Economic
Shanghai Auto Show: Chinese carmakers confident of overtaking Japan as world’s No. 1 exporter this year with shipments of 4.5 million units
China is likely to overtake Japan as the world’s top car exporter this year, with industry executives predicting shipments of up to 4.5 million units, on the back of the growing manufacturing and technological heft of the nation’s electric-vehicle makers. At the Shanghai Auto Show that started on April 18, more than a dozen leading domestic carmakers, including SAIC Motor, Chery Automobile, Geely, BYD and GAC Motor, were promoting their products to dealers from overseas markets. The rising exports would also help EV makers ride out slowing sales growth at home, where a bruising price war has failed to whet consumers’ buying appetite. A top official of the China Passenger Car Association (CPCA) said car exports could top 4 million units for the first time in 2023, up nearly 30 per cent from 3.11 million units last year. “The goal can be achieved if overall demand for vehicles abroad remains stable,” said general secretary Cui Dongshu. “Chinese automotive companies have the potential to increase their overseas sales.” If the sales forecasts in foreign markets prove to be accurate, then China would probably surpass Japan to become the world’s top auto exporter. In 2022, Japan’s exports fell nearly 8 per cent year on year to 3.5 million units. Click here to read...
World may face shortage of key food staple
Countries around the world are facing the biggest shortage of rice in two decades, CNBC reported on April 19, citing a report by Fitch Solutions. According to the agency’s estimates, the 2022-23 crop year will see an 8.7-million-ton shortage in the global supply, the largest shortfall since 2003-04, when it was 18.6 million tons. Data from Statista.com shows that global rice production last year was 502.9 million tons, making it the third-most produced grain after corn and wheat. However, production has been dropping in recent months as a result of bad weather in rice-producing countries like China and Pakistan, the report notes. China, the largest global producer, which supplied over 148 million metric tons of milled rice to the market in 2021-22, suffered from heavy rains and flooding in the second half of last year, which affected much of the country’s rice farmland. Currently, the country is “experiencing the highest level of drought in its rice growing regions in over two decades.” Both situations could be dire for the vulnerable crop, analysts say. Furthermore, forecasts claim that India, the world’s second-largest rice producer, may suffer from intense heat in the second and third quarters of 2023, which could also endanger its crop yield. European rice-growing countries such as France, Germany, and the UK have also been suffering from the highest level of drought in 20 years, which may further endanger this year’s supply, analysts say. Click here to read...
Gold And A New Crude Benchmark: A New Dawn For The Petroyuan?
Did you know that central banks bought more gold last year than any year in the past 55 years—since 1967? Though most don’t realize it, 1967 was a significant year in financial history, mainly due to the events at the London Gold Pool. The London Gold Pool was an agreement among central banks of the United States and Western European countries to stabilize the price of gold. The goal was to maintain the price of gold at $35 per ounce by collectively buying or selling gold as needed. However, in 1967 the London Gold Pool collapsed due to a shortage of gold and increased demand for the metal. That’s because European central banks bought massive amounts of gold as they began to doubt the US government’s promise to back the dollar to gold at $35/ounce. The buying depleted the London Gold Pool’s reserves and pushed the price of gold higher. In short, 1967 was the beginning of the end of the Bretton Woods international monetary system that had been in place since the end of World War 2. It ultimately led to severing the US dollar’s last link to gold in 1971. The dollar has been unbacked fiat confetti ever since—though the petrodollar system and coercion have propped it up. Click here to read...
Western countries dodging Russian oil ban – report
Western states that have banned direct purchases of Russian oil are now buying it indirectly from third countries, a report from the Centre for Research on Energy and Clean Air (CREA) claimed on April 19. In December, the EU, G7, and allied countries imposed an embargo and a $60-per-barrel price cap on Russian oil. Similar restrictions were introduced in February for exports of Russian petroleum products. While the so-called ‘price cap coalition’ cracked down on crude imports, it has increased purchases of refined products from “oil-laundering” countries, CREA claims. The EU, Australia, and most of the G7 countries imported a combined $45.9 billion worth of oil products from countries that have become the largest buyers of Russian crude in the 12 months since the beginning of the conflict in Ukraine, the report stated. According to CREA, “among the price cap coalition, the largest importer of oil products from the laundromat countries was the EU,” with imports reaching $19.4 billion since last February. Australia reportedly purchased $8.8 billion worth of refined crude in the 12-month period, followed by the US with $7.2 billion, the UK with $5.5 billion, and Japan with $5.2 billion. The highest proportions of imported oil products into price cap coalition countries were for diesel (29%), jet fuel (23%), and gasoil (13%). Click here to read...
