Global Developments and Analysis: Weekly Monitor(07-13 October 2024)

Economic

China curbs ‘excessive’ law enforcement in quest to quell private sector doubts

China is cracking down on behaviours from law enforcement seen as detrimental to the ordinary function of private businesses, a crucial step in restoring confidence as the country embarks on a whole-of-government effort to ensure a steady, sustainable economic recovery. Jurisdiction-breaking trips by officers to detain suspects, arbitrary fines and disparities in the punishments meted out to private and public entities have all been areas of frustration for China’s enterprises. As Beijing attempts to rally the private sector to reverse an economic slump, analysts said, entrepreneurs are expecting action to go along with words before they consider rekindling their faith. But those words are still being spoken – and louder than ever. In an Oct 08 meeting on the economy, Premier Li Qiang told an assemblage of business leaders that Beijing would “resolutely root out” persistent problems like fines, inspections and forced closures to guarantee peace of mind. “The key to stabilising the economy is to stabilise enterprises,” Li was quoted by state news agency Xinhua as saying. “We must do a good job in helping them tide over difficulties and ensure they can benefit from policies.” On the same day, the National Development and Reform Commission (NDRC) – China’s top economic planner and an overseer of the private sector – pledged to improve the situation at a widely watched press conference. Click here to read... [2]

How did Egypt and Israel’s economies do in a year of Houthi attacks?

When Frenchman Ferdinand de Lesseps suggested connecting the Red and Mediterranean seas by building the Suez Canal, his idea was clear: a shorter shipping route from Asia to Europe and a source of income from transit fees. The idea was welcomed by Egypt’s khedive, Ismail Pasha, and the Suez Canal opened in 1869. Since then, it has become one of the most important maritime routes in the world. On November 19, about six weeks into Israel’s war on Gaza, when Yemen’s Houthis began attacking ships they said were linked to Israel as they passed through the Red Sea to Suez. The Houthis said their actions would continue until Israel ended its war on Gaza. Hundreds of ships were forced to go south by their operators and insurers, bypassing the Red Sea to go around Africa’s Cape of Good Hope. About 12 percent of the world’s trade passes through the Suez Canal, including about 40 percent of Asia-Europe trade. Diverting this much traffic onto a longer route has negatively impacted the global economy, Mamdouh Salama, an expert in energy and transport economics, told Al Jazeera. “Ships taking the Cape of Good Hope route … add about 14 days to voyage time, which means higher costs for transporting goods in addition to higher insurance costs due to the increased risks to which ships are exposed,” he explained. Click here to read... [3]

China’s Mexico investment may dwarf official figures, with estimated US$13 billion in play

Chinese investment in Mexico – widely perceived as a handy detour around US-imposed tariffs – could be six times more than what is reflected in official data, a risk consultancy estimated in a report released on Oct 10. The Washington-based Rhodium Group has turned up more than 700 completed foreign direct investment transactions from China to the Latin American nation with a cumulative value US$13 billion. Both figures, if accurate, would overshadow official tallies of investment stock – the total accumulated level of direct investments. Chinese investments mostly take the form of factories that produce motor vehicles, electronics and consumer goods. Many use Mexico’s land border with the US to transport products, bypassing tariffs former US president Donald Trump imposed on direct shipments from China as part of a wider trade war. “Although it represents a relatively small portion of total foreign investment, Chinese FDI in Mexico is significantly higher than shown in official statistics,” the Rhodium Group said in its China Cross-Border Monitor report. “While some Chinese firms are eyeing the local Mexican market, overall investment appetite will be shaped by market access to the US.” Newly announced investments from China have averaged 13 major transactions per year since 2015, worth an average total of US$1 billion for each year through 2020, report authors said. Click here to read... [4]

How high can the low-altitude economy soar as US, China battle for supremacy?

It is no coincidence that Nansha, a district in Guangdong province’s capital city of Guangzhou, chose to showcase China’s advances in drones, electric vertical take-off and landing (eVTOL) aircraft and unmanned boat technology during the week-long National Day holiday. In particular, a demonstration by an EH216-S – a passenger-carrying pilotless eVTOL aircraft manufactured by the Guangzhou-based Ehang – was a “charming experience of future unmanned aerial transportation”, the Yangcheng Evening News reported last week during the seven-day “golden week” holiday, which finished on Oct 07. Dozens of companies around the world are betting on eVTOL aircraft amid increasing competition between China and the United States to make air travel in urban areas more accessible, although neither have begun commercial operations. China, which is the global leader in battery technology, is seeking to emulate its success in electric vehicles with air taxis by making eVTOL aircraft more affordable, with business travel and tourism seen as potential growth areas. “Right now, the battery amortisation cost is the largest contributor to the hourly operating cost of eVTOL aircraft,” said James Wang, a professor at the School of Mechanical and Aerospace Engineering within Singapore’s Nanyang Technological University. Click here to read... [5]

