Global Developments and Analysis: Weekly Monitor, 07 March 2022 - 13 March 2022

Economic

Economic Blacklist of Russia Marks New Blow for Globalization

The U.S.-led effort to expel Russia from international commerce marks another fracture in the free-trade vision that guided American policy for nearly 30 years, signalling a future where nations and companies shift away from trading with adversaries and focus more on like-minded partners. The actions taken by the U.S. and Western European allies since Russia invaded Ukraine have been swift and punishing—including banning or scaling back purchases of Russian oil, gas and coal to pressure Russian President Vladimir Putin to call off his troops. The West has also moved to oust Russian banks from international financial networks, while a bipartisan coalition of U.S. lawmakers has introduced legislation calling on the U.S. to press for Russia’s suspension from the World Trade Organization—an action that would have no precedent in WTO history. Jennifer Hillman, a trade lawyer who teaches at Georgetown University sees the future of global trade agreements could be in large regional pacts where there are coalitions of the like-minded. Moves to isolate Russia are “very satisfying in the short run, because the Russians are doing a very bad thing,” said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies. “But nobody wants to talk about the long-term consequences of weakening international institutions.” Click here to read... [2]

Russia Halts Exports Of Over 200 Products But Excludes Energy

Russia said on March 10 that it was suspending, until the end of this year, exports of more than 200 products, including technological and medical equipment, vehicles, and agricultural machinery, but oil, gas, and coal - the main revenue stream for the government – were spared from the list. The measure - which also includes the suspension of exports of electric equipment, railway cars and locomotives, containers, turbines, metal and stone cutting machines, video displays, projectors, consoles, and switchboards—“is necessary to maintain stability on the Russian market,” the government said in a statement. “In addition, the Government has also suspended the export of several types of timber and timber products to states that are undertaking hostile actions against Russia,” it added. Yet, just as Europe has been wary of slapping sanctions on Russian energy, Russia is equally wary of cutting off its largest revenue - energy. Crude oil and natural gas revenue accounted for 43 percent, on average, of the Russian government’s total annual revenue between 2011 and 2020, according to data compiled by the U.S. Energy Information Administration (EIA). The Russian Energy Strategy to 2035 prioritizes the increase in energy exports and revenue, which is indicative of the central role hydrocarbons play for the Russian government, the EIA notes. Click here to read... [3]

Palladium, copper and nickel hit historic highs on Russia sanctions

Prices for key industrial metals including palladium, copper and nickel are soaring to record levels as economic sanctions against Russia, a major supplier, threaten to squeeze supply and push manufacturers to seek other options. Nickel surged over 70% on March 07 on the London Metal Exchange, while palladium, used in catalytic converters to scrub auto engine exhaust, hit an all-time high for the first time in 10 months. In addition to political pressure to stop sourcing the metals from Russia, the logistical challenge of receiving shipments from the heavily sanctioned country is exacerbating the price increases. A prolonged supply crunch would push manufacturers to pass on higher prices to customers, aggravating inflation. Aluminium set a new all-time high for a second straight day, touching $4,073.50. The surge was particularly pronounced for nickel, used in electric vehicle batteries. The metal skyrocketed by nearly $21,000 to over $50,000 per ton -- the highest since June 2007. Russia produces 3.5% of the world's copper, 5.4% of its aluminum, 9.3% of its nickel and 42.8% of its palladium. Though such major Russian miners as Norilsk Nickel, the world's top producer of palladium and nickel, have not been directly targeted by sanctions, it is still growing tougher for them to do business. Click here to read... [4]

China turns to Russian gas to curb dependence on Quad members

Eager to no longer depend on geopolitical rivals like the U.S. and Australia for natural gas, China is forging ahead with new pipeline projects to boost imports from Russia. Preparations for a new pipeline to the Russian island of Sakhalin are in full swing in China's border province of Heilongjiang despite still frigid temperatures. Currently, the only gas pipeline between Russia and China is Power of Siberia, which began operating in 2019 and has an annual capacity of 38 billion cu. meters. The countries plan to establish a new pipeline under the deal with an annual capacity of 10 billion cu. meters. New developments are underway in Russia as well. Gazprom on March 1 announced it had begun taking concrete steps toward the construction of the Power of Siberia 2 pipeline, which would pass through Mongolia and have an annual capacity of around 50 billion cu. meters. Pollution-plagued China swapped out more of its coal for natural gas to clear its skies for the Beijing Winter Olympics. But the country relies on imports for nearly half the gas it consumes. China imports about 40%, the biggest portion, of its LNG from Australia. Just over 10% comes from the U.S. Click here to read... [5]

