Global Developments and Analysis: Weekly Monitor, 10 August - 16 August 2020

Medical

Japan and UK eye fall launch for $20bn global vaccine alliance

Japan, the U.K. and more than 70 other countries plan to form an alliance this fall to jointly procure 2 billion doses of coronavirus vaccines by 2021, looking to gain financial leverage in talks with pharmaceutical companies. The partnership initially pitched around June by Japan, the U.K., Germany, France and the European Union, aims to pool up to $20 billion. The alliance, named Covax, will pay vaccine makers in advance and procure doses for member countries. Supplies for individual nations will be capped at 20% of the population. The U.S. and China each have deep enough pockets to negotiate vaccine deals independently, putting others at a disadvantage. About 75 nations have expressed interest, including Canada, South Korea and Argentina. Membership requires an upfront investment, and the deadline for joining the group is set for the end of August. Gavi, a public-private organization that supports global immunization efforts, will run Covax. Click here to read.... [2]

Duterte takes Russia's offer of COVID vaccine after asking China

The Philippines will accept an offer for a pending Russian coronavirus vaccine once a supply becomes available, President Rodrigo Duterte said on Aug 10, soon after he discussed a similar deal with China. The Philippine leader even offered himself as a test subject for the Russian-made vaccine. "I'll volunteer to take it in public," Duterte said. "I'll be the first to be experimented on." Russia plans to approve a coronavirus vaccine on Aug 12. But because the candidate has not completed clinical trials, critics from Western nations question the product's safety. Yet Duterte expressed gratitude on Monday that Moscow is willing to share its supply with the Philippines. "I'm very happy because Russia is our friend," he said. "They said they will give the vaccine." Duterte thanked Russian President Vladimir Putin by name. Click here to read.... [3]

China to Supply Coronavirus Vaccine to Pakistan

China will supply coronavirus vaccines to Pakistan as part of an agreement for trials of the vaccine to be conducted in the South Asian nation, according to Pakistani government officials. Pakistan, one of China’s closest allies in the developing world, will receive enough doses early in distribution to vaccinate nearly one-fifth of the country’s population in the allocation, the officials said. The agreement, among the first China has reached as part of its efforts to test its coronavirus vaccine in populations beyond its borders, comes amid a global competition for access to vaccines that are now entering trials and expected to come to market in coming months. State-owned China National Pharmaceutical Group, also known as Sinopharm, has tied up with Karachi University’s International Centre for Chemical and Biological Sciences for the Pakistani trials. Click here to read.... [4]

Vaccine makers including Moderna must hit U.S. timing goals for full payments

The United States is tying payments for COVID-19 vaccines to timing milestones for production and approval, according to public documents and a Trump administration official, putting pressure on drug-makers including Moderna Inc to meet ambitious targets. In a deal with Moderna announced this week, federal agencies negotiated a sliding scale of payments. The Cambridge, Massachusetts, biotech’s $1.5-billion deal pays out in full if its vaccine receives regulatory clearance by January 31, 2021, according to filings. It receives $1.2 billion, if it falls short of that timing goal. Moderna also receives $600 million when it can demonstrate it has built out industrial-scale manufacturing capabilities for its vaccine, even if that happens before the drug is authorized by regulators, the filings show. Click here to read.... [5]

Strategic

Chinese Foreign Minister Wang Yi visits Tibet to ‘send message to India’ over border dispute

China’s Foreign Minister Wang Yi made a rare visit to Tibet on Aug 14, including a trip to the disputed border with India, as the three-month military stand-off between the two countries continued to drag on with little sign of resolution. Although a terse statement issued by the foreign ministry on Aug 15 did not mention India, Wang’s border trip was described by Chinese observers as an unusual and symbolic gesture. Wang, who is China’s special representative in border talks with India, said the security and stability of Tibet is of pivotal importance to China’s overall development, according to the foreign ministry’s statement, and urged diplomats to work with local officials to protect national security in the face of unprecedented challenges in the post-coronavirus world. Wang became the first senior central government official to visit the frontier area since the deadliest clash in over 50 years occurred on June 15 in the disputed Galwan Valley. Click here to read.... [6]