China Keeps World Guessing on Size of Fiscal Stimulus

It’s the biggest question in the global economy: How many hundreds of billions of dollars will Beijing plow into pumping up China’s wobbling economy? And the next biggest: How much of that will go to consumers? Chinese Finance Minister Lan Fo’an didn’t offer detailed answers to either question when he hosted a hotly anticipated news conference on Oct 12. Lan’s silence on both fronts left investors more or less where they were when stock markets opened in mainland China and Hong Kong on Oct 14 after some of the choppiest trading in years. China’s benchmark CSI 300 index was up 0.1% in early trading in Asia. Hong Kong’s Hang Seng was down 2%. Still, Lan did outline a laundry list of high-priority challenges that he vowed to tackle, signaling that he would spend some $300 billion of funds that have been earmarked for this year but haven’t yet been deployed. For some economists, Lan’s reassurances on Oct 12 offered enough reason to believe that the scale of whatever fiscal support Beijing eventually unleashes will be enough to nudge the economy over its official target of 5% gross domestic product growth this year—and enough, too, it is hoped, to ensure a decent 2025. “Beijing will deliver,” Société Générale economists Wei Yao and Michelle Lam told clients in a note on Oct 12 after Lan finished his remarks. Click here to read... [6]

India approves currency swap deal, will start FTA talks with Maldives

India scaled up its development assistance to the Maldives after their respective leaders held talks in New Delhi on Oct 07, aiming to repair strained ties after the Maldivian President came to power on an "India out" campaign last year. "Development partnership is an important pillar of our relationship," Indian Prime Minister Narendra Modi said after holding talks with Maldivian President Mohamed Muizzu, who arrived in the Indian capital on Oct 06 on a five-day state visit. Muizzu had earlier visited India in June to attend the swearing-in ceremony of Modi for a third straight term in office, but this is his first bilateral visit to India. Modi pointed out that this year the government-run State Bank of India, the nation's largest commercial lender, rolled over the Maldives' treasury bills (T-bills) worth over $100 million. "Today, as per the needs of the Maldives, a currency swap agreement of $400 million and 30 billion rupees ($357.3 million) has also been completed," he added. "We have also decided to initiate talks on a free trade agreement to strengthen our economic ties." India's financial support is crucial for the Maldives as it faces a debt default with its foreign exchange reserves reportedly dropping to about $440 million, just enough to cover six weeks of imports. Click here to read... [7]

South Korea's Hanwha 'not done' with U.S. shipyard acquisitions

South Korea's Hanwha group has its eye on further acquisitions of U.S. shipyards, the head of the group's American defense subsidiary told reporters on Oct 10. "We're not done," said Mike Smith, president and CEO of Hanwha Defense USA, when asked whether the purchase of shipbuilder Philly Shipyard in Philadelphia in June for $100 million was a one-time deal. Defense contractor Hanwha Systems and shipbuilder Hanwha Ocean's deal to acquire the shipyard, which has handled both commercial and government work, comes at a time when the U.S. is moving to restore its shipbuilding and ship repair capacity. "The Navy has a North Star. They want to have 75 combat-ready ships available at any time," said Smith, a former U.S. naval officer. But that won't be possible if American shipyards are clogged with repair orders or the U.S. is retiring ships faster than building new vessels, he said, both of which have been concerns on Capitol Hill. The latest ship tracker run by USNI News shows 295 vessels in the total battle force but only 79 underway at sea. "There's a benefit to a company like Hanwha coming in and buying a shipyard and bringing practices -- not just investing in facilities but knowing what types of investments to make and how to phase them in," Smith said. Click here to read... [8]

Russia’s foreign debt lowest since 2006 – central bank

The amount of debt owed by the Russian state and private companies to foreign financial institutions has dropped below $300 billion for the first time since 2006, the Bank of Russia reported on Oct 11. As of October 1, foreign liabilities amounted to $293.4 billion, having decreased by $24.5 billion, or 7.7%, since the beginning of 2024, according to a statement issued by the central bank. External debt is the portion of a country’s national debt borrowed by the state and private businesses from overseas lenders such as banks, the IMF, foreign companies and other creditors. “The dynamics were influenced by the reduction in other sectors’ liabilities mainly on raised loans, including within the framework of direct investment relations,” the regulator’s statement reads. Its data shows that in the third quarter, foreign debt dropped by $8.5 billion, or by almost 3%, mainly due to a decline in liabilities of the economy’s real sector. In addition, the public sector also reduced its external liabilities, by $1.3 billion, or by 4.2% per quarter. The volume of this sector’s debt amounted to just under $31 billion, a minimum since the end of 2015. In contrast, the central bank and credit institutions increased their debt abroad by almost $4 billion, or by 4.1% in the July-to-September period, to a two-year maximum of $101.5 billion, according to the report. Click here to read... [9]

