Global Developments and Analysis: Weekly Monitor, 20 June - 26 June 2022

Economic

Millions of Yemenis to go hungry as UN forced to slash food aid

The World Food Programme (WFP) has announced further dramatic cuts to food aid in Yemen, leaving millions of Yemenis already suffering through war unable to get enough food. The WFP said on 26 June that it was forced into the rationing as a result of not receiving enough funding, global economic conditions and the continued knock-on effects of the Russian invasion of Ukraine. The WFP provides food aid to 13 million people in Yemen, but the new cuts mean it will only be able to provide five million of them with 50 percent of their daily food requirements, with the remaining eight million only getting 25 percent. Caught between a protracted war and economic collapse, at least 17.4 million people – more than half of Yemen’s population – are in need of food assistance. “Critical funding gaps, global inflation and the knock-on effects of the war in #Ukraine have forced @WFP in #Yemen to make some extremely tough decisions about the support we provide to our beneficiaries,” the organisation said on Twitter. The WFP, which is the food-assistance branch of the United Nations (UN) added that “resilience and livelihood activities, and school feeding and nutrition programs” would be cut for four million people, leaving it available for only 1.8 million people. Click here to read... [2]

China’s yuan liquidity reserve pool highlights efforts to loosen US dollar hegemony

China’s plan to establish a yuan pooling scheme with the Bank for International Settlements (BIS), plus Indonesia, Malaysia, Hong Kong, Singapore and Chile could pave the way for the currency to play an anchoring role in the Asia-Pacific region, analysts said. The plan comes amid heightened worry in Beijing about US dollar hegemony and as global investors search for safe harbours while the US embarks on monetary normalisation to tame high inflation. The Renminbi Liquidity Arrangement, which could be used in periods of market volatility in the future, initially includes the People’s Bank of China (PBOC), the Bank Indonesia, the Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Central Bank of Chile. Each participant will contribute a minimum of 15 billion yuan (US$2.2 billion) or the equivalent in US dollars, creating a reserve pool at the BIS, according to a statement from the Switzerland-based financial institution owned by central banks. They will also have access to additional funding through a collateralised liquidity window, which allows participating central banks to make additional borrowing using their existing holdings as collateral. The PBOC said the arrangement will help meet reasonable international demand for the yuan and contribute to regional financial security. Click here to read... [3]

Korea on track to cut dependency on China for rare earths

South Korea's decision to join a U.S.-led pact on mineral supply helps satisfy a "definite need" to cut dependency on China for key resources, including rare earths, analysts said. Securing key resources has become a core task for major economies around the world, as minerals are a crucial element incorporated into cutting-edge technologies, green energy and national defense industries. Countries have traditionally relied on China as it not only holds the largest amount of rare earth reserves, but it also is the world's biggest producer. But China's recent moves to regulate the mining and exports of rare earths has had economies scrambling to secure alternative supplies, with the U.S.-led Minerals Security Partnership launched earlier this month. "Korea is more dependent on China [for supply of rare earth] because of proximity and because of the structure of trade between the countries where intermediate goods account for a large part," Kim Kyoung-hoon, senior researcher at the Korea International Trade Association's (KITA) Global Value Chain Research Task Force, said. Korea has its own rare earth reserves, but does not possess its own production capabilities, although in recent years it has moved to produce its own rare earth magnets. Click here to read... [4]

EU steps back into coal age – media

A number of EU countries have launched emergency plans aimed to lower and ration the use of natural gas and resurrect coal-fired power production, Business Insider reported on June 21. This week, Germany, Austria, and the Netherlands announced that coal-generated power could help them cope with an energy crisis in the coming winter. German Vice Chancellor and Economy Minister Robert Habeck said the country made a “bitter” decision to restart coal power plants. “But if we don’t do it, then we run the risk that the storage facilities will not be full enough at the end of the year towards the winter season. And then we are blackmailable on a political level,” he stated, as cited by Reuters. Austria also announced that it would be converting a gas-fired power plant to run on coal in case of emergencies, while the Netherlands removed its limit on coal-generated energy production. Reports also indicate that Italy’s coal-fired power plants have been stocking up on coal over the last few months. Meanwhile, the Netherlands and Denmark on June 20 also announced emergency plans that imply gas rationing in case of supply shortages. Italy is also mulling over declaring a state of alert on energy, Reuters reported, citing sources, which means the country could also start rationing gas to industrial users. Germany and Austria have already launched emergency plans of a similar nature. Click here to read... [5]

