Economic

Nations where 3.3 bn live spend more on debt than health, schools

Approximately 3.3 billion people – almost half of humanity – now live in countries that spend more money paying interest on their debts than on education or health, according to a new United Nations report. “Half our world is sinking into a development disaster, fuelled by a crushing debt crisis,” UN Secretary General Antonio Guterres told a press conference launching a report on July 12 on the state of the world’s debt. “In 2022, global public debt reached a record $92 trillion and developing countries shoulder a disproportionate amount,” the UN chief said. Because such a “crushing debt crisis” is concentrated mostly in poor developing countries, it is “not judged to pose a systemic risk to the global financial system”, Guterres said. “This is a mirage,” he said. According to the report, the number of countries facing high debt levels has increased sharply from 22 nations in 2011 to 59 in 2022. And a total of 52 countries, almost 40 percent of the developing world, are in serious debt trouble, Guterres noted. “In Africa, the amount spent on interest payments is higher than spending on either education or health. Developing countries in Asia and Oceania [excluding China] are allocating more funds to interest payments than to health,” the report states. Click here to read...

World ‘far off track’ on hunger targets, UN warns

The world is at risk of failing to meet its self-imposed obligation to see hunger eradicated by 2030, the UN warned on July 12. About 735 million people worldwide faced chronic hunger last year, an estimated 122 million more than in 2019, before the Covid-19 pandemic, the UN has said, in its latest report on food security. While countries in South America and many regions of Asia saw a decline in hunger rates thanks to economic recovery from the pandemic, the document reports, hunger is still on the rise in Western Asia, the Caribbean, and in all sub-regions of Africa. Among the main issues threatening progress towards the global goal to end hunger are conflicts, including the conflict in Ukraine, as well as weather-related events. According to the projections presented in the document, 600 million people globally will be living undernourished by 2030, meaning that the world is “far off track” to meet the United Nations’ goal of eradicating hunger. The pledge was made in 2015 when the UN adopted its Agenda for Sustainable Development, which includes 17 goals to be achieved, among them “creating a world free of hunger by 2030.” Click here to read...

Countries agree to extend digital services tax freeze through 2024

With the exception of Canada, countries with digital services taxes have agreed to hold off applying them for at least another year as a global multinationals tax deal to replace them was pushed back, the OECD said on July 12. More than 140 countries were supposed to start implementing next year a 2021 deal overhauling decades-old rules on how governments tax multinationals that are widely considered to be outdated as digital giants like Apple or Amazon can book profits in low-tax countries. The first part of the two-pillar deal aims to reallocate taxing rights on about $200 billion in profits from the biggest and most profitable multinationals to the countries where their sales occur. The more than 30 governments that have or plan national digital services taxes had agreed to put them on ice under a standstill clause until the end of this year, or drop them altogether once the first pillar takes shape. The second pillar calls on governments to put an end to tax competition between governments to attract investment by setting a global minimum corporate tax rate of 15% from next year. While the second pillar is moving ahead with over 50 countries already in the process of implementing it, some countries have concerns about a multilateral treaty underpinning the first pillar, the Organisation for Economic Cooperation and Development said after talks in Paris. Click here to read...

China’s Yuan tools seen keeping currency flexible, but Beijing downplays West’s devaluation concerns

China’s central bankers sent a strong signal on July 14 that they will insist on yuan flexibility to reflect market demands and absorb external shocks, but in the meantime it won’t let “big crocodiles” or a herd mentality disrupt the forex market when the national economy is at a critical junction in its recovery. Speaking at a press conference in Beijing, officials with the People’s Bank of China (PBOC) also dismissed Western worries about a deliberate devaluation of China’s currency to lift the competitiveness of struggling exporters. Unlike overseas investment banks that scrambled last month to cut China’s growth estimates on rising headwinds, the PBOC saw “better” signs in economic operations, household income and consumption, and a “good chance” for structural reforms. “We won’t give up our [policy] concentration, nor let nature take its course like a Buddhist,” deputy governor Liu Guoqiang said when speaking about China’s yuan policy at the briefing. Liu, in charge of the country’s forex market self-discipline mechanism, said that China has accumulated lots of tools to cope with yuan volatility, and that authorities have the confidence, conditions and ability to deal with various shocks and maintain the smooth operation of the forex market.“As for specific policy tools, we will use them rationally according to the needs of the situation”. Click here to read...