Protests Spread in Pakistan as Taxes Rise Under IMF Bailout

On paper, Pakistan’s deal with the International Monetary Fund for a $7 billion bailout seemed like an inevitability. A period of crushing inflation depleted foreign currency reserves and other economic shocks pushed the South Asian nation to the brink of default. But locking down the funds recently might have been the easy part. The fine print of the IMF program, which included increasing taxes by a record 40%, has caused panic across Pakistan. Leading to the deal, electricity prices jumped threefold for some people and the price of milk in Karachi surpassed what it would cost in Paris. Many Pakistanis now spend more than half of their income on food. And items from rice to shoes are increasingly out of reach for an already shrinking middle class. “People simply have no power to buy,” said Niaz Muhammad, who sells produce in an affluent area of Islamabad, the capital. Customers who used to purchase fruits and vegetables from him daily are now doing so only a couple of times a week, he said. “It’s not just me facing this. Everybody is.” Prime Minister Shehbaz Sharif, whose coalition government has only been in power for seven months, is urging patience in a country that can no longer keep up. Click here to read... [10]

US to Seek Global Financing for Cash-Strapped Developing Nations

The Biden administration is set to unveil a plan that would offer fresh financing to developing nations that face cash shortages, with the goal of keeping them from plunging into debt crises. The proposal will be announced by Jay Shambaugh, the US Treasury undersecretary for international affairs, on Oct 11, two weeks before global financial officials gather in Washington to discuss such issues. Under the program, called the Pathway for Sustainable Growth, the International Monetary Fund and World Bank would join with sovereign and private creditors, to support nations well before they require restructuring. The idea is intended to assist countries “struggling under temporary financing challenges but for whom debt is sustainable over time,” Shambaugh will say in a speech to the Atlantic Council in Washington, according to prepared remarks. Countries should be able to access “significant financing alongside significant reform measures,” and would be offered packages from “bilateral, multilateral and private sector sources.” Shambaugh’s prepared remarks don’t provide a detailed map for winning global backing for the plan. But he’ll say the broad goal is to give such countries the support they need to get through liquidity shortages and pursue ambitious climate and development goals. Click here to read... [11]

Russia Pitches BRICS Payment System Aiming to Break US Dominance

Russia is proposing changes to cross-border payments conducted among BRICS countries aimed at circumventing the global financial system, as the heavily penalized country seeks to sanctions-proof its own economy. The alternatives include developing a network of commercial banks that can conduct such transactions in local currencies as well as establishing direct links between central banks, according to a report prepared by the Russian Finance Ministry, the Bank of Russia and Moscow-based consultancy Yakov & Partners. The “multicurrency system” will need to “ring-fence its participants from any external pressures such as extraterritorial sanctions,” said the report, which also argued that US interests “are not always aligned with the interests of other participants” of the global financial network. The plan also includes the creation of centers for mutual trade in commodities such as oil, natural gas, grain and gold. The US and its allies imposed sweeping penalties on Russia after President Vladimir Putin ordered the February 2022 full-scale invasion of Ukraine. They froze Russia’s foreign assets and kicked major Russian lenders off the SWIFT financial messaging system. In response, Russia has sought to decrease its dependence on the dollar. Still, other BRICS countries not facing the same complications from sanctions have continued to prioritize access to the dollar-based financial system. Click here to read... [12]

Nuclear Power Referendum Passes in Kazakhstan

On October 6, Kazakh citizens voted in a nationwide referendum on whether to pursue the construction of a nuclear power plant. According to preliminary results released by the Central Referendum Commission (CRC), 71.12 percent voted in favor of building independent Kazakhstan’s first nuclear power plant. As scholar Togzhan Kassenova wrote recently for The Diplomat Magazine, “Whether and how Kazakhstan builds a nuclear power plant will impact the country’s future beyond the narrow issue of nuclear energy.” “It will demonstrate how Kazakhstan will deal with its energy security challenges, manage its complicated geopolitical situation and relationship with Russia, and whether the government will live up to its promise of being a ‘listening state,’” Kassenova argued. Reuters highlighted a comment from Almaty-based journalist and vlogger Vadim Boreiko referencing this final aspect. “I have come to the conclusion that the decision to build the nuclear power plant, and to build it with [Russian state nuclear firm] Rosatom, has already been made in [Tokayev’s office] and the people of Kazakhstan are being invited to polling stations as ‘notaries’ to authenticate this decision with their votes,” he wrote. Nationally, 64 percent of eligible voters took part in the referendum, with a dramatically lower proportion in Almaty, the country’s largest city, where only 25 percent of eligible voters cast ballots. Click here to read... [13]