EU leaders fail to set a date to end energy dependence on Russia

EU leaders want to end the Russian energy imports that help fund the war in Ukraine, but not yet. In a statement released March 11 following a summit in Versailles, France, they said countries would “phase out our dependency on Russian gas, oil and coal imports as soon as possible.” Russia's invasion of Ukraine had “brought war back to Europe,” the 27 leaders said. In response, they committed to boosting economic independence, which means slashing imports of Russian natural gas, oil and coal. Energy imports from Russia last year came to €99 billion, the Continent’s largest tie to Moscow. On March 10, Commission President Ursula von der Leyen proposed 2027 as a firm end date. That followed a Commission proposal earlier this week to cut Russian energy dependence by two-thirds by the end of this year and to drive that to zero "well before" 2030. But national leaders balked at agreeing to a concrete date this week. Instead, they asked Brussels to put forward a plan in May. The Commission would “come up with a proposal to phase out our dependency on Russian gas, oil, and coal by 2027, backed by the necessary national and European resources,” von der Leyen said after the summit. Click here to read... [6]

Central Asia Faces Financial Chaos As Russia’s Economy Collapses

Russia’s invasion of Ukraine and the Western sanctions in response have left former Soviet states in Central Asia facing economic chaos. The uncertainty is gripping Central Asia, where Russia is a top trading partner and the source of critical remittances. Local currencies rise and fall with the ruble. Kazakhstan was the first to respond to the crisis, raising its baseline interest rate from 10.25 percent to 13.5 percent just hours after the war began. The National Bank rapidly intervened in the currency market, selling U.S. dollars to protect the tenge. Kazakhstan is blessed with substantial reserves. The Samruk-Kazyna sovereign wealth fund held some $65 billion as of January. The National Oil Fund reportedly holds another $60 billion or more. While the ongoing restructuring at Samruk-Kazyna could result in revelations that cast doubt on those numbers, tens of billions are known to be held with Bank of New York Mellon and are relatively liquid. Uzbekistan may not be as economically dependent on remittances as Kyrgyzstan or Tajikistan but has more economic migrants in Russia than all the other Central Asian states put together. The strengthening of the sum and dollar against the ruble means that millions of Uzbek migrant workers earning rubles in Russia have taken a 50 percent wage cut in sum and U.S. dollar terms because of Putin’s war. Click here to read... [7]

Russia's asset seizure threat confronts companies with grim choices

As Russia lays the groundwork for seizing the assets of foreign companies exiting the country, international corporations face a grim choice among financial losses, costly legal battles or reputational ruin. Looking to soften the blow of sanctions squeezing its economy, Russia has drafted proposals that would let it take control of departing companies with more than 25% foreign ownership and hand them over to Moscow-friendly management. It is necessary to "introduce external management and then transfer these enterprises to those who actually want to work," President Vladimir Putin said in a videoconference with senior officials. This move escalates Moscow's campaign to crack down on the rapidly growing ranks of foreign companies bowing out of Russia, such as BP and Exxon Mobil, and those halting operations, like Sony Group. Sony declined to comment on Moscow's plans on asset seizure. Putin signed a decree this month banning taking more than $10,000 in foreign currency out of the country, and the government has restricted sales of Russian assets. Both moves are aimed at discouraging foreign enterprises from leaving. Businesses looking to exit Russia now face multiple potential roadblocks, not all from the government. Russian partners might sue over issues such as unwinding joint ventures. Click here to read... [8]

Rich Russians turning to Dubai to evade sanctions – media

Wealthy Russians have stepped up their efforts to move their funds from Europe to Dubai to evade Western sanctions placed on them over the war in Ukraine, Reuters has reported, citing financial and legal sources in the Gulf state. A globally acclaimed tourist destination, Dubai is also considered the region’s business hub. The United Arab Emirates’ recent refusal to condemn Russia’s military operation in Ukraine at the United Nations Security Council appears to have been interpreted by Russia’s rich as an invitation. An unnamed lawyer based in Dubai told the outlet his firm had received a number of enquiries from Russian entities about shifting “very significant funds” to Dubai. Several reportedly involved hundreds of millions of US dollars. Another source, a senior private banker, said Russian customers with accounts at private banks elsewhere were opening accounts with the same bank’s UAE branch or with local banks. They noted that the number of Russian customers had recently increased. Other sources said they had seen a recent growth in Russian investments in the region’s real estate. Analysts say the UAE, and Dubai in particular, is a convenient location, being only a few hours’ flight from Russia and not having regulators answerable to Western states. Click here to read... [9]