Japan annual trade deficit widens to record $161 billion
Japan's export growth slowed in March, dragged down by a drop in China-bound shipments of cars and steel in a slide that underscores concern about slackening global demand amid higher interest rates and Western banking-sector jitters. Import growth outpaced exports in March, due to the hefty cost of coal, crude and oil products, helping bring the annual trade deficit in the world's third-biggest economy to a record 21.7 trillion yen ($161 billion). It exceeded the previous record of 13.7 trillion yen in fiscal 2013. The yen's depreciation by 16.5% from the same month a year earlier also boosted the value of imports, rather than driving up external shipments as Japanese exporters have shifted production overseas during previous periods of yen strength. April 20's data, released by the Ministry of Finance, showed exports rose 4.3% in March from a year earlier, logging a 25th straight month of increase, led by shipments of U.S.-bound cars. That was above economists' median estimate of a 2.6% gain, but below a 6.5% increase in February. Analysts say Japan's trade deficit will persist for the time being as exports weaken. "Chinese consumption lacks strength even after zero-COVID curbs were lifted," said Takeshi Minami, chief economist at Norinchukin Research Institute. "Effects of the fully-fledged monetary tightening in the West since last summer will play out in their economies, causing Japan's exports to turn downward going forward." Click here to read...
Janet Yellen Says Security Comes Before Economy in U.S.-China Relationship
Treasury Secretary Janet Yellen said protecting national security would be the U.S. priority in its relationship with China even if it slows economic growth, taking a hawkish stance as she pushed for more collaboration with Beijing. In a speech April 20, Ms. Yellen laid out the Biden administration’s vision for its economic relationship with China. The U.S. will remain the world’s dominant economic power, Ms. Yellen said, curbing its ties with China in certain areas. But she said the U.S. isn’t trying to prevent China’s economic advancement, adding that many trading and scientific links should remain. “The United States will assert ourselves when our vital interests are at stake. But we do not seek to decouple our economy from China’s,” Ms. Yellen said at the School of Advanced International Studies at Johns Hopkins University. “A full separation of our economies would be disastrous for both countries.” Finding the balance with China between defending national security and encouraging economic growth is a central task for Ms. Yellen and the Biden administration. China is the world’s second largest economy, behind only the U.S., and the globe’s largest exporter. Trade between the two countries reached a record last year.But ties between the two countries have been deteriorating for years. Click here to read...
Trade envoy Tai says U.S. not seeking to ‘decouple’ from China
Washington is not seeking to decouple the American economy from China’s, U.S. Trade Representative Katherine Tai said April 20 while on a visit to Tokyo. Tai, who is on her fourth visit to Japan after being appointed the top U.S. trade envoy, said all members of President Joe Biden’s administration have been “very clear that it is not the intention to decouple” China’s economy. U.S. trade sanctions against China are “narrowly targeted,” she said.Given its huge size and importance, unravelling the ties with China that keep the world economy running is “not a goal or achievable,” Tai said in a news conference at the Foreign Correspondent’s Club of Japan.Chinese officials have often lashed out at the U.S. over trade sanctions and other restrictions on sharing of advanced technology with China, accusing Washington of trying to “contain” China and hinder its path toward greater affluence. Tai said that regular trade work between the U.S. and China was continuing and she was “completely open to engaging with my counterparts in Beijing,” though she has no immediate plans to visit China. At the same time, the United States is seeking to strengthen and expand economic security cooperation with its Asian allies and partners in response to China’s growing assertiveness and its dominance in many manufacturing industries. Click here to read...
U.N.: India to be world’s most populous nation by mid-2023
India is on track to surpass China by mid-2023 as the world’s most populous nation, United Nations data said April 19, raising questions about whether a booming, young Indian population will fuel economic growth for years to come or become a liability. While India's 254 million people between ages 15 and 24 is the largest number in the world, China is struggling with an aging population and stagnant population growth. That has sparked expectations that the demographic changes could pave the way for India to become an economic and global heavyweight. India’s young citizenry could drive the country’s economic growth for years to come, but it might just as easily become a problem if they aren't adequately employed. Economists have cautioned that even as India’s economy is among the fastest-growing as its population rises, joblessness has also swelled. Tech giant Apple, among other companies, hopes to turn India into a potential manufacturing hub as it moves some production out of China, where wages are rising as the working age population shrinks. The U.N. report said India will have about 2.9 million people more than China sometime in the middle of this year. India will have an estimated 1.4286 billion people versus mainland China's 1.4257 billion at that time, according to U.N. projections. Click here to read...
