Global Developments and Analysis: Weekly Monitor, 06 February- 12 February, 2023
Prerna Gandhi, Associate Fellow, VIF
Economic
U.S.-China trade hit record in 2022 despite tensions

Trade between the U.S. and China set a record last year, official figures released Feb 07 show, despite bilateral tensions running high. Imports and exports of goods between the countries hit $690.6 billion, a U.S. Bureau of Economic Analysis report shows. The U.S. imported more toys and other consumer products, with China increasing imports of soybeans and other foods. The robust figures run counter to talk that the world's two largest economies are on track to decouple. Exports to China increased by $2.4 billion, to $153.8 billion, while imports from China rose $31.8 billion to reach $536.8 billion, underpinned by strong U.S. consumer spending in the first half. The previous high for imports and exports between the two countries was $659 billion in 2018. "For U.S. importers, the benefit of buying cheap Chinese products was compelling, even with the sanction tariffs," said Kensuke Abe of trading company Marubeni's Washington office. Tariffs imposed on Chinese goods such as toys and plastic products -- worth $370 billion -- during the Trump administration mostly remain. The Biden administration weighed cutting them as part of dealing with the acute inflation, but the momentum for the move faded after Sino-American tensions rose, partly due to then-House Speaker Nancy Pelosi's visit to Taiwan last summer. Click here to read...

Biden SOTU: Oil Demand Will Last For At Least A Decade

In a rather surprising comment during the State of the Union Speech Feb 07 night, U.S. President Joe Biden admitted that the world would still need oil and gas “for at least another decade,” adding “and beyond that.” The acknowledgment surprised some followers and even elicited boos and hearty laughs from some in the crowd, although most in the oil and gas industry have long maintained that they will be needed for many years to come. Others in the oil and gas industry could consider his acknowledgment as going not far enough, considering the President’s chastisement of said industry for not ramping up investments as the world rebounded from Covid. Instead, the oil industry has been hard at work spending billions in share buybacks and paying out dividends, and President Biden has not wasted the opportunity to point out the industry’s war profiteering. In his speech last night, President Biden called for a quadrupling of taxes on corporate stock buybacks, which the President says will encourage more industry investments in the long term. But “long term” to the industry likely goes significantly beyond the decade to which Biden is referring, especially considering he is asking the industry to sink billions and billions of dollars into future development—many of which take years to come to fruition. Click here to read...

West European energy subsidies approaching $1 trillion – think tank

European nations have splashed out nearly €800 billion ($855 billion) on support measures as the region continues to reel from climbing energy costs, researchers at Brussels-based think tank Bruegel said on Feb 13. The analysts have urged governments to be more targeted in their spending aimed at subsidizing bills for households and businesses, in the face of wild swings in prices for gas and electricity over the past year. EU member states have so far allocated €681 billion to energy spending since September 2021, according to the researchers at Bruegel. Meanwhile, the UK and Norway have reportedly earmarked the equivalent of €103 billion and €8.1 billon, respectively. The total of €792 billion marks a nearly €86 billion increase in spending since Bruegel's last assessment released in November. The think tank attributes the boost to the region’s continued need to turn to more expensive supplies through winter after most EU states opted to stop importing gas from Russia. Germany reportedly topped the spending chart, allocating some €270 billion, while the UK, Italy and France – the next highest – each spent almost €150 billion. Most EU states spent a fraction of that. Luxembourg, Denmark and Germany were the biggest spenders on a per capita basis. The update on energy spending comes as EU member states are debating proposals to ease state aid rules further for green technology projects, as the region seeks to compete with subsidies in the US and China. Click here to read...

Oil prices jump after Russia announces production cuts

Oil prices jumped more than 2% on Feb 10, heading for weekly gains, as Moscow announced plans to reduce crude production next month in response to Western price caps. Brent crude futures were trading 2% higher to $86.21 a barrel while US West Texas Intermediate (WTI) futures were up 2% at $79.63. Both contracts are on course for weekly gains of around 10%. Earlier on Feb 10, Russian Deputy Prime Minister Aleksandr Novak announced that Moscow will voluntarily reduce oil production in March by 500,000 barrels per day as it halts sales to buyers complying with a Western-imposed price cap. Novak said the move should help restore market relations shattered by the price ceiling, which he branded “illegal.” The EU and the G7 nations introduced a price cap on Russian refined oil products on February 5, setting a limit of $100 per barrel for diesel, jet fuel and gasoline coming from Russia, and a $45-per-barrel cap for other oil products that trade below the crude price, such as fuel oil used in industry. Fuel exports priced over these limits will be barred from insurance and shipping services from companies located in Western countries. The caps follow a previously introduced $60-per-barrel price ceiling on Russian crude oil. Click here to read...