EU Council adopts new regulation on gas storage

The Council of the European Union (EU) on June 27 adopted a regulation aiming to ensure that gas storage capacities in the EU are filled before the winter season and can be shared between member states in the union. The regulation provided that underground gas storage on member states' territory must be filled to at least 80 percent of their capacity before the winter of 2022/2023 and to 90 percent before the following winter. Overall, the EU will attempt collectively to fill 85 percent of the total underground gas storage capacity in the bloc in 2022. Some member states do not have storage facilities on their territory, and so the regulation provides that they should store 15 percent of their annual domestic gas consumption in stocks located in other member states and thus have access to gas reserves stored in other member states. European Commissioner for Energy Kadri Simson told a press conference following a meeting of the bloc's energy ministers held in Luxembourg that it was imperative that countries update their contingency plans and turn to alternative means to save on gas. She said last week, Gazprom reduced the gas supply to companies in five member states, with 12 of the bloc's 27 member states being directly affected. Click here to read... [6]

Chemical giant may close plant due to gas shortage – WSJ

German chemicals major BASF may be forced to halt production at the world's biggest chemicals plant in Ludwigshafen, the Wall Street Journal reported on June 27, citing shortages of cheap and abundant Russian gas. According to the report, BASF has used Russian natural gas for years to generate power and as feedstock for products that make it into toothpaste, medicine, and cars. However, dwindling Russian gas supplies are proving a threat to the company's vast manufacturing hub, it says. "Cutting down production at this site will be a huge task," said BASF senior economist Peter Westerheide, as quoted by the WSJ. "We've never seen situations like this before. It's hard to imagine. With an area of approximately ten square kilometers, the Ludwigshafen complex spanning some 200 plants, accounts for about 4% of the total gas demand in Germany. Approximately 60% of the fuel used at the plant is meant to generate electricity, while the remaining 40% is feedstock for the production of chemical products, including ammonia and acetylene. BASF estimates that if the chemical complex continues to receive more than 50% of the maximum volume of gas, operations could be continued. Otherwise, the work of the complex will have to be stopped. Click here to read... [7]

China's private enterprises quadruple in last 10 years

The number of Chinese private enterprises quadrupled in the past decade amid efforts to optimize the business environment, the country's top economic planner said June 28. China's private enterprises increased from 10.85 million in 2012 to 44.57 million last year, Su Wei, deputy secretary general of the National Development and Reform Commission, told a press conference. Su attributed the expansion of private enterprises to the improved business environment for the non-public sector, as the country has vigorously spurred the development of various economic entities over the decade. China has long attached great importance to the private economy, encouraging it to play a bigger role in stabilizing growth and employment, and promoting structural adjustment and innovation. The private sector contributes more than 50 percent of the tax revenue, more than 60 percent of the GDP, and over 70 percent of the technological innovations; it also provides more than 80 percent of the urban employment and accounts for more than 90 percent of market entities in China. Highlighting the cultivation of high-quality market entities as one of the future reform goals, Su said China will step up the structural reform of private enterprises, support and guide the well-regulated and healthy development of capital, and foster a batch of world-class enterprises. Click here to read... [8]

China completes overhaul of antitrust law to corral Big Tech

Chinese tech companies will face stiffer penalties for crossing Beijing's red lines on competition after lawmakers on Friday approved changes to the country's antitrust law that were years in the making. The amendments, adopted by the National People's Congress Standing Committee, will go into effect on Aug. 1, Xinhua News Agency reports. The changes are the first to the law since it went into force in 2008. The enacted version has yet to be published in full. But based on a draft proposal announced in October, the changes are designed to put China's tech giants on a shorter leash despite signs in April that China's leadership was open to easing its crackdown on the likes of top e-commerce player Alibaba Group Holding. The draft amendments add the words "encouraging innovation" to the first article of the antimonopoly law's general provisions. A new Article 10 that states "business operators shall not exclude or limit competition by abusing data, algorithms, technology, capital advantages as well as platform rules." The wording seems to take aim at big tech companies that put the squeeze on smaller players and emerging rivals. Under the amended legislation "the vast majority of anticompetitive practices by platform providers can be regulated by law," Jiao Haitao, professor at China University of Political Science and Law in Beijing, told Chinese media. In one likely scenario, tech giants are expected to face legal repercussions if they force vendors to operate on only one platform, a practice known in China as "choose one from two." Click here to read... [9]

Samsung Heavy snags $3bn in orders for 14 LNG carriers

Samsung Heavy Industries said June 22 it has won orders for 14 liquefied natural gas carriers worth 3.9 trillion won ($3 billion) as European countries reduce natural gas purchases from Russia and look for alternative sources of the fuel in the wake of the Ukraine invasion. Orders received were for ships each with a tank capacity of 170,000 cu. meters. The scale of the orders coming in at one time is the largest ever for the South Korean shipbuilding industry. State-owned Qatar Petroleum, which has said it intends to order the vessels on a mass scale, appears to be among the customers. Samsung Heavy Industries has received orders for 24 LNG carriers this year alone, reaching a value of $6.3 billion and achieving 72% of the annual order target. Europe relies on Russia for 30% of its natural gas imports, which are delivered via pipeline. As an alternative, Europe plans to increase imports from the Middle East and Southeast Asia. As a result, the world's major maritime shipping lines are placing more orders for LNG vessels, benefiting South Korea's major shipbuilders. But Samsung Heavy is still struggling with the legacy of loss-making orders made during the shipbuilding recession. The company suffered its seventh straight operating loss in 2021, at 1.31 trillion won. Click here to read... [10]