As Ukraine war rages, Israel grapples with fate of oligarchs

Israel is grappling with a situation that involves dealing with dozens of Jewish Russian oligarchs as Western nations step up sanctions on businesspeople with ties to Russian President Vladimir Putin. A worried Israeli government has formed a high-level committee to see how the country can maintain its status as a haven for any Jew without running afoul of the biting sanctions targeting Putin’s inner circle. Several dozen Jewish tycoons from Russia are believed to have taken on Israeli citizenship or residency in recent years. Many have good working relations with the Kremlin, and at least four – Chelsea FC owner Roman Abramovich, Mikhail Fridman, Petr Aven and Viktor Vekselberg – have been sanctioned internationally because of their purported connections to Putin. Israel, which has emerged as an unlikely mediator between Ukraine and Russia, has not joined the sanctions imposed by the United States, United Kingdom, the European Union and others. But as the war in Ukraine drags on, and other names are added to the list, the pressure is increasing. In an interview with Israel’s Channel 12 TV station over the weekend, the US under-secretary of state for political affairs, Victoria Nuland, called on Israel to join the group of countries that have sanctioned Russia. Click here to read... [10]

Yuan deposits replace dollar and euro in Russian banks

With Russia now officially cut off from both the US dollar and the euro, the state-owned VTB Bank has offered its clientele the opportunity to open Chinese yuan savings accounts that yield a maximum interest rate of 8%. The country’s second-biggest bank has been hit by the Western sanctions aimed at the total financial isolation of Russia over its war in Ukraine. “In light of the rising dollar and euro exchange rates, many clients are showing interest in investing in other currencies, and the yuan is one of the most affordable and promising options for investing funds,” the bank said in a statement. Existing customers are reportedly able to open deposits remotely on VTB Online with a minimum amount of 100 yuan ($16). At VTB branches, they can deposit a minimum of 500 yuan. Russian financial institutions have been placed under increasing pressure after Ukraine-related sanctions were introduced. The banks have had to turn to China to start using its UnionPay system for credit cards, after Visa and Mastercard announced the suspension of operations in the country. “Some Russian banks can’t get access to other currencies, so yuan is probably the best other alternative,” Khoon Goh, head of Asia research at the Australia & New Zealand Banking Group, told Bloomberg. Click here to read... [11]

Ukraine war: Russia accuses West of wanting to stage ‘artificial’ default

Russia’s finance ministry on March 14 accused foreign countries of wanting to force Russia into an “artificial default” through unprecedented sanctions over Ukraine and said it would meet its debt obligations. “The freezing of foreign currency accounts of the Bank of Russia and of the Russian government can be regarded as the desire of a number of foreign countries to organise an artificial default that has no real economic grounds,” finance minister Anton Siluanov said in a statement. Ratings agency Fitch last week downgraded Russia’s sovereign debt rating farther into junk territory, warning that the decision reflects the view that a default was “imminent”. But Siluanov denied that Russia “cannot fulfil the obligations” of its government debt. The government is due to pay US$117 million on two of its dollar-denominated bonds on March 16. Technically it has a 30-day grace period, but that is a minor point. If it happens it would represent its first international default since the Bolshevik revolution over a century ago. Siluanov said Russia “is ready to make payments in roubles” according to the exchange rate of Russia’s central bank on the day of the payment, including its Eurobond issued since 2018. Click here to read... [12]

China’s coronavirus lockdowns could trigger ‘shock waves’ across global supply chains

