Global Developments and Analysis: Weekly Monitor, 08 August - 14 August 2022

Economic

For Sinopec, West’s Russian Oil Boycott is a Gift

Who benefits from worsening relations between the energy guzzling West and Russia? One apparent answer: the state-owned behemoth China Petroleum & Chemical Corp., better known as Sinopec. The listed subsidiary of Asia’s largest refiner posted bumper profits in the first quarter—a strong performance that may have been further inflated by cheap Russian oil. The company faces threats from falling state-set oil product prices and a slowing Chinese economy. But it could also benefit from another big dollop of even cheaper Russian crude if a European embargo or buyers’ cartel materialize later this year. China’s central bank is also finally being forced into easier monetary policy, which will provide some support for Chinese stocks writ large: Sinopec trades in Hong Kong, Shanghai and New York (for now). It will report second-quarter earnings on Aug. 28. Most of the company’s segments, with the exception of chemicals, performed well in the first quarter. Sinopec’s oil and gas production division unsurprisingly did very well, with earnings before interest and taxes rising nearly 300% year over year to 11.5 billion yuan, equivalent to $1.7 billion. The refining division, which is the larger profit driver, also performed solidly with its EBIT rising 15% to 22.9 billion yuan. More important, large volumes of discounted Russian crude only began to flow to China in the second quarter. Click here to read... [2]

Russia's Gazprom warns European gas prices could climb a further 60%

Russian state gas company Gazprom said on Aug 16 that European gas prices could spike by 60% to more than $4,000 per 1,000 cubic meters this winter, as the company's own export and production continues to fall amid Western sanctions. Gas flows from Russia, Europe's top supplier, are running at reduced levels this year, after one route was shut when Moscow sent troops into Ukraine in February and after sanctions triggered a dispute about the Nord Stream 1 pipeline's equipment. Gas prices have surged as a result. "European spot gas prices have reached $2,500 (per 1,000 cubic meters). According to conservative estimates, if such a tendency persists, prices will exceed $4,000 per 1,000 cubic meters this winter," Gazprom said. Dutch wholesale gas prices hit an all-time high of nearly 335 euros per megawatt hour (MWh) in spring. They have dipped since then to around 226.00 euros per MWh on Aug 16 but remain far higher than a year ago when they were about 46 euros per MWh. Kyiv has shut one of Gazprom's routes for exports to Europe, while Gazprom has reduced supplies to only 20% of the capacity of the Nord Stream 1 pipeline to Germany amid the equipment dispute. Overall, Gazprom's gas exports fell by 36.2% to 78.5 billion cubic meters between Jan. 1 and Aug. 15 and production was down by 13.2% to 274.8 billion cubic meters comparing to a year ago, it said in a statement. Click here to read... [3]

Saudi oil giant Aramco’s first-quarter profits surge 80 percent

Oil giant Saudi Aramco said its profits soared more than 80 percent in the first three months of the year as the state-backed company cashes in on the volatility in global energy markets and soaring oil prices following Russia’s invasion of Ukraine. The bumper first-quarter earnings by the firm formally known as the Saudi Arabian Oil Co show a record net income of $39.5bn, up from $21.7bn during the same period last year. The surge was “primarily driven by higher crude oil prices and volumes sold, and improved downstream margins”, Saudi Aramco said in a press release on Aug 14. “Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth,” said Aramco Chief Executive Amin Nasser. Resurgent economic activity and the relaxation of global coronavirus restrictions had already revived demand for hydrocarbons and delivered strong annual results for the state-backed company last year. In March, Aramco reported a 124 percent net profit surge for 2021. Oil prices rallied to a 14-year high of $139 a barrel in March immediately after Russia’s invasion of Ukraine, although they later receded as Russian oil continued to flow and new lockdowns hurt oil demand in China. International benchmark Brent crude traded at over $111 a barrel on Aug 14Click here to read... [4]

UN trade body urges actions to curb cryptocurrencies in developing countries

The UN Conference on Trade and Development (UNCTAD) called for actions to curb cryptocurrencies in developing countries in three policy briefs published on Aug 10. While private digital currencies have rewarded some, and facilitate ­remittances, they are an unstable financial asset that can also bring social risks and costs, the UN trade and development body warned. The three newly released UNCTAD policy briefs examined the risks and costs of cryptocurrencies, including the threats cryptocurrencies bring to financial stability, domestic resource mobilization and the security of monetary systems. Global use of cryptocurrencies has ­increased exponentially during the coronavirus pandemic, including in developing countries. Reasons for the rapid uptake of cryptocurrencies in developing countries include facilitation of remittances, as well as their use as a hedge against currency and inflation risks, UNCTAD said. Recent digital currency shocks in the market suggest that there are private risks to holding cryptocurrencies, but if the central bank steps in to protect financial stability, then the problem becomes a public one, the agency said. If cryptocurrencies become a widespread means of payment and even replace domestic currencies unofficially, this could jeopardize the monetary sovereignty of countries. In developing countries with unmet demand for reserve currencies, the so-called stablecoins, a type of digital currency that is pegged to the US dollar, pose particular risks. Click here to read... [5]