S. Korea returns Japan to its preferential trade partner list
After a four-year hiatus, South Korea has reinstated Japan on its list of preferential trade partners, the country’s Ministry of Trade, Industry and Energy announced April 24. Preferential trade partners are entitled to simplified export control procedures.Japan and South Korea removed each other from their lists of preferential trade partners in 2019. However, South Korea decided to put Japan back on its list without waiting for Japan's move after a meeting between Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol in March, which improved bilateral relations. With the reinstatement of Japan to South Korea’s list of preferential trade partners, the country’s businesses will enjoy benefits in exporting goods to Japan. For example, South Korean authorities will check goods to be exported to Japan in shorter periods. Businesses will also have to submit less paperwork to South Korean authorities to export goods. It is believed the unilateral move is aimed at encouraging Japan to soon reinstate South Korea to its list of preferential trade partners. The two countries’ relevant authorities have been discussing the reciprocal action and will have meetings in Japan on April 24 and 25. Other moves to improve economic relations between the two countries have also been accelerating. Click here to read...
Bangladesh finds way to pay Russia for nuclear plant: with yuan
Bangladesh appears to have found a workaround for stalled payments it owes Russia for a nuclear power plant: settling them in Chinese yuan. With U.S. and European sanctions barring Russia from much of the international banking system, Dhaka has been scrambling for ways to settle repayments worth $110 million for the still under construction Rooppur power plant. But last week, a high-level delegation from Russia and Bangladesh's Ministry of Finance agreed that the bills could be paid in yuan. Uttam Kumar Karmaker, additional secretary of the ministry's Economic Relations Division (ERD), told Nikkei Asia that repaying Moscow in China's currency appeared to be the most viable option under the present circumstances. The sanctions went up in response to Russia's war in Ukraine. "Because of the sanctions against Russian banks," Karmaker said, "we couldn't process payments in U.S. dollars. Russia asked us to settle the payments in their currency, rubles, but that was not feasible. So we both opted for yuan." Rooppur, when completed, will be capable of generating 2,400 megawatts of power. It is to be a crucial element of Bangladesh's plans to generate more energy and reduce its reliance on coal. The new arrangement, which should help ensure the project moves forward, comes amid growing calls from Global South nations and others to move away from the dollar and reduce the dominance of Western-led financial institutions. Click here to read...
Bangladesh holding free trade talks with 11 countries: PM Hasina
Bangladesh is discussing free trade agreements with 11 countries, Prime Minister Sheikh Hasina said in an exclusive interview, as the South Asian country seeks new means to promote exports once preferential tariff exemptions expire in three years. The prime minister spoke with Nikkei Asia at her official residence in Dhaka ahead of a visit to Japan -- her first in four years -- that starts April 25. During the trip, Hasina and Japanese Prime Minister Fumio Kishida are expected to agree to upgrade bilateral ties to a "strategic comprehensive partnership." This comes as Japan ramps up infrastructure investment in the strategically situated country on the shores of the Indian Ocean, countering China's Belt and Road Initiative. Hasina said Bangladesh will be facing a "very different situation" once it completes the transition out of "Least Developed Country" status -- a United Nations classification that exempts the poorest nations from tariffs on exports to developed countries. The nation of around 170 million people has met the criteria for graduating and will lose the privileges in 2026. "Therefore we have taken the initiative" to pursue a range of trade deals, Hasina said. "We want to sign these FTAs so that we can increase our business and trade. At present, with 11 countries, we are discussing." Click here to read...
China shelves monetary easing in test of economy's recovery
China's central bank kept lending rates unchanged on April 20, adding to signs that it has put monetary stimulus on hold while it watches the progress of the nation's consumer-driven economic recovery. The People's Bank of China's one-year loan prime rate, a reference for lending to blue-chip companies, stayed at 3.65%. The five-year rate, a benchmark for mortgage interest rates, remained 4.3%. Both are unchanged for eight months. In a statement after the April 7 quarterly meeting, the PBOC monetary policy committee did not reference strengthening "counter-cyclical" action to curb downward swings in the economy. The panel omitted such language for the first time in a year and a half, suggesting a shift to a neutral stance.China's economy has picked up following the end of zero-COVID pandemic measures. Real gross domestic product in the January-March quarter rose 4.5% on the year, an uptick from the 2.9% growth in the previous quarter. Bank lending is expanding on the economic recovery and increased loans by government-backed financial institutions. New yuan-denominated loans in the quarter were up 27% on the year, the highest growth rate since April-June 2020. The PBOC will focus on widening China's recovery. Growth in the service sector was strong in the January-March quarter, but sales of durable consumer goods such as automobiles were sluggish, as was production. Click here to read...