Russia finds alternative to Siemens turbines

Russia has begun producing Iranian-designed parts to replace Siemens turbines in its hydropower plants after sanctions impeded the servicing of German-made equipment last year. MGT-70 gas turbine units are copies of Siemens hardware, developed by the Islamic Republic. The country attained a license for their assembly and localized production before a recent wave of anti-Iran sanctions took effect. Currently, Russia can domestically produce small and medium turbines, but devices with a large capacity of between 100MW and 120MW were produced at a Siemens assembly plant in Russia. The Iranian turbines could potentially replace equipment produced by the German industrial giant, which halted operations in Russia last year due to sanctions. These measures have hit industry ties between Russia and its Western equipment suppliers. Last year, state energy giant Gazprom had to gradually reduce gas deliveries to Europe via the Nord Stream 1 pipeline due to technical problems related to servicing turbines. Manufactured by Siemens, the turbines needed regular maintenance at the company’s plant in Montreal, Canada, where they became stranded due to Ottawa’s sanctions on Russia’s energy industry. After a request from Germany, which feared a shortage of gas if the pipeline were shut down, Canada exempted the turbines from restrictions. Click here to read...

China Makes Big Moves To Secure Iraqi Oil

Whilst the U.S. and its allies appear to be taking a subtle approach to advancing their remaining interests in Iraq, as hinted at by the Qatar’s talks to buy a 30 percent stake in TotalEnergies’ US$27 billion project package, China seems to be taking a more direct route to what it wants. Last week saw six oil concessions awarded by Baghdad to three companies from China and the UAE, as part of the fifth licensing round, according to Iraq’s latest Oil Minister, Hayan Abdul Ghani. In addition, according to a senior source who works closely with Iran’s Petroleum Ministry spoken to exclusively by OilPrice.com in the past few days, PetroChina is set to take over as the sole lead operator of Iraq’s supergiant West Qurna 1 oil field as the U.S.’s ExxonMobil is finally close to being able to sell its 32.7 percent stake in the site. Looking at the second part of this turn of events in China’s favour first, West Qurna 1, located around 65 kilometres from southern Iraq’s principal oil and export hub of Basra, holds a considerable portion of the estimated 43 billion barrels of recoverable reserves held in the entire supergiant West Qurna oil reservoir that comprises the West Qurna 1 and West Qurna 2 oil fields. Click here to read...

Indonesia promises move to clean energy, but challenges loom

In Indonesia’s region of East Kalimantan, the country’s dependence on coal is on full display. Driving on the region’s toll road, passersby can watch excavators digging coal from shallow pits as trucks filled with the carbon-rich rocks rush by. Under a bridge in Samarinda, the region’s capital, hundreds of mammoth, jet-black mountains of coal sit in barges being pulled along the waterway, headed to plants across Indonesia or other countries. They’re sights that Indonesia has pledged to phase out--or at least drastically reduce--by agreeing to some five schemes with international stakeholders, including the largest-signed $20 billion Just Energy Transition Partnership deal. While the deals aim to turn one of the largest coal-producing countries toward its vast greener energy sources, experts warn that financial, policy, infrastructure and other challenges need to be overcome. Indonesia’s energy transition is “very unique” because of high economic growth, geography, population centers and clean energy potential, said David Elzinga, a principal energy specialist at the Asian Development Bank. Despite Indonesia’s energy potential from solar, hydropower, geothermal, wind and other sources, only some 12% of them are tapped, according to the International Renewable Energy Agency. Nearly all energy demand is met by fossil fuels, with 60% coming from highly-polluting coal. Click here to read...

Australia trade minister to travel to Beijing to meet counterpart

Australian Trade Minister Don Farrell said on Feb 06 he had agreed to an in-person meeting with Chinese counterpart Wang Wentao in Beijing in the near future, in the latest sign that relations between the two countries are thawing. "Our meeting represents another important step in the stabilization of Australia's relations with China," said Farrell following a videoconference meeting, the first between the trade ministers of the two countries since 2019. "Our discussion covered a range of trade and investment issues, including the need for resumption of unimpeded trade for Australian exporters so that Chinese consumers can continue to benefit from high-quality Australian products." The two ministers agreed to enhance dialogue at all levels, including between officials, as a pathway toward the timely and full resumption of trade, Farrell's office said in a statement. Both parties agreed to look for further ways to cooperate, including on climate change and encouraging business delegations, the statement added. The meet comes weeks after Chinese officials relaxed import bans on Australian coal as both countries work to improve diplomatic relations after more than two years of Chinese trade sanctions that have frozen trade in barley, coal, wine and other goods and services. Click here to read...

