Global Developments and Analysis: Weekly Monitor, 04 July - 10 July 2022

Economic

Roundup: UN report warns global hunger figure rose to 828 mln in 2021

The number of people affected by hunger rose to 828 million in 2021, an increase of 46 million from the previous year, the United Nations (UN) Food and Agriculture Organization (FAO) said in a report on July 06. The 2022 edition of "The State of Food Security and Nutrition in the World" (SOFI) report -- drafted by the FAO and four other UN agencies -- carries fresh figures on nutrition and food accessibility at the global level, including the latest estimates of the costs and affordability of a healthy diet. The report said the number of people affected by hunger has increased by 150 million since the outbreak of the COVID-19 pandemic. This would risk pushing the international community further away from reaching Goal 2 of the UN Sustainable Development Agenda, which is to end hunger and malnutrition by 2030. "After remaining relatively unchanged since 2015, the proportion of people affected by hunger jumped in 2020 and continued to rise in 2021 to 9.8 percent of the world population," the SOFI said. "This compares with 8 percent in 2019 and 9.3 percent in 2020." "The ongoing war in Ukraine is disrupting supply chains and further affecting prices of grain, fertilizer and energy," the report warned. Click here to read... [2]

China’s coronavirus recovery at ‘critical point’, says Li Keqiang, singling out five regions to carry the economy

Chinese Premier Li Keqiang has told five prosperous coastal provinces that form the backbone of the economy to “exhaust all means” to stabilise production and employment, as the country stands at a “critical point” in economic recovery from the coronavirus pandemic. Shanghai and southeastern provinces Guangdong, Jiangsu, Zhejiang and Fujian must unclog supply chain bottlenecks and steer the economy back on track as soon as possible, while controlling fresh outbreaks, Li told a symposium on July 07 attended by local officials. These provincial-level jurisdictions – which together account for about one-third of China’s overall economic output – should continue to do the heavy lifting for national growth and securing fiscal strength, said Li, according to the official Xinhua News Agency. Li made the remarks as China braces for its lowest quarterly growth rate in more than two years next week, with economic data expected to reflect the impact of lockdowns and other stringent virus control measures on the economy. The five coastal regions singled out by Li contribute nearly 40 per cent of China’s total fiscal income and about 80 per cent of all localities’ net revenue transferred to the central government, playing a pillar role for the treasury and subsidising poorer central and western Chinese regions. Click here to read... [3]

China, emerging markets suffering worst capital exodus in 7 years with US$4 billion net outflow in June

China and over 20 other emerging markets are undergoing their worst wave of capital exodus in around seven years, a global financial industry association has warned. Overseas investors withdrew US$2.5 billion net from Chinese bonds in June, according to data from the Institute of International Finance (IIF), while US$9.1 billion net flowed into other emerging markets’ bonds last month. But a net total of US$4 billion was withdrawn from emerging markets’ equities and bonds combined in June, marking the fourth straight month of net losses, the Washington-based IFF said. Overseas investors still deposited US$9.1 billion into China’s equities in June, compared with outflows of US$19.6 billion in other emerging markets, the IIF added. “We see that the current outflow episode is similar in scale to the [yuan] devaluation scare in 2015 and 2016,” IIF economist Jonathan Fortun wrote on July 06 after China suffered a huge foreign capital outflow from its securities markets in 2015, when around US$670 billion was withdrawn. Fortun warned that the mounting risk of a global recession was weighing on the capital flow into emerging markets as anxiety builds over geopolitical events, tighter monetary conditions and inflation. China’s foreign exchange reserves also fell by a more than expected US$56.5 billion from a month earlier to US$3.07 trillion at the end of June. Click here to read... [4]

China trade, spending rebound dulled by zero-Covid uncertainty

China’s trade and domestic consumption are unlikely to make a robust comeback in the second half as uncertainties including Beijing’s zero-Covid policy persist for the world’s second-biggest economy, experts say. Pinpoint Asset Management president and chief economist Zhang Zhiwei said falling international demand will significantly slow China’s exports as expectations for Western economies worsen. “In the past month, investment banks around the world have downgraded their forecasts for economic growth in the United States and Europe, which will likely slow China’s exports,” Zhang said. “In the first half of the year, China’s main problem was supply chain issues, while in the second half it will likely become the issue of [decreasing] demand, and the increase in trade might not be strong enough to become the main engine of China’s economic growth.” Analysts also argued that the uncertainties of Covid-19 measures will continue to loom over domestic consumption, which is still significantly weaker than pre-pandemic levels, despite some recovery. “Consumption and the whole service sector are still constrained by Covid-19 [control] measures, and people’s incomes are affected as well,” Zhang said. He added that people were becoming more risk averse and less willing to travel or go to crowded public places – changes in behaviour that will work against a consumption recovery. Click here to read... [5]