SpaceX could replace Russia’s Soyuz rockets – Reuters

The European Space Agency (ESA) is considering Elon Musk’s SpaceX as an option to fill the launch gap created by Europe’s break away from Russia’s Roscosmos, according to ESA Director General Josef Aschbacher. In an interview with Reuters published on Aug 12, Aschbacher said the ESA had already begun preliminary technical discussions with the space company, which could temporarily provide its launchers. The agency lost access to Russia’s Soyuz rockets after sanctioning Moscow over its ongoing military operation in Ukraine. Space X has emerged as a key contender to fill the gap alongside Japan and India. However, the final decision will depend on the unresolved timetable for Europe’s delayed Ariane 6 rocket, Reuters reports. “I would say there are two-and-a-half options that we’re discussing. One is SpaceX that is clear. Another one is possibly Japan,” Aschbacher told the outlet, noting that Tokyo is still waiting for the inaugural flight of its next-generation rocket. Aschbacher stated that SpaceX was the more operational of the contenders and would most likely be one of the “back-up launches” the ESA would consider, but noted that talks are still at an exploratory phase as many technical details need to be examined. Click here to read... [6]

China’s stricken property market gets a boost as government is set to guarantee bonds of some private developers

China’s government has instructed a state-owned credit enhancement company to provide guarantees to a number of private property developers issuing bonds, giving them a leg-up to raise capital during a debt crisis that has hobbled the industry for the last year. First up is Chongqing Longfor Corporate Expansion Limited, a unit of Longfor Group Holdings, which will issue yuan-denominated notes worth between 1 billion yuan (US$147 million) and 1.7 billion yuan on August 24, according to a term sheet seen by the South China Morning Post. The full amount of the bond will have “unconditional, irrevocable joint-liability guarantees” from state-owned China Bond Issuance, the country’s first professional credit enhancement institution, established in 2009, according to the term sheet. The notes will be priced with a coupon between 3 per cent and 4.3 per cent, and the funds will be used for unspecified project construction, the repurchase of offshore bonds and payment of offshore debt, the Post has learned. Several other property companies, including Country Garden Holdings and Cifi Holdings, will also be supported by the guarantees for their onshore bond sales, which are expected soon, according to sources. Sino-Ocean Group, Seazen Holdings and Gemdale Corporation are also likely to be among them, the sources said. Click here to read... [7]

U.S. Approves Nearly All Tech Exports to China, Data Shows

A Commerce Department-led process that reviews U.S. tech exports to China approves almost all requests and has overseen an increase in sales of some particularly important technologies, according to an analysis of trade data. Of the U.S.’s total $125 billion in exports to China in 2020, officials required a license for less than half a percent, Commerce Department data shows. Of that fraction, the agency approved 94%, or 2,652, applications for technology exports to China, the analysis showed. For 2021, that approval rate decreased to 88%, the analysis showed, but changes in data compilation methods between the two years make comparisons difficult. The figures omit applications “returned without action,” meaning their outcomes were uncertain. The result: The U.S. continues to send to China an array of semiconductors, aerospace components, artificial-intelligence technology and other items. Critics say such sales, which have taken place across successive U.S. administrations, could be used to advance Beijing’s military interests. The Commerce Department says it is focused on long-term, strategic competition with China and that it makes export-control decisions with its interagency partners in the Defense, State and Energy Departments. China, already a technological powerhouse, is developing increasingly sophisticated chips as well as other advanced technologies. Click here to read... [8]