China's local government debt risk controllable: experts
China's overall government debt ratio remains low compared with other major economies, and the country's local government bond debt risk is controllable, as a strong economic rebound provides support for local government financing vehicles' (LGFVs) debt repayment capability, analysts said. The comment came after a new round of Western media hype over China's alleged local government debt problem while choosing to neglect facts as well as the Chinese central government and provinces' efforts in dissolving local government debt. For example, the New York Times plastered the sensational headline "China's cities are buried in debt," and the Economist claims that "China's cities are on the verge of a debt crisis." Chinese local government debt includes outstanding local government bonds and bank loans, and bonds issued by LGFVs that is typically an infrastructure project investment. The latter is generally called hidden debt. By February, the amount of outstanding local government bonds totaled 36.22 trillion yuan ($5.25 trillion), according to data released by China's Ministry of Finance. "There is no official figure on the total amount of LGFVs' debt. It's estimated to be around 60 trillion yuan, of which about 40 trillion yuan belongs to local government debt," Liu Guohong, director of the Department of Finance and Modern Industries at the China Development Institute in Shenzhen, Guangdong Province, told the Global Times on April 23. Click here to read...
World’s First Carbon Import Tax Approved by EU Lawmakers
The European Union’s parliament approved legislation to tax imports based on the greenhouse gases emitted to make them, clearing the final hurdle before the plan becomes law and enshrines climate regulation in the rules of global trade for the first time. April 18’s vote caps nearly two years of negotiations on the import tax, which aims to push economies around the world to put a price on carbon-dioxide emissions while shielding the EU’s manufacturers from countries that aren’t regulating emissions as strictly, or at all. The tax gives credit to countries that put a price on carbon, allowing importers of goods from those countries to deduct payments made for overseas emissions from the amount owed at the EU’s borders. The tax has raised concerns in the U.S., where companies worry the plan would erect a web of red tape for companies seeking to export to Europe. It has also drawn criticism from China and parts of the developing world, where manufacturers tend to emit more carbon dioxide than their competitors in Europe and rely more on coal-fired electricity. Governments and lawmakers in other countries are already under pressure to follow suit. The U.K. is debating whether to introduce a carbon border tax, while Democrats in Congress proposed legislation to create one. Click here to read...
Saudi Crown Prince Transfers 4% Of Aramco To Sovereign Wealth Fund
Saudi Arabia’s Crown Prince Mohammed bin Salman has transferred a 4% stake in Aramco to an investment company owned by the kingdom’s sovereign wealth fund. According to a statement issued by the crown prince, the transfer will strengthen the sovereign wealth fund’s financial position and its credit rating, Reuter’s report noted that the fund is Saudi Arabia’s main tool of diversifying its economy away from oil. "This is a private transfer between the state and Sanabil, and the company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from the transfer," Aramco said in a stock exchange filing cited by the Associated Press. The AP recalled that last year, another 4% of Aramco was transferred to the Public Investment Fund. Reuters notes that Sanabil, the investment vehicle of the PIF, commits some $3 billion to investments on an annual basis. To date, some 1.73 percent of the company’s stock is traded on the Saudi exchange, the AP notes. The state still owns 90.18% of Saudi Aramco.Aramco reported a net profit of $161.1 billion for 2022, up from $110 billion a year earlier and a record net earnings result for the company, which joins every other big oil producer in the world to benefit from higher oil prices. Click here to read...
Major lithium-producing country to nationalize reserves
Chilean President Gabriel Boric has announced that the nation’s vast lithium industry will be brought under government control in an effort to boost the economy and protect the environment. Future lithium contracts will only be issued as public-private partnerships with state control, Boric explained last week, noting the government would not terminate current contracts, but that companies should be open to state participation before their contracts expire. “This is the best chance we have at transitioning to a sustainable and developed economy. We can't afford to waste it,” the Chilean leader said during a televised address to the nation. Chile holds the world’s largest lithium reserves and is the second largest producer of the metal globally. Lithium-ion batteries are vital for most consumer electronics and electric vehicles (EVs). Moreover, lithium is deemed to be a “pillar for the fossil-fuel free economy” by the United Nations, seen as the primary way to store energy in the clean power grids of the future. The Chilean government’s move comes as a new challenge to global EV manufacturers, who have been scrambling to secure battery materials amid countries’ attempts to protect their natural resources. In neighbouring countries of the Lithium Triangle – Chile, Argentina and Bolivia – governments have been also looking for a greater public sector stake in mining of the metal, with plans to develop their own lithium battery sector. Click here to read...
Strategic
China and Philippines discuss ties as Manila opens bases to U.S.