Kazuo Ueda, Tapped as Bank of Japan Chief, Is Seen as Pragmatic Insider

Kazuo Ueda, who was picked Feb 14 to lead Japan’s central bank, is a pragmatist steeped in the institution’s culture who is likely to seek balance among competing camps, say people who know him. In his writings, Mr. Ueda, 71, tends to discuss scenarios and risks without advocating any position, sometimes irking those who want more aggressive action. Mr. Ueda has said he thinks Japan’s weak economy requires monetary stimulus, but has also sympathized with bankers who complain that low interest rates are hitting their profits. He shows familiarity with theories that suggest Japan’s high government debt isn’t a problem—and perhaps should go even higher—but he also nods to fiscal hawks who fear the debt could spiral out of control. “He thinks through various ideas flexibly and fairly,” said Koichi Hamada, an emeritus professor of economics at Yale University who has known Mr. Ueda since the 1970s when they worked together on a research paper. “He is the right person for the job because he is able to keep balance and manage policy calmly when views are split.” Some years ago, Mr. Hamada, an advocate of strong monetary stimulus, approached Mr. Ueda for a book of interviews Mr. Hamada was conducting with leading economists. As Mr. Hamada tells the story, Mr. Ueda said no, explaining that he found his former colleague too doctrinaire. A representative of Kyoritsu Women’s University, where Mr. Ueda teaches, said he wasn’t available for comment. Click here to read...

Europe Sets Rules for Producing Green Hydrogen

The European Union issued strict regulations for what qualifies as renewable hydrogen under its clean-energy transition plan, shaping how companies are expected to deploy billions of euros of investments in hydrogen factories in the coming years. Governments around the world are looking to hydrogen to help replace fossil fuels in industrial processes and electricity generation. Current supplies of hydrogen are largely produced from cracking open molecules of natural gas. The U.S., Europe and other countries are planning to invest hundreds of billions of dollars on factories that use electricity to power machines called electrolyzers, which produce hydrogen by splitting open molecules of water. The question is how much of that electricity should come from renewable sources for the hydrogen to be considered renewable. In Europe, the answer will determine whether hydrogen producers can qualify for financial incentives and whether their product can be used to meet the bloc’s renewable-energy targets. The U.S. Treasury Department is drafting rules that will determine which producers can qualify for billions of dollars in tax credits for green hydrogen under the Inflation Reduction Act. “The commission’s had to achieve a very difficult balancing exercise between ensuring that the production of renewable hydrogen doesn’t result in additional fossil fuel generation — which could be considered to be greenwashing” and allowing the market to grow, said Christopher Jones, an energy and antitrust expert at law firm Baker McKenzie. Click here to read...

North Korea stole record amount of crypto in 2022: U.N. report

North Korea stole a record amount of cryptocurrency assets in 2022, according to a draft United Nations report obtained by Nikkei, another sign of how the isolated country is circumventing international sanctions to raise funds. The report, compiled by a U.N. Security Council panel, details that North Korean actors used increasingly sophisticated techniques to gain access to digital networks involved in cyber finance and steal information of potential value, including for weapons programs. This led to a higher value of cryptocurrency assets being stolen by North Korea in 2022 than in any previous year, according to the report. The panel also investigated the alleged export of North Korean military communications equipment and began an investigation into reports of ammunition exports. In the report, the panel accuses North Korea of continuing the production of nuclear fissile materials. It also says North Korea carried out tests of at least 73 ballistic missiles and missiles combining ballistic and guidance technologies, including eight intercontinental ballistic missiles. The hermit nation "openly describes many of the missile launches as 'ballistic,' in explicit violation of the United Nations sanctions regime," the report said. The panel also noted that illicit ship-to-ship imports of cargo in North Korean territorial waters continue and that prohibited ship-to-ship exports of North Korean coal persist. Click here to read...

East Timor faces economic challenges ahead of joining ASEAN

East Timor's accession to the Association of Southeast Asian Nations, or ASEAN, has received considerable attention in diplomatic circles since November, when leaders from the bloc agreed "in principle" to admit the island state as its 11th member. But experts caution that the tiny country of 1.3 million people still has much to do to meet the expectations of existing members. "Even as East Timor was admitted to join ASEAN, I think it will be not easy, and will take time," one diplomat from outside the bloc told Nikkei Asia earlier this month. ASEAN leaders at the November summit agreed to pave the way for Timor-Leste, as East Timor is officially known, to join the bloc and said a road map for full membership will be drawn up at this year's summit. ASEAN foreign ministers met Saturday, with the envoy from East Timor invited for the first time. At the meeting, ministers from the current members adopted guidelines regarding East Timor's observer status in the group. Despite the progress, some experts say East Timor has a long way to go before it becomes a full member. "Timor-Leste is still [in] observer status for now, but if Indonesia does manage to help get Timor-Leste into ASEAN, it faces several challenges," said Maria Ortuoste, a professor of political science at California State University East Bay. Indonesia is the rotating chair of ASEAN this year. Click here to read...