Biden signs CHIPS Act, marking major shift in US crackdown on China

US President Joe Biden on Aug 09 signed into law the so-called CHIPS and Science Act that aims to crack down on China's semiconductor supply chain, setting the stage for an intensified, politically charged battle in the complex global chip industry with profound implications. The move also marks a serious escalation and a shift in the US' multi-year crackdown on China's chip sector, as Washington resorts to domestic legislations instead of relying on sanctions on specific Chinese companies in the campaign, Chinese industry analysts noted, calling for comprehensive countermeasures from the Chinese government and companies. The bill includes $52 billion in subsidies for chip manufacturing and research, as well as a $24 billion investment tax credit for chip plants in the US. However, one condition that companies must meet to receive the subsidies is that they must not expand their semiconductor manufacturing in China for 10 years after they get a grant to build a US plant, a Bloomberg report noted. This is just one example of the US' intensifying campaign to cut China out from the global chip supply chain. The US is also talking to some of its Asian allies such as South Korea and Japan about forming a chip alliance. Click here to read... [9]

Joe Biden ‘cautious’ on China tariffs after Nancy Pelosi’s Taiwan trip, US commerce chief says

US House Speaker Nancy Pelosi’s visit to Taiwan has made geopolitics with China “particularly complicated” as President Joe Biden weighs the future of tariffs on more than US$300 billion in goods from the US rival, according to his commerce chief. “Certainly, it has made it a little more challenging,” Gina Raimondo said in an interview on Bloomberg Television’s Balance of Power With David Westin on Aug 10. “It’s harder, but I am hopeful that we will get beyond that and get back to a place where we can have more of those discussions.” Biden is considering what to do with the Trump-era tariffs and is weighing his options, Raimondo said. He is “very cautious” and does not want to do anything that would hurt American workers, she said. “But I know he’s looking at it. We’ve talked about it again recently, and I expect he’ll be making a decision before too long.” Meanwhile, China’s war games around Taiwan have led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, setting those options aside for now, according to sources familiar with the deliberations. Biden administration officials are eager not to do anything that could be viewed by China as an escalation while also seeking to avoid being seen as retreating in the face of the communist country’s aggression, Reuters reported. Click here to read... [10]

UN says humanitarian agencies face ‘biggest funding gap ever’

The United Nations’ humanitarian projects face a record funding gap this year, with only a third of the required $48.7bn secured so far as global needs outpace pledges, according to the world body’s Office for the Coordination of Humanitarian Affairs (OCHA). The money is needed to help about 204 million people worldwide as armed conflict and climate change emerge as key drivers of “mega crises” that threaten the livelihoods of whole communities. “More than halfway through the year, the funding shortfall is $33.6bn, our biggest funding gap ever,” OCHA spokesman Jens Laerke told a media briefing on Aug 12. “The needs in the world are rising much faster than the donor funding is coming in,” he said. So far, $15.2bn has been collected by the midyear mark, also a record, Laerke said, in a year of soaring humanitarian needs. According to OCHA’s website, the United States is the top donor, contributing just a little more than $8bn, while the World Food Programme was the largest recipient. The nearly $50bn needed includes all the UN-coordinated appeals worldwide, like the annual humanitarian response plans in the Democratic Republic of the Congo and Syria, as well as flash appeals in war-torn Ukraine and regional appeals for refugees in Afghanistan. Click here to read... [11]

UK pauses overseas aid payments amid concerns about overspending on war in Ukraine

The UK temporarily paused overseas development aid that is not deemed critical because of concerns about rising pressure on government budgets, people familiar with the matter said. The Foreign Office informed some staff a freeze is necessary because crises including Russia’s war in Ukraine have led to additional expenditure that means the government is in danger of overspending, according to the people, who spoke on condition of anonymity. Any payments above £1 million (US$1.2 million) are barred unless critical to life or unless their blockage leads to additional costs, they said. New contracts and activity linked to agreements that have yet to start are also being paused. The new rules are in place until the autumn when a new prime minister will be able to make decisions on whether to stop or resume some aid payments and activities, one of the sources said. The pause essentially means that the UK is all but halting overseas aid payments for now. The Foreign Office didn’t immediately respond to a request for comment. The move is a blow to Britain’s aid recipients, who are already reeling from the country’s decision to slash its aid budget to 0.5 per cent of gross national income from 0.7 per cent to help repair the budget deficit in the wake of the Covid-19 pandemic. Click here to read... [12]

Japan falls out of top 10 nations with most-cited scientific papers

Japan fell outside the top 10 ranking of nations with the most highly cited scientific papers after being overtaken by Spain and South Korea, according to an education ministry report released on Aug. 9. Japan ranked 12th in the average number of such papers published between 2018 and 2020, dropping two places from the previous report, which covered the years between 2017 and 2019. The rankings were released in the report titled “Japanese Science and Technology Indicators 2022.” “The number of papers produced in Japan has remained almost unchanged in recent years, but its ranking has been falling as other countries are publishing more,” a ministry official said. The National Institute of Science and Technology Policy, affiliated with the ministry, calculated the rankings based on the top 10 percent of the most-cited scientific papers in each research field, and other factors. While Japan accounted for an average of 3,780 of such papers between 2018 and 2020, the figure is less than 10 percent of that for China, which ranked top in the category with an average of 46,352 papers. Japan’s ranking has been declining since the mid-2000s, when the country stood in fourth place. Click here to read... [13]