Secret Ties Between U.A.E. and Israel Paved Way for Diplomatic Relations

The diplomatic breakthrough between Israel and the United Arab Emirates caps more than a quarter-century of deepening—but largely secret—business and security ties between the two countries that signals a major shift in the geopolitics of the Middle East. A major driver bringing the Israelis and Emiratis together has been their shared distrust of Iran, which they view as a destabilizing force in the region, and their concern about its growing military capabilities. That drove increasing intelligence cooperation between the two, according to current and former U.S. officials. The Aug 08 agreement now paves the way for other Arab and Muslim nations that have warming relations with Israel, including Bahrain, Oman and Morocco, to follow the Emirati lead. Click here to read.... [7]

Pakistan army chief to visit Saudi Arabia in quest to smooth ties

Pakistan’s army chief will visit Saudi Arabia on Aug 16 weekend, officials said, seeking to calm diplomatic strains over Kashmir as financial support for Islamabad hangs in the balance. The two countries are traditionally close and Saudi Arabia in 2018 gave Pakistan a $3 billion loan and $3.2 billion oil credit facility to help its balance of payments crisis. But Riyadh is irked by criticism from Pakistan that Saudi Arabia has been lukewarm on the Kashmir territorial dispute, two senior military officials told Reuters, motivating General Qamar Javed Bajwa’s planned fence-building visit on Aug 16. Pakistan has long pressed the Saudi-led Organization of Islamic Countries (OIC) to convene a high-level meeting to highlight alleged Indian violations in the part it controls.But the OIC has only held low-level meetings so far. Click here to read.... [8]

US open to nuclear agreement with Russia before including China

The U.S. may move forward with a nuclear agreement with Russia first in a bid to apply pressure on Beijing to sign a weapons treaty, Washington's top arms control negotiator said, despite characterizing China as an "urgent threat." Marshall Billingslea, the special presidential envoy for arms control said Washington had been keen to strike a trilateral agreement with Moscow and Beijing but is now open to a bilateral agreement with Russia first. "That is, I think, a very prudent approach, particularly because we may be able to agree to something with Russia that would be the framework which we would want China to join," Billingslea said in a phone interview on Aug 14. The Trump administration has sought a new treaty with three conditions: it includes China, adds restrictions on all types of nuclear weapons and strengthens and verification. Click here to read.... [9]

Japan wants de facto 'Six Eyes' intelligence status: defense chief

Japan is eager to expand cooperation with the "Five Eyes" intelligence-sharing alliance that includes the U.S. and the U.K, Defense Minister Taro Kono told Nikkei, expressing hopes for the framework that would allow the country to obtain key classified information at an early stage. "These countries share the same values," Kono said in an interview. "Japan can get closer [to the alliance] even to the extent of it being called the 'Six Eyes'." The Five Eyes grouping takes its name from the number of countries that comprise it -- the U.K., the U.S., Canada, Australia and New Zealand. The members share deep historical and cultural ties anchored in their common Anglo-Saxon heritage and use of the English language. Their multilateral UK USA Agreement covers cooperation in signals intelligence, analysis and sharing of information obtained through wiretapping networks for security purposes.Despite not being a formal member, Japan has been sharing information with the group. Click here to read.... [10]

Xi calls on Chinese not to waste food as crop shortage fears grow

Chinese President Xi Jinping is urging people not to waste food as concerns grow over crop shortages stemming from the coronavirus pandemic and natural disasters. Xi has advocated legislation and supervision to prevent food waste, calling it "shocking and distressing," state media Xinhua reported on Aug 11. Floods in areas along the Yangtze River, the worst since 1998, destroyed 5.6 million hectares of crops in July, according to the Ministry of Emergency Management. Parts of the country remain inundated. The ability to feed a population of 1.4 billion is a top priority for the government, which relies on both domestic production and imports. But there are no signs yet of a stockpile shortage -- summer grain output stood at 142.8 million tons this year, up 1.21 million tons from a year earlier, official data show. Click here to read.... [11]