White-shirted group attacks protesters at China banking scandal demonstration

Victims of what could be one of China’s largest financial scandals were surrounded by local police and beaten by unidentified men during a protest in Henan province on July 10. An estimated 1,000 depositors gathered in front of the Zhengzhou sub-branch of the People’s Bank of China on July 10 morning, in a latest attempt to recover millions of yuan frozen in rural banks. One depositor, surnamed Guo, said people had come from all over China to protest, arriving at the scene as early as 4am. Videos sent to the South China Morning Post show the protesters lined up in rows in front of the bank, holding banners that read “No deposits, no human rights”, “We are against Henan government’s corruption and violence”, chanting, “Henan banks, give me my money back” and “[Premier] Li Keqiang, investigate Henan”. One depositor brought portraits of Mao Zedong and pasted them on pillars in front of the bank, Guo said. Portraits of the late Communist leader are sometimes used in protests against corruption and corporate power in China. Other photos and videos that were shared on social media platform Weibo have been censored, along with hashtags recording the protest. Hundreds of thousands of people across China who had deposited their money in four rural banks based in Henan have been trying to get their money bank since April. Click here to read... [6]

What does the Airbus deal mean for wider China-Europe cooperation?

Three major Chinese airlines' July 08 announcement of a massive 292 plane order from European plane manufacturer Airbus has attracted widespread attention in the West. In the context that global aviation sector has been hammered by the COVID-19 pandemic and the European economy continues to grapple with surging inflation, the $37 billion deal, one of the largest for Airbus, is not only of great significance for the company, also, as Reuters said, is "a breakthrough for Europe." The equal and mutually beneficial deal demonstrates that China and the EU have a solid foundation and good prospects in aviation cooperation. Aviation cooperation involves trade and industrial investment. It is also a comprehensive and systematic cooperation involving science and technological domain. Another background of the deal is that there have been some political differences between China and the EU in recent years, and these differences seem to have created some negative impacts on the normal economic and trade cooperation between the two sides. Now, Europe faces a question: should it continue to let political differences affect normal economic and trade cooperation? Click here to read... [7]

Arabs lose faith in Western democracy to deliver economic stability: BBC

Arabs are losing faith in Western democracy to deliver economic stability across the Middle East and North Africa, the BBC reported on July 10, citing a latest survey. More than half of the 23,000 people interviewed across the region by the Arab Barometer network agree with the statement that an economy is weak under a Western democratic system, the report said. There's a growing perception that Western democracy is not a perfect form of government, and it won't fix everything, the report cited Michael Robbins, director of the Arab Barometer, a research network based at Princeton University which worked with universities and polling organizations in the Middle East and North Africa to conduct the survey between late 2021 and spring 2022, as saying. "What we see across the region is people going hungry, people need bread, people are frustrated with the systems that they have," Robbins said. Most respondents don't expect the economic situation in their country will improve in the next few years. Click here to read... [8]

US pressing even tougher chip bans on China

The US government is finding it easier to harass Chinese semiconductor producers than to support its own industry. As the CHIPS Act remains stalled in Congress and Commerce Secretary Gina Raimondo warns that large foreign investments are at risk, tougher US sanctions against China are reportedly in the works. Congress has been debating for a year and a half but has not yet reconciled the House and Senate versions of the CHIPS Act, which would provide US$52 billion in subsidies to domestic and foreign semiconductor companies that invest in America. News reports indicate that the US government is putting pressure on the Netherlands to block ASML Holding NV from selling technology used in making a large proportion of the world’s chips to China. The Japanese government is also being prodded by the US to ban Nikon’s sales of similar chip-making technology to China, according to the reports. The equipment in question is deep ultra-violet (DUV) lithography tools, which are used in the production of most semiconductors. Lithography is the technology used to transfer semiconductor designs, or circuit patterns, from the photomask to the surface of the wafer for fabrication. Shipments of extreme ultra-violet (EUV) tools to China were embargoed during the Trump administration. EUV, which has a shorter wavelength than DUV, is used by TSMC of Taiwan and Samsung of South Korea to make chips with the world’s smallest 5-nanometer (nm) and 3-nm design rules. Click here to read... [9]

