentially Oil-Rich Arctic Seabed

The US and Canada have agreed to begin negotiations over claims to an Arctic seabed that may be rich in oil and is of growing strategic importance as Russia and China ramp up their presence in the North. The US State Department and Global Affairs Canada will announce Sept 24 a joint task force to negotiate the boundary of the Beaufort Sea, according to a person familiar with the discussions, asking not to be identified because the matter is not yet public. The two countries have overlapping claims to the seabed north of Alaska, Yukon and Northwest Territories, which is thought to contain significant oil reserves. The Arctic is also a region that has become increasingly accessible due to climate change and has drawn greater interest from Russia and China. In a statement that’s expected to be released Sept 24 morning, the US and Canadian governments say they will work collaboratively toward a final agreement to clarify their Arctic maritime boundaries. Click here to read... [31]

Biden Reneges on His Ukraine Promise

President Biden styled himself as a stalwart supporter of Ukraine’s freedom in his valedictory at the United Nations this week, and the press agrees. But the less admirable side of the President’s Ukraine legacy is on display as the Administration refuses to level with Congress and the American public about its strategy to win the war. As part of its Ukraine supplemental funding bill this year, Congress stipulated that the Biden Administration submit a strategy for U.S. aid, due within 45 days. The Administration has been notorious for dragging its feet on specific weapons or failing to offer systems in the quantities required for Ukraine to retake its territory from Russia. The Biden Team has hidden behind platitudes such as supporting Ukraine “as long as it takes,” which isn’t a strategy. It long ago became a rhetorical evasion. The White House said Sept 26 the U.S. would offer Kyiv an additional Patriot air defense battery; munitions known as Joint Standoff Weapons; and open up 18 more training slots for Ukrainian F-16 pilots. All these are worthy and long overdue. But Republicans in Congress are right to insist that the Administration articulate a larger theory of how Ukraine can use the assistance to regain momentum and take more territory back from Mr. Putin. Click here to read... [32]

Health

‘Coloniser’ microbes to superbugs: How antibiotic resistance behaves

Antimicrobial resistance, or AMR, is a rising global health concern – with doctors, scientists and public health experts sounding the alarm that some of the world’s most reliable antibiotics are becoming less effective against so-called “superbugs”. AMR occurs when bacteria, viruses and parasites no longer respond to medicines, making people sicker and increasing the spread of infections, according to the World Health Organization (WHO). “Antimicrobial resistance threatens a century of medical progress and could return us to the pre-antibiotic era, where infections that are treatable today could become a death sentence,” WHO Director-General Dr Tedros Adhanom Ghebreyesus warned this month. AMR is thought to contribute to millions of deaths every year, and will cause increased suffering, particularly for low- and middle-income countries, the WHO said. The world needs new solutions, according to health experts. Dr Sylvia Omulo – a doctor of epidemiology, who holds a PhD in immunology and infectious diseases from the College of Veterinary Medicine at Washington State University – studies AMR. She works at their campus in Nairobi, Kenya. For almost 20 years, she has investigated the links between humans, animals and their shared environments, and the microbes that live inside all of them. Omulo doesn’t study the microbes that kill us. She studies those that don’t, but that might give us clues to better understand the complex ecosystems that coexist with us inside our guts, noses and on our skin. Click here to read... [33]

Denmark’s Premier Brushes Off Risk as Novo Outgrows Economy

Danish Prime Minister Mette Frederiksen said she’s “extremely proud” of the country’s corporate champions and rejected concerns that any downturn at pharma giant Novo Nordisk A/S would destabilize the economy. The success of Novo’s weight-loss treatments has transformed the drugmaker into Europe’s most valuable company and made it a key driver of domestic economic growth. That’s triggered worries about the small nation’s reliance on the company, and that Denmark — if the drugmaker were to face serious challenges — could suffer like Finland did when Nokia Oyj slumped in the early part of the 2000s. But Frederiksen rejected the notion of a so-called Nokia risk in relation to Novo, whose market value of about $570 billion is more than Denmark’s annual GDP. Instead, in an interview with Bloomberg Television in Copenhagen, she said that the economy has been strong for “quite a long time” thanks to skilled workers and a broad range of successful businesses. “I am extremely proud that we have big, now global, companies coming from Denmark. I don’t see a lot of risks with even the size of some of the companies, because we have a very strong economy also in other sectors,” she said. “But we have of course to watch it.” Novo Nordisk was for years a stalwart at home, but blockbuster diabetes treatment Ozempic and weight-loss substance Wegovy turbocharged its growth. Click here to read... [34]