Global Developments and Analysis: Weekly Monitor, 13 June 2022 - 19 June 2022

Economic

Chinese President Xi Jinping warns against international decoupling in Russia speech

Chinese President Xi Jinping has warned against international decoupling and criticised the imposition of sanctions in a speech to a Russian economic forum. He also expressed “confidence” in the Chinese economy as international investors closely watch what measures it will take to recover from the impact of Covid-19. The speech delivered via video link to the 25th St Petersburg International Economic Forum on June 17 reaffirmed Beijing’s longstanding agenda of promoting multilateralism and increasing its say in international issues. Such issues have now become more urgent amid growing tensions with the West and the fall-out from Russia’s invasion of Ukraine. “It is necessary to strengthen the connection of development policies, international rules and standards, and abandon such actions as decoupling, supply suspension, unilateral sanctions and maximum pressure,” Xi said without naming specific countries. “[We] need to remove trade barriers, maintain the stability of global industrial and supply chains, and work together to deal with the increasingly severe food and energy crises.” The forum, during which Russian President Vladimir Putin blasted the West, was also attended virtually by the Egyptian and Kazakhstan leaders. No representatives from Western nations were present at the four-day event. Click here to read... [2]

'Casus belli': What Kaliningrad blockade means for Russia

Lithuania blocked the rail transit of some Russian goods to the country’s Kaliningrad Region on June 18. Vilnius authorities explained the move by stating that the goods in question were sanctioned by Brussels in connection with the conflict in Ukraine, and therefore can no longer pass through EU territory even if they travel from one part of Russia to another. Why is that important? Kaliningrad Region is a Russian exclave in Europe, sandwiched between Poland and Lithuania along the Baltic Coast. Its position in the heart of Europe enables it to easily deliver Russian goods to any part of the EU bloc. As an exclave, or a territory which belongs to Russia but is geographically separated from the mainland, it should be granted full access to and from mainland Russia under international law. Therefore, some analysts suggest that Lithuania’s move to block Russia’s access to its own territory could, to some extent, be considered a ‘casus belli’ – a cause for the declaration of war. Why did Lithuania block transit? According to Lithuanian officials, the decision was made after getting the approval of the European Commission, EU’s main governing bodyClick here to read... [3]

Russia Steps Up Pressure on European Gas Supplies

Russia stepped up pressure on Europe’s biggest economies with further cuts to the supply of gas, raising concerns of a fuel shortage this winter. Gas flowed through Nord Stream, the main conduit for Russian fuel into Europe, at an anemic pace for a fourth-straight day, reaching on June 17 only 55% of its rate from the start of the week. Germany’s Uniper SE, the continent’s biggest importer of Russian gas, said it was receiving 40% of the gas it had requested from Russia’s state-owned exporter, Gazprom PJSC. France’s gas network manager, meanwhile, said no gas had flowed into the country through its border with Germany since June 15. And in Italy, the eurozone’s third-biggest economy, Eni SpA said Gazprom was sending 50% of the gas the energy major had requested. Russia is punching back against European sanctions and military support for Ukraine, targeting Europe’s ability to power its economy. The continent has long relied on Russian gas to generate electricity, fuel factories and heat homes—a vulnerability the Kremlin is now exploiting. In slashing gas exports, Russia is heaping pain on businesses and households already contending with decades-high inflation driven by energy costs. Europe has raced to shore up alternative sources of gas since war broke out in Ukraine. But it will struggle to replace the current hole in Russian supplies, let alone a full cutoff, analysts said. Click here to read... [4]

Major foreign holders of US treasury securities reduce holdings following interest rate hikes

Major foreign holders of the US treasury securities including China and Japan reduced their holdings in April as the US Federal Reserve continues to raise interest rates, newly released data from the US Department of Treasury revealed on June 15 local time. The US Federal Reserve announced on June 15 a 75 basis points rate hike of its benchmark interest rate to the 1.50 percent to 1.75 percent range, the biggest rate hike since 1994. China, the second largest holder of US treasury securities, reduced its holdings by $36.2 billion to a balance of $1.00 trillion in April, the lowest level since June 2010. This is also the fifth consecutive month that China has reduced its holdings, offloading a total of $77.4 billion over a five-month period. Analysts noted that the increase of 75 basis points reflects the urgency of the crisis the US is currently facing, with more frequent and even large rate hikes expected amid a critical economic and social situation, which will significantly impact investment confidence. The rate hikes will lead to a decline in securities prices, so investors have to reduce their holdings or even leave the market in a bid to avoid risk, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on June 16. Japan, the biggest foreign holder of US treasury securities, reduced its holdings by $13.9 billion in April, with $1.22 trillion remaining, the lowest amount since February 2020. Click here to read... [5]