Rising coronavirus cases in China, including in economic powerhouses Shenzhen and Shanghai, are stirring fears about severe disruptions to the global shipping industry and supply chain, according to industry insiders. As the country grapples with its most severe outbreak since the initial wave in early 2020, Beijing has doubled down on its “dynamic zero-Covid strategy”, prompting local governments to impose stringent prevention measures, including lockdowns. On March 13, 19 out of 31 mainland provinces reported local infections, with recorded daily infections across the country reaching 2,243. Experts have warned that strict containment efforts by local governments will weigh on cargo movement inside and out of the country. “Lockdowns in China will further reduce capacity and cause a surge in already inflated shipping prices,” said Johannes Schlingmeier, co-founder and CEO of Container xChange. “The shock waves will be felt across the US and America, and almost everywhere in the world.” China’s tech hub Shenzhen in the southern province of Guangdong entered a de facto lockdown for this week, when three rounds of mass testing will be conducted. The city – home to 17.6 million people – reported 86 infections on March 13. Click here to read... [13]

Turkey's steelmakers grab for market share from China, Russia, Ukraine

Turkey's steel industry is making a grab for a bigger share of the global market as China holds back production to cut emissions and Russia's invasion of Ukraine mires two other key rivals in conflict. Turkish steelmakers pushed production and exports to record levels in 2021 and are further expanding capacity this year, in what could prove a test of the unconventional economic policies being pursued by the government of President Recep Tayyip Erdogan. The dramatic devaluation of the lira, while increasing raw materials costs for steelmakers, has boosted the competitiveness of the country's exports. The Turkish industry has also benefited as steel buyers look to secure metal nearer to home after transportation costs soared and supplies were interrupted during the coronavirus pandemic. A World Bank report published in February calculated that on average, a 10-percentage-point decrease in shipping reliability led to a 5% rise in Turkey's exports, thanks to "European multinationals sourcing more intensively from Turkey, instead of [other parts of] Asia." Domestic consumption grew 13%, but exports jumped 20% to total 19.9 million tons. Click here to read... [14]

Lebanese youths abandon education as crisis bites

Before Lebanon’s devastating financial crisis struck, Faraj Faraj thought university could set him on a path out of a cramped family home in a poor area of Beirut and toward financial independence. Instead, like increasing numbers of Lebanon’s young people, soaring costs forced the 19-year-old to drop out of studying just over a year ago, before he had finished secondary school. “I don’t have family who can help me complete my education, and there’s no work,” he said, adding that even though he was at a state school, the cost of transport had become hard to bear. UN research published in January showed that 30 percent of those aged 15-24 in Lebanon had dropped out of education. More young people are skipping meals and cutting back on health care, the survey showed. The coronavirus pandemic and the port blast, which still scars Beirut’s seafront, deepened what the World Bank has described as one of the worst economic collapses since the mid-19th century. “Once a young person drops out of school at the age of 13, 14, 15, it’s really difficult to get them back into school, and so they enter into a very precarious job market with a serious lack of education and skills,” said Alexandre Schein, head of UNICEF’s youth section in Lebanon. Click here to read... [15]

The Inflation Hits Just Keep Coming, Raising Stakes for the Fed

For the Federal Reserve, the hits driving inflation keep piling up. Escalating sanctions by the West to punish Russia for its war against Ukraine are driving fears that an episode of increased inflation, already at its highest levels in 40 years, will become harder to wring out of the U.S. economy without a recession. Before Moscow’s invasion three weeks ago, Federal Reserve Chairman Jerome Powell had begun laying the groundwork for a more aggressive series of rate increases, driven by concerns that labor markets were overheating. He and his colleagues were also banking on getting an assist from recovering supply chains later this year, limiting how far rates would have to rise. Now, the global economy faces the prospect of higher energy and commodity prices, which will raise the costs to transport and manufacture a range of goods, while the conflict further disrupts global shipping networks. “The war makes inflation more intractable,” said Steven Blitz, chief U.S. economist at TS Lombard, a research firm. The threat is unlikely to alter what the Fed does at its meeting this week. Mr. Powell said earlier this month that the central bank wants to avoid adding to volatility at a time when geopolitical uncertainty has already raised the risk of a sharp pullback in risk-taking by investors. Click here to read... [16]

Oil concerns give Iran the upper hand in nuclear talks: Lawmakers

Iran should use the opportunity provided by instability in the global energy markets and push its demands in nuclear talks in Vienna, a majority of Iranian lawmakers have suggested. A statement signed by 160 of Iran’s 290 members of parliament was read out publicly on March 13. It said Tehran should not bind itself by “fabricated deadlines” by the West and push for its demands in the talks in the Austrian capital. “Now that the Ukraine crisis has increased the West’s need for the Iranian energy sector, the US need for reduced oil prices must not be accommodated without considering Iran’s righteous demands,” the parliamentarians wrote. They also called for “economic, technical and political” guarantees that the United States will not renege on the country’s 2015 nuclear deal with world powers again as it did in 2018 and said American sanctions must be lifted effectively and comprehensively. This comes less than a month after 250 legislators signed a statement that sought to assert dominance by setting strict conditions for a return to the nuclear deal, even as the nuclear file is handled by Iran’s Supreme National Security Council (SNSC). Click here to read... [17]