China poses tougher threat than Soviet Union did in Cold War: Pompeo

Secretary of State Mike Pompeo said on Aug 12 that the United States views the threat posed by China as "much more difficult" to counter than that presented by the Soviet Union during the Cold War, citing Beijing's economic clout among other factors. Pompeo made the remarks in Prague, where he again called on like-minded countries to join U.S. efforts to confront the Chinese Communist Party. But while the increasing U.S.-China rivalry has raised concerns about the emergence of a new Cold War, Pompeo said the current situation "isn't Cold War 2.0." "The challenge of resisting the CCP threat is in some ways much more difficult. That's because the CCP is already enmeshed in our economies, in our politics, in our societies in ways the Soviet Union never was," he added, using the acronym of the Chinese Communist Party. Click here to read.... [12]

Chinese fishermen told not to approach disputed Senkaku Islands

Chinese local authorities facing the East China Sea have instructed fishermen not to get close to the disputed Japanese-controlled Senkaku Islands, Kyodo News learned on Aug 15. Before this summer's fishing suspension in nearby waters ends on Aug 16, fishermen said they have been told by the city governments of Fujian and Zhejiang provinces not to sail within 30 nautical miles of the uninhabited islets. While China has ratcheted up pressure on Japan by constantly sending its vessels into or near the Japanese territorial waters to challenge the status quo, Beijing may be trying to avoid excessive friction with Tokyo, regional experts said. Click here to read.... [13]

Trump says he is inclined to host G7 meeting after the November 3 election

U.S. President Donald Trump said on Aug 11 he is interested in hosting a Group of Seven summit in a “calmer atmosphere” after the November presidential election, and that he has not decided whether to invite Russian President Vladimir Putin. In May as the coronavirus pandemic was spreading, Trump postponed a G7 summit he had hoped to hold in June until September or later, and said he hoped to expand the list of invitees to include Australia, Russia, South Korea and India. “I’m much more inclined to do it sometime after the election. ... We could do it through teleconference or we could do it through a meeting,” the Republican president said at White House news conference. Click here to read.... [14]

4 members of Abe’s Cabinet visit Yasukuni on war anniversary

Four Cabinet ministers visited Tokyo's war related Yasukuni Shrine on Aug. 15, the anniversary of Japan's defeat in World War II, in a move that is bound to raise heckles in China and South Korea.The ministers who visited are: Environment Minister Shinjiro Koizumi, often touted as a future prime minister; Koichi Hagiuda, the education minister; Seiichi Eto, the state minister in charge of Okinawa and Northern Territories affairs; and Sanae Takaichi, the internal affairs minister. The last time a Cabinet minister visited Yasukuni Shrine on Aug. 15 was in 2016 when Takaichi and Tamayo Marukawa, the state minister in charge of the Tokyo Olympics, did so. The visits this year marked the largest number since Shinzo Abe began his second stint as prime minister in December 2012. Abe himself did not visit Yasukuni but sent a representative with a ritual offering of “tamagushi-ryo” to pay for a branch of a sacred “sakaki” tree. Click here to read.... [15]

Democrat Joe Biden chooses U.S. Senator Kamala Harris for White House running mate

Democratic presidential candidate Joe Biden on Aug 11 picked Senator Kamala Harris as his choice for vice president, making her the first Black woman on a major-party U.S. presidential ticket. With social unrest over racial injustice rocking the country for months, Biden had been under increasing pressure to select a Black woman as his running mate. Harris is also the first Asian-American on a major presidential ticket. Biden on Twitter called Harris “a fearless fighter for the little guy, and one of the country’s finest public servants.” Harris wrote on Twitter that Biden could “unify the American people because he’s spent his life fighting for us.” Click here to read.... [16]

Thai demonstrators call for political reforms in biggest rally since 2014 coup

On Aug 16, thousands of protesters gathered in Bangkok’s Ratchadamnoen Avenue in Thailand's biggest demonstration since a military coup in 2014. It was organised by Free People, a youth group calling for political reforms in Thailand. Following that was a speech by human rights lawyer Arnon Nampa. He was arrested and then released on bail just over a week ago for his involvement with a previous anti-government rally. “We’ve received a formal request that we maintain our three proposals only,” Arnon said onstage. The lawyer referred to the protesters’ main demands for the government under Prime Minister Prayut Chan-o-cha. They include the dissolution of the House of Representatives, charter amendments and an end to public harassment by state officials. “As for the request for our biggest dream, that is to see the monarchy remain with Thai society and truly stay above politics, they asked us not to keep dreaming,” he said. Click here to read.... [17]