China’s May oil imports from Russia soar 55% to a record, surpass Saudi supply

China’s crude oil imports from Russia soared 55 percent from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine. Imports of Russian oil, including supplies pumped via the East Siberia Pacific Ocean pipeline and seaborne shipments from Russia’s European and Far Eastern ports, totalled nearly 8.42 million tons, according to data from the Chinese General Administration of Customs. That’s equivalent to roughly 1.98 million barrels per day (bpd) and up from 1.59 million bpd in April. China is the world’s biggest crude oil importer. Chinese firms, including state refining giant Sinopec and state-run Zhenhua Oil, have ramped up purchases of Russian oil, enticed by steep discounts after western oil majors and trading houses pulled back due to sanctions. Saudi Arabia trailed as the second-largest supplier, with May volumes up 9 percent on year at 7.82 million tons, or 1.84 million bpd. This was down from April’s 2.17 million bpd. Russia took back the top ranking after a gap of 19 months. Customs data released on June 20 also showed China imported 260,000 tons of Iranian crude oil last month, its third shipment of Iran oil since last December, confirming an earlier Reuters report. Click here to read... [6]

China manufacturing: fresh lay-offs in the Pearl River Delta add to worries over economic slowdown

In the Pearl River Delta, China’s export manufacturing heartland, migrant workers are watching their incomes plummet and jobs disappear overnight, as local businesses grapple with challenges ranging from coronavirus outbreaks to tumbling international orders. Two years ago, tens of thousands of migrant workers were cast out of work as employers scaled back production due to the US-China trade war and the initial coronavirus outbreak, which started in the central Chinese city of Wuhan. Few people then would have anticipated the pace of China’s recovery, with exports hitting new highs in the past year and even migrant workers older than 50 in demand in the region’s factories. Now, the story is being rewritten again, with factories laying off workers and young people unable to find casual jobs. From the footwear industry to electronics to garments, insiders say they are facing a rare combination of pressures: supply chain disruptions caused by coronavirus controls; declining demand in the domestic, European and US markets; and a massive shift in overseas orders to Southeast Asia. China’s export growth rebounded in May from a slump in April, as manufacturing activity in Shanghai gradually returned to normal after a two-month lockdown was lifted. But analysts have called it a “temporary blip”, with most predicting momentum to fade as headwinds grow. Click here to read... [7]

How the US’ Xinjiang labour law has crippled China’s cotton industry before even entering effect

With the next harvest a mere three months away, cotton mills in China’s far west Xinjiang region are currently sitting on about 3 million tonnes of unsold inventory – a massive stockpile more than a million tonnes larger than it usually is this time of year. That means more than half of the cotton harvested last autumn has yet to be sold. “Xinjiang cotton used to be the most expensive cotton in the world. Now it has become the cheapest, and still no one buys it,” said the owner of a cotton-ginning mill in southern Xinjiang, who spoke on condition of anonymity. “Now I would lose 2,000 yuan (US$300) selling each tonne of cotton.” This is owing to the impact of the Uygur Forced Labour Prevention Act – a United States law that effectively bans American imports of all products from Xinjiang unless conclusive evidence shows that no forced labour was involved in their production. Even though the new law does not take effect until June 21, it is already having the intended effect on China’s cotton and textile industry. “Downstream clients, especially those focusing on foreign markets, basically dare not use [Xinjiang cotton] anymore, so they won’t buy,” the mill owner said. Click here to read... [8]

Companies brace for chaos as Xinjiang import ban starts in U.S.

Manufacturers and retailers are bracing for chaos as U.S. Customs prepares to enforce a ban on imports from China's Xinjiang region from June 21 in response to reports of forced labour. Companies are scrambling to gauge how the new rules could affect their business and supply chains with Asian clothing suppliers, international retail chains, U.S. solar-panel makers and Chinese floor-tile material makers among scores of groups that could see U.S. bound shipments seized. Signed into law by President Joe Biden at the end of last year, the Uyghur Forced Labor Prevention Act presumes that all U.S.-bound imports traced to Xinjiang, from cotton and tomatoes to floor tile and solar panel materials, were made using forced labor and brands them as "high priority" for seizure. More than 900 shipments from the region were seized in the last quarter of 2021 by American authorities under earlier trade restrictions. But trade and business groups said the new legislation's vague wording threatens to put the bulk of China's $500 billion in annual shipments bound for the U.S. at risk. "The way the law is written could be interpreted as applying to other kinds of goods from other parts of China that allegedly involved forced labor at some point along the supply chain," Doug Barry, a senior director at the U.S.-China Business Council, told Nikkei Asia in an email. Click here to read... [9]