Strategic

Ukraine war: US-China talks focus on Beijing’s support of Russia

China’s top diplomat Yang Jiechi met US national security adviser Jake Sullivan in Rome on March 14 as the war in Ukraine threatened to become a new source of tension between the two countries. For seven hours, Yang and Sullivan discussed a full range of tensions now dividing Washington and Beijing, US officials said, but they focused extensively on Ukraine, with the US warning that China will face serious consequences if it backs Russia in the war. “What we have conveyed – and what was conveyed by our national security adviser in this meeting – is that, should they provide military or other assistance that of course violates sanctions or supports the war effort, that there will be significant consequences,” White House spokeswoman Jen Psaki said. The comments were the latest sign that Russia’s invasion of Ukraine late last month has injected even more distrust into Washington’s already tense relationship with Beijing. Psaki declined to discuss the form punitive measures might take, but she indicated that they would be initiated by the US and carried out in coordination with allies. A Chinese readout of the meeting said that Yang warned the US not to mischaracterize Beijing’s stance on the war. Zhao Lijian, a spokesman for China’s foreign ministry, denied US media reports that Moscow had asked Beijing for military assistance. Click here to read... [18]

Xi objects to Russia sanctions in summit with France and Germany

Chinese President Xi Jinping criticized sweeping sanctions against Russia in a virtual summit March 08 with French President Emmanuel Macron and German Chancellor Olaf Scholz, while urging "maximum restraint" in Ukraine to avoid a humanitarian crisis. The punitive measures by the U.S., the European Union, Japan and others will "affect global finance, energy, transportation and stability of supply chains," Xi said, as reported by China Central Television. Xi warned that dragging down a world economy already burdened by the coronavirus pandemic is "in no one's interest." While China has not endorsed Russia's invasion of Ukraine, which Moscow calls a "special operation," Beijing has emphasized its solid ties with Russia and pushed back against sanctions that threaten to debilitate its economy. Xi called for dialogue on equal footing among the European Union, Russia, the U.S. and NATO. "The pressing task at the moment is to prevent the tense situation from escalating or even getting out of control," he said. China will remain in communication with France, Germany and the EU on the matter, he said. The Chinese leader continued to avoid committing Beijing to a mediator role, only praising efforts by Paris and Berlin to resolve the conflict through negotiation. Ukraine has asked China to help mediate a ceasefire. Click here to read... [19]

China calls for verification of Russian claims of US bioweapons help to Ukraine

China has urged the United Nations to “properly address” Russian claims that the US is building a military biological programme in Ukraine – allegations that the United States has dismissed as misinformation. At a UN Security Council meeting on March 11, Chinese ambassador Zhang Jun said the relevant parties should give comprehensive clarification and accept multilateral verification. “China has noted with concern relevant information released by Russia,” Zhang said, according to China’s permanent mission to the UN. Zhang said Beijing looked forward to receiving more specific information on World Health Organization advice to the Ukrainian government to destroy pathogens located in laboratories to prevent the spread of disease. Russia first claimed on March 07 that its forces had found evidence of Ukrainian attempts to eradicate traces of a military biological weapons programme in Ukraine financed by the US. The US denies the allegations, with Pentagon spokesman John Kirby saying on March 09 that the claims were “classic Russian propaganda”. Zhang hit back, saying the US envoy had “made groundless accusations” against China. “The US always says they advocate transparency. If they believe the relevant information is fake, they can just provide us with relevant data for clarification, so that the international community can draw a conclusion by itself,” he said. Click here to read... [20]