Philippines abandons joint energy exploration talks with China

The Philippines' outgoing foreign minister said on June 23 that talks over joint energy exploration between his country and China in the South China Sea had been terminated, citing constitutional constraints and issues of sovereignty. The two countries have sparred for decades over maritime sovereignty and had since 2018 pledged to jointly explore oil and gas assets in the Philippines' exclusive economic zone (EEZ), despite China also laying claim to them. "We got as far as it is constitutionally possible to go. One step forward from where we stood on the edge of the abyss is a drop into constitutional crisis," Teodoro Locsin said in a speech. "Three years on and we had not achieved our objective of developing oil and gas resources so critical for the Philippines -- but not at the price of sovereignty; not even a particle of it." It was not clear when the decision was taken. China's embassy in Manila did not immediately respond to a request for comment. The Philippines, which relies overwhelmingly on fuel imports, has struggled to find foreign partners to help exploit its offshore energy reserves due to China's overlapping claims. The two countries vowed to work together instead, helped by outgoing Philippine President Rodrigo Duterte's pursuit of warmer ties with China. But many experts doubted such an arrangement was possible due to political sensitivities and warned any deal to share energy resources could be seen as legitimizing the other side's claim, or giving away sovereign territory. Click here to read... [11]

China-Russia auto parts export base being built in Suifenhe, Heilongjiang Province

The launching ceremony for the construction of China-Russia auto parts export base was held on June 27 in Suifenhe city, Northeast China's Heilongjiang Province, which will help increase export items to Russia and exploring new areas of bilateral cooperation, local media reported on June 27. Guangdong Masuma Information Technology Co invested 150 million yuan ($22.40 million) to set up the export base covering a space of 70,000 square meters. The annual output value of the export base is expected to reach 200 million yuan after the construction is complete, which will generate 12 million yuan in tax income for local government. Officials from Suifenhe suggested that, as the first export base for auto parts in the city, the project will serve the Belt & Road Initiative and propel China-Russia cooperation, and will also boost local auto parts manufacturing. Click here to read... [12]

Default Won’t Trigger a Long Winter for Russia

Failing to pay your debts can stop you getting a loan again. Except if you are a country—even Russia. Russia has defaulted on its foreign debt for the first time since the Bolshevik Revolution. Because this is a result of Western sanctions forbidding banks, clearinghouses and bondholders from processing and receiving the money—despite Moscow’s willingness and ability to pay—it will spark a yearslong legal battle with far more complexity than previous sovereign delinquencies. While the U.S. had previously banned Moscow from raising additional financing in dollars and locked it out of the American banking system, a temporary exemption had allowed outstanding debt to be serviced. Letting this expire in May was a way to ratchet up pressure on Russia over its invasion of Ukraine. Investors had already priced this in, with dollar- and euro-denominated Russian sovereign bonds trading down roughly 75% since March. The sanction is designed for the long term: Defaulting on international debts damages a nation’s standing among global financiers. Countries may take years to raise funds in hard currency again, impairing economic growth. This is the theory, at least. Even after freezing the Kremlin’s official reserves abroad, the West has continued importing its oil and gas. Click here to read... [13]

Chinese cities explore ‘housing coupons’ policy to boost property sales

More than 20 Chinese cities have explored the potential of the "housing coupon" policy to spur property sales and accelerate the recovery of the important sector, in addition to reducing down payments and removing home purchase restrictions. The "housing coupon" is a supplement to monetary compensation for existing residential housing subject to demolition or resettlement. That is to say, the coupon is not a direct rehousing payment, but a voucher to offset the payment for buying a home. On June 20, Zhengzhou, Central China's Henan Province, announced the implementation of the "house resettlement ticket", noting that properties purchased by buyers using the "resettlement ticket" will not be listed as the number of units purchased by the family. From this year, a number of provinces and cities have issued supportive policies to boost real estate market, while noting that policies take time to produce a result, with a few high-demand cities seeing a bounce back in sentiment, experts noted. So far, the real estate market in some cities face inventory pressure, so in order to reduce the risk of inventory backlog in the sector, some local governments have re-launched property promotions. In addition to Zhengzhou, more than 20 cities including Nanjing in East China's Jiangsu Province and Ningbo in East China's Zhejiang have implemented similar supportive policies. Click here to read... [14]