Taiwan’s advanced technology makes it indispensable

The world is becoming more dependent on the Taiwanese semiconductor industry, not less, even as the war of words between the US and China heats up and people talk about the lessons to be learned from Ukraine. According to the latest quarterly World Fab Forecast released by SEMI on June 13, Taiwan is expected to lead global spending on semiconductor production equipment this year, with a 52% increase to US$34 billion. South Korea is forecast to come second with a 7% increase in spending to $25.5 billion, China third at $17 billion, and North America fourth at an unimpressive $9.3 billion. Total industry spending is expected to increase by 20% to a record $109 billion. SEMI (formerly Semiconductors Equipment and Materials International) bills itself as “the global industry association that unites the entire electronics manufacturing and design supply chain.” “Fab” is industry jargon for semiconductor fabrication facility or factory. TSMC, the world’s largest integrated-circuit (IC) foundry (contract manufacturer), will once again account for the bulk of semiconductor capital spending in Taiwan. According to market research organization TrendForce, TSMC is likely to increase its share of the global foundry market from 53% in 2021 to 56% in 2022, while Taiwan’s total share rises from 64% to 66%. Other Taiwanese foundries include UMC, Vanguard and Powerchip.Click here to read... [10]

Horn of Africa could face "unprecedented" food insecurity in 2023, WFP warns

The Horn of Africa could face "unprecedented food unavailability problems" in 2023 due to ongoing drought and food supply shortages caused by the Russia-Ukraine conflict, David Beasley, the executive director of the UN World Food Program (WFP), has warned. "The drought situation in the Somali region of Ethiopia is desperate and extraordinary," Beasley said during a briefing June 16 after his visit to the drought-stricken Gode district in Ethiopia's Somali region. The region has been hit by several years of conflict, and climate change and was recently affected by the impacts of COVID-19 and the Russia-Ukraine conflict which cut food supply to Africa and the entire world, the WFP chief said. Highlighting that Russia and Ukraine supply about 13 percent of wheat, 20 percent of maize, and 76 percent of sunflower oil to the world, Beasley said the conflict has pushed the number of African people suffering from food shortages to 325 million from 276 million before the conflict began some months ago. "WFP's operational cost has increased by additional 70 million U.S. dollars every month after the Russia-Ukraine (conflict) broke out, which resulted in an increase in fuel, fertilizer and shipping prices," he said, noting that the situation forced WFP to cut food ration to 4 million people. Click here to read... [11]

Iraq seeks to raise oil production to 8 mln bpd by 2027

Iraq seeks to raise its crude oil production to 8 million barrels per day (bpd) by the end of 2027 to fulfil its commitment to export quota within the Organization of the Petroleum Exporting Countries (OPEC), Iraqi Oil Minister Ihsan Abdul-Jabbar Ismail said June 19. "Iraq is working to increase its capabilities to raise its oil production capacity, and we have large projects to increase production, and we are committed to reaching the peak production of 8 million bpd by the end of 2027," Ismail told official Iraqi News Agency. Projects are underway in Iraqi oil fields, especially in the southern province of Basra, according to the minister. "The ceiling of Iraqi oil exports in June is 3.8 million bpd and July 3.85 million bpd," he noted. On June 1, the Iraqi Oil Ministry said it had exported about 102 million barrels of crude oil in May, with an average of 3.3 million bpd. Ismail's remarks came after by the OPEC and its allies, collectively known as OPEC+, decided to significantly raise oil supply in July and August in an effort to stabilize the surging oil prices. Iraq's economy heavily relies on crude oil exports, which account for more than 90 percent of the country's revenues. Click here to read... [12]

Pakistan blackouts choke economy as China power plants go unpaid

Electricity outages are disrupting life and business in Pakistan as the cash-strapped government struggles to compensate Chinese power suppliers, complicating efforts to resuscitate the ailing economy. The power crunch has echoes of the crisis in another South Asian country, Sri Lanka, which has also suffered hourslong blackouts, contributing to social unrest. Pakistan's government has attempted to ease the shortages by shifting back to a five-day workweek -- reversing a change to a six-day week that was intended to increase productivity. It is also considering shutting down commercial markets at 8 p.m. to conserve energy. Meanwhile, households that can afford it buy uninterruptible power supply, or UPS, devices that store electricity to use during outages. Prices have soared, however, with a UPS and accompanying battery costing around $300 -- beyond the range of most working-class families. One of the major reasons for the blackouts is that Chinese power producers under the China-Pakistan Economic Corridor (CPEC) initiative have shut down multiple plants because the Pakistani government has failed to pay dues to the tune of 300 billion rupees ($1.5 billion). The government is currently working to unlock billions of dollars in International Monetary Fund support. But the IMF reportedly wants it to renegotiate its arrangements with the Chinese power producers before paying the 300 billion rupees. Click here to read... [13]