Xi risks having hands tied as China's next premier race heats up

As the National People's Congress wraps up, attention is turning to the question of who will succeed Premier Li Keqiang next year, a decision that could reveal much about the power balance in the Communist Party's upper echelons. China watchers are looking to the succession race for insight into an economic strategy that has grown murkier over the past few years. The premier is typically tasked with economic planning, though Li has spent much of his tenure as China's No. 2 leader sidelined by President Xi Jinping. After taking office in 2013, Li set out the economic strategy that became known as "Likonomics" -- an effort to transition China's economy from rapid growth to greater stability. While progress was made on some of the premier's goals, such as liberalizing the auto market, his influence diminished as Xi took a greater hand in economic policy from around 2016, working through Vice Premier Liu He, a close ally. Xi has tried to strike out on a different path from predecessor Deng Xiaoping's "reform and opening up" approach, in anticipation of protracted economic friction between China and the U.S., but has yet to settle on a clear replacement. The dual circulation strategy announced in 2020 -- focusing on domestic demand while also tapping foreign markets -- has fizzled without concrete steps toward implementation. Click here to read... [21]

China looks to military law to protect its overseas presence

Stronger legal protections for China’s security and rights in its territorial waters and airspace – as well as in outer space – were the subject of a military discussion panel as part of the “two sessions” meetings in Beijing this week. President Xi Jinping opened the discussion on March 07 at a meeting of deputies from the People’s Liberation Army and the People’s Armed Police Force during the annual gathering of the National People’s Congress. “China should make more comprehensive the body of military laws and regulations that involve foreign countries, so as to better protect national interests through the use of law,” Xi told a panel on the sidelines of the legislative session. According to briefing notes released to the media, the military delegates discussed Xi’s remarks at a panel meeting the next day, including how to speed up the legislative process. Former Southern Theatre Command chief Wang Jiaocheng, a member of the NPC Standing Committee, said areas covered should include foreign trade, protection of maritime rights and interests, and outer space security “to make good use of legal weapons to maintain national security”. Former air force commander Ding Laihang told the panel legal protections could be strengthened for construction projects related to China’s global infrastructure programme, the Belt and Road Initiative. Click here to read... [22]

U.S. says North Korea tested ICBM system as Kim Jong Un orders space program expanded

North Korea recently used what would be its largest ever intercontinental ballistic missile (ICBM) system in two secretive launches, likely paving the way for a resumption of long-range tests, U.S. and South Korean officials said. North Korea froze its ICBM and nuclear tests in 2017 after launching its first missiles capable of reaching the United States. It has also not conducted a nuclear weapons test since, but leader Kim Jong Un has warned of a return to testing both. The escalation in North Korea tensions comes as South Korea on March 09 elected a new conservative president. Yoon Suk-yeol has said preemptive strikes may be needed to counter any imminent attack by the North and has vowed to buy American THAAD missile interceptors, while remaining open to restarting stalled denuclearization talks. In launches on Feb. 27 and March 5, North Korea did not specify what missile was used, but said they tested components for reconnaissance satellites Kim said would soon be launched to monitor military activity by the United States and its allies. “The purpose of these tests, which did not demonstrate ICBM range, was likely to evaluate this new system before conducting a test at full range in the future, potentially disguised as a space launch,” Pentagon spokesman John Kirby said in a statement. Click here to read... [23]

South Korea diplomacy faces tough test as Yoon assumes power

With Yoon Suk-yeol's victory in the South Korean presidential election on March 10, Seoul and Tokyo can now start rebuilding their strained relationships. Yoon will take office on May 10, but the two nations have no time to waste in tackling bilateral issues caused by what many experts call the biggest diplomatic failure of the outgoing administration of Moon Jae-in. What the two countries can achieve over the next three months will determine the course of bilateral relations over Yoon's five-year term, which runs through 2027. According to a South Korean government insider, Yoon plans to meet Japanese Ambassador to South Korea Koichi Aiboshi to explain his policy toward Japan prior to his inauguration. Before being sworn in, Yoon also wants to propose that the two countries exchange special envoys. On the basis of this, Tokyo is expected to select the appropriate representatives to attend the inauguration while formulating a specific agenda to discuss with the new president. Senior officials in Japan and South Korea say the inauguration is key to setting the tone for bilateral ties. South Korea hopes that Japanese Prime Minister Fumio Kishida will attend the ceremony. "That will make it easier to sell our Japanese policy to the public going forward," said one government source. Click here to read... [24]