Vietnam's glowing economic statistics raise eyebrows at home

Skepticism about economic statistics released by Vietnam's central and local governments is spreading, as gross domestic product and tourism figures show marked improvement despite poor business sentiment. The country's structural steel industry has been hit hard by plummeting demand from lack of investment and an economic slowdown. Production facilities have seen operating rates fall to about 30%, and steelmakers are in the red. In the capital Hanoi, new buildings that have been abandoned mid-construction are becoming a more common eyesore. "Business sentiment is worse than during the global financial crisis," a source at a Japanese trading house said. However, the General Statistics Office of Vietnam said on June 29 that the country's real gross domestic product in the April-June period was estimated to have grown by 4.14%, surpassing 3.28% growth in January to March. The June industrial production index was 2.8%, marking two straight months of statistical improvement. Business sources say the figures seem odd. Just before the government released the numbers, Standard Chartered forecast GDP growth of 1.5% for the April-June quarter. Even a General Statistics Office survey showed pessimism in the business community, with only about 30% of manufacturing companies saying that business trends in the April-June period improved from the previous quarter. Click here to read...

Japan, EU to launch security and chip supply chain talks

Leaders of Japan and the European Union on July 13 agreed to establish a strategic dialogue to deepen their security partnership, while also bolstering cooperation on semiconductors and other economic issues. The talks, to be held at the foreign ministerial level, are designed to facilitate cooperation between Japan and the 27 members of the EU amid Russia's invasion of Ukraine and China's military buildup. "We oppose any unilateral attempts to change the status quo by force or coercion anywhere in the world," Japanese Prime Minister Fumio Kishida, European Commission President Ursula von der Leyen and European Council President Charles Michel said in a joint statement from their meeting in Belgium. "We know that Indo-Pacific security and European security are indivisible," von der Leyen said at a joint news conference, pledging greater engagement in both regions. Tokyo and the European bloc plan to use the new dialogue for cooperating not only on maritime security, but also in emerging domains like cyber and space that are not confined by geography. They will consider joint exercises between the Japan Self-Defense Forces and European troops. The two sides will reinforce supply chains for critical materials as well, according to the joint statement. They will create an early warning mechanism for semiconductor supply chains, sharing supply and demand data. Semiconductors have emerged as a priority for economic security. Click here to read...

Xi Jinping Chokes off Crucial Engine of China’s Economy

Desperate for capital and with their economies struggling, China’s cities are wooing Western businesses with previously unavailable goodies. Beijing has labelled 2023 the “Year of Investing in China” and local officials have embarked on promotional tours overseas to drum up interest from investors. That effort is running headlong into President Xi Jinping’s national-security agenda, with its focus on fending off perceived foreign threats. That has made any Chinese investment a potential minefield for foreign firms. A Xi-led campaign this year has hit Western management consultants, auditors and other firms with a wave of raids, investigations and detentions. Meanwhile, an expanded anti-espionage law has added to foreign executives’ worry that conducting routine business activities in China, such as market research, could be construed as spying. The perception that doing business in China has become much riskier is choking the flow of capital into an economy already struggling with weak private investment and consumption, as well as soaring youth unemployment. Foreign direct investment in China fell to $20 billion in the first quarter of this year, compared with $100 billion in last year’s first quarter, according to an analysis of government figures by analyst Mark Witzke at research firm Rhodium Group. Click here to read...

Iraq Tests U.S. Sanctions with Oil-for-Gas Deal with Iran

For a decade, Iraq has procured Iranian natural gas in an arrangement that powered millions of Iraqi homes but pushed Baghdad into billions of dollars in debt to Tehran because U.S. sanctions restricted payments for the fuel. Now Iraq says it has found a way around sanctions: Paying Iran for gas with Iraqi oil. The agreement injects uncertainty into the Biden administration’s attempts to cool tensions with Iran and contain its nuclear program. Iraqi Prime Minister Mohammed al-Sudani announced the barter arrangement this week after Iran cut gas supplies late last month over unpaid debts, plunging Iraq into blackouts and electricity shortages just as summer temperatures in the country’s south began breaching 120 degrees. Iran’s natural gas helps provide more than half of Iraq’s power needs during peak summer months. Iran has since resumed supplying gas, and Sudani—who has had generally good relations with the Biden administration since taking office in October—blamed the U.S. for the electricity crisis. “We could not get approval to transfer all the dues,” Sudani said. Biden administration officials said they were seeking more details about how the oil-for-gas trades would work in practice and whether the system would violate U.S. sanctions. They rejected assertions by Sudani and other Iraqi officials that Iraq’s electricity shortages were caused by U.S. delays in approving Baghdad’s payments to Tehran. Click here to read...