$21 Billion Needed to Bring Electricity to World’s Poorest by 2030

Bringing electricity supply to several hundred million of the world’s poorest would require investments of $21.3 billion by 2030. This is according to the Global Association for the off-grid solar energy industry, which said the sum is six times larger than what it has managed to attract in investments so far, as Bloomberg reported. The annual sum that needs to be spent on opening access to electricity to those without it would come in at about $3.6 billion over the period. “Access to finance remains a significant challenge for the off-grid solar industry,” GOGLA said in a new report, as access to electricity actually worsens instead of improving. In 2022, the number of people without access to electricity rose for the first time in 20 years, to 685 million. This is the latest data available, the report noted. The great majority of people without access to electricity live in sub-Saharan Africa and the numbers are rising. In 2010, 50% of those lived in the region. By 2022, this has risen to 85%, the industry association also reported. The cheapest way to provide electrification to these no-access areas is off-grid solar, according to GOGLA, but it needs financial support from other entities. Per the organization’s proposal, a mix of debt, subsidies, and equity would do the job. Click here to read... [14]

Cost of Producing Green Hydrogen Makes It Prohibitive, Says Study

A Harvard University study casts doubt on the viability of hydrogen as a fuel in the U.S. The researchers say the costs of producing, moving and storing the gas are higher than they are for using fossil fuels and then removing carbon from the atmosphere afterwards. The study, published Oct 08 in the scientific journal Joule, says for every metric ton of carbon dioxide it now reduces, green hydrogen costs between $500 and $1,250. But carbon capture and storage prices currently range between $100 and $1,000 a ton, making it more viable to simply extract atmospheric carbon dioxide instead. “The argument made is that hydrogen is expensive now but [production] costs will come down,” said Roxana Shafiee, postdoctoral researcher at the Harvard University Center for the Environment who led the study. “The issue is that production costs are just one part of the supply chain.” “If you look at the value proposition as a whole, there is no way [it’s cost effective]. It has to be cost competitive,” Shafiee added. Hype around hydrogen and in particular green hydrogen, which is made through renewable energy, has slowed this year, as rising costs and low interest both from energy producers and heavy industry have put a number of projects on hold or delayed them. Click here to read... [15]

Wildlife populations decline 73 percent over past half-century, report says

Wildlife populations across the globe have shrunk by more than 70 percent over the past half-century, according to the World Wide Fund for Nature (WWF). The conservation charity published a stocktake on Oct 10, assessing more than 5,000 species of mammals, birds, amphibians, reptiles and fish, warning that habitats like the Amazon rainforest were reaching “tipping points”, with potentially “catastrophic consequences” for “most species”. The Living Planet Report found the 35,000 populations under review had fallen 73 percent since 1970, mostly due to human pressures. The biggest decline was recorded in populations of freshwater species, followed by terrestrial and marine vertebrates. Among the snapshots provided, the report found that the population of pink river and tucuxi dolphins in the Brazilian state of Amazonas declined by 65 percent and 57 percent respectively as a result of hunting, with climate change also threatening their survival. In Gabon, the number of forest elephants had declined by 78 to 81 percent, with WWF researchers finding “strong evidence” of poaching for the ivory trade. With almost half the continent’s forest elephants in Gabon, the decline was considered a “considerable setback” for the future of the species. The report found that habitat loss and degradation, driven primarily by food systems, is the biggest threat to wildlife populations around the world, followed by overexploitation, invasive species and disease. Click here to read... [16]

Strategic

Putin cements ties with Iranian president in Central Asia meeting

Russia's Vladimir Putin held talks with Iranian President Masoud Pezeshkian on Oct 11 in Turkmenistan, where the two leaders hailed their countries' growing economic ties and similar views on world affairs, an entente viewed with concern by the U.S. At odds with Washington and the European Union over Russia's war in Ukraine -- something he casts as part of a wider existential struggle against an arrogant and self-interested West -- Putin is keen to deepen ties with what he calls the Global East and Global South. Putin, whose country is hosting a summit of the BRICS nations in Kazan on Oct. 22-24, invited Pezeshkian to come to Russia on an official visit, a proposal the Iranian leader accepted according to Russia's state RIA news agency. "Economically and culturally, our communications are being strengthened day by day and becoming more robust," Pezeshkian was cited as telling Putin by Iran's official IRNA news agency. "The growing trend of cooperation between Iran and Russia, considering the will of the top leaders of both countries, must be accelerated to strengthen these ties," he said. Pezeshkian last month committed his country to deeper ties with Russia to counter Western sanctions. The two countries say they are close to signing a strategic partnership agreement, something Pezeshkian said on Oct 11 he hoped could be finalized at the BRICS summit in Russia later this month. Click here to read... [17]