Pakistan to stay on terror financing watchdog's 'gray list'

An international watchdog said June 17 it will keep Pakistan on a so-called "gray list" of countries that do not take full measures to combat money laundering and terror financing but raised hopes that its removal would follow an upcoming visit to Islamabad to determine its progress. The announcement by Marcus Pleyer, the president of the Financial Action Task Force, was a blow to Pakistan's newly elected government, which believes that it has mostly complied with the organization's tasks. Expectations were high in Pakistan that FATF would announce its removal from the list at June 17's meeting in Berlin. Instead, Pleyer said an on-site inspection by FATF in Pakistan would take place before October and that a formal announcement on Pakistan's removal would follow. He said FATF is praising Islamabad for implementing the organization's action plans -- a clear indication that Pakistan is moving closer to getting off the "gray list." "Pakistan's continued political commitment to combating both terrorist financing and money laundering has led to significant progress," FATF said in a statement. The country's efforts were sustained, it said and added that Pakistan's "necessary political commitment remains in place to sustain implementation and improvement in the future." Click here to read... [14]

Three Gulf, nine African sovereign funds sign deal for investment

Three Gulf sovereign funds have signed a deal in Rabat to promote investment in Africa, alongside nine from within the continent. The deal was signed by the Abu Dhabi Investment Authority and holding firm ADQ in addition to the Kuwait Investment Authority on the sidelines of the first meeting of the Africa Sovereign Investors Forum (ASIF), on June 20. ASIF is a platform bringing together sovereign funds of Angola, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Morocco, Nigeria and Rwanda. The organisers gave no details on how exactly the Gulf funds will support their African counterparts. But ASIF “will enable us to explore new opportunities with potential partners in Africa for ADQ and its portfolio companies”, said ADQ CEO Mohamed Hassan Alsuwaidi. Heads of African sovereign funds taking part at the event said the focus for ASIF will be on mobilising capital and equity, promoting green projects and investing in logistics to improve interconnectivity within the continent. The African sovereign funds that signed the deal include Morocco’s Ithmar Capital, Nigeria Sovereign Investment Authority, Ghana Infrastructure Investment Fund, Gabon’s Fonds Gabonais d’Investissements Stratégiques (FGIS), Rwanda’s Agaciro Development Fund, Angola’s Fundo Soberano, the Sovereign Fund of Egypt, Senegal’s FONSIS and Djibouti’s Sovereign Fund. Click here to read... [15]

IMF team arrives in Sri Lanka as crisis worsens

An International Monetary Fund (IMF) team arrives in Sri Lanka on June 20 for talks on a bailout programme, but time is short for a country just days from running out of fuel and likely months from getting any relief money. Sri Lanka is battling its worst financial crisis since independence in 1948, as decades of economic mismanagement and recent policy errors coupled with a hit from COVID-19 to tourism and remittances, shrivelling foreign reserves to record lows. The island nation of 22 million people suspended payment on $12bn in debt in April. The United Nations has warned soaring inflation, a plunging currency and chronic shortages of fuel, food and medicine could spiral into a humanitarian crisis. The IMF team, visiting Colombo through June 30, will continue recent talks on what would be Sri Lanka’s 17th rescue programme, the IMF said on June 19. “We reaffirm our commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies,” the global lender said in a statement. Colombo hopes the IMF visit, overlapping with debt restructuring talks, will yield a quick staff-level agreement and a fast track for IMF board disbursements. But that typically takes months, while Sri Lanka risks more shortages and political unrest. Click here to read... [16]

Strategic

The old world is over: Key takeaways from Putin's first major speech since Russia's military offensive in Ukraine- RT

New centers of power have emerged, the unipolar world order isn’t coming back, and the “colonial” way of thinking has failed, Russian President Vladimir Putin told the St. Petersburg International Economic Forum (SPIEF) on June 17, in what the Kremlin described as an “extremely important” speech. When the US declared victory in the Cold War, Americans designated themselves the “messengers of God on earth,” with interests that should be considered sacred and no obligations, Putin told the audience at SPIEF. New centers of power have since emerged, and have the right to protect their own systems, economic models and sovereignty. These “truly revolutionary, tectonic changes in geopolitics, the global economy, in the technological sphere, in the entire system of international relations,” are “fundamental, pivotal and inexorable,” Putin said. “And It is a mistake to suggest that one can wait out the times of turbulent change and that things will return to normal; that everything will be as it was. It will not.” When the US and its allies launched the campaign to “cancel” Russia over the conflict in Ukraine, they hoped to crash and undermine the Russian economy and society. The sanctions have instead boomeranged on their creators, aggravating social and economic problems, driving up the cost of food, electricity and fuel, and hurting the quality of life across the West, but especially in Europe. Click here to read... [17]