Russia becomes top market for Chinese cars – Bloomberg

Chinese carmakers delivered more vehicles to Russia than anywhere else in the world during the first five months of this year as part of a major expansion in the country following the exodus of European, American, and Japanese marquees, Bloomberg reported on July 12. Car exports to Russia from January to May were almost double those delivered to Mexico, China’s next biggest auto sales market. Asian car manufacturers exported around 287,000 finished vehicles to Russia in the first five months of the year, while Mexico received a total of 159,000 cars in the same period, customs data released by the China Association of Automobile Manufacturers shows. In 2022, China exported around 162,000 vehicles to Russia. The top three Chinese brands in Russia were Chery, the country’s second-largest car exporter worldwide, Geely and Great Wall. These accounted for a third of all new car sales in the first half of the year, according to the Association of European Businesses. Ukraine has designated Geely and Great Wall as “sponsors of war,” placing them on a list of more than two dozen companies that have continued to do business in Russia. Some experts believe Chinese automakers risk facing pressure over their business in Russia, while others say they have been able to “fly under the radar” due to not being well known in the EU. Click here to read...

The West Loses Grip on China's Auto Market As Domestic Carmakers Boom

In China, domestic automakers are starting to overtake Western companies, marking a big win for Beijing's domestic industrial policies and signalling the potential end to decades of dominance by Western automakers. In fact, local auto brands produced in China made up 54% of the wholesale car market for the first half of 2023, The Wall Street Journal noted earlier this week. This is up from 48% a year prior and marks the second 6 month period wherein local brands have surpassed foreign ones in a row. It's no secret that NEVs are leading the charge for China's home grown vehicles. We noted just days ago that NEV sales in China were up 25.2% YOY, totalling 665,000 units. Passenger vehicle output fell 0.5% YOY but was up 10.3% sequentially, coming in at 2.2 million units. Nine of China's 10 best selling electric vehicles makers were local companies, led by BYD, the Journal reported. Tesla was the only foreign automaker on the EV Top 10. The country's focus on EVs since 2009 has turned it from a global "follower" to a global "leader" in the industry. Stephen Dyer, a Shanghai-based auto consultant at Alix Partners, told WSJ other automakers would have to learn from China's developing trend if they want to find success in the market. Many Western companies started to step away from China after its auto market peaked in 2017. Click here to read...

China Is Quietly Building a Green Energy Empire In Latin America

China is rapidly expanding its green energy production and growth potential and, in doing so, is quickly gaining influence in key emerging markets around the world. While China is busily making inroads in renewable energy markets in Southeast Asia, Africa, and even the West, nowhere has its sphere of influence grown more rapidly or completely than in Latin America. China has been vastly outpacing the rest of the world in terms of clean energy spending, with more numerous and more developed clean energy supply chains than anywhere else on the planet. China alone was responsible for nearly half of all renewable energy spending worldwide in 2022, totalling a whopping $546 billion USD according to figures from a Bloomberg NEF analysis released early this year. This figure crushed the next-biggest spenders, the US and the EU: Beijing’s spending nearly quadrupled Washington’s $141 billion in clean energy spending, and was 2.5 times more than the EU’s $180 billion. China’s intensive spending on the sector has paid off; the country’s clean energy sectors are now economically independent enough to be weaned off of heavy government support, and are now out-competing every other clean energy leader on the global stage. “China has managed to nurture these really integrated, efficient value chains for making things like solar panels, for making things like battery cells,” Antoine Vagneur-Jones, head of trade and supply chains research at Bloomberg NEF, was recently quoted by Scientific American. Click here to read...

Chinese companies must look abroad, including Saudi Arabia, as domestic economy struggles, venture capitalist says

Chinese enterprises should formulate a global strategy amid the challenging economic environment of China’s slower-than-expected recovery, according to Roman Shaw, a venture capitalist with 20 billion Yuan (US$2.8 billion) of assets under management. Meanwhile, Charles Li Xiaojia, former CEO of the Hong Kong stock exchange, said he is pinning his hopes on global capital flowing into China’s small and medium-sized enterprises. “The domestic economic environment after three years of the Covid-19 pandemic, although we had higher expectations for the second quarter, turned out to be very challenging,” Shaw, founding partner of Detong Capital, said at the Hong Kong - Shanghai Science and Finance Forum on July 14. Looking outside China is crucial, as many industries are experiencing fierce internal competition, he said.“It is very important to develop a global strategy for your business and investments, especially under this environment,” Shaw said. Shanghai-based Detong Capital, founded in 2006, focuses on venture capital and private equity investments in China, including online and offline consumer technology, healthcare and high-tech manufacturing. Its portfolio includes Farfetch, a global digital luxury marketplace that listed on the New York Stock Exchange in 2018, and Bairong, an independent artificial intelligence platform that listed on the main board of Hong Kong stock exchange in 2021. Click here to read...