China has 'no right to represent Taiwan,' Lai says in National Day speech

Taiwan will remain a responsible actor while defending its sovereignty and democracy in the face of global conflicts and chaos, President Lai Ching-te said Oct 10 in a closely watched National Day speech. "Taiwan is determined to maintain peace and stability across the Taiwan Strait to achieve global security and prosperity and is also willing to work with China to respond to climate change, prevent infectious diseases, maintain regional security, pursue peace and common prosperity, and bring benefits to people on both sides" of the waterway, he said. Delivering his first National Day address since taking office earlier this year, Lai reiterated his staunch defense of Taiwan's rights. "As president, my mission is to safeguard the survival and development of the country and unite the 23 million people of Taiwan; and to insist that the nation's sovereignty cannot be infringed upon and annexed," he said. Ahead of the speech, concerns grew that China would launch a new round of military drills around Taiwan, just as it did days after Lai's inauguration as president on May 20. In recent years, Beijing has stepped up military pressure and political interference against its island neighbor, which it claims as its territory. It has repeatedly lashed out at Lai, whom it considers a "separatist," and refused to engage with his government. Click here to read... [18]

Japan PM Ishiba tempers tone on Asian NATO, nuclear energy reduction

With his eye on a snap lower house election on Oct. 27, Japanese Prime Minister Shigeru Ishiba moderated his stance on several policy proposals during parliamentary questioning on Oct 07, including on the creation of an Asian version of NATO. An Asian NATO "cannot be launched overnight," Ishiba said during a question-and-answer session with opposition party leaders. He had proposed the idea of a NATO-style collective security framework in Asia during his campaign last month to become leader of the ruling Liberal Democratic Party. "As prime minister of this country, I need to first focus on pressing foreign policy and national security challenges," he said. Ishiba outlined plans to "build an organic and multilayered framework" to bolster Japan's alliance with the U.S. and boost cooperation with other U.S. allies like South Korea, Australia and the Philippines. He signaled that he would maintain efforts by predecessor Fumio Kishida to engage in multilateral frameworks, including the Quadrilateral Security Dialogue with the U.S., Australia and India. Ishiba also walked back past criticisms of Abenomics, an economic stimulus package launched under former Prime Minister Shinzo Abe that included aggressive monetary easing and heavy fiscal spending. Abenomics "raised the gross domestic product, created jobs and increased corporate profits," he said on Oct 07. Click here to read... [19]

Race starts for Lower House election amid calls for reform

Campaigning kicked off on Oct. 15 for a Lower House election, focusing mainly on the fund-raising scandal that rocked the ruling Liberal Democratic Party, political reform and the higher cost of living. Prime Minister Shigeru Ishiba, who is LDP president, set a goal of securing 233 seats between the LDP and its junior coalition partner, Komeito, in the Oct. 27 election, or a simple majority of the 465-seat chamber. “We are entering this election campaign with deep reflection so that proceeds from fund-raising parties will never be underreported again,” Ishiba said in a speech in Iwaki, Fukushima Prefecture, on Oct. 15. When the Lower House was dissolved on Oct. 9, the LDP held 247 seats and Komeito occupied 32. The coalition total of 279 seats was 46 more than the simple majority. The LDP is expected to field 342 candidates, including 34 involved in the scandal, while 50 are expected to run from Komeito. Yoshihiko Noda, president of the Constitutional Democratic Party of Japan, said the top opposition party aims to win the most seats and push the governing coalition into a minority position. “The fund-raising scandal is the major election issue,” Noda told reporters in Matsudo, Chiba Prefecture, on Oct. 14. “A change in government is the most important political reform.” Click here to read... [20]

North Korea blows up parts of inter-Korean roads in a symbolic display of anger

In a symbolic display of anger, North Korea on Oct 15 blew up the northern section of unused roads that once linked it with the South, with the rivals exchanging threats days after the North claimed that its rival flew drones over its capital Pyongyang. The roads’ choreographed demolition underlines North Korea’s growing anger against South Korea’s conservative government. North Korean leader Kim Jong Un has vowed to sever relations with South Korea and abandon the goal of achieving peaceful Korean unification. Observers say it’s unlikely Kim will launch a preemptive, large-scale attack on South Korea because of fear that an almost certain massive retaliation by the more superior forces of the United States and South Korea would threaten Pyongyang’s survival. In response to the explosions, South Korea’s Joint Chiefs of Staff said its military fired within southern sections of the border as it bolstered its readiness and surveillance posture. The statement did not give details, but the move could have been an attempt to avert cross-border fire by North Korea. It wasn’t immediately known whether North Korea responded. South Korea’s Unification Ministry, which handles affairs with North Korea, separately condemned the North’s detonations as a “highly abnormal” and “regressive” measure that violates previous inter-Korean agreements. Click here to read... [21]

Chinese envoy praises Bangladesh student protesters while urging return to stability