The foreign ministers of China and the Philippines met on April 22 after bilateral relations were jolted by Manila's move to allow the U.S. access to its military bases near Taiwan, sparking opposition from Beijing. Philippine Foreign Affairs Secretary Enrique Manalo opened a meeting with Chinese counterpart Qin Gang, whose three-day visit to Manila coincides with the largest-ever Philippine-U.S. military drills. The ministers spoke about Philippine President Ferdinand Marcos Jr. and Chinese President Xi Jinping's meeting in Beijing in January, when the leaders agreed to boost ties. The diplomats also discussed their maritime dispute in the South China Sea and other regional issues. "Amid the fluid and turbulent regional situation, a healthy and stable China-Philippines relationship is not only meeting the aspirations of our two peoples but also in line with the common aspirations of regional countries," Qin said. "We need to work together to continue our tradition of friendship ... and properly resolve our differences in the spirit of credibility, consultation and dialogue, and keep our promises to each other so as to bring more benefits to our two countries," Qin added. Manalo noted the "significant developments" that show "not only the vibrancy but the depth and breadth of our relations," adding, "there is, of course, much work that needs to be done." He said the $22.8 billion investment pledges Marcos secured during his China state visit are slowly being realized. Click here to read...
Japan, South Korea hold first security talks in 5 years
Japanese and South Korean officials resumed a bilateral security dialogue on April 17 after a five-year hiatus, reviving a framework that had been paralyzed by the two countries' fraying relations. The two sides exchanged views on the response to North Korea as well as the potential for bilateral cooperation -- or trilateral cooperation with the U.S. -- in the Indo-Pacific region, according to Japan's defence ministry. They committed to communicating closely with each other as part of efforts to strengthen coordination, the ministry said.Japan and South Korea had previously held working-level security consultations 11 times since 1998 between diplomatic and defence officials, discussing defense policy and the security environment in northeast Asia. But those discussions were suspended in 2018, amid disputes over wartime labourers and an incident in which a South Korean warship was alleged to have trained its weapons radar on a Japanese patrol aircraft. At April 17's talks in Seoul, Japan was represented by Takehiro Funakoshi, director-general of the Asian and Oceanian Affairs Bureau at the Ministry of Foreign Affairs, and Atsushi Ando, deputy director-general of the Ministry of Defence's Defense Policy Bureau. South Korea's foreign ministry said both sides found consensus in their assessment of the northeast Asian security environment and agreed to develop security cooperation that is future-oriented. Click here to read...
Kishida attack exposes holes in Japan's VIP protection
An attack on Japanese Prime Minister Fumio Kishida using an explosive device at an election campaign event in western Japan on April 15 has revealed flaws in the methods of protecting dignitaries that should have been corrected following the assassination of former Prime Minister Shinzo Abe last year. Police efforts to keep the suspect away from Kishida appear to have been lax, along with the assessment of risks at the site before the attack. As election season unfolds, experts have raised the question of whether security problems are being promptly dealt with, and how to address them. Ryuji Kimura, the 24-year-old man suspected of carrying out the attack, blended in with the crowd beforehand. Kimura approached the prime minister at a distance of about 10 meters before allegedly lobbing the device. Video footage taken at the scene shows a cylindrical object landing near the prime minister. A loud explosion was heard as Kishida was being escorted away unhurt by police. Procedures for protecting dignitaries, set forth in the National Police Agency's (NPA) internal rules, were thoroughly revamped for the first time in about 30 years in the wake of the deadly attack on Abe in July 2022. The new rules require local police to prepare a security plan before a dignitary visits a site, to allow the agency to perform advance screening. Click here to read...
Stakes in Sudan’s War Include Russian Gold, Nile Dam, Key Shipping Lane
The fate of some of Africa’s most important strategic resources is hanging in the balance as Sudan’s top two generals vie for supremacy, from the waters of the Nile and access to crucial shipping lanes to some of the continent’s largest gold mines. These riches have long caught the eye of outside powers, including Russia, Egypt and the petro-states of the Gulf. Now, some are trying to influence the outcome of the conflict, by offering weapons and other military support to the rival factions, moves that could drag out a lethal confrontation between Sudan’s military and a state-sponsored militia in which hundreds of people have already been killed. Thousands have been wounded and many more have either fled or remain trapped in their homes amid airstrikes and street-level exchanges of gun and artillery fire that continued on the first day of Eid, when Muslims around the world celebrate the end of Ramadan. Russian paramilitary group Wagner has offered heavy weapons to the Rapid Support Forces, the militia run by Lt. Gen. Mohamed HamdanDagalo, The Wall Street Journal has reported. A person close to the general said he has declined the offer for now. Gen. Dagalo’s rival, Lt. Gen. Abdel Fattah al-Burhan, the commander of Sudan’s military and the country’s de facto head of state, meanwhile, has received support from neighboring Egypt, the Journal has also reported. Click here to read...