Japan worries it could miss out on leading project to develop new jets

Government officials are concerned they will lose out on playing a leadership role in developing the next-generation fighter jet for the Air Self-Defense Force. Japan reached an agreement in December with Britain and Italy to jointly develop a new fighter jet. The three companies involved in the endeavor--Mitsubishi Heavy Industries Ltd., Britain’s BAE Systems Plc and Leonardo SpA of Italy--will establish a joint venture for the development of the aircraft to replace the F-2, according to sources. The head office of the new company will be in Britain, mainly because the corporate tax rate there is low. British companies also have a proven record of developing and exporting fighter jets. But with the head office in Britain, Japan will not likely play a leadership role in the joint development project. That had been considered a key factor when government officials were considering which nation to work with in the joint development project. Originally, the United States had been the leading candidate because of its long history of being an ally to Japan. Some officials had suggested partnering with Britain, however, would make it easier for Japan to play a leadership role. That optimism now appears to have been premature. Click here to read...

China’s South America free-trade deal to have ‘clear impact’, but may irk US by seeking opportunities in its ‘backyard’

A proposed free-trade agreement between China and a group of South American nations, which includes Argentina and Brazil, will benefit all sides economically, but will further increase competition between Washington and Beijing in the so-called backyard of the United States, according to analysts. New leftist Brazilian President Luiz Inacio Lula da Silva said that the proposed deal between China and the Southern Common Market (Mercosur), which also includes Uruguay and Paraguay as full members, will modernise and open up the South American trade bloc to other regions. A possible agreement can be discussed after a similar free-trade agreement (FTA) with the European Union is finalised, added Lula, who returned for a third term as president in January. “The unilateralism and hegemonism of the US contradict with the multilateralism and an open regionalism of Mercosur, including those in Latin America and Caribbean,” said Xie Wenze, a professor with the Chinese Academy of Social Sciences’ Institute of Latin American Studies. Lula’s election had already renewed hopes of the deal with the European Union 20 years after negotiations started, and reports suggest it could be ratified this year. China is Brazil and Uruguay’s No 1 trading partner, as well as Argentina’s No 2, but Beijing has not yet established an official relationship with Paraguay due to its stance on Taiwan. Click here to read...

China stock rally stutters as Goldman Sachs report shows reopening exuberance fading amid spending, property worries

Sluggish consumer spending and a property market that remains in the doldrums are making money managers who invest in Chinese stocks cautious about the strength and speed of China’s recovery, according to Goldman Sachs. While there is a consensus view that China’s economy will bounce back this year after the removal of all Covid-19 restrictions, investors are not convinced about the timing or magnitude of the recovery, the US investment bank said in a report based on meetings with both onshore and offshore fund managers at asset-management firms and insurance companies. Local traders expect a slow recovery in household consumption this year because of the weakening home market and fallout from three years of pandemic curbs, economists led by Maggie Wei and Hui Shan wrote in the report, released on Feb 10. Efforts to arrest the downturn of the real-estate sector have not translated into a material industry-wide recovery so far, they said. “China’s own experiences suggest property down cycles have always been associated with weak household consumption,” the report said. “Local investors therefore question, without the stabilisation or rebound of the property sector, whether relaxation of Covid controls alone could generate high single-digit year-over-year growth in household consumption.” Click here to read...

Strategic
Xi, Biden stake claims in China-US rivalry by touting opposing political systems

In two pivotal speeches within a day, Chinese President Xi Jinping and his US counterpart Joe Biden sought to seize higher ground in the China-US rivalry as tensions between the world’s two most powerful nations rise on various fronts, from ideology to geopolitics. In a rare, explicit display of celebration of the Chinese governance model against Western systems, Xi argued in a speech on Feb 07 that China had debunked “the myth that modernisation means Westernisation” and hailed the Chinese model as one for developing countries to follow. Addressing top Communist Party cadres and government officials at a study session to follow up on key decisions made at the 20th party congress in October, Xi said China’s path “showed a new modernisation model, different from the West”, which he called a “brand new form of human civilisation”. “We have completed in decades the industrialisation process that had taken developed Western countries hundreds of years,” he said in the speech, a month before an annual legislative session unveils a new line-up of top government jobs for the next five years. Hours later, Biden mentioned China five times in his State of the Union address, calling for solidarity among Democrats and Republicans. Click here to read...