Moon's offer for talks with Japan raises doubts

President Moon Jae-in underlined on Aug 15 during a speech to mark Liberation Day that Korea is open for talks with Japan to sort out pending bilateral issues. But skepticism is rising that the offer for talks will not have much impact on improving the strained bilateral ties, given the negative reactions to Moon's speech. During the speech to mark the 75th anniversary of Korea's liberation from Japan's 1910-45 occupation, Moon underlined the need for diplomacy, while repeating Seoul's resolute stance that it cannot intervene in a judiciary decision regarding the two countries' shared past.He added, "At the same time, we will work with Japan to protect universal values of humanity…I believe that joint efforts by Japan and Korea to respect individual human rights will become a bridge for friendship and future cooperation between the peoples of our two countries." This was a noticeable departure from the stern tone he took during his speech last year amid rising bilateral tension over history and trade disputes. Click here to read.... [18]

UN Security Council rejects US bid to extend Iran arms embargo

The United Nations Security Council has resoundingly rejected a bid by the United States to extend a global arms embargo on Iran. In the Security Council vote on Aug 14, Washington got support only from the Dominican Republic for its resolution to indefinitely extend the embargo, leaving it far short of the minimum nine "yes" votes required for adoption. Eleven members on the 15-member body, including France, Germany and the United Kingdom, abstained. Russia and China strongly opposed extending the 13-year ban, which was due to expire on October 18 under a 2015 nuclear deal signed between Iran and six world powers. Mike Pompeo, the US Secretary of State, announced the defeat of the resolution ahead of a very brief virtual council meeting to reveal the vote. "The Security Council's failure to act decisively in defense of international peace and security is inexcusable," he said in a statement. Click here to read.... [19]

Economic

Gold Is Flying High, but Getting Harder to Mine

Gold is among the rarest metals in the earth’s crust and much of the easier-to-get ore has already been mined. What is left is harder to find and more expensive to extract, miners say. Miners are spending less money on finding new gold, with the industry’s exploration budget at $4.44 billion last year, 63% lower than its record high in 2012, according to Australia-based Minex Consulting. That comes as finding new gold is becoming more expensive as miners have to dig deeper and enter more remote terrain in search of untapped deposits. The average cost to find an ounce of gold was $62 between 2009 and 2018, more than double the cost for the previous decade, according to Minex. Click here to read.... [20]

Taiwan Seeks to Start Free-Trade Talks with U.S.

Taiwanese President Tsai Ing-wen said she wants to start talks on a free-trade pact with the U.S., part of a broad effort to deepen her island democracy’s partnership with Washington and resist pressure from Beijing. In an online speech aired Aug 12, Ms. Tsai said starting trade negotiations are among her second-term priorities in strengthening relations with the U.S., a major trading partner and key arms supplier for Taiwan. Ms. Tsai didn’t set a time frame for the talks. Progress toward formal free-trade negotiations have been stalled for roughly two decades over disagreements that include Taiwanese restrictions on additives used in the production of American pork and beef. Click here to read.... [21]

Chinese firms flood into U.S. IPOs despite delisting threat

The U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards, but mainland firms are rushing to offer their shares on New York exchanges, sometimes in blockbuster deals. Despite the threat and rising U.S.-China tensions, the allure of a valuation on the world’s deepest stock market makes the risk of eventual delisting manageable, while financial-technology companies find the regulatory burden of a U.S. listing lighter than that in mainland China or Hong Kong, companies, advisers and investors say. So far this year, Chinese companies have raised $5.23 billion in U.S. initial public offerings, more than double the $2.46 billion for the same period last year, Refinitiv data show. Click here to read.... [22]