U.S. Shale Challenges OPEC with Record Production In 2023

Last year, oil prices hit multi-decade highs shortly after Russia invaded Ukraine, prompting the Biden administration to urge U.S. producers and OPEC to ramp up production at a faster clip so as to rein in spiralling oil prices. However, Saudi Arabia and its allies responded by doing the exact opposite, cutting production when oil prices started plummeting. Predictably, the United States and Europe were irked by the cartel’s defiance, with President Joe Biden’s administration accusing Saudi Arabia of colluding with Russia and supporting its war in Ukraine. Well, President Biden can at least thank his lucky stars that the U.S. Shale Patch paid heed to his clarion call: the Energy Information Administration (EIA) has forecast total U.S. output will hit 12.61M bbl/day in the current year, eclipsing the previous record of 12.32M bbl/day set in 2019's and easily beating last year's 11.89M bbl/day. U.S. crude oil output is up 9% Y/Y blunting OPEC’s efforts to keep supplies low in a bid to goose prices. There is little doubt the U.S. Shale Patch is largely responsible for keeping oil markets well supplied and oil prices low: Rystad Energy has estimated that whereas OPEC and its allies have announced cuts amounting to ~6% of 2022's production, non-OPEC supply has made up for two-thirds of those cuts, with the U.S. accounting for half of that. Click here to read...

UAE Will Not Make Voluntary Oil Production Cuts

The United Arab Emirates has announced that it will not join Saudi Arabia in making voluntary oil production cuts, claiming that the cuts by the Saudis are enough to balance the markets. This is hardly surprising considering that the UAE has in the past argued that it should be allowed to pump more than its current OPEC quota. The UAE has plans to ramp up its crude production capacity to five million barrels per day (bpd) by 2027, well above OPEC’s quota of 3 mb/d. A week ago, for the second month running, Saudi Arabia extended its voluntary 1M bbl/day oil production cut for another month, this time till August. The reduction will take the country’s production to ~9M bbl/day, the lowest level in several years. The Kingdom has been single-handedly sacrificing sales volume in a bid to goose weak oil prices, but has so far reaped little reward, thanks to increased supply by non-OPEC producers including the United States. Improved efficiency and newer technologies have made U.S. oil companies more profitable, even at lower crude prices, with J.P. Morgan estimating that the cost of drilling and fracking in the U.S. shale has dropped by 36% since 2014. Shale giant ExxonMobil Corp. is now betting that shale producers can double crude output from their existing wells by employing novel fracking technologies. Click here to read...

Millions of jobs at risk from AI ‘revolution’ – study

The artificial intelligence (AI) “revolution” could jeopardize more than a quarter of jobs in the 38-member Organization for Economic Co-operation and Development (OECD), the group warned in a report this week. Jobs that could be replaced by AI make up 27% of the labor force in OECD countries, with Eastern European states most exposed to automation, the Paris-based organization said in its 2023 Employment Outlook. The OECD is a 38-member bloc mainly made up of wealthy nations but also including emerging economies such as Mexico and Estonia. Even though there are currently few signs that AI could cause significant disruption to the labour market, numerous jobs are already at risk because the “revolution” is in its early stages, according to the OECD. Positions that could be displaced by automation were defined as using more than 25 of the 100 skills and abilities that AI could substitute. “How AI will ultimately impact workers in the workplace and whether the benefits will outweigh the risks, will depend on the policy actions we take,” OECD Secretary General Mathias Cormann was quoted by Reuters as saying. “Governments must help workers to prepare for the changes and benefit from the opportunities AI will bring about,” he added. In March, Goldman Sachs predicted that generative AI such as ChatGPT could replace up to 300 million full-time jobs worldwide. Click here to read...

Strategic

The House Refuses to Abandon Ukraine

The House passed the annual defence policy bill on July 14, and what a shock it must have been for the press corps. The Beltway media spent the week informing readers that conservative social policies doomed the bill and that GOP isolationists might block support for Ukraine. They need better sources. Neither happened, nor Republican amendments to abandon Ukraine in particular were routed on the floor. The GOP’s abandon-Ukraine caucus is loud and damaging to the party, but most Americans appreciate the stakes for the U.S. in backing Kyiv. The House bill authorizes $300 million in security assistance for Ukraine, which Rep. Marjorie Taylor Greene aimed to strip in an amendment. Her measure failed 341-89. Rep. Matt Gaetz tried to block all further military aid for Kyiv, which lost 358-70. A majority of Republicans joined Democrats in opposing both. The measures would have damaged U.S. interests and been a disaster for the public’s view of Republicans as the party of a strong national defence. Since when are Republicans against helping people who want to fight for their freedom against Russia or China?Not one to miss an opportunity to adopt a losing cause, Donald Trump belly-flopped in on July 14 with a statement that when he wins the Presidency he’ll end the war in “24 hours,” details never to follow. “This conflict must end. Not one American mother or father wants to send their child to die in Eastern Europe. We must have PEACE.” Click here to read...