Concerns grow over Korea's pension fund

Korea's public pension fund is the world's third largest, with close to 1,000 trillion won ($763.3 billion) of assets under management, but there are concerns over the agency's ability to manage the fund. The National Pension Service (NPS) faces the daunting task of reforming its pension system, as the fund is set to be depleted in the coming decades, with Korea's population aging rapidly. The pension fund had initially been estimated to become depleted in 2057, but more recent projections have indicated that it could end up depleted sooner. The Federation of Korean Industries' research unit projects that the percentage of people aged 65 and older will rise from the current 17.3 percent to 37 percent in 2045, making South Korea the most aged country in the world. The federation forecasts that the pension fund will enter a deficit in 2039 and be depleted in 2055 under the current scheme. The Ministry of Health and Welfare has initiated a process to calculate a more accurate estimate by March of next year, as part of a process to fix the pension system. However, key leadership positions at the ministry remain vacant. The capacity of the NPS to manage assets has also come under fire. Click here to read... [14]

What a Chinese Blockade of Taiwan Would Mean for Global Business

A Chinese blockade of Taiwan would cripple global supply chains and raise freight prices in Asia and potentially beyond, because of the outsize role that the island of roughly 23 million people plays in global business. Taiwan accounts for roughly 70% of the world’s microchip supply. It serves as an important part of the production chain for goods including smartphones, computers and cars. And it sits next to Pacific shipping lanes that channel trillions of dollars’ worth of trade flowing in and out of East Asia. “Taiwan matters far more to the world economy than its 1% share of global GDP would indicate,” Gareth Leather, an economist with research firm Capital Economics, wrote last week. Cutting off Taiwan’s exports would result in chip shortages for cars and electronics and drive up inflationary pressures, he said. A yearlong disruption to Taiwan’s chip supply chain could cost global electronics companies some $490 billion in losses, according to a 2021 report by the Boston Consulting Group and the Semiconductor Industry Association. Should Taiwanese chip output be disrupted permanently, it would take at least three years and $350 billion to build production capacity elsewhere to make up for it, the report said. A closure of the Taiwan Strait, one of the world’s busiest routes, would have a severe impact on shipping capacity, said Soren Skou, chief executive of Danish shipping giant A.P. Moller-Maersk A/S. Click here to read... [15]

Chinese enterprises tap into Switzerland capital market amid US' reckless financial 'decoupling'

Amid an increasingly volatile and complex international environment as well as delisting risks in the US, Chinese listed companies have been turning to other markets such as Switzerland to raise funds while fending off the fallout caused by China-US geopolitical tensions. Experts said this marks an important move in promoting the two-way opening-up of China's stock market, and the fast growth of other overseas markets will soon mean the US stock market is not irreplaceable. They urged the US to correct its mistakes and build a fair and predictable business environment for Chinese companies. On Aug 08, Shanghai-listed B2B platform Beijing United Information Technology Co announced that it plans to issue Global Depositary Receipts (GDRs) to get listed in SIX Swiss Exchange, Switzerland's principal stock exchange, according to a filing on the Shanghai Stock Exchange. The company said the move will help it expand international financial channels to meet the needs of the company's domestic and overseas business and elevate the company's international brand and corporate image. GDRs are bank certificates issued in more than one country for shares in a foreign company. They are commonly used when the issuer raises capital in the local market as well as in the international markets, either through private placement or public offerings. Click here to read... [16]

Strategic

No need for nuclear weapons in Ukraine – Moscow

There are no targets in Ukraine that warrant a Russian nuclear strike, so claims that Russia could use nuclear weapons in its ongoing military operation are absurd, Defense Minister Sergey Shoigu has insisted. He was speaking during a security conference in Moscow on 16 Aug. “The use [of nuclear weapons] is restricted to emergencies only, as outlined in Russian guidelines that are publicly available,” he added, noting that the weapons are meant as a deterrence against foreign aggression. Shoigu said that “claims of possible use of chemical weapons in Ukraine are absurd too,” since Russia destroyed its stockpile in an effort that was completed in 2017. False accusations of such attacks have been used by Western-backed groups in Syria in the past, he added. The Russian minister, who was speaking during the opening of the Moscow Conference for International Security, said the situation with strategic weapons reduction and control was at a difficult spot due to the ongoing confrontation between the US and Russia. “American statements that claim that Russia has to earn the right to continue dialogue with the US are beyond the pale. Weapons control is a two-way street,” he stressed. The Russian official said Washington was an unreliable partner when it came to the balance of strategic power. Click here to read... [17]