China’s Xi Reaffirms Support for Moscow in Call With Putin

Chinese President Xi Jinping re-emphasized support for Moscow’s security concerns in his second phone call with Russian President Vladimir Putin since Russia invaded Ukraine nearly four months ago, showing little sign of backing off from an entente that has alienated Beijing further from the West. The conversation took place on Mr. Xi’s 69th birthday, a sign of both leaders’ desire to reinforce a personal friendship that has helped take the China-Russia relationship to the closest point since the early years of the Cold War. Messrs. Putin and Xi have conversed on the Chinese leader’s birthday several times since Mr. Xi took power in 2012. The Chinese readout of the June 15 call was emblematic of Beijing’s position in neither criticizing nor endorsing Russia’s invasion of Ukraine, while the Russian description of the call contained language suggesting Moscow has Beijing’s backing for the war. “China is willing to continue mutual support with Russia on issues related to core interests and major concerns such as sovereignty and security,” Mr. Xi said during the call, according to China’s Foreign Ministry. The statement from the Kremlin said the Chinese leader “noted the legitimacy of the actions taken by Russia to protect the fundamental national interests in the face of challenges to its security created by external forces.” Click here to read... [18]

Pentagon updates US goals in Ukraine

The US is seeking to make the conflict in Ukraine more costly for Moscow than whatever Russian President Vladimir Putin hopes to achieve, Under Secretary of Defense for Policy Colin Kahl said on June 14. Kahl insisted that Russia was making only “tactical” gains in Ukraine and would be unable to achieve its allegedly “grandiose objectives” of taking over the entire country. He put this down, in part, as a consequence of signficant US military aid to Kiev. “We’ll continue to provide Ukraine what they need for the fight,” Kahl said on June 14, opening a conference organized by the Center for New American Security (CNAS), a defence industry lobby group where he previously worked. CNAS is funded by the likes of Northrop Grumman and Raytheon, which stand to make huge revenues from replenishing American weapons stocks after the conflict. The US government alone has provided Ukraine with over $5.3 billion in military assistance, of which $4.6 billion has come since February 24, Kahl pointed out. The US goal is “to make sure that Ukraine can defend itself, that a sovereign independent democratic Ukraine endures, that we give Ukraine the capability to strengthen their position at the bargaining table,” Kahl explained, and to “impose a cost on Russia in excess to whatever benefits Vladimir Putin hopes to achieve through this conflict.” Click here to read... [19]

Taiwan Strait is international waters: Taiwan MOFA

The Ministry of Foreign Affairs (MOFA) slammed China’s recent claims that the Taiwan Strait is its territorial waters and exclusive economic zone (EEZ), calling it “absurd” and insisting that the strait is international waters. Bloomberg reported June 13 that Chinese military officials have been claiming that the Taiwan Strait is not international waters during meetings with U.S. officials in recent months, causing increasing concern from the Biden administration. As China rarely mentions the legal status of the Taiwan Strait during meetings with the U.S., the comments have raised suspicions about China’s intention to stop other countries’ naval vessels from entering the waters. China’s Ministry of Foreign Affairs claimed June 13 that the Taiwan Strait is its territorial waters and contended that the international law of the sea does not have any stipulation regarding “international waters” and that “related countries” were just manipulating the Taiwan issue to make excuses for threatening China’s sovereignty. Taiwan’s MOFA spokeswoman Joanne Ou denounced China’s territorial claims, saying that the strait is in fact international waters. She said that Taiwan has respected actions of foreign vessels in the strait that are within the boundaries of international law, including innocent passage. Taiwan understands and supports the freedom of U.S. vessels to sail through the strait and their contribution to regional stability and peace, Ou said. Click here to read... [20]

East China Sea tensions: Will fresh Sino-Japan talks over Beijing’s gas drilling end in deadlock again?

Tokyo and Beijing are set to hold talks on June 23 about China’s apparent exploration for natural resources in contested areas of the East China Sea, although analysts are not upbeat about the two sides reaching an agreement in the dispute. Takehiro Funakoshi, head of the Foreign Ministry’s Asian and Oceanian Affairs Bureau, will speak over video with Hong Liang, who oversees Beijing’s border and ocean affairs, Kyodo News reported. ‘Little likelihood’ of either backing down, ahead of the CCP’s National Congress and Japan’s July election for Upper House of the Diet. The discussions will be the first high-level contact on the issue since November. Japan is expected to make a formal protest to China unilaterally pushing ahead with the construction of what appears to be gas drilling platforms in the East China Sea. Tokyo will point out that the two governments reached an agreement in 2008 to jointly develop oil and gas reserves in areas where the nations’ territorial claims overlap. Though the previous talks ultimately deadlocked and an agreement was never signed, Tokyo is expected to ask that Beijing resume discussion on development rather than simply pushing ahead with exploration and exploitation of gas and oil deposits. Click here to read... [21]