Taliban throws wrench into Pakistan's plans for cheap coal power

The Taliban has upset Pakistan's plans to ease its energy crisis by importing cheaper coal from Afghanistan, exposing the neighbors clashing interests. Facing a severe energy shortage, partly due to a lack of foreign reserves to import coal or gas for its Chinese-built power plants, Islamabad recently announced its intention to import coal from Afghanistan in Pakistani rupees instead of dollars. This way, it hoped to reduce its dependence on more expensive South African coal. But the Taliban rulers in Kabul more than doubled the price, quickly setting customs duties at 30%. Afghanistan has its own foreign funding crunch under Western sanctions and is keen to generate more revenue. The Taliban is also eager to show that it can assert itself and is no proxy, observers note. Pakistan has been grappling with blackouts that disrupt life and business, and its woes have grown only worse this week due to severe weather and flooding. The country imports about 70% of its coal from South Africa for its cement and textile industries, as well as some power plants. However, it has not been able to do so in the last few months as coal prices have remained close to record highs. In South Africa, elevated prices are linked not only to the Ukraine war but also to disruptions from domestic civil unrest, according to an S&P Global analysis in May. Click here to read... [10]

World population to reach 8 bln on Nov. 15: UN

The global population is projected to reach 8 billion on Nov. 15, with India projected to surpass China as the most populous country in 2023, the United Nations (UN) said July 11, World Population Day. "It is a reminder of our shared responsibility to care for our planet and a moment to reflect on where we still fall short of our commitments to one another," said UN Secretary-General Antonio Guterres. The growth rate is at its slowest since 1950, having fallen under 1 percent in 2020, according to the World Population Prospects 2022. The world's population could grow to around 8.5 billion in 2030 and 9.7 billion in 2050 and peak at around 10.4 billion during the 2080s, and countries in sub-Saharan Africa are expected to contribute more than half of the increase through 2050, said the report. More than half of the projected increase up to 2050 will be concentrated in eight countries: the Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines and the United Republic of Tanzania, it added. Fertility has fallen markedly in recent decades for many countries, the report said, noting that two thirds of the global population today lives in a country or area where lifetime fertility is below 2.1 births per woman, roughly the level required for zero growth in the long run for a population with low mortality. Click here to read... [11]

OPEC Oil Output Lags Behind Targets Despite Pledges to Boost Supplies

Oil production from the Organization of the Petroleum Exporting Countries continued to lag behind targets in June, raising fresh concerns about whether the cartel is capable of easing the worst supply crisis in decades ahead of a meeting between President Biden and the group’s largest members. Output from the 10 OPEC members involved in the cartel’s plans to gradually raise production to prepandemic levels rose to 24.81 million barrels a day in June, the group said, according to data from a collection of secondary sources. That put it roughly 1.06 million barrels a day behind its agreed-upon quota for June of 25.87 million barrels a day. OPEC’s total output, including all 13 members of the cartel, rose 234,000 barrels a day in June to 28.72 million barrels a day, the group said in its monthly market report. Members Iran, Venezuela and Libya are exempt from the group’s quotas. The latest figures will likely sharpen focus on the group’s struggles to raise its output ahead of Mr. Biden’s visit to the Middle East this week. A lack of spare capacity and unrest in some member states has seen the group consistently fall behind its targets. The war in Ukraine, which has seen millions of barrels of Russian oil cut off from Western markets, has sent oil prices surging and heightened the need for fresh oil supplies to fill the gap. Click here to read... [12]

Russia halts transit of Kazakh oil to Europe – media

A Russian court on July 06 ordered a 30-day suspension of the activity of the Caspian Pipeline Consortium (CPC), which takes oil from Kazakhstan to the Black Sea via one of the world's largest pipelines. The suspension of the transit was necessitated by technical issues identified by Russia’s consumer protection watchdog Rospotrebnadzor. According to Reuters, the CPC operator said that the ruling to suspend operations was related to paperwork on oil spills and that the consortium had to abide by it. The company also stated it had submitted an appeal to the court in the Russian city of Novorossiysk requesting that enforcement of the ruling be deferred to avoid a stoppage that could lead to irrevocable consequences for the pipeline equipment. Meanwhile, trading sources familiar with the operations of the terminal told Reuters that oil exports from the CPC terminal on the Black Sea were continuing on July 06 morning. The CPC is a multinational oil transportation project involving Russia, Kazakhstan and a consortium of leading oil companies. The pipeline system mainly collects crude from the large oil fields of western Kazakhstan but also from Russia. Its total capacity is over a million barrels of oil per day, which is 2.3% of the global seaborne crude trade. Click here to read... [13]