China welcomes Yellen's visit, helpful for thawing fraught relations

China welcomes US Treasury Secretary Janet Yellen to visit China, Shu Jueting, spokesperson of the Ministry of Commerce (MOFCOM), said at a regular press conference on Feb 09. Experts said the comment sends a clear message about China's open stance for dialogue with the US despite their disputes. Yellen said on Feb 08 that she wants to visit China, though she has no specific plans at the current stage, Bloomberg reported on Feb 09. When asked about such a visit by the media, Yellen said: "I do think improved communication is important...I still hope to be able to visit China and meet with economic counterparts, but I don't have any more details to offer." Following a meeting with Chinese Vice Premier Liu He on January 18 in Switzerland, the US Treasury announced Yellen's plans to travel to China and welcomed her counterparts to the US in February. In responding to media questions about Yellen's remarks, the MOFCOM spokesperson said that it is important for both countries to maintain normal communication, while noting Liu and Yellen's half-day constructive meeting in Zurich. Now that China-US relations are affected by the balloon case, Yellen's statement about her willingness to visit China is sending a relatively positive signal, Chinese experts said. Click here to read...

Russia intensifies winter assault as Ukraine braces for major offensive

Russian forces ramped up a winter assault in eastern Ukraine, bringing tens of thousands of freshly mobilised troops to the battlefield, while Kyiv expected Moscow to broaden its offensive as towns in the northeast and south came under fire. Ukraine’s military said on Feb 07 that 1,030 Russian troops were killed over 24 hours, the highest daily toll of the war. The figure could not be independently verified, and Russia has also claimed to have killed large numbers of Ukrainian troops in recent weeks. For its part, Russia said it had inflicted 6,500 Ukrainian casualties in the month of January. Ukraine national security chief Oleksiy Danilov said in an interview on Feb 07 that the Kremlin is expected to target the northeastern Kharkiv or southern Zaporizhzhia regions in a new thrust. “Attempts at an offensive in either the Kharkiv or Zaporizhzhia direction will of course be made,” he told Reuters in Kyiv. “How successful they’ll be will depend on us.” The Ukraine Armed Forces said on Feb 07 evening that more than 30 towns and villages in Kharkiv and 20 communities in Zaporizhzhia came under fire. Click here to read...

Russia comments on prospects of peace treaty with Japan

Any plans to strike a peace treaty with Japan are off the table for Moscow, a Russian Foreign Ministry spokesperson has said, citing Tokyo's hostility towards Russia. “As for the subject of a peace treaty, as you know, it has been closed for us,” Maria Zakharova said during a regular media briefing on Feb 10. The spokeswoman noted that the Foreign Ministry clearly articulated its position on the issue last March, stating that the “unfriendly” stance of Japan makes any further negotiations impossible. The remarks came shortly after Japanese Prime Minister Fumio Kishida vowed to prioritize reopening talks with Moscow on the peace treaty, and resolving the territorial dispute over the South Kuril Islands, referred to by Tokyo as the “northern territories.” “The fact that 77 years after the end of the war, the issue of the Northern Territories has not been resolved and there is no peace treaty between Japan and Russia is extremely regrettable... The Japanese government is committed to resolving the territorial issue and concluding a peace treaty,” Kishida said on Feb 07 during a ceremony to commemorate the day of the “northern territories.” During the event, Japan referred to the four southern islands of the Kuril chain as “illegally occupied” by Moscow for the first time in five years. Click here to read...

China and visiting Kuomintang official affirm working to keep peace

A top Chinese official told a senior Taiwan opposition figure on Feb 10 that both China's Communist Party and Taiwan's Kuomintang (KMT) should oppose Taiwan independence and interference by external forces. Wang Huning, the Communist Party's fourth-ranked leader, told Andrew Hsia, Taiwan's opposition KMT's deputy chairman, during a meeting in Beijing that both parties should maintain peace in the Taiwan Strait, Chinese state television reported. China claims democratically ruled Taiwan as its own and has stepped up military and diplomatic pressure to get the island to accept Chinese sovereignty. Taiwan's government says only the Taiwanese people can decide their future. The KMT said Hsia told Wang that no matter how big their differences are, as long as the two sides can continue dialogue and regard maintaining peace in the Taiwan Strait as an important goal, "there are no difficulties that cannot be resolved." "Maintaining the peace and stability of cross-strait relations and promoting the well-being of the people of Taiwan and the people on both sides of the strait have always been the KMT's highest-priority policy goal," the party paraphrased Hsia as saying. Taiwan's ruling Democratic Progressive Party has seized on Hsia's China trip to attack the KMT for being too close to Beijing and wanting to sell out Taiwan, and has criticized Hsia for going to "pay court to the communists." Click here to read...