China’s top envoy in Bangladesh praised the “courage and wisdom” of the country’s student protesters while meeting representatives of the movement, some of whom have joined Dhaka’s interim government. Yao Wen, the Chinese ambassador to Dhaka, met the student representatives on Oct 10, commending them for their role in the anti-government movement. The student protests erupted in July and marked the final chapter in a two-year wave of unrest that ultimately led to a regime change in Bangladesh. “[Yao] appreciated the courage and wisdom shown by the young generation of Bangladesh in the student movement and encouraged the young people to contribute to the country to make it return to the right track of unity, stability, development, and prosperity,” the Chinese embassy said in a statement. According to the embassy, the student representatives expressed gratitude to China in the Oct 10 meeting, noting that Beijing sent an emergency medical rescue team to help treat those injured during the summer unrest. They also reiterated their commitment to maintaining Bangladesh-China relations, calling China “a true and reliable friend”. China is Bangladesh’s biggest trading partner, with bilateral trade totalling 168.4 billion yuan (US$23.8 billion) in 2023, including 161.1 billion yuan in Chinese exports to the South Asian country. Click here to read... [22]

Mighty Dragon: China’s J-20 fleet surges past US in Pacific

China’s growing J-20 stealth fighter fleet, bolstered by new cutting-edge technology and domestic engines, is gaining fast on the US as it grapples with rising costs, modernization delays and internal debates over the future of air dominance. This month, defense resource Janes reported that China’s People’s Liberation Army-Air Force (PLAAF) has rapidly expanded its fleet of Chengdu J-20 “Mighty Dragon” fifth-generation fighters, with 12 air brigades equipped as of May 2024. Janes notes this marks a sharp increase from just 40 aircraft in early 2022, with over 70 inducted in the past year alone, judging on assessments made from recent satellite imagery. It says that the J-20, designed to rival America’s F-35, plays a pivotal role in China’s strategy to project power beyond its coastal defenses, particularly in the South China Sea, Taiwan Strait and Western Pacific. The report notes that the aircraft’s deployment across key theater commands underscores China’s emphasis on enhancing fifth-generation air power. Moreover, Janes says the PLAAF is also replacing older J-11s and Su-27s with J-20s, supported by advancements in domestic engine technologies like the WS-15 that have reduced China’s reliance on Russian-made engines. However, the report points out that cost factors, with each J-20 priced at US$110 million, may limit production. It mentions that China’s growing defense budget, projected at $232 billion in 2024, supports further fighter procurement. Click here to read... [23]

S Korea piles in with US in arming up the Philippines

The Philippines and South Korea elevated ties to a strategic partnership, Manila’s latest move to build a bulwark and stockpile more arms against China’s rising threat in the South China Sea. South Korean President Yoon Suk Yeol said after meeting counterpart Ferdinand Marcos Jr that the two sides had “opened a new chapter” and that his country would “actively take part” in the Armed Forces of the Philippines’ (AFP) modernization drive. Over the next decade, the Philippines is scheduled to invest up to US$35 billion under its Horizon 3 military modernization program, with a singular focus on naval and aerial acquisitions. Over the past decade, South Korea has been a top supplier of modern military equipment, including fighter jets and warships. Unlike its liberal predecessor under President Moon Jae-in – who primarily focused on the Korean Peninsula conflict and maintaining stable ties with Beijing – the conservative Yoon administration has more openly welcomed closer defense ties with Washington and like-minded powers in the region. Cognizant of criticism of his perceived as pro-US foreign policy, especially by pro-China elements such as the powerful Duterte clan, the Marcos Jr administration has adamantly pursued its own version of a “multi-aligned” foreign policy. To dispel accusations of overreliance on America, the Philippines has been proactively upgrading defense ties with a host of quasi-non-aligned nations, including India, New Zealand, and, most crucially, South Korea. Click here to read... [24]

Kremlin comments on prospect of nuclear talks with US

Moscow considers talks on nuclear threat reduction vital, but any discussions by world powers should be broader in scope given the current state of affairs with regard to the Ukraine conflict, Kremlin spokesperson Dmitry Peskov has said. The US signaled earlier that it is open to dialogue with Russia, China, and North Korea on nuclear security issues. “In fact, our president has already spoken about this. Russia considers such contacts necessary, and they cannot be postponed, but we must consider all security issues as a whole, taking into account the current state of affairs,” Peskov told a press briefing on Oct 14 after being asked about the likelihood of Russia’s participation in talks. “In the conditions of the war that is being waged against Russia with the indirect and even direct involvement of nuclear powers such as the US, UK, and France, it is absolutely impossible to talk about this without contextualizing the topic to all other security aspects,” he said. On Oct 13, US President Joe Biden called on global powers to continue taking steps to make the world safer by ridding it of nuclear weapons. “Reducing the nuclear threat is important not despite the dangers of today’s world but precisely because of them,” Biden said in a statement congratulating this year’s Nobel Peace Prize winners, the Japanese anti-nuclear weapons organization Nihon Hidankyo. Click here to read... [25]