Ukraine having ‘no success’ with counteroffensive – Putin

The much-touted Ukrainian counteroffensive has seen no success more than a month after it was launched, Russian President Vladimir Putin said in an interview aired on July 16. Putin praised Russia’s “heroic” troops and insisted that the direction of Moscow’s military campaign was “positive.” “All attempts by the enemy to breach our defences… including through the use of strategic reserves have fallen flat throughout the counteroffensive. Our enemy remains unsuccessful,” the Russian leader told journalist Pavel Zarubin. According to Putin, Russian troops are launching counterattacks of their own in some sections of the front line and are “taking the most advantageous positions.” The Russian Defense Ministry previously reported that Ukraine has suffered heavy losses and has failed to reach even Russia’s first line of defence on most fronts. The Defense Ministry has also published numerous videos showing damaged or destroyed Ukrainian heavy military equipment, including Western-made tanks and infantry fighting vehicles. According to the ministry, the Ukrainian military has lost 26,000 men advancing through minefields and without air support during its counteroffensive. The Western media has also acknowledged heavy losses among Ukrainian troops, with Forbes describing them as “disastrous” in late June. The New York Times reported this week that the Ukrainian military lost 20% of the equipment it sent into battle during the first two weeks of the operation. Click here to read...

China and Russia should lead ‘global governance reform’ – Xi

Chinese President Xi Jinping hosted a top Russian senator, Valentina Matvienko, for talks in Beijing on July 10. The high-profile negotiations revolved around strengthening ties between the two nations, as well as their joint multinational projects. “China is ready to continue to work with Russia to develop a new era of comprehensive strategic cooperative partnership that is mutually supportive, deeply integrated, pioneering and innovative, and mutually beneficial to help rejuvenate the two countries and promote a prosperous, stable, fair and just world,” Xi said during the meeting, which involved multiple senior officials from the two countries. Moscow and Beijing should “lead the correct direction of global governance reform,” Xi stressed, underlining that the development of the bilateral ties has become “a strategic choice made by both countries based on their own national and people’s fundamental interests.” Xi added that the importance of developing ties within such multinational groups as the Shanghai Cooperation Organization (SCO) and BRICS. During the meeting, Matvienko, the speaker of Russia’s upper chamber of parliament, relayed a “spoken message” from Russian President Vladimir Putin to Xi. She said Russia-China ties have in recent years reached their highest-ever point and they will continue to improve even further. “This is the key role of the leaders of the two states. Such cooperation is in the best interests of our countries,” she said. Click here to read...

Kremlin says Putin trip to China is 'on the agenda'

The Kremlin said on July 12 that a visit by President Vladimir Putin to China was on the agenda, adding that now was a good time to build on the already strong relationship between the two countries. Kremlin spokesman Dmitry Peskov told a regular news briefing that the date of Putin's trip would be announced when it had been finalized. "Now is an absolutely opportune moment to maintain high dynamics in the development of bilateral Russian-Chinese relations... The exact dates will be agreed and you will be informed. Dialogue continues at various levels," he said. Russia has further strengthened its economic, trade, political and military ties with China after its decision to send tens of thousands of troops into Ukraine drove relations with the West to post-Cold War lows. Putin and Chinese President Xi Jinping committed to a "no limits" partnership just weeks before Russia launched what it calls a "special military operation" in Ukraine on Feb. 24 2022. Xi visited Moscow in March this year and sealed a series of economic and other agreements with his "dear friend" Putin. China, a major buyer of Russian oil and gas, presented a paper calling for a de-escalation and eventual ceasefire in Ukraine, but Kyiv and its Western allies rejected the plan, saying it would lock in Russian territorial gains. Click here to read...

Japan and Saudi Arabia agree to launch regular diplomatic dialogue

Japan and Saudi Arabia on July 16 agreed to launch a strategic dialogue between foreign ministers that will cover a wide range of issues, from national security to the economy.Arriving in Saudi Arabia as his first stop on a three-day Middle East tour, Japanese Prime Minister Fumio Kishida on July 16 met with Saudi Arabian Crown Prince Mohammad bin Salman. After meeting with the crown prince, Kishida told reporters, "[We will] evolve from the relationship between oil-producing and consuming countries to a new global partnership in the era of decarbonization." They also agreed to launch a strategy called the "Lighthouse Initiative" at the suggestion of the Saudis. Its details along with agreements on joint public-private projects in line with the strategy will be announced as early as on July 17. It is expected to include the joint production of ammonia, which emits no carbon dioxide (CO2) when burned. Joint investment in the development of rare earth mines, which are essential for electric vehicle batteries and other gear, will also be included in the agreement. Japan will provide mine exploration knowledge and provide technical support for the initial Saudi survey. This will help diversify supply sources concentrated in China. China is deepening its involvement in the region by leveraging massive investments. Beijing brokered a deal between Iran and Saudi Arabia in March to resume diplomatic relations. Click here to read...