Abe calls Trump 'unconventional,' Xi 'realist' in posthumous memoir

Former U.S. President Donald Trump was "unconventional through and through," while Chinese President Xi Jinping was a "fierce realist." This is how former Japanese Prime Minister Shinzo Abe describes the two leaders in a posthumous memoir that goes on sale in Japan on Feb 08. Abe provided an in-depth look into his interactions with global leaders in the book, which is a collection of 18 interviews he gave after stepping down in October 2020. Abe, who was assassinated while campaigning in Nara Prefecture in July last year, is the longest-serving Japanese prime minister, with his eight years and eight months in office. The ex-leader framed his efforts to build rapport with Trump, including through rounds of golf, as a matter of protecting Japanese interests. "Japan as a whole would have been in a difficult situation if it became a target" of Trump's criticism, Abe said of his approach. "It was important to create an environment where we could talk." Trump did not see himself as the leader of the Western world, Abe said. "He saw things from a bilateral lens, like treating U.S.-China ties as a matter of the trade balance or looking at U.S.-Russia relations solely as a matter of national security," Abe said. Abe said he repeatedly urged Trump "to act as the leader of the free world." On former U.S. President Barack Obama, Abe said: "We only spoke about work. He is a type of person who is difficult to forge friendship with." Click here to read...

U.S. renews warning it’ll defend Philippines after China spat

The United States renewed a warning that it would defend its treaty ally if Filipino forces come under an armed attack in the disputed South China Sea after a Chinese coast guard ship allegedly hit a Philippine patrol vessel with military-grade laser that temporarily blinded some of its crew. U.S. State Department spokesperson Ned Price said China’s “dangerous operational behavior directly threatens regional peace and stability, infringes upon freedom of navigation in the South China Sea as guaranteed under international law and undermines the rules-based international order." “The United States stands with our Philippine allies,” Price said in a statement after the Philippines on Feb 13 accused a Chinese coast guard ship of using laser on Feb. 6 to block the Philippine patrol vessel BRP Malapascua from approaching the Second Thomas Shoal, a submerged reef that has been occupied by Filipino forces. “An armed attack on Philippine armed forces, public vessels, or aircraft, including those of the coast guard in the South China Sea, would invoke U.S. mutual defense commitments” under a 1951 treaty, he said. The treaty obligates the allies to help defend one another in case of an external attack. Click here to read...

Japan eyes Philippines as first recipient of security grant

Japan is looking to provide a security cooperation grant to the Philippines, its first such allotment under a new program designed to bolster the defensive capabilities of regional allies. Japanese Prime Minister Fumio Kishida will meet with Philippine President Ferdinand Marcos Jr. in Tokyo on Feb 09, with both sides working to include the grant in the summit's outcome document. In key security policy documents updated in December, Japan outlined plans to create the new program as a way to strengthen the armed forces of partner countries. The government's draft budget for fiscal 2023 included 2 billion yen ($15.2 million) for the initiative. The Philippines would be the first recipient of the grants, which could take the form of funding and equipment. Further details will be ironed out once the Japanese parliament passes the budget. The new program is separate from Japan's development assistance grants, which are limited to nonmilitary purposes. In remarks delivered on Feb 08 before leaving for Japan, Marcos expressed interest in pursuing wide-ranging cooperation with Japan, including on the national security and economic fronts. Click here to read...

U.S. jets down 4 objects in 8 days, unprecedented in peacetime

A U.S. fighter jet shot down an “unidentified object” over Lake Huron on Feb 12 on orders from President Joe Biden. It was the fourth such downing in eight days and the latest military strike in an extraordinary chain of events over U.S. airspace that Pentagon officials believe has no peacetime precedent. Part of the reason for the repeated shootdowns is a “heightened alert” following a spy balloon from China that emerged over U.S. airspace in late January, Gen. Glen VanHerck, head of NORAD and U.S. Northern Command, said in a briefing with reporters. Since then, fighter jets last week also shot down objects over Canada and Alaska. Pentagon officials said they posed no security threats, but so little was known about them that Pentagon officials were ruling nothing out — not even UFOs. “We have been more closely scrutinizing our airspace at these altitudes, including enhancing our radar, which may at least partly explain the increase,” said Melissa Dalton, assistant defense secretary for homeland defense. U.S. authorities have made clear that they constantly monitor for unknown radar blips, and it is not unusual to shut down airspace as a precaution to evaluate them. But the unusually assertive response was raising questions about whether such use of force was warranted, particularly as administration officials said the objects were not of great national security concern and the downings were just out of caution. Click here to read...