Algeria, Niger, Nigeria resume talks on Trans-Sahara gas pipeline

Algeria, Niger and Nigeria held talks this week on the revival of a decades-old project to pipe gas across the Sahara, a potential opportunity for Europe to diversify its gas sources as Russia’s war in Ukraine continues. The three countries have set up a task force for the project and designated an entity to update a feasibility study, said Niger’s oil ministry in a statement on June 22, following a two-day meeting in Abuja, the Nigerian capital. The Trans-Saharan gas pipeline is an estimated $13bn project that could send up to 30 billion cubic metres a year of supplies to Europe. The idea was first proposed more than 40 years ago and an agreement signed between the countries in 2009, but progress stalled. The revival talks come at a strategic time, as the European Union seeks to wean itself off Russian gas following the invasion of Ukraine, and is seeking alternative sources. “(The pipeline) should allow Europe to diversify its sources of natural gas supply but also allow several African states to access this high-value energy source,” said the statement. With a length of 4,128 kilometres (2,565 miles), the pipeline would start in Warri, Nigeria, and end in Hassi R’Mel, Algeria, where it would connect to existing pipelines that run to Europe. Click here to read... [15]

US and Taiwan hold first round of trade talks in new bid to counter China’s economic influence

The US said on June 27 that it had held a first round of talks with Taiwanese officials on an initiative aimed at boosting trade ties “based on shared values” – formally opening another front on which US President Joe Biden is trying to counter Beijing’s economic influence. US deputy trade representative Sarah Bianchi and Taiwanese minister without portfolio John Deng met under the auspices of the American Institute in Taiwan (AIT), Washington’s de facto embassy on the self-ruled island, and the Taipei Economic and Cultural Representative Office in Washington (Tecro), according to an announcement by the office of the US Trade Representative (USTR). The two sides expect to sign “agreements with high-standard commitments”, which “will cover a number of trade areas, including trade facilitation, regulatory practices, agriculture, anti-corruption, small- and medium-sized enterprises, digital trade, labour, environment, standards, state-owned enterprises, and non-market policies and practices”, USTR said. The office’s announcement about the US-Taiwan Initiative on 21st-Century Trade earlier this month sparked an angry response from Beijing, which considers the self-ruled island to be a renegade province. “The US insistence on playing the Taiwan card will only endanger China-US relations,” foreign ministry spokesman Zhao Lijian said after AIT and Tecro announced the initiative. Click here to read... [16]

Sri Lanka Restricts Fuel Use to Essential Services

Sri Lanka has sharply restricted fuel use and urged residents to stay home as it struggles to shore up energy supplies amid its deepening sovereign debt crisis. The South Asian nation’s wilting economy has seen Sri Lankans endure months of double-digit inflation, rolling power blackouts and severe shortages in food and medicines, sparking nationwide anti-government protests. Sri Lanka’s foreign reserves are depleted to the point that it can no longer afford to pay for essential imports, and the country defaulted for the first time in its history last month. The country’s economy faced complete collapse, Prime Minister Ranil Wickremesinghe said last week. Late June 27, authorities shut schools and urged all to work from home until July 10, with rationed fuel supplies reserved for public transport, medical services and food transportation. Sri Lanka’s fuel shortage has worsened in recent weeks, with residents lining up for hours and sometimes days to obtain gasoline in queues that snake for miles around city blocks. Sri Lanka has been heavily reliant on credit lines advanced by larger neighbour India to purchase fuel in recent months. But Sri Lanka’s energy minister, Kanchana Wijesekera, said the government was now struggling to secure fresh fuel shipments to replenish stockpiles of 9,000 metric tons of diesel and 6,000 metric tons of petrol, which would be exhausted within days if use wasn’t curbed. Click here to read... [17]

Strategic

G-7 Summit Exposes West’s Challenges in Tackling Russia

The Group of Seven rich democracies ended their summit with an agreement to discuss a batch of new sanctions against Russia, but the gathering underlined the limits of using economic tools to punish Russia four months after its invasion of Ukraine. While weapons deliveries have made an immediate difference on the battlefield and Ukraine has been clamoring for more equipment to repel Moscow’s forces, sanctions have proven slow to take effect, some of them have backfired against the West, and new ones have so far been too complex to deploy quickly. G-7 leaders displayed some unity during their three-day summit in the German Alps as they pledged their unwavering support to Ukraine, with no sign of dissent on public display. Yet Kyiv and some Western experts said the Russian advance could only be halted in the short term with more heavy weapons. The unprecedented sanctions against Russia implemented by the G-7 and other nations—targeting Moscow’s economy, energy exports and central-bank reserves—have caused global market volatility and raised energy costs. Now high inflation, slowing growth, and the specter of energy shortages in Europe this winter are damping the West’s appetite for tougher sanctions against Moscow. Divergences among the leaders of the U.S., Canada, Britain, France, Italy, Germany and Japan prevented them from agreeing on concrete new sanctions, with the group only agreeing to start work on measures ranging from a price cap on Russian oil purchases to a gold embargo. Click here to read... [18]