U.S. team seeks to break heated election standoff in Bangladesh

A high-level U.S. delegation will head to Bangladesh as a domestic political standoff threatens to upend national polls and with ties unravelling after Washington pledged sanctions against local officials who undermine free elections. The South Asian nation's previous two elections were dogged by claims of vote-rigging and other misconduct. Now, opposition parties are calling for the ruling Awami League to hand over power to a caretaker body that will "restore democracy" by ensuring free and fair voting in the January-scheduled polls. The Awami League, in power since 2009, has rejected the idea and last week curtailed the Election Commission's authority to postpone or cancel results over future reports of violence or other irregularities at polling centers across the country of 170 million. The U.S. delegation, including U.S. Assistant Secretary of State for South and Central Asian Affairs Donald Lu and Under Secretary of State for Civilian Security, Democracy, and Human Rights Uzra Zeya, are expected to be in the capital Dhaka from July 11-14. Washington has given few details about their trip. Zeya's office has said she'll be in India and then Bangladesh where she will meet with senior officials to discuss a range of issues, including "free and fair elections," labour issues, human rights and combating human trafficking. Click here to read...

Taiwan People's Party takes early role of spoiler ahead of vote

With Taiwan's presidential and legislative elections about six months away, it remains unclear whether the two main parties will be able to win a majority of seats. Each party has announced candidates for the presidential election. The ruling Democratic Progressive Party (DPP), which takes a hard-line stance against Beijing, will field Vice President William Lai Ching-te, right-hand man of current President Tsai Ing-wen. Main opposition party Kuomintang (KMT), which conciliatory stance toward the mainland, will field Hou Yu-ih, the mayor of New Taipei City. However, the run-up to the mid-January election has been dominated not by the main parties, but by the upstart Taiwan People's Party (TPP) and its leader and presidential candidate, Ko Wen-je. Ko served as mayor of Taipei, a position said to be the gateway to the presidency, for eight years after his term ended in December. He has criticized the island's traditional money-influenced politics and is known as a strategist, who formed the TPP in 2019 to tap support from voters frustrated with the two parties. In a June public opinion poll by broadcaster TVBS, Ko received support from 33% of respondents, topping the polls for the first time ahead of Lai with 30% and Hou with 23%. Click here to read...

Germany adopts first-ever China strategy

The German government has for the first time revealed a “Strategy on China,” with a focus on reducing trade reliance on its largest economic partner, which Berlin views as a “systemic rival.” The paper, published on July 13 on the Foreign Office webpage, states that China has changed, and Germany needs to adapt its approach as a result. Having achieved strong economic growth over the past few decades, Beijing is now pursuing an economic policy that “aims to make it less dependent on other countries, while trying to make others more dependent on China,” the document says. While Germany is not seeking to decouple itself from Beijing “de-risking is urgently needed”, the 40-page English-language version of the strategy stated. The document cites the example of Germany’s prior dependence on Russia as its main supplier of energy, and the need to avoid such a situation arising with other countries in areas that are critical to the energy transition or technological innovation. “It is a priority for us to reduce such risks swiftly and at a cost that is acceptable to the German economy,” the paper states. According to the document, Germany depends on China in numerous areas, including various metals and rare-earth elements, medical technology and pharmaceuticals, as well as for information technology and products needed to manufacture semiconductors. Click here to read...

The Best of Frenemies: Saudi Crown Prince Clashes with U.A.E. President

Saudi Crown Prince Mohammed bin Salman gathered local journalists in Riyadh for a rare off-the-record briefing in December and delivered a stunning message. The country’s ally of decades, the United Arab Emirates, had “stabbed us in the back,” he said. “They will see what I can do,” he told the group, according to people at the meeting. A rift has opened up between the 37-year-old Mohammed and his onetime mentor U.A.E. President Sheikh Mohamed bin Zayed Al Nahyan that reflects a competition for geopolitical and economic power in the Middle East and global oil markets. The two royals, who spent almost a decade climbing to the top of the Arab world, are now feuding over who calls the shots in a Middle East where the U.S. plays a diminished role. U.S. officials said they worry that the Gulf rivalry could make it harder to create a unified security alliance to counter Iran, end the eight-year-old war in Yemen and expand Israel’s diplomatic ties with Muslim nations. “These are two highly ambitious people who want to be key players in the region and the go-to players,” a senior Biden administration official said. “On some level they still collaborate. Now, neither seems comfortable with the other being on the same pedestal. On balance, it’s not helpful to us for them to be at each other’s throats.” Click here to read...