China Has More ICBM Launchers Than U.S., American Military Reports

The U.S. military has notified Congress that China now has more land-based intercontinental-range missile launchers than the U.S., fueling the debate about how Washington should respond to Beijing’s nuclear buildup. “The number of land-based fixed and mobile ICBM launchers in China exceeds the number of ICBM launchers in the United States,” the commander of the U.S. Strategic Command, which oversees nuclear forces, wrote the Senate’s and House’s Armed Services Committees on Jan. 26. The notification comes as the U.S. is facing the challenge of deterring Russia’s substantial nuclear forces as well as China’s growing nuclear arsenal. U.S. lawmakers are involved in an increasingly heated debate about how best to counter Beijing, including the Pentagon’s response to the Chinese surveillance balloon that recently traversed the U.S. and hovered over Montana, where a portion of the American military’s ICBM arsenal is deployed. The U.S., which is modernizing all three legs of its land, sea and air based nuclear arsenal, has a much larger nuclear force than China. The suspected Chinese spy balloon drifts to the ocean after being shot down off the coast South Carolina. Many of China’s land-based launchers still consist of empty silos, according to U.S. officials and experts outside government. The Strategic Command also notified Congress that the U.S. has more intercontinental-range missiles based on land, and more nuclear warheads mounted on those missiles, than China. Click here to read...

Xinjiang Governor’s Planned Visit to Europe Sparks Anger

Lawmakers and human-rights groups in Europe have denounced an expected visit to London and Brussels this month by a Chinese official sanctioned by the U.S. for helping orchestrate repression of ethnic minorities. The official, Erkin Tuniyaz, is the governor of Xinjiang, the region of northwest China where as many as a million or more Uyghurs, Kazakhs and members of other Turkic groups have been held in camps and prisons as part of a campaign of forced assimilation. Mr. Tuniyaz, who is chairman of the Xinjiang government and the region’s No. 2 official, has been a visible advocate of Chinese policies in the region. He described the mass detention program as “preventive counterterrorism and deradicalization measures” enacted under Chinese law during an online forum held by the regional government and China’s U.N. mission in 2021. The U.S., which has said China’s campaign in Xinjiang amounts to a form of genocide, sanctioned Mr. Tuniyaz in 2021 for being the leader of an entity that has engaged in “serious human rights abuse.” The designation makes him ineligible to travel to the U.S. The U.K. Parliament also passed a motion in 2021 describing China’s policies in the region as genocide, and the European Parliament adopted a resolution last year that the campaign carried a “serious risk of genocide.” Both the U.K. and the European Union have sanctioned Chinese officials in Xinjiang, but not Mr. Tuniyaz. Click here to read...

OPEC chief calls for pause in climate talks

Global oil producers should invest much more in the industry to meet the world’s future energy needs, the secretary general of the Organization of Petroleum Exporting Countries (OPEC) said on Feb 12. Speaking at the Egypt Petroleum Show, Haitham Al-Ghais of Kuwait said climate policies need to be more “balanced and fair.” His comments follow a major shift among countries and energy corporations, on moving away from fossil fuels. “It is imperative that all parties involved in the ongoing climate negotiations pause for a moment; look at the big picture,” Al-Ghais said. He called for joint efforts “towards an energy transition that is orderly, inclusive and helps ensure energy security for all.” Global prices of oil, natural gas and coal soared last year following the Ukraine-related sanctions imposed by Western powers on Russia, one of the world’s biggest producers and exporters of crude and petroleum products. In March 2022, the industry’s main global benchmark – Brent – topped $133 per barrel, surging by over $50 from the start of that year, to reach its highest level since June 2008. Prices then eased, and ended the year at around the same level they started. However, on a yearly basis, oil is being traded 43% higher than in 2021. According to Al-Ghais, the global oil industry needs up to $500 billion of investment annually through 2045, as it has been “plagued by several years of chronic underinvestment.” Click here to read...

Iran’s Raisi leads large delegation in first state visit to China

Iran’s President Ebrahim Raisi has arrived in Beijing accompanied by a large delegation for a three-day trip to China aimed at boosting economic and bilateral ties. The trip is Raisi’s first state visit to the Asian economic giant and the first by an Iranian president in 20 years, according to Iranian state media. Raisi and Xi had first met as presidents on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Uzbekistan in September. China had supported Iran’s now-successful bid to become a full member of the organisation. The Iranian president, who assumed office in August 2021, is accompanied by a wide-ranging team, including the new central bank governor, pointing to his priorities during the trip. Six members of Raisi’s cabinet, including ministers of economy, petroleum, foreign affairs, trade, transport and urban development, and agriculture are also part of the delegation. An op-ed by Raisi was published on Feb 13 in a leading Chinese publication, in which he welcomed expanding bilateral ties. Raisi will hold a meeting with Xi, followed by negotiations between delegations that are expected to lead to the signing of several agreements in the presence of the presidents. Click here to read...