Euro hits US dollar parity for first time in 20 years

The euro has hit parity with the United States dollar and stock markets fell as the prospect of further central bank tightening and worries about the health of economies worldwide unnerved investors. By July 12, the euro was at a low of $1, its weakest in more than 20 years. The US dollar’s role as the go-to currency for investors worried about the economic outlook has been boosted in recent weeks, with the US currency roaring to two-decade highs against multiple currencies. The euro has been particularly vulnerable given the effect of a continuing spike in natural gas prices on the regional economy and the war in Ukraine. SG Futures said this is a “catastrophe” for the European Union as energy imports run the risk of becoming more pricey. “Energy supply is already unaffordable and as we head into winter it’ll likely get even worse,” it added on a tweet. The biggest single pipeline carrying Russian gas to Germany, the Nord Stream 1, began annual maintenance on July 11, with flows expected to stop for 10 days. Euro weakness has been a big part of the dollar index’s push higher, with the safe-haven US currency also supported by worries about growth elsewhere, as China, in particular, implements strict zero-COVID policies to contain fresh outbreaks. Click here to read... [14]

Strikes Roll Across Europe as Unions Push for Higher Wages to Offset Inflation

Strikes are snarling trains in France, delaying criminal trials in England and roiling air travel across Europe, as labor leaders across the continent seize on the spiraling cost of living to demand sometimes substantial raises. Spain-based cabin crews at budget carrier easyJet PLC are demanding a 40% boost in their base pay, and future annual raises in line with inflation amid strikes they plan to continue this month. In England, criminal lawyers—who are self-employed but are paid fees by the government to represent defendants who can’t afford their own lawyer—are asking for a 25% pay boost in a walkout that has stretched into a second week. Strikes are a part of life in much of Europe. This year, though, the summer strike season has collided with historically high inflation, emboldening labor leaders. “Wages are lagging a long way behind prices, and it is the job of the trade unions to ensure wages catch up,” said Mick Lynch, the head of the U.K.’s National Union of Rail, Maritime and Transport Workers, which represents train workers who paralyzed much of the country during a weeklong strike last month. Annual inflation for the eurozone, the bloc of European countries using the common currency, accelerated to a record high in June, hitting 8.6% from a year ago. It is the highest rate since records began in early 1997. Click here to read... [15]

EU’s scramble for gas hurting poorer nations – WSJ

European Union members are actively buying up liquefied natural gas (LNG) as an alternative to Russian pipeline supplies, depriving poorer countries that cannot compete for the fuel due to high prices, The Wall Street Journal claimed on July 08. According to the publication, the price of LNG has skyrocketed 1,900% from its low two years ago. Current prices are equivalent to buying oil at $230 a barrel, while LNG normally trades at a discount to oil. Developing countries cannot compete with Europe for the supplies at such prices of about $40 per million British thermal units (MMBtu). According to Wood Mackenzie data, cited by the Journal, European nations have ramped up their LNG imports by almost 50% year-to-date through June 19. At the same time, India’s imports during that period decreased by 16%, China slashed purchases by 21%, and Pakistan by 15%. A tender from Pakistan for around $1 billion of LNG attracted no offers on July 07, the country’s officials said. Each day, the country’s businesses and homes are suffering hours of government-imposed electricity shutdowns because Islamabad can’t import enough natural gas to fuel power plants, they explained. In some cases, cargoes that were destined for poorer countries are diverted to Europe. Experts note that’s profitable even if suppliers are forced to pay penalties under contracts with developing countries. Click here to read... [16]

Strategic

China presents US with further demands to improve relations at meeting between Foreign Minister Wang Yi and Secretary of State Antony Blinken

China has expanded its list of demands to the United States if it wants to improve relations as senior officials met on July 04. Both US Secretary of State Antony Blinken and Chinese Foreign Minister Wang Yi described their talks in Bali as “constructive”, with Wang saying they had created conditions for further high-level exchanges. However, he also accused the US of failing to fix their damaged ties after the Donald Trump era. “Sino-US relations are still not out of the predicament created by the previous US administration, and they are even facing more and more challenges,” Wang said, according to the state news agency Xinhua. He added that the US wrongly sees China as a threat, saying: “If this ‘threat’ theory is allowed to further develop, US policy towards China will be entering a dead end that it cannot exit”. Wang said China has presented Blinken four demands: remedial action for Washington to take; a list of Beijing’s key concerns; US legislation it wants changing and eight areas where the two sides can cooperate. Details of the list were not made available. China had already presented a list of its key concerns and remedial action it wanted in July last year, including a call for visa restrictions on Communist Party members to be lifted and for fairer treatment of Chinese citizens in the US. Click here to read... [17]