Central Asian nation re-elects president

Uzbekistan’s incumbent president, Shavkat Mirziyoyev, was re-elected to another term in office on July 10, the election authority of the Central Asian nation reported, having counted most of the votes. According to preliminary results released on July 09 morning, the incumbent received over 87% of the vote, putting him well above the threshold of 50% plus one vote required to win the election in the first round. More than 15.6 million people took part in the election – a turnout of just under 80% – according to the Central Election Commission. Less than 1% of the ballots were deemed invalid. Russian President Vladimir Putin was among the world leaders who congratulated Mirziyoyev on his success – first in a cable message on July 10, and later by phone. The two expressed their “mutual intention for comprehensive Russian-Uzbekistan relations,” the Kremlin press office said. Mirziyoyev is the second person to be elected president in Uzbekistan since it gained independence in the wake of the dissolution of the USSR in the 1990s. He previously served as prime minister under President Islam Karimov. After Karimov died in office in 2016, Mirziyoyev was elected as his successor. He secured a second five-year term as president in 2021, but in April this year, Uzbekistan's citizens voted in a referendum to change their constitution. The reform extended the presidential term to seven years and granted Mirziyoyev the right to run for office again. Click here to read...

Iran summons Russian envoy over statement with GCC on islands

Iran’s foreign ministry has summoned the Russian ambassador to Tehran over Moscow’s support for the United Arab Emirate’s claim over three disputed islands in a joint statement with the Gulf Cooperation Council (GCC). Iran protested the challenging of its ownership over the islands in the Persian Gulf and asked Russia to “correct its position” on the issue, the foreign ministry said on Wednesday. The ministry said the Russian envoy emphasised Russia’s respect for Iran’s territorial integrity and promised to relay the message of protest to Moscow. On July 11, foreign ministry spokesman Nasser Kanani rejected the statement over the islands, saying: “These islands perennially belong to Iran and issuing these kinds of statements is in contradiction to Iran’s friendly relations with its neighbours.” In the statement, issued by Russia and the GCC after a joint strategic dialogue meeting on July 10 in Moscow, Iran’s ownership of the Greater Tunb, Lesser Tunb and Abu Musa are challenged. Russia and the Arab states said they support “all peaceful efforts, including the initiative of the UAE and its endeavours to reach a peaceful solution” to the issue “through bilateral negotiations or the International Court of Justice, in accordance with the rules of international law and the United Nations Charter”. The three islands in the Strait of Hormuz have been governed by Iran since 1971, but are claimed by the UAE as part of its territory. Click here to read...

Iran signs agreements with Zimbabwe as Raisi wraps up Africa tour

Iran and Zimbabwe have signed 12 agreements to boost bilateral relations as Iranian President Ebrahim Raisi wrapped up a three-country African tour. Zimbabwean President Emmerson Mnangagwa greeted Raisi as “my brother” on the tarmac after the Iranian leaders’ plane landed on July 13 in the capital, Harare. Hundreds of people holding welcome banners, including many from the Southern African country’s Muslim community, turned out at Robert Mugabe International Airport. “When you see him, you see me. When you see me, you see him,” Mnangagwa told a crowd of people waving Zimbabwean and Iranian flags who had gathered around the two heads of state. “When we went to war, Iran was our friend,” said Mnangagwa, referring to Zimbabwe’s fight against Britain for independence, which it attained in 1980. “I am happy you have come to show solidarity.” The 12 agreements signed later in the day include plans to create a tractor manufacturing plant in Zimbabwe with an Iranian company and a local partner. Others map out cooperation in energy, agriculture, pharmaceuticals and telecommunications as well as research, science and technology projects. Both countries are under United States sanctions, and Raisi’s trip to Africa, where he also stopped in Kenya and Uganda, comes as Iran tries to shore up diplomatic support and ease its international isolation. Click here to read...

Tunisia and EU finalise deal on migration

The European Union and Tunisia have signed a memorandum of understanding for a “strategic and comprehensive partnership” aimed at combatting irregular migration and boosting economic ties between the bloc and the North African country, which lies on a major route for migrants and refugees travelling to Europe.European Commission President Ursula Von der Leyen, Dutch Prime Minister Mark Rutte, and Italian Prime Minister Giorgia Meloni held renewed talks with Tunisian President Kais Saied on July 16as the number of migrants and refugees departing from Tunisia and trying to reach Europe has significantly increased in recent months. Speaking at the Tunisian presidential palace, Von der Leyen hailed the accord as an investment in “shared prosperity and stability”. “Tunisia and the European Union are bound by our shared history and geography, and we share strategic interests,” she said. Saied said there is the utmost need for a collective agreement on what he called “inhuman migration”, for which he blamed criminal networks. “This memorandum should be coupled at the earliest time by a set of binding agreements emanating from its principles,” he said. Rutte said the agreement would help combat human traffickers. “It contains agreements on disrupting the business model of people smugglers and human traffickers, strengthening border control and improving registration and return. All essential measures for bolstering efforts to stop irregular migration,” Rutte said on Twitter. Click here to read...