Trump's WeChat ban threatens Apple's smartphone sales in China

U.S. President Donald Trump signed an executive order on Aug 14 banning U.S. transactions with WeChat from Sept. 20, describing the Tencent Holdings-owned app as a threat to national security. A separate order issued the same day targeted TikTok, the viral streaming app owned by ByteDance. Apple is the only Western smartphone maker with a notable presence in the Chinese market and relies on the country for nearly 20% of its revenue. While the specific scope of the WeChat ban remains to be seen, some iPhone users in China have already made up their minds as to which side they will choose, if forced. "If Apple removes WeChat from its China App Store, I will switch to Huawei," said Chen Xixiang, an iPhone user from Chongqing city who has bought a new Apple handset every year since 2008. Click here to read.... [23]

US seizes virtual currency alleged to fund militant groups

The Justice Department said on Aug 13 that it has seized millions of dollars from cryptocurrency accounts that militant groups, including al-Qaida and the Islamic State, relied on to finance their organizations and violent plots. Law enforcement officials said the groups used the accounts to solicit donations, including by trying to raise money from the sale of fraudulent personal protective equipment for the coronavirus pandemic. Officials described it as the largest-ever seizure of virtual currency funds related to terrorism. It's also part of a broader Justice Department goal of disrupting the financing of extremist organizations, including those designated as foreign terror groups. Cryptocurrencies such as Bitcoin are favored for illicit transactions because they are perceived as hard to trace. Click here to read.... [24]

Japan grows wary of China's smart-city global standards

The Japanese government has grown increasingly concerned about China's proposed international standards for smart cities, worried about a competitive disadvantage as companies vie for business. China has already submitted smart-city proposals to both the International Organization for Standardization, or ISO, and the International Electrotechnical Commission, according to a source close to the government here. Three of the seven confirmed proposals from China are due to come up for a vote around year-end. A new standard needs a two-thirds supermajority to pass. Should China's proposals become the international standard, this would have repercussions for not only Japanese and Western companies, but also national security. China has independently submitted 16 proposals to establish committees within the ISO and IEC since 2014, a March survey shows, accounting for 25% of the total. Japan has submitted only two proposals. Click here to read.... [25]

EU revokes trade preferences for Cambodia over human rights concerns

The European Union said on Aug 12 that duty-free access for Cambodia's garment and other exports is now partially withdrawn due to the country's failure to improve its human rights record. "The EU's decision to partially withdraw Cambodia's duty-free quota-free access to the EU market is now effective," the European Commission, the EU's executive arm, said in a statement. "It was taken "due to serious and systematic concerns related to human rights ascertained in the country," the commission said. It said despite the move, it remains open to engaging with Cambodia on "necessary reforms," which include allowing a credible, democratic opposition to engage in politics and initiating a process of national reconciliation. Click here to read.... [26]

Thailand's economy shrinks most in more than 20 years

Thailand's economy suffered its worst contraction since the Asian financial crisis more than two decades ago, data showed on Aug 17, as the coronavirus shattered the country's crucial tourism industry. The outbreak "has made our economy fall by 12.2 per cent, lower than during the Tom Yum Kung crisis", said Secretary-general Thosaporn Sirisumphand, using the local name for the Asian Financial Crisis that struck in 1998. The economy shrank 12.5 per cent in the second quarter of that year. The NESDC forecast a 7.5 percent contraction in 2020. The slump is "not as dramatic as some regional peers", said economist Alex Holmes at Singapore-based Capital Economics, pointing out Singapore, Malaysia and the Philippines saw worse readings. But "the outlook remains one of the worst in the region because of Thailand's reliance on tourism", he told AFP. Click here to read.... [27]

Japan to offer Bangladesh loans worth $3.17 bil. for infrastructure

The Japanese government said on Aug 12 it will extend loans totalling up to 338.25 billion yen ($3.17 billion) to Bangladesh for seven projects, most of which will be building infrastructure to support its economic growth. Of the total, Japan will offer as much as 89.02 billion yen for constructing a railway bridge across the Jamuna River running in the middle of Bangladesh and 80 billion yen for expanding terminals at Hazrat Shahjalal International Airport in Dhaka in response to growth in passenger and cargo demand. In the area of urban transport, Japan will offer up to 55.70 billion yen for building a part of Mass Rapid Transit Line 5 and 72.19 billion yen for constructing Mass Rapid Transit Line 6. Both lines will run in Dhaka to ease severe traffic congestion. Click here to read.... [28]