Libyan Militia and Egypt’s Military Back Opposite Sides in Sudan Conflict
A powerful Libyan militia leader and the Egyptian military have sent military support to rival generals battling for control of neighbouring Sudan, people familiar with the matter say, an illustration of how the fighting threatens to draw in regional powers. KhalifaHaftar, the commander of a faction that controls eastern Libya, dispatched at least one plane to fly military supplies to Sudan’s paramilitary Rapid Support Forces, these people said. Meanwhile, Egypt sent warplanes and pilots to back the Sudanese military, they added. The involvement of outside forces raises the risk of a dangerous escalation in the fighting that could widen the conflict and undermine efforts by the U.S., the United Nations and others to mediate a cease-fire. The U.S. is calling on all actors to renounce violence and return to negotiations, according to a State Department spokesperson, who said Washington is consulting very closely with regional and other partners on the situation in Sudan. The State Department is preparing to impose sanctions on members of both camps as a deterrent, people familiar with the matter said April 19.Sudan’s strategic position on the Red Sea, its access to the Nile River and vast gold reserves have long been coveted by outside powers. Click here to read...
US military helping Japan counter its ‘greatest security challenge’ from China, says top commander
The United States is stepping up its efforts to strengthen Japan’s defences and counter the Chinese military as it becomes increasingly assertive towards Taiwan, according to a senior American commander. The US military has been working with its Japanese counterpart to shore up defences in the country’s southwest islands with joint military exercises targeting the activities of the People’s Liberation Army, Major General Joel Vowell, the commander of the US Army in Japan, said on April 20. “Focus has shifted to the real problem today and tomorrow, which is protecting the sovereignty of Japan, [with the] main effort [being] in the southwest islands,” Vowell said. “We see that, together, very clearly, very soberly as the greatest security challenge.” Japan had shifted its defensive focus from North Korea to China because of the threat the People’s Liberation Army could pose to the islands of southwestern Japan, including the Ryukyu chain, he added.Some exercises by the US military and the Japan Ground Self-Defence Force, including the annual Yama Sakura and Orient Shield drills, focus on scenarios such as an invasion or Japanese sovereignty being compromised. Vowell said Japan was worried that the PLA might block or seize some Japanese islands to stop it from intervening if Taiwan is attacked. Click here to read...
On Basco Island South of Taiwan, U.S. Military Prepares for Conflict With China
On a rocky, windswept island just over 100 miles south of Taiwan, U.S. troops from the Marines and Army ran out of MV-22 Osprey aircraft with weapons, including Javelin and Stinger missile launchers, before setting up camp next to a field of watermelons.On the opposite side of the island, a Himars rocket launcher was brought ashore on April 24 from an amphibious landing craft, a system that could give U.S. forces the ability to target ships up to a few hundred miles away. The drills were part of the largest-ever annual military exercises between the U.S. and the Philippines, which this year for the first time included a focus on the defence of the northern Philippines and preparations for conflict if China moves to take Taiwan through force. The two-day exercises on Bascoisland show the importance of defending a major maritime transit point for both the Chinese and American militaries, known as the Bashi Channel. “Whoever controls the channel has a very strategic chokepoint,” said retired Maj. Gen. Restituto Padilla, a former deputy chief of staff of the Armed Forces of the Philippines. The channel, about 70 miles wide and bordered by the southern tip of Taiwan and the cluster of islands that include Basco, provides the Chinese navy with access to the east coast of Taiwan and the Pacific, including for submarines from their main base at the southern island of Hainan. Click here to read...
Taiwan in talks with Washington about potential weapons stockpiles on or near island, premier confirms
Taipei is in talks with Washington about potentially building weapons stockpiles in the region to give the island access to weapons needed to fight Beijing in the event of a cross-strait conflict, Taiwan confirmed on April 24. “The proposal of regional contingency stockpiles is still in the negotiation process,” Taiwanese Premier Chen Chien-jen said on Monday. Chen confirmed that Taiwan and the US had been in discussions over the potential plan since the US National Defence Authorisation Act (NDAA) 2023 was approved by US Congress late last year. The premier was responding to reporters’ queries about whether the ammunition depot would be built in Taiwan or elsewhere near the island following concerns from local military experts that building a large warehouse on the island would further stoke cross-strait tensions. The NDAA, signed into law by US President Joe Biden on December 23, includes provisions for military aid and cooperation programmes for the island. In addition to a proposal for the two sides to have joint military exercises, strengthen security partnerships and modernise Taiwan’s security capabilities, it also calls for an increase in annual regional contingency stockpiles to include and support Taiwan. “The [US] President may establish a regional contingency stockpile for Taiwan that consists of munitions and other appropriate defence articles” or “inclusion of Taiwan among other allies eligible for defence articles” one of the provisions says. Click here to read...