China hits back at US over G7 ‘zero-sum’ belt and road alternative

Beijing has slammed Washington’s renewed efforts to jointly counter China’s Belt and Road Initiative, calling the G7-backed global infrastructure project a geopolitical scheme to smear and contain China. US President Joe Biden and other leaders from the Group of 7 unveiled the “Partnership for Global Infrastructure and Investment” at their annual gathering in Germany on June 26, with a pledge to raise US$600 billion over five years to fund infrastructure projects in developing countries. The partnership is largely a revival of the Build Back Better World initiative launched at the G7 summit a year ago – a scheme that faltered over financial difficulties and competing efforts by the United States and its European allies, such as the EU’s Global Gateway. Outlining the Biden administration’s China policy in May, US Secretary of State Antony Blinken said the renewed G7 effort would be “a coordinated, high-standard, and transparent approach to meet the enormous infrastructure needs in developing countries”. Beijing last week described Biden’s rebranded initiative as a “zero-sum game approach” targeting China. Shi Yinhong, an expert on international affairs at Beijing’s Renmin University cautioned that China’s own initiative might face greater challenges if Beijing failed to address mounting concerns over the push for global influence through infrastructure projects and their cost-benefit. Click here to read... [19]

Putin to attend G20 summit – Kremlin

Russian President Vladimir Putin will attend the G20 summit in Indonesia this November, the Kremlin announced on June 27. While multiple Western leaders have demanded Russia’s expulsion from the event, Indonesian President Joko Widodo, who is hosting this year's gathering, has invited Putin to the meeting in Bali. Russian presidential aide Yuri Ushakov announced Putin’s attendance, but told reporters that it is still unclear in what capacity the Russian leader will participate. “I hope that the pandemic will allow this important forum to be held in person, but I cannot guess,” Ushakov said. US President Joe Biden called on Widodo, in March, to exclude Putin from this year’s meeting, while Canadian Prime Minister Justin Trudeau declared that “it can't be business as usual to have Vladimir Putin sitting around the table pretending that everything is OK. Because it's not OK and it's his fault.” However, Widodo did not cave in to the pressure campaign and invited Putin as planned. The Indonesian leader has also called on Ukrainian President Volodymyr Zelensky to travel to Bali in November. Widodo attended the G7 summit in Germany as a guest this weekend, and after leaving on June 26 he will travel this week to Kiev and Moscow to meet with Zelensky and Putin. Click here to read... [20]

Yoon expected to promote arms exports during NATO trip

President Yoon Suk-yeol is expected to engage in marketing efforts in his first overseas trip since his inauguration toward exporting domestically developed weapons that are currently capturing attention from countries amid Russia's invasion of Ukraine. Yoon is now attending the NATO Summit in Madrid, Spain, where he will discuss security and economic ties with world leaders. Although Korea does not belong to the 30-member alliance, it was invited along with Japan, Australia and New Zealand as the organization's Asia-Pacific partners. The expectations come as a number of countries have shown interest in Korean-made military hardware as part of efforts to boost military capabilities in light of the war in Ukraine. The local defense industry is particularly focusing on Yoon's summit with his Polish counterpart Andrzej Duda, scheduled for June 29 (local time), as the two leaders may close an arms deal during the bilateral talks. The Central European country is one of the most enthusiastic about purchasing Korean weaponry such as Korea Aerospace Industries' (KAI) FA-50 light fighter jet and Hyundai Rotem's K2 tank. Polish Defense Minister Mariusz Blaszczak and a delegation visited Korea late last month and early this month, respectively, and toured defense firms as well as military units operating the weapons in which the country is interested. Click here to read... [21]

Biden aims at China in new illegal fishing policy framework

The Biden administration is stepping up efforts to combat illegal fishing by China, ordering federal agencies to better coordinate among themselves as well as with foreign partners in a bid to promote sustainable exploitation of the world’s oceans. On June 27, the White House released its first ever National Security memo on illegal, unreported and unregulated fishing, or IUU, to coincide with the start of a United Nations Ocean Conference in Lisbon, Portugal. Nearly 11 percent of total U.S. seafood imports in 2019 worth $2.4 billion came from illegal, unreported and unregulated fishing, according to the U.S. International Trade Commission, a federal agency. While China isn’t named in the lengthy policy framework, language in it left little doubt where it was aimed. The memo is bound to irritate Beijing at a time of growing geopolitical competition between the two countries. China is a dominant seafood processor and through state loans and fuel subsidies has built the world’s largest distant water fishing fleet, with thousands of floating fish factories spread across Asia, Africa and the Americas. Specifically, the memo directs 21 federal departments and agencies to better share information, coordinate enforcement actions such as sanctions and visa restrictions and promote best practices among international allies. Click here to read... [22]