Explosions refocus Ukraine war on Russian-annexed Crimea as Vladimir Putin lashes US

The world’s attention on Russia’s war in Ukraine on Aug 16 turned anew to the Russia-annexed occupied Crimean Peninsula, where a mysterious ammunition storage fire and explosions was the second incident in a week to shake Moscow’s sensitivities. The Russian Defence Ministry said there were no serious casualties from the blasts in the northern Crimean village of Mayskoye, state-owned news agency RIA reported, though two people were injured. The agency also reported a fire at a transformer substation 20km away. The ministry said a fire erupted at a “site for temporary storage of ammunition of one of the military units”. “As a result of the fire, the stored ammunition detonated,” the ministry said, adding that it wasn’t immediately clear what caused the fire. The Crimean peninsula on the Black Sea, which Russia seized and annexed from Ukraine in 2014 in a move not recognised by most countries, is the base of Russia’s Black Sea Fleet and popular in the summer as a holiday resort. Last week, blasts at a military airbase in the city of Novofedorivka, on Crimea’s western coast, caused extensive damage and destroyed several Russian warplanes. Moscow called that an accident, though simultaneous blasts at several parts of the base had left craters visible from space. Click here to read... [18]

EU proposal to curb Iran sanctions revealed – Politico

The EU has proposed watering down the US sanctions on Iran’s Islamic Revolutionary Guard Corps (IRGC) in a move to salvage the landmark 2015 nuclear deal with Tehran, Politico reported on Aug 12, citing a draft of the agreement. The text in question was submitted by the EU and negotiated in Vienna by all parties to the accord, formally known as the Joint Comprehensive Plan of Action (JCPOA), on Aug 08 after 16 months of talks. For the agreement to take effect, it must be approved by the governments in Iran and the US, which unilaterally pulled out of the deal. According to Politico, the text’s provisions mean that the US is set “to make greater concession than expected” to revive the deal, including easing the US sanctions on the IRGC, an influential branch of the Iranian Armed Forces. The issue of lifting or diluting the sanctions on the Revolutionary Guard Corps has been especially contentious, since Washington has designated it as a terrorist organization. Earlier, many high-profile US lawmakers and officials spoke against any efforts to drop the restrictions placed on the organization. Nonetheless, the European initiative, brokered by EU foreign policy Chief Josep Borrell in close cooperation with his American counterparts, would not remove the sanctions entirely, but significantly curb them, the report says. Click here to read... [19]

Beijing’s Taiwan white paper: the messages for home and abroad

Beijing said it has the “greatest sincerity” for peaceful unification with Taiwan in its clearest statement of intent since US House Speaker Nancy Pelosi’s visit to the island triggered a crisis. On the same day as it announced a formal end to unprecedented military exercises encircling the island, Beijing released the first white paper on Taiwan in over two decades, titled “The Taiwan Question and China’s Reunification in the New Era”. It clearly laid out China’s position, saying it would never allow any attempt to separate Taiwan but also would try its best to achieve unification by peaceful means. “We will work with the greatest sincerity and exert our utmost efforts to achieve peaceful reunification,” the white paper said, adding again that the option to use force would not be renounced, and if adopted, would target external and separatist activities, rather than the people on the island. “We will only be forced to take drastic measures to respond to the provocation of separatist elements or external forces should they ever cross our red lines.” The document was released on Aug 10 jointly by the Taiwan Affairs Office and the Information Office, both under the State Council, Beijing’s cabinet. Beijing’s first white paper on Taiwan was published in 1993, after the two sides reached the 1992 consensus, an oral agreement on the one-China principle. A second came in 2000, after Macau’s return to Chinese sovereignty, leaving Taiwan the only missing piece to the unification of China. Click here to read... [20]