India wary of China setting up Bangladesh missile maintenance hub

With China preparing to set up a maintenance facility in Bangladesh for surface-to-air missile systems it supplied in 2011, alarm bells are ringing in New Delhi. The deal on the maintenance hub has not been officially announced either by Beijing and Dhaka, but a senior Bangladeshi diplomat confirmed to Nikkei Asia that the two countries have reached agreement on the facility. He said, "Beijing and Dhaka want to keep this development under wraps currently as China is under increasing scrutiny from the West -- particularly the U.S. -- for upsetting the security balance in Asia with its territorial aggression." He added that the formal announcement of the missile deal has been complicated by Russia's invasion of Ukraine "which has led the world to cry out for peace rather than war." The facility, in which Chinese company Vanguard is a partner, is part of a raft of Chinese military-related investments and supplies going to Bangladesh that also includes warships, naval guns, anti-ship missiles and surface-to-air missile systems themselves. According to the Stockholm International Peace Research Institute, a Sweden-based think tank, Bangladesh procured some 17% of all Chinese military exports from 2016 to 2020, making it China's second-largest arms customer, after Pakistan. Click here to read... [25]

Moscow sets conditions for Putin-Zelensky negotiations

There may be a need for direct talks between Vladimir Putin and Ukrainian leader Volodymyr Zelensky, and the Russian president is ready to take part in such negotiations, but it would require some preparation, Russia’s foreign minister, Sergey Lavrov, has said. “We’ve confirmed today that President Putin isn’t rejecting the idea of a meeting with President Zelensky,” Lavrov said after “difficult” talks with Ukrainian FM Dmytro Kuleba in Turkey’s Antalya on March 10. He said he reminded his Ukrainian counterpart that Putin and Russia are “always ready to meet if we can achieve some added value and solve the problem.” However, Moscow sees no use in “meeting simply for the sake of meeting,” the minister pointed out. “Possibly at some point, such necessity will hopefully arise,” Lavrov said of the possible talks between Putin and Zelensky. “But for this to happen preparatory work must be done along the Belarusian track.” The delegations from Moscow and Kiev have already held three rounds of talks in Minsk since the start of the conflict on February 24. However, they haven’t delivered any significant results yet. “Our very specific proposals were heard out by the Ukrainian side, and they promised that there would be very specific answers. We’re waiting,” the foreign minister said. Click here to read... [26]

China urges Japan to be cautious concerning nuclear sharing talks: spokesperson

China on March 14 expressed serious concern over discussions on a nuclear sharing arrangement that would see Japan host U.S. nuclear weapons and urged Japan to be cautious. Foreign Ministry spokesperson Zhao Lijian made the remarks at a daily press briefing when asked to comment on relevant voices from Japan. As a non-nuclear weapon state party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), Japan should earnestly fulfil its international obligations in this regard, Zhao said, noting that China has always opposed the deployment of nuclear weapons by nuclear-weapon states on the territory of other countries. "For historical reasons, relevant movements of the Japanese side in the field of military security have always attracted great attention," the spokesperson said. Zhao said that in recent days, there have been continuous and dangerous comments in Japan that violate the country's three non-nuclear principles. This has forced Japan's Asian neighbors and the international community to strongly question whether or not Japan can adhere to the path of peaceful development. China has expressed serious concern and urges Japan to practice caution in its words and deeds and take a responsible attitude in maintaining regional peace and stability, Zhao said. Click here to read... [27]

Putin approves sending foreign volunteers to Donbass

Russian President Vladimir Putin said March 11 that he supported the idea of allowing volunteers from abroad to provide military assistance to Donbass. Western countries and Ukraine do not hide that they are gathering mercenaries and sending them to Ukraine, Putin said at a meeting with permanent members of Russia's Security Council. Russian Defense Minister Sergei Shoigu told Putin that he had received "a huge number of applications from various kinds of volunteers from different countries" who would like to come to Lugansk and Donetsk in order to "participate in what they consider a liberation movement." "The largest number is from the Middle Eastern countries. There are already more than 16,000 applications," Shoigu reported. "If you see that there are people who want on a voluntary basis, especially not for money, to come and help people living in Donbass, you need to meet them halfway and help them move to the war zone," Putin said after listening to his report. Putin also backed Shoigu's initiative to transfer Western-made weapons captured by the Russian military in Ukraine to the forces of Donbass. Click here to read... [28]