A new Quad? Japan, South Korea, Australia, New Zealand eye four-way anti-China summit on sidelines of Nato meet

Japan, South Korea, Australia and New Zealand are considering holding a four-way summit on the fringes of a Nato leaders’ gathering in Spain next week, according to a source close to the South Korean presidential office. The envisaged meeting on the sidelines of the transatlantic security alliance gathering is seen by the four nations as an attempt to keep an assertive China in check in the Indo-Pacific after Russia’s invasion of Ukraine heightened concerns about its implications for a region where Beijing has been expanding its influence. Japan has sounded out South Korea about the possibility of the quadripartite meeting, the source said on June 20. Leaders from the four nations are expected to deepen cooperation in realising a free and open Indo-Pacific and may discuss increased support for Pacific island nations, sources familiar with the matter said. China and the South Pacific nation of Solomon Islands signed a security treaty earlier this year that would reportedly allow the deployment of Chinese troops, a development, if realised that would spark concerns among regional powers such as Australia, New Zealand, the United States and Japan. Japan, South Korea, Australia and New Zealand are not members of Nato but have been invited as partners to the summit to be held in Madrid on June 29 and 30. Click here to read... [22]

China launches Fujian, PLA Navy’s 3rd aircraft carrier

China launched its third and most advanced aircraft carrier on June 17, bringing it a step closer to its goal of building a blue-water navy with at least six aircraft carrier battle groups by 2035. The Fujian – named after the southeastern coastal province – left the Jiangnan shipyard in Shanghai, after at least two delays. The launch was televised by state broadcaster CCTV. The Type 003 warship, with a hull number of 18, is the first carrier in China’s fleet to use an electromagnetic catapult to launch planes from the deck. The launch of the Fujian makes the Type 003 the second carrier class in the world – after the US Navy’s Gerald R. Ford class – to use the advanced catapult system that allows planes to launch more frequently and with a bigger payload of fuel and munitions. That translates to more sorties and a larger striking and reconnaissance range, compared to the ramp-assisted launchers on China’s other two carriers, the Liaoning and Shandong. With the Fujian, China has leapfrogged the older and less power-efficient steam catapult launcher to replace its ski-jump take-off ramps with the most advanced electromagnetic catapults. Click here to read... [23]

China, India build roads and bridges in disputed Himalayan region

China is building a second bridge that can accommodate tanks and other armored vehicles across a lake in the Himalayan region of Ladakh, spiking tensions along its border with India two years after a deadly skirmish in the area. Ladakh has been a subject of discord between the countries for decades. New Delhi has also built roads that can support heavy vehicles in the region and has said it is ready to continue constructing infrastructure. The first bridge China built across the disputed Lake Pangong Tso is 400 meters long and 8 meters wide, according to security and defense sources cited by Indian media. Its construction activity was initially confirmed in January. The second bridge across the lake crosses the Line of Actual Control, the de facto border between the two countries. Both bridges are "in areas that have continued to be under the illegal occupation of China since the 1960s," Arindam Bagchi, a spokesperson for the External Affairs Ministry said. "We have never accepted such illegal occupation of our territory, nor have we accepted the unjustified Chinese claim or such construction activities." The two sides have held rounds of talks between commanders who are stationed in the region, but tensions have yet to ease. Indian External Affairs Minister Subrahmanyam Jaishankar has called his country's ties with China "not normal." Click here to read... [24]

China’s ‘non-war ops’ may target protests or Taiwan

A set of trial outlines on China’s military operations other than war (MOOTW) takes effect June 15, to provide the legal basis for deployment of the People’s Liberation Army (PLA) to suppress riots or secure oil transport during emergency. Chinese President Xi Jinping, who is also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, has signed trial outlines to standardize the PLA’s missions, including disaster relief, humanitarian aid, escort, and peacekeeping and other operations that aim to safeguard China’s national sovereignty, security and development interests, Xinhua reported. Some political commentators said it was possible that the PLA could block the Taiwan Strait by suddenly launching a so-called non-war military operation in a bid to disrupt energy supply to Taiwan, Japan and South Korea. It is unclear precisely why Xi signed such a document at this time; its full text has not been available. However, the issue is by no means a new one, so there is hardly an element of surprise here. Some Chinese military experts had said for decades that MOOTW ought to be used to suppress Taiwanese independence moves. The announcement came as leaders of the United States and China clearly were failing in efforts to keep the Taiwan issue low-key. Click here to read... [25]