USTR Tai calls U.S. tariffs on Chinese goods 'significant' leverage

U.S. Trade Representative Katherine Tai on June 22 said that she views tariffs on Chinese goods as "a significant piece of leverage" in the U.S.-China trade relationship and removing them would likely have a limited effect on controlling short-term inflation. In testimony before a U.S. Senate Appropriations subcommittee, Tai said that it was important to focus on protecting American trade interests against China's plans to dominate important industries such as semiconductors. "We need to be keeping our eye on the ball on this bigger picture," Tai said. Tai's comments indicated that she was still pushing for U.S. President Joe Biden to maintain tariff leverage over China as he deliberates over whether to lift some of the so-called Section 301 duties on Chinese imports as a way to try to ease high inflation. "The China tariffs are, in my view, a significant piece of leverage -- and a trade negotiator never walks away from leverage," Tai said. Tai added that the key challenge for Biden's administration was converting "this leverage into a strategic program that will strengthen American competitiveness and defend our interests in a global economy in which China will continue to play." Tariffs and other trade tools can help improve the competitive position of the U.S. economy in the medium and long term, Tai said, adding: "With respect to short-term challenges, there is a limit to what we can do with respect to, especially, inflation." Click here to read... [23]

U.S., Japan and Australia launch Pacific island initiative

The United States, Japan, Australia, Britain and New Zealand on June 24 launched an initiative to step up engagement with Pacific island countries, as China seeks to boost economic and defense cooperation with them. Under a mechanism named "Partners in the Blue Pacific," the five countries said they will pursue "more effective and efficient" ways to deal with challenges such as "growing pressure on the rules-based free and open international order." "As our countries -- Australia, Japan, New Zealand, the United Kingdom, and the United States -- continue to support prosperity, resilience, and security in the Pacific, we too must harness our collective strength through closer cooperation," they said in a statement. The statement indicated areas for potential cooperation with Pacific island countries, such as Fiji, Micronesia and Tonga, including climate change, transport, maritime security, health and education. The United States and its allies like Japan have been alarmed by China's moves to bolster its influence in the Pacific, such as by signing a security pact with the Solomon Islands in April. The treaty reportedly allows the deployment of Chinese police, military and other armed personnel, as well as the docking of the Asian power's military ships in the islands. Click here to read... [24]

Afghanistan ends search for survivors of earthquake that killed 1,000

Authorities in Afghanistan have ended the search for survivors of an earthquake that killed 1,000 people, a senior official said on June 24, adding that supplies of medicine and other critical aid were inadequate. About 2,000 people were injured and 10,000 houses were partially or completely destroyed in June 22’s earthquake in a remote area near the border with Pakistan, Mohammad Nassim Haqqani, a spokesperson for the disaster ministry, told Reuters. “The search operation has finished, 1,000 are dead and the injured are around 2,000, both serious and superficial injuries,” Haqqani said. He did not elaborate on why the search for survivors was being called off after some 48 hours. Survivors have been pulled from the rubble of other earthquakes after considerably more time. The 6.1 magnitude earthquake struck about 160 kilometers southeast of Kabul, in a region of arid mountains dotted with small settlements that has often been at the center of Afghanistan’s decades of war. Poor communications and a lack of proper roads have hampered relief efforts in a country already grappling with a humanitarian crisis that has deteriorated since the Taliban took over last August. Haqqani said Afghanistan did not have enough critical supplies to treat the wounded. “The health ministry does not have enough drugs, we need medical aid and other necessities because it’s a big disaster,” he said. Click here to read... [25]

Belgium prime minister cautions against treating China as if it is another Russia

Belgian Prime Minister Alexander De Croo has warned against lumping China into the same geopolitical basket as Russia, saying that “for the moment” each should be considered differently. “I think the last thing we should do is turn our backs to China the way we are turning our backs to Russia,” De Croo told an event in Brussels on June 27. Noting Beijing is ‘an important trading partner’, De Croo represents a widening schism between two factions on EU China policy. He advocated a continuation of the European Union’s triptych policy, regarding Beijing as a partner, rival and competitor. “They’re an important trading partner. It’s a fact – I mean, you can be in favour of it or not, but they’re an important trading partner,” De Croo told the Brussels Forum, an event organised by the German Marshall Fund of the United States. De Croo’s remarks came amid a flurry of summitry in Europe, at which China is an important topic of conversation. At a Group of 7 meeting in Krun, Germany, on June 26, the world’s most powerful democracies committed pledged US$600 billion towards rivalling China’s infrastructure drive in low-income states. A Nato meeting in Madrid, Spain, that starts on June 28 is expected to identify China for the first time as a key risk in its new “strategic concept” blueprint. Click here to read... [26]