U.S. tells China its support for Russia complicates relations

China’s support for Russia’s war in Ukraine is complicating U.S.-Chinese relations at a time when they are already beset by rifts and enmity over numerous other issues, U.S. Secretary of State Antony Blinken told his Chinese counterpart on July 09. In five hours of talks in their first-to-face meeting since October, Blinken said he expressed deep concern to Foreign Minister Wang Yi about China’s stance on Russia’s actions in Ukraine and did not believe Beijing’s protestations that it is neutral in the conflict. The talks had been arranged in a new effort to try to rein in or at least manage rampant hostility that has come to define recent relations between Washington and Beijing. “We are concerned about the PRC’s alignment with Russia,” Blinken told reporters after the meeting in the Indonesian resort of Bali. He said it is difficult to be “neutral” in a conflict in which there is a clear aggressor but that even it were possible, “I don’t believe China is acting in a way that is neutral.” The Biden administration had hoped that China, with its long history of opposing what it sees as interference in its own internal affairs, would take a similar position with Russia and Ukraine. But it has not, choosing instead what U.S. officials see as a hybrid position that is damaging the international rules-based order. Click here to read... [18]

Assassination of Japan’s Shinzo Abe stuns world leaders

Leaders around the world condemned the assassination of former Japanese Prime Minister Shinzo Abe on July 08 as “despicable,” “cowardly” and “terrorism” while recalling him as a man devoted to peace, security and international cooperation. Tributes poured in as governments expressed sorrow and solidarity with Japan over the loss of Abe, who was Japan’s longest-serving leader before stepping down in 2020 for health reasons. Abe, 67, was shot from behind in Nara in western Japan while giving a campaign speech. He was airlifted to a hospital and later pronounced dead. The attack was especially shocking in one of the world's safest countries, where guns are strictly controlled. U.S. President Joe Biden said he was “stunned, outraged, and deeply saddened.” He visited the residence of Japan’s ambassador to the U.S. on July 08 to offer condolences. He placed a bouquet of flowers on a table set up near a koi pond and wrote in a condolence book that Abe was “a man of peace and judgment.” The U.N. Security Council stood in silent tribute to Abe after the current council president, Brazil’s U.N. Ambassador Ronaldo Costa Filho, expressed “our sadness and shock at the senseless assassination.” Japanese Prime Minister Fumio Kishida, who hastily returned to Tokyo from campaign events around the country, condemned the “unforgivable act.” Click here to read... [19]

China puts Taiwan ‘reunification’ strategy at heart of national revival plans

Beijing’s top official for cross-strait affairs has outlined a framework for a Taiwan strategy, saying tensions with the island would gradually be resolved as mainland China’s strength grows. In an article published in People’s Daily on July 07, Liu Jieyi, head of the Taiwan Affairs Office, said one focus of the strategy would be preventing and resolving major risks and hidden dangers in the Taiwan Strait, creating a “favourable environment” for national rejuvenation. “Our growing comprehensive strength and significant institutional advantages continue to be transformed into efficiency in work related to Taiwan issues and push forward the process of national reunification,” Liu said. Reunification should be promoted as part of the country’s rejuvenation, and this would serve as the “main goal” of Beijing’s new plan on Taiwan, while solving the Taiwan issue based on the mainland’s development would serve as the “strategic idea”, Liu said. It is the first time Liu has laid out the framework of a strategy for dealing with Taipei. In November, the Communist Party adopted a historical resolution that raised the idea of an overall strategy on Taiwan. The resolution did not give specifics but said the strategy would be based on President Xi Jinping’s remarks on Taiwan issues since he took power in 2012. Click here to read... [20]

Russia leaves G20 Bali meeting early, as ‘frenzied criticism’ over Ukraine clouds Indonesia’s multilateralism push

The first incarnation of the Group of 20 (G20) Foreign Ministers’ meeting in Indonesia’s resort island of Bali is being clouded by bickering between major powers over the war in Ukraine, which analysts say may hinder Indonesia’s attempts to push for multilateralism and peace at the forum. Tension was felt during the reception dinner on July 07 night for 20 of the planet’s largest economies, a meal snubbed by Group of Seven (G7) members because Russian Foreign Minister Sergey Lavrov was attending. The Kremlin’s top diplomat was reported on July 08 to have left the summit earlier than planned. Foreign ministers also skipped the traditional group photo on July 07 because it included Lavrov, with Japanese news agency Kyodo reporting that US Secretary of State Antony Blinken proposed the snubbing to his G7 counterparts. Addressing the dinner’s patchy attendance, Indonesian foreign minister Retno Marsudi said she “understood and respected” the G7 members’ moves, adding that the dinner was an informal event, which meant there was no obligation for country delegations to join. Asked by reporters whether Blinken interacted at all with Lavrov during July 08’s meeting, Retno said that the two “had a discussion in the same room”. Click here to read... [21]