Top election official in Myanmar assassinated by guerrillas
A top election official in Myanmar was fatally shot in his car in Yangon, the country’s commercial capital, in the latest attack attributed to militants opposed to military rule. Sai Kyaw Thu, deputy director-general of the military-appointed Union Election Commission, was shot multiple times on April 22, according to the military’s information office, media reports and a statement of responsibility from an urban guerrilla group. The information office on April 23 said the attack was carried out by the People’s Defense Force, the loosely organized armed wing of the pro-democracy National Unity Government, an underground group that opposes the military-installed government that was established when the army seized power two years ago. Many opposition forces including local People’s Defense Force groups operate autonomously from the National Unity Government but the military labels them all as “terrorists.” A resistance group calling itself “For The Yangon” said it carried out the attack on Sai Kyaw Thu, a former lieutenant colonel. It declared “Mission: Accomplished” in a Facebook post on April 22 evening that was illustrated with three photos of their target. Sai Kyaw Thu is believed to be the most senior official of the Election Commission to be shot since the army seized power on Feb. 1, 2021, from the elected government of Aung San Suu Kyi. Click here to read...
Erdogan's defence-heavy campaign shows off new 'drone carrier'
Dubbed the world's first armed-drone carrier, Turkey's new multipurpose amphibious assault ship, the TCG Anadolu, debuted to the public in Istanbul this week. The Turkish Naval Forces' new flagship vessel, moored in front of Topkapi Palace, the former residence of the Ottoman sultans, drew a line of enthusiasts that stretched 2 kilometers. That the public showing came one month before Turkey's presidential and parliamentary elections was no coincidence. President Recep Tayyip Erdogan is more eager to burnish his accomplishments in national security than discuss his roller-coaster handling of the economy. Originally a landing helicopter dock, the Anadolu was built in Turkey based on a Spanish design. According to a navy official, the warship has a complement of 1,200 personnel and can transfer one amphibious battalion of approximately 700 marines during peacetime. During wartime that can be increased to 5,000. According to the state-owned Anadolu Agency, the 231-meter ship can stay at sea for 90 days without replenishment and can travel nonstop to Japan or Australia. The flexible design allows the vessel to carry a variety of cargo, including up to 13 tanks and around 41 armed drones. Space has been allocated on the ship for a drone command and control center. Parts and components made in Turkey account for around 70% of the ship, including the combat management system, an official told Nikkei Asia. Click here to read...
Italy ponders exit from China’s ‘Belt and Road’ – Bloomberg
Italy may pull out of Beijing’s ‘Belt and Road’ infrastructure project amid mounting tensions between the world’s two superpowers, the US and China, Bloomberg reported on April 22, citing sources. Italy is the only Group of Seven (G7) country that has a memorandum of understanding (MOU) on the initiative with Beijing, set to expire next year. According to the report, Italian Prime Minister Giorgia Meloni wanted to make an announcement on Italy’s participation in the ‘Belt and Road’ by May’s G7 summit, but is still undecided as to whether the MOU should be scrapped or renewed. Sources claim opinions on the future of the deal are split within Meloni’s administration, with her Brothers of Italy party favouring an exit, while others are urging to stay put. Prior to being elected, pro-US Meloni called the agreement with China a “big mistake,” but lately her rhetoric on the ‘Belt and Road’ has been more cautious. The MOU was initially signed in 2019 and will be automatically extended in March 2024 unless Meloni decides to opt out. While the deal itself has not led to deeper cooperation between Italy and China, analysts warn that scrapping it would lead to economic and diplomatic repercussions and a souring of Italian-Chinese relations. The two countries have strong economic ties. Click here to read...
China gains ground over US in Southeast Asia influence since 2018: report
China has extended its influence in Southeast Asia over the United States in the past five years, according to a new measure by an Australian think tank.The US has continued to lose influence to China across four power measures – economic relationships, defence networks, diplomatic influence and cultural influence – since 2018, the benchmark year in the “Asia Power Snapshot: China and the United States in Southeast Asia” report by the Lowy Institute. In 2018, China led the US 52–48 for influence in the region. In 2022, this lead increased to 54–46. Such a measure of power was significant as patterns of influence formed part of the broad context in which Southeast Asian countries made their strategic choices, the report said. Overall, China’s strength as a power in Southeast Asia lay in its diplomatic and economic relations, whereas the US was better in defence networks and cultural influences, it said. China’s economic strength was well ahead. The US’ economic relationships were weaker than those of China in every country of Southeast Asia, the report said. The US’ biggest loss in influence since 2018 was in Malaysia, by seven points, followed by Brunei and Indonesia at five points each. Beijing’s influence remained the strongest in Cambodia, Laos and Myanmar where it retained a big lead over the US. Click here to read...