Thai diplomat meets with Suu Kyi in detention in Myanmar

Thailand’s top diplomat said July 12 that he met with ousted Myanmar leader Aung San Suu Kyi in detention over the weekend and she conveyed her openness to engage in talks to resolve the crisis gripping her strife-torn nation. Thai Foreign Minister Don Pramudwinai is the only government official outside of Myanmar known so far to have met with Suu Kyi since she was detained with other officials when the army seized power from her elected government on Feb. 1, 2021. He told his counterparts in the Association of Southeast Asian Nations, who are meeting in Indonesia's capital, that Suu Kyi was in good health when he met with her for more than an hour on July 09. “She encourages dialogue,” Don told reporters in Jakarta when asked what message Suu Kyi conveyed to him. “Obviously we’re trying to find a way to settle with Myanmar.” The military takeover and the crackdown on the armed resistance to it plunged the country into deadly chaos. Western and European governments, including the United States, have imposed sanctions on Myanmar's military government and demanded the immediate release of Suu Kyi and other political detainees. Click here to read...

China signs pact with Solomon Islands on ‘law enforcement and security matters’

The Solomon Islands has signed an agreement to boost cooperation with China on “law enforcement and security matters,” in a move likely to raise concerns among the South Pacific island’s traditional partners including Australia, New Zealand and the United States. The agreement, details of which were not immediately released, was contained in a joint statement made public July 11 following a meeting July 10 in Beijing between Chinese Premier Li Qiang and Solomons’ Prime Minister Manasseh Sogavare. As part of efforts to build a “comprehensive strategic partnership” the sides agreed to: “Enhance cooperation on law enforcement and security matters. The Chinese side will continue to provide support and help to Solomon Islands as needed in strengthening Solomon Islands’ police law enforcement capacity.” Located 2,000 kilometers (1,200 miles) northeast of Australia, Solomon Islands have been China’s biggest success in a campaign to expand its presence in the South Pacific. Sogavare’s government switched official recognition in 2019 to Beijing from Taiwan, the self-governed island democracy China claims as part of its territory. The Solomon Islands signed a secretive security agreement with Beijing in 2022 that might have allowed Chinese military forces in the South Pacific. However, Sogavare rejected suggestions his government might give Beijing a military foothold in the region. Click here to read...

Health

U.S. Republican lawmakers link fentanyl crisis to China policy

Republican lawmakers and presidential candidates in the U.S. are targeting Chinese production of chemicals used to make fentanyl, as the deadly American opioid crisis becomes a key part of their policy toward Beijing. Drug overdose deaths in the U.S. have surged in recent years, surpassing 109,000 in 2022. Fentanyl, a potent synthetic opioid, accounts for most of these deaths, the Centers for Disease Control and Prevention (CDC) reports. These overdoses are linked to the broader American problem of prescription opioid abuse, as fentanyl often is distributed as pills that are difficult to distinguish from prescription painkillers. In 2019, China added all fentanyl-type drugs to its list of controlled substances, a move that stemmed the flow of finished fentanyl from China to the U.S. But Chinese manufacturers remain the primary suppliers of the chemical precursors for fentanyl production. These chemicals are purchased by criminal organizations in Mexico, such as the Sinaloa and Jalisco cartels, that process them into finished fentanyl and smuggle the drug into the U.S. Lawmakers on both sides of the aisle have highlighted the need to target elements of the illicit fentanyl supply chain that lie beyond the U.S. border. The FEND Off Fentanyl Act, introduced by South Carolina Sen. and Republican presidential candidate Tim Scott, has been cosponsored by 29 Democrats. Click here to read...

Latin American nation declares emergency over rare disease

Peru has declared a state of emergency amid a rise in cases of the rare autoimmune disease, Guillain-Barre syndrome (GBS). Nearly 200 instances have been reported in recent months, with authorities allocating over $3 million to procure drugs for treatment. The measures which will last 90 days, was announced by Peruvian Health Minister Cesar Vasquez during a visit to the National Institute of Neurological Sciences on July 08. “There has been a significant rise in recent weeks that forces us to take action as the state to protect the health and life of the people,” the official explained. According to the minister, the state of emergency will allow the National Center for the Supply of Strategic Health Resources to purchase immunoglobulin for the treatment of GBS patients for the next two years. More than 12 million Peruvian sol ($3.3 million) has been earmarked for this purpose, Vasquez revealed. Most regions already have sufficient medicines at their disposal, although a redistribution scheme has been set up to help those in need, the minister added. According to official data, 182 GBS cases have been recorded in Peru to date. Of those, 31 remain in hospital and 147 have been discharged. Four people have succumbed to the disease since January. Click here to read...