Taiwan hits back at new Chinese doctrine

Taiwan is against the “one country, two systems” solution proposed by Beijing, a spokeswoman for the self-governed island’s Foreign Ministry has said, according to Reuters. Speaking at a press conference on Aug 11, Joanne Ou said the Chinese government was using U.S. House Speaker Nancy Pelosi's controversial visit to Taipei as an “excuse to create a new normality to intimidate Taiwan's people.” In a White Paper published on Aug 10, Beijing refused to rule out the use of force to gain control over Taiwan, but pledged to seek peaceful unification using “one country, two systems” as a guiding principle. The concept, which previously allowed some autonomy to Hong Kong and Macau, could bring “a positive impact on the resolution of the Taiwan issue,” according to the document. Commenting on the White Paper, Taiwan's Foreign Ministry spokesperson said the island’s authorities reject Beijing’s proposal, as only the Taiwanese people can make decisions on their future. “China’s whole statement absolutely goes against the cross-strait status quo and its reality,” Ou was quoted by The Defense Post as saying. Beijing’s first White Paper on Taiwan since 2000 accuses the ruling party in Taipei of misrepresenting the principle of “one country, two systems” and of doing “everything possible to target the principle with baseless criticisms.” The paper hails the principle as a “resounding success” in Macau and Hong Kong. Click here to read... [21]

Diehard "Taiwan independence" separatists to be sanctioned: spokesperson

A spokesperson of the Taiwan Work Office of the Communist Party of China Central Committee on Aug 16 announced sanctions on "Taiwan independence" diehards on a Chinese mainland's list. In order to safeguard the peaceful development of the cross-Strait relations and the immediate interests of the people on both sides of the Strait, and resolutely punish "Taiwan independence" diehard elements, it is decided that Bi-khim Hsiao, Koo Li-hsiung, Tsai Chi-chang, Ker Chien-ming, Lin Fei-fan, Chen Jiau-hua and Wang Ting-yu are listed as diehard "Taiwan independence" separatists, and punitive measures are imposed on them, as well as Su Tseng-chang, You Si-kun and Jaushieh Joseph Wu, who had already been on the list, said the spokesperson. They and their family members are banned from entering the mainland and the special administrative regions of Hong Kong and Macao. Their affiliated institutions are restricted from forging cooperation with relevant organizations and individuals on the mainland. The enterprises related to them, as well as their sponsors, are prohibited from engaging in profit-making activities on the mainland. Other punitive measures will also be taken. They will be held to lifelong accountability according to law, said the spokesperson. Sanctions are also imposed on the president of the "Taiwan Foundation for Democracy," and the secretary general of the "International Cooperation and Development Fund." Click here to read... [22]

U.S. Rules Out Releasing Billions in Afghan Funds After Strike

The Biden administration has decided it won’t release any of the roughly $7 billion in foreign assets held by Afghanistan’s central bank on U.S. soil and has suspended talks with the Taliban over the funds after the killing of al Qaeda’s leader in Kabul, according to U.S. officials. The decision reverses early indications of progress in talks between the U.S. and the Taliban and deals a blow to hopes of an economic recovery in Afghanistan as millions face starvation a year into the group’s rule. The U.S. drone strike that killed al Qaeda leader Ayman al-Zawahiri late last month exposed deep rifts within the movement and fanned concerns in the West about a resurgence of global terrorism emanating from Afghanistan. After the strike that killed the al Qaeda leader, the U.S. suspended talks with Taliban banking officials and ruled out using some of the money for aid or other operations to stabilize the Afghan economy, after previously suggesting this could be an option. A year after the Taliban took control of Afghanistan, experts say there are signs their rule is allowing al Qaeda to stage a comeback in the country. The Afghan central bank needs those funds to resume key functions aimed at stemming soaring inflation, stabilizing the exchange rate and reviving the ailing economy. “We do not see recapitalization of the Afghan central bank as a near-term option,” top U.S. envoy Tom West told The Wall Street Journal in a statement. Click here to read... [23]

China’s Xi Jinping Plans to Meet With Biden in First Foreign Trip in Nearly Three Years

Chinese officials are making plans for Xi Jinping to visit Southeast Asia and meet face-to-face with President Biden in November, according to people familiar with the preparations, in what would mark the Chinese leader’s first international trip in nearly three years and his first in-person meeting with Mr. Biden since the American leader’s inauguration. The trip preparations suggest that the 69-year-old Mr. Xi is confident about his fortunes at a twice-a-decade congress set to take place this fall, where he is expected to break with recent precedent and claim a third term as Communist Party chief. Officials involved in the preparations said the Chinese leader is first expected to conclude the party congress, then would likely attend a summit of leaders from the Group of 20 nations on the Indonesian island of Bali on Nov. 15-16. From there, Mr. Xi is expected to travel to the Thai capital of Bangkok to attend the Asia-Pacific Economic Cooperation summit two days later, they said. Part of the preparations, which are still at the early stage and could be changed, is to prepare a possible meeting between Messrs. Xi and Biden on the sidelines of one of the two summits, the people said. Click here to read... [24]