Xi Jinping allies lay out Chinese president’s global risk outlook in countdown to Communist Party congress

China is at a critical point in its ties with other countries, with risks mounting from international conflict and competition, a leading Communist Party theorist wrote in an article summarising President Xi Jinping’s global outlook. In comments published online on July 08, Qu Qingshan, head of the Central Committee’s Institute of Party History and Literature, said it was crucial for China to address the challenges, from US containment efforts to the West’s polarisation tactics and the threat of a middle-income trap. His comments are seen as part of a broader effort to rally support for the president as the party prepares for its national congress later this year. In another article published on July 08, Chen Yixin, secretary general of the committee’s Commission for Political and Legal Affairs, focused inward, saying China would improve its mechanism to “strictly govern the party and the police” and tackle the root of violations of party discipline. Alfred Wu, an associate professor and assistant dean at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said Qu was a top party theorist and his article was an important part of building a theoretical foundation for the party. “The key message here is the party should be ready to set itself into a prolonged crisis mode to handle and prevail over the unprecedented challenges,” Wu said. Click here to read... [22]

UK PM Johnson to step down

Boris Johnson resigned on July 07 as leader of Britain's Conservative Party, paving the way for the selection of a new prime minister after dozens of ministers quit his scandal-hit government. "It is clearly the will of the parliamentary Conservative Party that there should be a new leader of that party, and therefore a new prime minister," Johnson said outside 10 Downing Street. Johnson, 58, announced that he would step down after a slew of resignations from his top team in protest at his leadership but would stay on as prime minister until a replacement is found. The timetable for a Tory leadership race will be announced next week. The leadership election will take place over the summer and the victor will replace Johnson by the party's annual conference in early October, the BBC and others reported. He said he was "sad ... to be giving up the best job in the world" and justified fighting on in the final hours to deliver the mandate he won in a general election in December 2019. In the frenzied hours building up to Johnson's announcement, opposition Labour leader Keir Starmer had welcomed his impending departure. But Starmer said "a proper change of government" was needed and demanded a no-confidence vote in parliament, potentially triggering a general election, rather than Johnson "clinging on for months and months." Click here to read... [23]

Israeli PM, Egyptian president agree to meet "soon" in phone call

Israeli Prime Minister Yair Lapid and Egyptian President Abdel Fattah al-Sisi made a phone call on July 10 and agreed to meet "soon," Lapid's office said in a statement. The two leaders focused on U.S. President Joe Biden's upcoming trip to the Middle East and noted "the need for calm" for the Palestinian issue, according to the statement. Referring to the peace treaty between Egypt and Israel signed in 1979, they described the agreement as "the foundation for the two countries' strategic relations and a central pillar of regional stability." They also expressed their "commitment to continuing to develop relations, especially in the economic sphere." Biden is scheduled to visit Israel, the West Bank and Saudi Arabia between July 13 and 16. The U.S. president said in a statement in late June that his trip aims partly to "deepen Israel's integration in the region." Israel hopes that the visit could lead to some improvement in its ties with Saudi Arabia as the two countries have no diplomatic relations. Click here to read... [24]

Kishida upbeat on constitutional revision after election sweep

Prime Minister Fumio Kishida vowed to speed efforts to hold a referendum and revise the Constitution after pro-revision lawmakers retained their requisite two-thirds majority in the Upper House election. During a live TV Asahi Corp. broadcast on July 10, as his Liberal Democratic Party candidates continued to win seats, he underscored his commitment to amending the 1947 Constitution. “We should tackle this huge challenge with courage,” Kishida said. The Constitution has never been amended, although this has been a longtime goal for the LDP. The LDP is proposing four changes. They would add clauses to enshrine the legal status of the Self-Defense Forces, allow the Cabinet to limit civil rights in a national emergency, expand educational support and prohibit combining two or more prefectures to create an Upper House electoral district. Referring to these four items during the TV Asahi interview, Kishida suggested that he is in favor of proceeding on a given measure once it gains support, rather than waiting for a consensus to emerge for all of them. “I intend to proceed with the revision process with any one of the proposals once approval is won after deepening discussion on them,” he said. He made similar remarks during an interview with TV Tokyo Corp. and other media. Click here to read... [25]

U.N. Approves Shortened Six-Month Extension of Syria Aid, Yielding to Russian Demand