Gulf States Urge U.S. to Prevent Israeli Strikes on Iranian Oil

Gulf Cooperation Council (GCC) countries are deeply alarmed by Israel's current threats of launching a major counter-attack on Iran, which would likely involve ballistic missiles and fighter jet strikes on key infrastructure, both energy and military. The Biden White House has this week sought to talk the Israelis down from hitting oil and gas sites. Gulf countries including Saudi Arabia, Qatar, and United Arab Emirates are now also lobbying the US and Israel to avoid hitting Iran's oil sites, on fears that with such an escalation Tehran would in turn target oil facilities in the Gulf. This was already a reality that played out in the last half-decade of regional proxy conflict between the Iran axis and the West-Gulf country alliance. The Saudis and GGC states wish to avoid the kind of attacks which could impact its oil production and exports, such as the 2019 Abqaiq–Khurais Saudi Aramco drones strikes. The US blamed Iran for those historic attacks, but Tehran leaders never owned up to it. It may have been done by Iranian proxies out of Iraq, but the West ultimately views that it was Tehran's finger on the trigger. Last week, the Saudis attempted to convince the Iranians of their neutrality, amid a series of high-level meetings, which recently included President Masoud Pezeshkian visiting Doha to meet with GCC officials. Click here to read... [26]

Israel Fights on Multiple Fronts as War With Hamas Marks a Year

The Israel Defense Forces said it intercepted most of a barrage of rockets fired toward Tel Aviv by Hamas and other Iran-backed groups, as fighting escalated Oct 07 on multiple fronts after a year of war. Sirens sounded across central Israel, and two people were injured, according to Israeli health officials. The military had warned earlier of what it called an “immediate” threat of rocket fire from Hamas to mark the militant group’s attack on the country 12 months ago. Reflecting the regional tensions spawned by the war, the Israel Defense Forces said 135 rockets were fired at northern Israel by Lebanon-based Hezbollah, while Israeli jets carried out heavy bombardment in southern Lebanon. The IDF said Israel’s Air Force struck what it called more than 110 “Hezbollah terror targets” in Lebanon. And the IDF said it also intercepted an incoming missile from Yemen, where Houthi rebels continue to stage attacks on ships in the Red Sea. The exchange of fire, alongside Israel’s decision to send troops back into parts of northern Gaza over the weekend, underlined the danger Benjamin Netanyahu’s government still sees from Hamas. That’s despite Hamas suffering huge losses since its invasion on Oct. 7 last year, with Israeli officials estimating about half of its roughly 35,000 fighters are dead. Click here to read... [27]

Netanyahu calls on UN to evacuate Lebanon peacekeepers

Israeli Prime Minister Benjamin Netanyahu has demanded that UN Secretary-General Antonio Guterres withdraw UNIFIL peacekeepers from southern Lebanon, adding that by remaining there they are “providing a human shield to Hezbollah terrorists.” In a Hebrew-language video message posted to social media on Oct 13, Netanyahu told Guterres “it is time for you to withdraw UNIFIL from Hezbollah strongholds and from the areas of combat.” “The IDF has repeatedly asked for this, and has been met with repeated refusals, all aimed at providing a human shield to Hezbollah terrorists,” he continued. UNIFIL, or the United Nations Interim Force in Lebanon, was formed in 1978 to oversee the withdrawal of Israeli forces to below the so-called ‘blue line’, which separates Lebanon from Israel and the occupied Golan Heights. Headquartered in the town of Naqoura, UNIFIL is currently composed of around 10,000 troops from around 50 countries, who are tasked with monitoring the demilitarization of southern Lebanon between the blue line and the Litani River. Israel maintains that UNIFIL has done nothing to prevent Hezbollah entrenching itself in this region, while preventing its own forces from responding to the threat. In the weeks since the Israel Defense Forces (IDF) crossed the blue line and entered southern Lebanon, UNIFIL has claimed that Israeli forces have repeatedly hit its bases and outposts. Click here to read... [28]

Inside Mexico’s New Plan to Take On Cartel Violence

Mexico’s new President Claudia Sheinbaum is using her first 100 days in office to try to lower homicides and loosen the grip of organized crime groups that control swaths of the country, extort businesses, smuggle drugs and kill with impunity. Among Sheinbaum’s top efforts to “pacify the country” will be a push to slash killings in the country’s 10 deadliest cities, including Tijuana and Ciudad Juárez on the U.S. border, according to a presentation of the strategy seen by The Wall Street Journal. She is also planning new efforts to combat the smuggling of the deadly drug fentanyl, which kills tens of thousands of Americans a year, the presentation says. In a graphic display of the violence that Sheinbaum must deal with, the mayor of Chilpancingo, the capital of Guerrero, one of Mexico’s most violent states, was assassinated Oct 06, officials said. The newly elected mayor, Alejandro Arcos, was the second Chilpancingo official to be killed in the last three days, the probable victim of one of two violent gangs that control the city. “It is a state totally dominated by organized crime,” said Eduardo Guerrero, a Mexico City security expert. “It’s a jungle. What the criminals are saying to authorities is: We rule here.” Click here to read... [29]