U.S. in "national battle" over abortion rights

A wave of protests and lawsuits has swept the United States after the Supreme Court on June 24 overturned the landmark 1973 Roe v. Wade decision that established a constitutional right to abortion. A judge on June 27 blocked southern state Louisiana from enforcing the abortion ban, while a governor signed an executive order to protect women seeking abortions in New Mexico and an attorney general was accused of illegally threatening abortion providers with criminal prosecution in Texas. Robin Giarrusso, an Orleans Parish civil district court judge, on June 27 issued a temporary restraining order blocking Louisiana, one of 13 states which passed "trigger laws" to ban or severely restrict abortions once the Supreme Court overturned the 1973 ruling. The plaintiffs in the suit there do not deny that the state can ban abortion. Instead, they contend Louisiana has multiple and conflicting trigger mechanisms in law, according to local media reports. A hearing to decide whether to further block enforcement of the ban has been scheduled on July 8. In a lawsuit filed on June 27 in Houston on behalf of several health care providers, the American Civil Liberties Union accused Texas Attorney General Ken Paxton of illegally threatening abortion providers before relative state laws take effect. Click here to read... [27]

UN Ocean Conference opens in Lisbon

A global drive to map 80 percent of the seabed by 2030 should be launched to protect the world's oceans, United Nations (UN) Secretary-General Antonio Guterres said on June 27. Speaking at the opening of the 2022 UN Ocean Conference in Lisbon, Portugal, Guterres called on governments around the world to "increase their ambition to recover the oceans." Pollution of all kinds must be reduced in order to protect "people whose lives depend on the sea from the impact of climate change," he said in a statement. New, climate-resilient coastal infrastructure must be created, he added, and the maritime transport sector must commit to reducing carbon emissions to zero "by 2050." Portuguese President Marcelo Rebelo de Sousa also called for the mapping of maritime territory, as well as more investment in environmental education. De Sousa said: "This Lisbon conference has to be not only a sign that there is room for peace, multilateralism, dialogue, cooperation, but also a sign that we are going to act faster." Portuguese Prime Minister Antonio Costa June 27 made a commitment to classify 30 percent of the national marine area by 2030, and to bring all national fishery stocks within sustainable biological limits. The Portuguese government "will continue to invest in the Air Center initiative, as a network of scientific collaboration between countries and research institutes in areas such as space, observation of the atmosphere, oceans, climate and energy," Costa said. Click here to read... [28]

‘A new era’: Saudi Arabia’s MBS in Turkey as nations mend ties

Saudi Arabia’s Crown Prince Mohammed bin Salman (MBS) travelled to Turkey for the first time in years for talks with President Recep Tayyip Erdogan, aiming to fully normalise ties that were ruptured after the 2018 killing of Saudi journalist Jamal Khashoggi at the Saudi consulate in Istanbul. Erdogan welcomed Prince Mohammed at the presidential palace in Ankara with a ceremony and the two shook hands and embraced, before being met by members of the Turkish cabinet. In a statement following the talks, the two countries emphasised determination on ushering in a new period of cooperation in bilateral relations. MBS’ visit comes as part of a tour that included stops in Egypt and Jordan earlier this week. Prince Mohammed has been leveraging Saudi Arabia’s vast wealth and oil production capacity to soften criticism of the country’s human rights record. In turn, Erdogan is seeking financial support that could help relieve Turkey’s beleaguered economy ahead of tight elections for the presidency, expected in 2023. The trip is expected to bring “a full normalisation and a restoration of the pre-crisis period”, a senior Turkish official told Reuters news agency. “A new era will begin.” The Turkish official said the two countries had lifted restrictions on trade, flights and the screening of TV series, with mutual negative media coverage also halted. Click here to read... [29]

U.S. lawmakers push for Asia-Pacific engagement with flurry of bills

U.S. lawmakers on both sides of the aisle are coming out with an array of bills and resolutions aimed at expanding the Biden administration's involvement in Asia, including strengthening ties with Pacific nations and expanding support for Taiwan. Democratic Rep. Ami Bera, who chairs the House Foreign Affairs Subcommittee on Asia, the Pacific, Central Asia and Nonproliferation, and Rep. Steve Chabot, the panel's top Republican member, co-sponsored and introduced the Indo-Pacific Engagement Act this week. "When it comes to advancing U.S. interests in the Indo-Pacific, it's time that we match resources with rhetoric," Bera said Tuesday in a news release. "For decades we have routinely underinvested in both diplomatic and aid assistance, setting the stage for China to expand its influence and attempt to define the rules in the region," the representative said. "It is deeply frustrating that year after year administrations of both parties produce a budget that places the Indo-Pacific near the bottom of our national priorities," Chabot added. This bill requires the administration to draw up a five-year plan to increase engagement with and aid to Pacific Island nations. It calls on the government to assign additional diplomatic personnel in the Indo-Pacific and compile a list of locations where new embassies and consulates are needed. The Indo-Pacific Engagement Act stresses the importance of sustained engagement in the region to advancing American interests in the 21st century and explicitly cites "countering the malign influence of" China in the region as one of its goals. Click here to read... [30]