Antony Blinken Visits Africa, Vying With Russia for Favor on Continent Hit by Rising Food Prices

U.S. Secretary of State Antony Blinken began a three-country tour of Africa on Aug 07 at a time of growing U.S. concern about Russia’s clout on the continent and on the heels of a recent trip by Moscow’s top envoy. The rise in food prices accelerated by the Russian invasion of Ukraine has hurt Africa, where most countries are net food importers. High fuel and food costs, drought, conflict and economic disruptions from the coronavirus pandemic are exacerbating poverty and unrest, and have driven millions to the brink of famine. Many African countries have resisted taking sides in the war in Ukraine and dismissed Western calls to participate in sanctions targeting Moscow. Mr. Blinken’s trip, which starts in South Africa, comes amid a flurry of high-level visits to the continent by U.S. officials carrying the message that Russia’s actions in Ukraine are to blame for the food crisis. “It’s been somewhat of a wake-up call,” said Brahima Sangafowa Coulibaly of the liberal-leaning U.S.-based think tank Brookings Institution. “African countries did not signal an overwhelming appetite to just buy into the West’s rhetoric.” Major powers such as South Africa have declined to support United Nations resolutions condemning Russia. The African Union has complained to European leaders that paying for Russian food exports has become harder since most big Russian banks were removed from the Swift payment system. Click here to read... [25]

Yoon's 'audacious initiative' for NK lacks details: experts

President Yoon Suk-yeol unveiled what he called the "audacious initiative," which consists of economic assistance for North Korea in exchange for its denuclearization, in his Liberation Day speech on Aug 15, but its feasibility has been questioned as it carries no guarantee of security and lacks details. During his speech, Yoon said the initiative will "significantly improve North Korea's economy and its people's livelihoods in stages" if North Korea gives up its nuclear program and accepts his proposal. "We will implement a large-scale food program, provide assistance for power generation, transmission and distribution infrastructure and carry out projects to modernize ports and airports for international trade. We will also help enhance North Korea's agricultural productivity, offer assistance to modernize hospitals and medical infrastructure and implement international investment and financial support initiatives," Yoon said. First mentioned during Yoon's inauguration speech in May as part of his North Korea policy, Yoon once again asked the Ministry of Unification to come up with a plan including economic support and security guarantees during the ministry's policy briefing to the president in July. However, security issues were not included in Yoon's speech, leaving little to attract interest from North Korea. "Yoon's so-called 'audacious initiative' is not very different from the Lee Myung-bak administration's Denuclearization, Opening and 300 Initiative," Cheong Seong-chang, director of the Center for North Korean Studies at the Sejong Institute said. Click here to read... [26]

Myanmar court jails Suu Kyi for six years for corruption

A court in military-ruled Myanmar sentenced deposed leader Aung San Suu Kyi to six years in prison on Aug 15 after finding her guilty in four corruption cases, a source with knowledge of the proceedings said. The 77-year-old Nobel laureate and figurehead of Myanmar's opposition to military rule has been charged with at least 18 offenses ranging from graft to election violations, carrying combined maximum jail terms of nearly 190 years. Suu Kyi had called the accusations absurd and denies all charges against her. She was found guilty on Aug 15 of misusing funds from the Daw Khin Kyi Foundation - an organization she founded promoting health and education - to build a home, and leasing government-owned land at a discounted rate, the source said. Suu Kyi, who is being held in solitary confinement in a jail in the capital Naypyitaw, had already been sentenced to 11 years in prison in other cases. Myanmar has been in turmoil since last year when the military overthrew an elected government led by Suu Kyi's party, after it won a general election, and led a deadly crackdown on dissent. Tens of thousands of people have been jailed and many tortured, beaten or killed, in what the United Nations has called crimes against humanity. Click here to read... [27]