Satellite imagery of N. Korean nuclear test site suggests work to enable multiple tests: Beyond Parallel

Recent satellite imagery of North Korea's nuclear test site has shown activities that may suggest additional tests following what will be the country's seventh nuclear weapon test, a U.S. monitor said June 15. The satellite imagery, acquired June 14, showed new "construction activity" near Tunnel No. 4 at the Punggye-ri nuclear test site, according to Beyond Parallel, a project of the Center for Strategic and International Studies, a Washington-based think tank. "The most recent image shows new indications of activity below the entrance to Tunnel No. 4," it said in a report published on its website, adding the activity strongly suggested "an effort to re-enable it for potential future testing." The report noted activities at Tunnel No. 3, which began about four months ago, are "apparently now complete and ready for an oft-speculated seventh nuclear test." The report comes after South Korean Foreign Minister Park Jin said the North appears to have finished all preparations for its seventh nuclear weapon test and that only a "political decision" remained before Pyongyang actually goes ahead with a test. The country conducted its sixth and last such test in September 2017. Beyond Parallel said the most recent imagery also showed construction of new buildings or modifications to existing buildings, which it said may suggest are "efforts to further re-enable the facility" for future tests. Click here to read... [26]

European leaders talk up EU prospects for Ukraine in first visit since war began

The leaders of Germany, France and Italy, all criticised in the past by Kyiv for support viewed as too cautious, visited Ukraine on June 16 and offered the hope of EU membership to a country pleading for weapons to fend off Russia's invasion. Air raid sirens blared in Kyiv as the visit by French President Emmanuel Macron, Germany's Olaf Scholz and Italy's Mario Draghi began, with the leaders touring a nearby town wrecked early in the war. After holding talks with Ukrainian President Volodymyr Zelenskyy, the leaders signalled that Ukraine should be granted European Union candidate status, a symbolic gesture that would draw Kyiv closer to the economic bloc. Scholz said Germany had taken in 800,000 Ukrainian refugees who had fled the conflict and would continue to support Ukraine as long as it needs. "Ukraine belongs to the European family," he said. On the battlefield, Ukrainian officials said their troops were still holding out against massive Russian bombardment in the eastern city of Sievierodonetsk, and described new progress in a counteroffensive in the south. But they said battles on both main fronts depended on receiving more aid from the West, especially artillery to counter Russia's big advantage in firepower. Click here to read... [27]

U.S. senators introduce broad Taiwan bill to boost security assistance

A duo of U.S. senators introduced a bill on June 16 to significantly enhance support for Taiwan, including provisions for billions of dollars in U.S. security assistance and changes to the decades old law undergirding Washington’s unofficial ties with the Chinese-claimed democratic island. The senators’ Taiwan Policy Act of 2022 threatens severe sanctions against China for any aggression against Taiwan and would provide $4.5 billion in foreign military financing over the next four years, as well as designate Taiwan a “major non-NATO ally,” according to the text. The sponsors, Senate Foreign Relations Committee chairman Bob Menendez, a Democrat, and Republican Lindsey Graham, said it would be the most comprehensive restructuring of U.S. policy toward Taiwan since the Taiwan Relations Act of 1979 - the bedrock of U.S. engagement with the island since Washington opened up relations with China that year. Should it become law as currently written, the bill would “prioritize and expedite” arms sales to Taiwan until Congress determines the threat to the island has significantly abated, as well as direct the Secretary of Defense to establish a training program to increase Taiwan and U.S. armed forces interoperability. Click here to read... [28]

Yoon's push for South Korea-Japan thaw meets hesitancy in Tokyo

South Korean President Yoon Suk-yeol has already made big waves barely a month into office, especially when it comes to national security. In addition to deepening the alliance with the U.S., South Korea is also accelerating three-way talks with Japan. Yoon sees the revival of trilateral cooperation as central to deterring North Korea, which has test fired at least 28 missiles -- a record pace -- so far in 2022. But South Korea aims to bridge its rift with Japan on more than just the North Korea threat. Yoon's team has been looking to build closer ties with Japan based on the countries' shared strategies and values. They first want to discuss how South Korea and Japan could cooperate in the region before tackling controversial historical issues -- the opposite approach of how the countries have typically handled negotiations. Yoon's top priority is establishing a bilateral strategic dialogue, which at its core is about national security. However, the Japanese side has thrown a wrench into Yoon's plans for detente. Many political leaders in Tokyo have been perplexed by how quickly things are shifting under the new South Korean leader. The South Korean government had wanted Park to visit Japan around June 13, according to one diplomatic source, so he could lay the groundwork for Yoon and Japanese Prime Minister Fumio Kishida to meet on the sidelines of the NATO summit in Spain that starts June 29. Click here to read... [29]