China laid more than 1,400 national security charges since 2018, top prosecutor’s office reveals in a first

More than 1,400 charges related to endangering state security were laid in the last five years, China’s top prosecutorial agency said on Feb 15, offering a rare glimpse into the scale of such indictments. Past disclosures by the Supreme People’s Procuratorate (SPP) only provided the total number of criminal indictments, with no specific data offered on state security charges – which usually relate to the Chinese Communist Party’s efforts against espionage and subversion, with trials mostly held behind closed doors. Preventing and identifying acts that endanger national and public security was the top priority of prosecutors, SPP deputy director Sun Qian said in announcing the case data for 2018-2022. Another 435,000 cases relating to endangering public security were tried in the same period, he added. “In terms of prosecutions against endangering national security and public security, [the prosecutors aim to] severely punish crimes of infiltration, subversion and secession and we focus on enhancing our ability to prevent and spot these crimes,” Sun said in Beijing. However, the percentage of those indicted of such crimes remained relatively low, he clarified. Defendants charged with endangering national security made up just 0.03 per cent of total criminal indictments in the past five years, Sun said. Those charged with endangering public security represented 6.3 per cent. Click here to read...

Olympics row deepens as 35 nations demand ban for Russia, Belarus

A group of 35 countries including the United States, Germany and Australia will demand that Russian and Belarusian athletes are banned from the 2024 Olympics, the Lithuanian sports minister said on Feb 10, deepening the uncertainty over the Paris Games. The move cranks up the pressure on the International Olympic Committee, which is desperate to avoid the sporting event being torn asunder by the bloody conflict unfolding in Ukraine. "We are going in the direction that we would not need a boycott because all countries are unanimous," Jurgita Siugzdiniene said. Ukrainian President Volodymyr Zelenskyy took part in the online meeting attended by 35 ministers to discuss the call for the ban, pointing out that 228 Ukrainian athletes and coaches died as a result of the Russian aggression. "If there's an Olympic sport with killings and missile strikes, you know which national team would take the first place," he told the ministers. "Terror and Olympism are two opposites, they cannot be combined." British sports minister Lucy Frazer said on Twitter that the meeting was very productive. "I made the U.K.'s position very clear: As long as [Russian President Vladimir] Putin continues his barbaric war, Russia and Belarus must not be represented at the Olympics," she wrote. Lee Satterfield, assistant secretary of state who leads the U.S. Department of State's Bureau of Educational and Cultural Affairs, also participated in the meeting. Click here to read...

Health
Amid cholera outbreak, health fears grow in quake-hit Syria

Aid groups and public health experts warn that a series of devastating earthquakes could exacerbate a cholera outbreak in Syria first detected last year. The warnings come as rescue operations ceased in both opposition and government-held portions of Syria – and hope diminished amid remaining searches in Turkey – six days after a series of quakes hit the region. As of Feb 12, the death toll topped 35,000 in the two countries, with at least 4,500 dead in Syria. Across war-torn Syria, where the UN has estimated that 5.3 million people have been left homeless by the disaster, “there was a perfect storm brewing before the earthquake – of increasing food insecurity, collapsing healthcare systems, the lack of access to safe water and poor sanitation”, said Eva Hines, chief of communications for the United Nations Children’s Fund (UNICEF) in the Syrian capital, Damascus. “More than half of people in Syria depend on unsafe alternative water sources when it comes to their water needs. And that, of course, increases vulnerability to fast-spreading waterborne diseases such as cholera,” Hines told Al Jazeera. In September last year, the Syrian government declared an outbreak of cholera – a diarrhoeal infection caused by ingesting food or water contaminated by the Vibrio cholerae bacteria. The disease can prove deadly, particularly for children. Click here to read...

Equatorial Guinea confirms first Marburg virus disease outbreak

Equatorial Guinea has confirmed its first outbreak of the Marburg virus, a highly infectious and deadly disease similar to Ebola, following the deaths of at least nine people, the World Health Organization (WHO) said on Feb 13. The small Central African country quarantined more than 200 people and restricted movement last week in its Kie-Ntem province after detecting an unknown haemorrhagic fever. Neighbouring Cameroon also restricted movement along its border over concerns about contagion. “Thanks to the rapid and decisive action by the Equatorial Guinean authorities in confirming the disease, emergency response can get to full steam quickly,” Dr Matshidiso Moeti, WHO regional director for Africa, said in the statement on Feb 13. In addition to the nine deaths, Equatorial Guinea has reported 16 suspected cases of Marburg virus with symptoms including fever, fatigue and blood-stained vomit and diarrhoea, WHO said. Marburg virus disease can have a death rate of up to 88 percent, according to WHO. There are no vaccines or antiviral treatments approved to treat it. The deaths have been preliminarily linked to a funeral ceremony in the Kie-Ntem province’s Nsok-Nsomo district, Equatorial Guinea health minister Mitoha Ondo’o Ayekaba said on Feb 10. Click here to read...

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