‘Work underway’ to restore Qatar-UAE ties: Doha
Qatar and the United Arab Emirates (UAE) will restore diplomatic ties and reopen embassies soon, more than two years since the UAE, Saudi Arabia, Bahrain and Egypt lifted a blockade on Qatar, ending a rift in diplomatic relations that began in 2017, according to Qatar’s International Media Office and media reports. The office told Al Jazeera in a statement: “Work is underway between the Qatari and Emirati teams to reopen the respective embassies as soon as possible, exact date to be announced upon the finalization of the process.” The Reuters news agency on April 18 quoted a UAE official as saying that “the activation of diplomatic ties, which will include the reopening of embassies, is under process”, while an unnamed Gulf official told the agency that the embassies are expected to reopen by mid-June. Saudi Arabia and Egypt became the first of the formerly blockading countries to reappoint ambassadors to Qatar in 2021, while the UAE had yet to make the move. Bahrain announced last week that it would restore diplomatic relations. The Gulf official reportedly said that Qatari and Emirati officials had agreed to restore diplomatic ties late last month and that Abu Dhabi has informed Doha who its envoy would be, but that Qatar has yet to do the same.The Qatari Foreign Ministry has yet to comment on the issue. Click here to read...
Lebanon’s political impasse continues despite Iran-Saudi deal
As the recent China-brokered Saudi-Iran deal brought a glimmer of hope to the Middle East, it cast a shadow of doubt on Lebanon, where a months-long presidential vacuum has deepened the country’s institutional paralysis and worsened an economic crisis that has festered for years. The rivalry between Iran and Saudi Arabia has had a detrimental effect on the stability of Lebanon, a small Mediterranean country whose ruling elite has long been aligned with foreign powers to maintain influence and economic stability. An economic crisis that hit in 2019 saw the Lebanese pound lose more than 90 percent of its value, and the ruling class – which has been widely blamed for the financial collapse – failed to check the currency’s free fall. Meanwhile, the country has had no president and only a caretaker government since last year. The Saudi-Iran agreement, which is set to lead to a full restoration of diplomatic ties between the two countries following a seven-year rupture, has the potential to remake the regional order. Saudi Arabia has already pushed for Iran-ally Syria’s reintegration into the Arab League, more than a decade after its suspension over President Bashar al-Assad’s brutal crackdown on pro-democracy protests. In Yemen, the deal appeared to have helped broker the release of hundreds of Iran-backed Houthi prisoners in Saudi Arabia, paving a potential path towards peace in the conflict-ridden country. Click here to read...
Azerbaijan sets up first checkpoint on only land route to Armenia
Azerbaijan on April 23 set up a checkpoint on the only land link between Armenia and the Nagorno-Karabakh enclave, sparking an angry response from its arch-rival. The move fuels tensions between the ex-Soviet Caucasus nations that fought two wars over Azerbaijan’s Armenian-majority region of Nagorno-Karabakh. “The units of the Azerbaijani Border Service established a border checkpoint on the sovereign territory of Azerbaijan, at the entrance of the Lachin-Khankendi road,” the state border service said. Azerbaijan and Armenia went to war in 2020 and in the 1990s over Nagorno-Karabakh.Under the Russia-brokered ceasefire that ended the 2020 conflict, Azerbaijan is required to guarantee safe passage on the Lachin corridor, which is patrolled by Russian peacekeepers. Azerbaijan, however, said it set up the checkpoint at 12pm local time on April 23 “to prevent the illegal transportation of manpower, weapons, mines.” It said the checkpoint “shall be implemented in interaction with the Russian peacekeeping force.” Washington said it was “deeply concerned that Azerbaijan’s establishment of a checkpoint on the Lachin corridor undermines efforts to establish confidence in the peace process”. “We reiterate that there should be free and open movement of people and commerce on the Lachin corridor and call on the parties to resume peace talks and refrain from provocations and hostile actions along the border,” the US State Department said in a statement. Click here to read...
Health
Covid Emerged as Chinese Lab Faced Biosafety Issues, Senate Republican Study Finds
A Chinese laboratory conducting advanced coronavirus research faced a series of biosafety problems in November 2019 that drew the attention of top Beijing officials and coincided with the Covid pandemic’s emergence, according to a new report being released by Senate Republicans on the pandemic’s origins. The report, released April 17 by a Republican member of the Senate Health Committee, a final version of which was viewed by The Wall Street Journal, charts a confluence of unexplained events in that month and concludes the pandemic more likely began from a lab accident than naturally, via an animal infecting humans. Based on the work of a team of specialists, the 300-page document draws on open source reporting, including medical studies, scientific journals and numerous Chinese government documents. It estimates that the SARS-CoV-2 virus, which causes Covid, first emerged between Oct. 28 and November 10, 2019—weeks earlier than the Chinese government’s timeline and close to that of an earlier assessment from the U.S. intelligence chief. A Chinese researcher affiliated with the People’s Liberation Army apparently began work on a vaccine against SARS-CoV-2 in November 2019, the report says, citing the time needed for research that went into filings for a patent in February 2020. It notes that November 2019 is “before the known outbreak of the Covid-19 pandemic” and suggests some in China had earlier knowledge of the virus. Click here to read...