Russian warships pass south of Tokyo: Japan's Defense Ministry

Seven Russian warships passed near the Izu Islands south of Tokyo this week, the Defense Ministry said June 17, as Japan is on alert over increasing military activity by Russia and China near its territory. The vessels, which had sailed southward off Hokkaido in the Pacific Ocean, were spotted in the sea near uninhabited islets of the Izu Islands from June 16 into June 17, marking the first instance of Russian warship navigation in the area since October. At that time, a total of 10 warships from China and Russia passed through while circumnavigating the Japanese archipelago. According to the Joint Staff, vessels and patrol aircraft of the Maritime Self-Defense Force monitored the movements of the Russian warships. The Russian ships were spotted on June 16 morning at a location 180 km southeast of the eastern tip of the Boso Peninsula in Chiba Prefecture, near Tokyo. The Joint Staff also revealed that two Chinese missile destroyers sailed in the Sea of Japan after passing the Tsushima Strait off Kyushu, and went through the Soya Strait into the Okhotsk Sea. Click here to read... [30]

Israel set for election as PM says coalition will disband

Israeli legislators will vote to dissolve parliament, opening the way for the country’s fifth election in three years, following weeks of pressure on Prime Minister Naftali Bennett’s fragile governing coalition. Bennett will step aside to be replaced by Foreign Minister Yair Lapid, his partner in the unlikely coalition of opposites that ended former Prime Minister Benjamin Netanyahu’s record 12-year rule 12 months ago. Bennett and Lapid decided to present a vote to dissolve parliament in the coming days, Bennett’s office said on June 20. Lapid is then to serve as caretaker prime minister until new elections can be held. Announcing the plan to disband the government during a nationally televised news conference, Bennett said he had made “the right decision” in difficult circumstances. “Together, we got Israel out of the pit. We accomplished many things in this year. First and foremost, we brought to centre stage the values of fairness and trust,” Bennett said, standing alongside his main partner, Lapid. “We shifted to a culture of ‘we,’ ‘together.’” Lapid and Bennett in June 2021 formed the coalition after two years of political stalemate, ending Netanyahu’s stay in power. With a razor-thin parliamentary majority and divided on major policy issues such as Palestinian statehood, Israel’s occupation of the West Bank, and state and religion issues, the eight-faction alliance began to fracture when a handful of members abandoned the coalition. Click here to read... [31]

Health

China's COVID-19 mass testing mantra is building a waste mountain

Hazmat-suited workers poke plastic swabs down millions of throats in China each day, leaving bins bursting with medical waste that has become the environmental and economic levy of a zero-COVID strategy. China is the last major economy wedded to stamping out infections no matter the cost. Near-daily testing is the most commonly used weapon in an anti-virus arsenal that includes snap lockdowns and forced quarantines when just a few cases are detected. From Beijing to Shanghai, Shenzhen to Tianjin, cities are now home to an archipelago of temporary testing kiosks, while authorities order hundreds of millions of people to get swabbed every two or three days. Mass testing appears set to stay as Chinese authorities insist that zero-COVID has allowed the world's most populous nation to avoid a public health catastrophe. But experts say that the approach - a source of political legitimacy for the ruling Communist Party - creates a sea of hazardous waste and a mounting economic burden for local governments who must plough tens of billions of dollars into funding the system. "The sheer amount of medical waste that is being generated on a routine basis (is) at a scale that is practically unseen in human history," said Yifei Li, an environmental studies expert at New York University (NYU) Shanghai. Click here to read... [32]

North Korea faces infectious disease outbreak amid COVID-19 battle

North Korea reported an outbreak of an unidentified intestinal epidemic in a farming region on June 16, putting further strain on the isolated country as it battles chronic food shortages and an unprecedented wave of COVID-19 infections. Leader Kim Jong Un sent medicines to the western port city of Haeju on June 15 to help patients suffering from the "acute enteric epidemic", state news agency KCNA said, without giving the number affected, or identifying the disease. The term enteric refers to the gastrointestinal tract. "(Kim) stressed the need to contain the epidemic at the earliest date possible by taking a well-knit measure to quarantine the suspected cases to thoroughly curb its spread, confirming cases through epidemiological examination and scientific tests," KCNA said. An official at South Korea's Unification Ministry handling inter-Korean affairs said the government is monitoring the outbreak, suspected to be cholera or typhoid. The reported outbreak comes as the North tackles its first outbreak of COVID-19 infections. It declared a state of emergency last month, amid concerns over a lack of vaccines and medical supplies. South Korea's spy agency earlier told lawmakers that waterborne diseases, such as typhoid, were already widespread in the country before it announced the coronavirus outbreak. Click here to read... [33]