Under the threat of a Russian veto, the U.S. and its allies on the United Nations Security Council yielded to Moscow’s demand that cross-border aid to rebel-held areas in northern Syria be continued for six months rather than the 12 months the West had been seeking. A resolution calling for a six-month extension was approved by the 15-member Security Council on July 12 morning. Russia and China voted for the measure along with 10 other members of the body. The U.S., Britain and France abstained. Western officials described the resolution as a difficult compromise that will enable the U.N. to continue humanitarian aid to more than four million people until Jan. 10 in areas outside the control of President Bashar al-Assad. Authorization to provide that aid had expired on Sunday. But they acknowledged that the measure leaves the longer-term future of the U.N. aid corridor in doubt. Under the resolution, the Security Council would need to vote again for the U.N. to continue using the channel for a second six-month period—that is, from Jan. 10 until July 10, 2023. Western officials acknowledge that they don’t know whether Moscow will allow the aid to continue at that point. Western diplomats said they intend to again seek its extension but also need to draw up contingency plans in case the aid corridor is shut down early next year. Click here to read... [26]

Iran set to deliver armed drones to Russia, White House says

The White House on July 11 said it believes Russia is turning to Iran to provide it with "hundreds" of unmanned aerial vehicles, including weapons-capable drones, for use in its ongoing war in Ukraine. U.S. national security adviser Jake Sullivan said it was unclear whether Iran had already provided any of the unmanned systems to Russia, but said the U.S. has "information" that indicates Iran is preparing to train Russian forces to use them as soon as this month. "Our information indicates that the Iranian government is preparing to provide Russia with up to several hundred UAVs, including weapons-capable UAVs on an expedited timeline," he told reporters July 11. Sullivan said it was proof that Russia's overwhelming bombardments in Ukraine, which have led it to consolidate gains in the country's east in recent weeks, were "coming at a cost to the sustainment of its own weapons." Sullivan's revelation comes on the eve of President Joe Biden's trip to Israel and Saudi Arabia, where Iran's nuclear program and malign activities in the region will be a key subject of discussion. The U.S. decision to publicly reveal that the two countries' chief regional rival was helping to rearm Russia comes as both Israel and Saudi Arabia have resisted joining global efforts to punish Russia for its invasion of Ukraine due to their domestic interests. Click here to read... [27]

Sri Lankan President Gotabaya Rajapaksa to Resign Amid Protests

Sri Lankan President Gotabaya Rajapaksa, whose family has dominated the country’s politics for much of the past two decades, has agreed to resign, the parliament’s speaker said, after antigovernment protesters stormed and occupied the president’s residence and office. In a televised statement on July 09 night, Sri Lanka’s parliamentary speaker, Mahinda Yapa Abeywardena, said the president had informed him of his intention to step down Wednesday “to ensure a peaceful transition of power.” Prime Minister Ranil Wickremesinghe said earlier July 09 he will also resign. The political fallout follows months of public unrest. The South Asian nation’s wilting economy has seen Sri Lankans endure months of double-digit inflation, rolling power blackouts and severe shortages of fuel and medicine. 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 on its debt for the first time in its history in May. With queues outside gas stations snaking for miles around city blocks, authorities closed schools and restricted gas supplies to essential services to conserve fuel. Braving tear gas and water cannons in the capital, Colombo, protesters—many waving the national flag and clad in black—stormed the president’s residence and office July 09, in one of the largest antigovernment demonstrations in the country this year amid a deepening sovereign debt crisis. Click here to read... [28]

U.S.-China tensions, Kiribati's exit cloud Pacific leaders' meeting

Tensions between China and the United States, and the withdrawal of the remote Pacific island nation of Kiribati, have overshadowed the Pacific Islands Forum as leaders arrived in Fiji on July 11 for the first in-person summit in three years. During the four-day meeting, Pacific island leaders will discuss how to gather more international support and funding to fight the impact of rising sea levels and climate change, as well as China's ambitions for greater security ties across the region. A bid by Beijing to sign a broader regional trade and security deal with 10 nations that recognise China, but is opposed by some forum members, was also to be discussed. Tuvalu Foreign Minister Simon Kofe said in an interview he was saddened by news of Kiribati's withdrawal and Pacific leaders would need to "look at the concerns raised by Kiribati" when they meet this week. Kiribati President Taneti Maamau said in a letter his country would withdraw from the forum because it did not agree with terms of a deal brokered weeks ago to solve a rift between Micronesian states and other members, and wanted the meeting delayed. New Zealand's Prime Minister Jacinda Ardern said Kiribati's withdrawal was "disappointing", while Australia pledged A$2 million ($1.36 million) to assist Kiribati with drinking water amid a severe drought -- an impact of climate change. Click here to read... [29]