A Port Deal Unsettles U.S. Counterterror Fight in the Horn of Africa

A surprise deal that could allow Ethiopia to base warships in a breakaway region of Somalia is stoking tensions throughout a corner of Africa already ablaze with militant violence. Under the agreement, Somaliland, a self-declared state within Somalia’s recognized borders, would grant landlocked Ethiopia rights to naval and commercial port facilities on the Red Sea. In exchange, Ethiopia would become the first country in the world to recognize Somaliland as an independent state. The accord, announced at the beginning of the year, has set the region on edge, with bellicose rhetoric now heating up between Somalia and Ethiopia, and international players from Cairo to Washington getting involved. Somali authorities are opposed to Somaliland’s independence. In response to the port deal, they are threatening to expel Ethiopian troops who have been helping them fight al-Shabaab, the local al Qaeda affiliate. “As a landlocked nation, Ethiopia has no right or claim to Somali territory for the establishment of a naval military base,” Somali Foreign Minister Ahmed Moalim Fiqi told the United Nations Security Council this month. Egypt—furious over a giant dam Ethiopia built on the Blue Nile—has joined Somalia’s camp and last month delivered a shipload of artillery and antitank weapons to Mogadishu, Somalia’s capital. Click here to read... [30]

Why Lasers Could Be Kryptonite for Drones

Earlier this year the U.S. Army shot down a number of hostile drones in the Middle East using a weapon long dismissed as more science fiction than reality—the laser. After decades of costly, problematic development, a growing number of countries from the U.K. to South Korea say they have harnessed the technology for military use. The role of lasers is likely to be narrow for the foreseeable future because of their large energy needs, limited range and problems with bad weather. But militaries say the new weapons could prove an effective way to shoot down drones, a key task as they look for cheaper ways to counter a proliferation of unmanned aerial vehicles, or UAVs, in combat. Laser weapons shoot highly concentrated beams of light that deliver intense heat to their target. The beams, which travel at the speed of light, cut through metal to destroy engines, fuel tanks, electronics and other key parts of a target, or can be used to “dazzle,” or blind, their sensors and cameras. “The old adage that lasers were five years from being amazing and always will be, that is changing,” said Doug Bush, the U.S. Army’s assistant secretary for acquisitions, logistics and technology. “Lasers for counter drone [warfare] may have met their moment,” he said. Click here to read... [31]

Health

Chinese pharmaceutical firms expand to Africa under ‘health silk road’

Chinese pharmaceutical giant Shanghai Fosun Pharmaceutical is expected to complete the first phase of its manufacturing facility near Abidjan, Ivory Coast’s biggest city, for antimalarial drugs and antibiotics by the end of the year. The manufacturing facility, financed with €50 million (US$54.7) from the International Finance Corporation last year, is expected to produce 5 billion tablets annually once all three phases are completed. According to Fosun, the project will bring nearly 1,000 job opportunities to the Grand-Bassam area east of Abidjan. Fosun Pharma is one of a growing number of Chinese companies to set up offshore manufacturing plants in Africa as they search for markets for pharmaceuticals and medical products under the “health silk road” – a nickname for health sector investments under the Belt and Road Initiative, Beijing’s global trade and infrastructure strategy. President Xi Jinping promised during the Forum on China-Africa Cooperation (FOCAC) summit last month that Beijing would promote pharmaceutical production and the medical equipment industry in Africa, including access to active pharmaceutical ingredients, through co-investment by Chinese and African private sector players. The construction of the plant in Ivory Coast has been driven by huge demand in Africa. The World Health Organization estimates sub-Saharan Africa accounts for more than 95 per cent of global malaria cases and deaths. Click here to read... [32]

UN calls for action as famine and disease stalk Sudan

United Nations agencies have warned that famine and disease threaten to cause “countless” deaths in war-torn Sudan unless emergency action is taken. Malnourishment, crumbling healthcare facilities and a surge of cholera cases are blighting the population, officials from the World Health Organization (WHO) said on Oct 08 as they underlined the “immense challenges” faced by aid workers after 18 months of war in the country. “Malnourished children and mothers are dying due to lack of access to care, and cholera is spreading in many parts of the country,” said WHO’s regional director Hanan Balkhy at a media briefing in Cairo, the capital of neighbouring Egypt. “Without immediate intervention, famine and disease will claim countless more lives.” The ongoing war between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF) has raged since April last year, killing 20,000 people and displacing more than 10 million – including 2.4 million who have fled to other countries – according to UN estimates. The international community has been floundering in its efforts to bring an end to the devastating conflict, which has been overshadowed by the wars in Ukraine and Gaza. Click here to read... [33]