Campaigning gets under way for July 10 Upper House election

Campaigning kicked off June 22 for the Upper House election that will give voters their first opportunity to assess the Kishida administration’s performance since it took power eight months ago, with skyrocketing increases in consumer prices and fuel due to the weakening yen being a key issue. The vote on July 10 will determine 125 seats, including a by-election in Kanagawa Prefecture neighboring Tokyo. A total of 545 candidates registered for the prefectural and proportional representation districts by the 5 p.m. deadline. A record 181 women are running in the election. The overall number of candidates was much higher than 2019 when 370 ran, in large part due to bickering among opposition parties over backing the same candidate in the single-seat prefectural districts that are the key to determining which side emerges victorious. Of the 32 single-seat prefectural districts, the opposition is backing the same candidate in only 11 districts, while more than one opposition camp candidate is running in the other 21 districts. Prime Minister Fumio Kishida and the leaders of eight other major parties held a debate at the Japan National Press Club in Tokyo on June 21 where the focus was how to deal with the surge in consumer prices triggered by Russia’s invasion of UkraineClick here to read... [31]

Iran nuclear talks to resume: EU

Iran and the European Union announced June 25 the resumption of indirect negotiations between Iran and the US in the coming days to revive the Iranian nuclear pact. Making the remarks at a joint televised press conference with Iranian Foreign Minister Hossein Amir-Abdollahian, visiting EU Foreign Policy Chief Josep Borrell said the talks will resume "quickly" and "immediately" in an effort to "solve the last outstanding issues." The top EU diplomat told reporters that "talks between Iran, the United States and the EU will not take place in Vienna because they will not be in the P4+1 format," referring to Britain, China, France, Russia and Germany. The talks "will probably take place somewhere closer to the Gulf and more specifically in a Gulf state," he added. "We are expected to resume talks in the coming days and break the impasse. It has been three months and we need to accelerate the work. I am very happy about the decision that has been made in Tehran and Washington," said Borrell in a statement. For his part, Amir-Abdollahian said that he had detailed, in-depth talks on Iran's demands with Borrell, adding "we are ready to resume negotiations in the coming days." Click here to read... [32]

Does China’s demotion of its deputy foreign minister signal a rethink over Russia ties?

Rumours have been rife as to why Le Yucheng was recently removed as China’s highest-ranking deputy foreign minister. For a career diplomat and a key candidate for the top job at the foreign ministry, his appointment last week to a vice-ministerial position as deputy head of a less prominent agency overseeing television and radio broadcasting was clearly a huge disappointment. Many have linked his setback to Beijing’s miscalculation over Moscow’s invasion of Ukraine. It is widely believed that the Chinese leadership made a strategic error in boosting their partnership with Russia to one that has “no limits” and “no forbidden areas”, three weeks before Russian President Vladimir Putin launched an all-out attack on Ukraine on February 24. Some said Putin may have duped President Xi Jinping about his plans when they issued a joint statement in Beijing that has been cited by critics as evidence of China’s tacit approval of Moscow’s invasion. As China’s refusal to condemn Moscow’s invasion is becoming increasingly unpopular both at home and abroad, many have faulted Le, who was responsible for the ministry’s daily affairs and Eurasian relations, for his role in Beijing’s embarrassing diplomatic blunder. But given China’s high-centralised decision-making process, it would be hugely unfair to point the finger at Le for policy decisions with global implications, which apparently go well beyond his pay grade. Click here to read... [33]

Health

North Korea’s First Covid Wave Has Passed With No Apparent Signs of Catastrophe

When North Korea disclosed its first Covid-19 outbreak last month, leader Kim Jong Un called it one of the greatest upheavals since the country’s founding. Its 26 million people were unvaccinated and malnourished, and its healthcare system is among the most poorly equipped in the world. But after six weeks, the country is reporting a dwindling number of Covid-19 cases and appears to have avoided an outright catastrophe, according to defectors and medical experts familiar with the country’s health system. An Omicron variant that is considered to be less virulent, an ability to impose strict lockdowns and a population with resilient immune systems have likely aided the country’s efforts, the defectors and experts say. North Korea, a country that tightly controls information, took an unusual step on May 12 by going public with its Covid outbreak. The data released since then—tracking fevers, deaths and symptoms, sometimes by region or demographic—both undercount and overstate reality, they add. With limited PCR testing capacity, North Korea tracks Covid-19 cases by counting those with fevers, albeit at a lower temperature threshold at 98.6 degrees Fahrenheit than what is typically used globallyClick here to read... [34]