Cambodia invites Russian foreign minister to ASEAN meetings

Cambodia has invited Russian Foreign Minister Sergey Lavrov to annual ASEAN-related meetings slated for early August, with the decision likely to cause concern among the international community which has been split in its response to Moscow's invasion of Ukraine. Speaking at a briefing to the foreign diplomatic corps on July 06, Cambodian Foreign Minister Prak Sokhonn said he asked the Russian minister to attend the Association of Southeast Asian Nations Regional Forum and other related meetings. Cambodia, this year's ASEAN chair, has also invited Myanmar to the meetings although only as a "nonpolitical representative," according to Prak Sokhonn, who recently made a trip to the Southeast Asian country where a military junta ousted the democratically elected government of Aung San Suu Kyi in 2021. Cambodia will host a foreign ministerial meeting of the 10-member association as part of the ARF -- one of the few security dialogue frameworks in which North Korea participates and which includes countries such as China, Japan the United States -- as well as other related meetings in Phnom Penh for four days from Aug. 3. Since the invasion began in late February, Russia's participation in international meetings has been a subject of discussion, especially for host nations that are wary of some countries boycotting their multilateral gatherings. Prak Sokhonn, who is also Cambodia's deputy prime minister, said as of Wednesday Russia has made no official confirmation of the foreign minister's participation. A government source, however, told Kyodo News that Lavrov is "very highly likely" to attend. Click here to read... [30]

Beijing warns of Southeast Asia nations becoming ‘chess pieces’

Southeast Asian countries should avoid becoming the pawns of “major powers” and should not antagonize each other, Chinese Foreign Minister Wang Yi has said. “We should insulate this region from geopolitical calculations… from being used as chess pieces, from major power rivalry and from coercion,” Wang said in Jakarta, Indonesia on July 11, as quoted by Reuters. Wang made his comments while attending a meeting of the ASEAN, a regional ten-member economic and political bloc of Southeast Asian nations. “The future of our region should be in our own hands,” he said. The minister said countries should “respect each other’s legitimate rights and interests in the Asia-Pacific instead of aiming to antagonize or contain the other side.” In March, Wang accused the US of seeking to set up “a version of NATO” in the Indo-Pacific in order to stoke tensions in the region. “The Asia-Pacific is a promising land for cooperation and development, not a chessboard for geopolitical contest,” he said. The White House later denied that it wanted to establish “an Asian version of NATO.” July 11’s statement from the top Chinese diplomat came after US Secretary of State Antony Blinken urged ASEAN to pressure Myanmar, one of the bloc’s members, where the military seized power in a coup last year. Click here to read... [31]

‘Reorient… not rupture’: Biden defends Saudi visit in column

US President Joe Biden has defended his upcoming visit to Saudi Arabia amid criticism the trip represents a backslide in his administration’s commitments to human rights. In an op-ed published late on July 09 in The Washington Post newspaper, Biden said the visit to the kingdom is important and assured the United States remains “strong and secure”. He added that he wanted to “reorient and not rupture” relations with the oil-rich Arab nation. Biden’s visit to Saudi Arabia is part of a wider Middle East tour from July 13 to July 16 that includes stops in Israel and the occupied West Bank. “We have to counter Russia’s aggression, put ourselves in the best possible position to outcompete China, and work for greater stability in a consequential region of the world,” Biden wrote. “To do these things, we have to engage directly with countries that can impact those outcomes,” he added. “Saudi Arabia is one of them, and when I meet with Saudi leaders on July 15, my aim will be to strengthen a strategic partnership going forward that’s based on mutual interests and responsibilities, while also holding true to fundamental American values.” Experts say topping the agenda during Biden’s stop in Jeddah will be a push for increased Saudi oil production in the hope of taming spiralling fuel costs and inflation fuelled by Russia’s invasion of Ukraine. Click here to read... [32]

Health

Beijing appears to retract vaccine mandate after pushback

The Chinese capital Beijing appears to have backed off a plan to launch a vaccine mandate for entry into certain public spaces after pushback from residents. While not explicitly saying it had dropped the plan, a city official was quoted in state media late July 07 saying that people could enter venues with a negative virus test result and a temperature check, as has been the norm. They also said vaccinations would continue on the principle of "informed, voluntary consent.” An unidentified official in the pandemic control office said residents of the city could enter any sort of public venue with a negative PCR test done in the last 72 hours and a temperature check, according to a short question and answer post from the official Beijing Daily, the main paper of the city government, published late July 07 night. The city announced July 06 that starting next week, people had to show proof of COVID-19 vaccination before they can enter some public spaces including gyms, museums and libraries. It drew intense discussion as city residents worried how the sudden policy announcement would disrupt their lives. A phone call to the Beijing government’s press office to confirm the policy change did not go through. The phone had been set to “do not disturb” mode according to a recorded message. Click here to read... [33]