Rival Libyan premier says he plans to be in Tripoli in days

A rival Libyan prime minister says he plans to be in the country’s capital and seat his government there in a matter of days — even though a parallel administration opposing his is currently located in Tripoli. Fathi Bashagha expressed his belief that the war-torn country could be unified without more fighting and that his government will focus on holding elections soon, the only way out of Libya’s decade-old conflict. However, his statement is likely to add to fears that Libya’s two rival administrations are heading into a deeper confrontation and that the divisions signal a return to civil strife after more than a year of relative calm. On March 10, the United Nations and the United States urged restraint and expressed concern over reports of armed groups deploying in and around Tripoli. A former air force pilot and businessman, Bashagha was named prime minister last month by the House of Representatives, which has been based in Tobruk. The lawmakers selected Bashagha to replace embattled Prime Minister Abdul Hamid Dbeibah, who is based in Tripoli, claiming Dbeibah’s mandate had expired after Libya failed to hold its first presidential elections in December. Click here to read... [29]

Iranian Guards claim ballistic missile attacks in Erbil

Iran’s Revolutionary Guards Corps (IRGC) have taken responsibility for ballistic missile attacks in Iraq’s northern Kurdish regional capital of Erbil, according to Iran’s state media. The elite forces in a statement released on March 13 said it targeted the Israeli “strategic centre” in the country. “Any repetition of attacks by Israel will be met with a harsh, decisive and destructive response,” the statement said. Israel killed two Iranian members of the IRGC earlier this week in Syria, a close ally of Tehran. Earlier, Kurdish officials said a dozen ballistic missiles launched from outside Iraq struck the region, with Erbil Governor Omed Khoshnaw telling local broadcaster Rudaw that there was a terror attack against the US Consulate. According to the Kurdish interior ministry, the missiles caused only material damage to the new consulate building and injured one civilian. A US State Department spokesperson called it an “outrageous attack” but said no Americans were hurt and there was no damage to US government facilities in Erbil. Iraqi state TV quoted the semi-autonomous Kurdish region’s counterterrorism force as saying 12 missiles launched from outside Iraq hit Erbil. Masrour Barzani, the prime minister of northern Iraq’s Kurdish Regional Government (KRG) condemned the attack. Click here to read... [30]

Iran blames US for JCPOA delays as top diplomat heads to Russia

Foreign Minister Hossein Amirabdollahian will head to Moscow on March 15 for talks with his Russian counterpart, the Iranian foreign ministry has announced, as it doubled down on its position that the United States is preventing an agreement in the nuclear deal talks held in Vienna. Ministry spokesman Saeed Khatbizadeh told reporters on March 14 that Amirabdollahian’s meeting with Sergey Lavrov will mainly focus on the discussions in the Austrian capital to restore the Comprehensive Plan of Action (JCPOA), as the deal is formally known. Khatibzadeh said the pause in the talks announced by European coordinators on March 11 does not signal an impasse. He also portrayed Russia’s last-minute demand that sanctions related to its invasion of Ukraine will not affect its future dealings with Iran, pointing to other proposals brought on the table by the various negotiating sides since the beginning of the talks in April 2021. The spokesman stressed that reports by Western media that the talks are mostly held up by Russia’s demand are part of the US strategy. “Downgrading what is happening in Vienna to one element – meaning Russia’s demand – is what the US wants so everyone would forget its own responsibilities”. Click here to read... [31]

Medical

Coronavirus: China doubles down on zero-Covid to confront worst wave since Wuhan

Public transport has been stopped and all but essential travel banned in some of China’s biggest cities, as authorities try to rein in the country’s worst coronavirus outbreak since Wuhan in 2020. Lei Zhenglong, deputy director of the National Health Commission’s disease prevention and control bureau, said on March 14 that more than 10,000 people had been infected with Covid-19 since the start of March, with cases spanning 27 of the 31 provincial-level areas on the mainland. In the country’s south, the tech hub of Shenzhen – home to 17.6 million people – went into lockdown for a week on March 14. Residents will be tested three times before March 20. China has relied on such curbs on movement and mass testing to keep case numbers low but, the latest outbreak raises questions about whether China can continue to avoid living with the virus. The strategy, known as “dynamic zero-Covid”, does not aim to eliminate cases but to strictly suppress them when they arise. But Lei reaffirmed the country’s commitment to its playbook, saying the present outbreak required a stricter, earlier and quicker response. “The general strategy to prevent imported cases and internal rebounds and the general policy of dynamic zero-Covid are fully effective in dealing with the Omicron outbreak,” he told state broadcaster CCTV. Click here to read... [32]