German fighter jets head to Australia in shift for Indo-Pacific

Germany is sending 13 military aircraft to joint exercises in Australia, the air force's largest peacetime deployment, underlining Berlin's increased focus on the Indo-Pacific amid rising tensions with China in the region. Last year, a German warship sailed into the South China Sea for the first time in almost 20 years, a move that saw Berlin joining other Western nations in expanding its military presence in the region amid growing alarm over Beijing's territorial ambitions. Tensions have also risen over Taiwan since China -- which claims Taiwan as its own territory -- kicked off military drills around the democratically governed island after U.S. House of Representatives Speaker Nancy Pelosi visited Taipei at the start of August. On Aug 15, six Eurofighter jets took off from a base in Neuburg an der Donau in southern Germany and three A330 tankers from Cologne for the three-day flight to Australia where they will, together with four German A400M transporters that have already left, join 16 other nations in the biennial exercise Pitch Black. During the deployment, which includes detours to Japan and South Korea, the pilots will conduct almost 200 midair refuelings of the fighter jets, German air force chief Ingo Gerhartz told reporters ahead of the mission. Asked whether the warplanes will pass the South China Sea and the Taiwan Strait, two flashpoints of tensions with China in the region, Gerhartz said the aircraft would use civilian air traffic routes and that no passage of the Taiwan Strait was planned. Click here to read... [28]

PM Kishida to bring back veteran Hamada as Japan defense chief

Japanese Prime Minister Fumio Kishida is set to tap Yasukazu Hamada as defense minister Aug 10 in a cabinet reshuffle that mixes experienced hands and new faces to take on the host of policy challenges facing the government. Hamada, a lower house lawmaker versed in national security issues, served as defense minister from 2008 to 2009 under then-Prime Minister Taro Aso. He will replace current Defense Minister Nobuo Kishi. Similarly, COVID-19 response coordinator Katsunobu Kato is expected to serve as health, labor and welfare minister, a position he held twice under former Prime Minister Shinzo Abe. The new cabinet, to be launched Aug 10, will face issues including inflation, the coronavirus pandemic, energy security and revisions to key national security documents this year. Kishida took pains to distribute cabinet and key party positions evenly among competing Liberal Democratic Party factions. "Unity within the government and the ruling parties is more important now than ever to overcome one of our most difficult postwar periods," Kishida told reporters Aug 09. Kishida has faced criticism over ruling party lawmakers' ties to the Unification Church and his controversial decision to hold a state funeral for Abe. Click here to read... [29]

Unification Church admits links with Japanese lawmakers

The head of the former Unification Church in Japan acknowledged the group has relationships with lawmakers, saying Aug 10 that it encourages members to be "active in national politics and take part in elections." Tomihiro Tanaka, said the church does not support any specific party, but it is likely to have "more crossover" with ruling Liberal Democratic Party politicians because of their common stance against communism. "While our members do belong to a religious organization, as individual citizens we do encourage them to be active in national politics and also to take part in elections," Tanaka, president of the church known formally as the Family Federation for World Peace and Unification, told reporters at the Foreign Correspondents' Club of Japan. The links between the Unification Church and Japanese politicians have come under the spotlight after the man accused of shooting Shinzo Abe last month said he had a grudge against the group and thought the former prime minister was linked to it. Prime Minister Fumio Kishida instructed lawmakers in his ruling party to cut ties to the church -- a move that the religious leader called "unfortunate." "The LDP's policy decisions are made through a variety of processes, including listening to the opinions of a wide range of citizens, explanations from relevant ministries and agencies, and discussions with experts and specialists," Kishida told reporters Aug 10. Click here to read... [30]

PLA recruitment relaxes age limits, focuses on STEM skills

As nationalist sentiment runs high amid cross-strait tensions, Beijing has rolled out a People’s Liberation Army recruitment programme that relaxes age limits and gives priority to university students majoring in science, technology, engineering and mathematics. In the second phase of this year’s recruitment programme, starting this month, the age limit for postgraduate students has been lifted from 24 to 26, according to the PLA’s Eastern Theatre Command, which oversees operations around Taiwan. It also said priority would be given to recruiting students in universities’ science and technology schools and those with skills necessary for fighting in a war. The Global Times reported on Aug 08 that such STEM skills include those related to the internet, communication, engineering, surveying and drone operation. Yu Qi, from Zhejiang province, told Chinese state broadcaster CCTV on Aug 09 that he wished to “serve the motherland with his righteous ardour”. “The recent situation in the Taiwan Strait has worried every one of us, and it has also shown that peace can only be attained by a country’s power,” he said. “I am willing to serve the motherland and make the title ‘soldier’ my lifelong glory.” Click here to read... [31]

Health

Why has polio been found in London, New York and Jerusalem, and how dangerous is it?

Polio, a deadly disease that used to paralyse tens of thousands of children every year, is spreading in London, New York and Jerusalem for the first time in decades, spurring catch-up vaccination campaigns. Polio terrified parents around the world for the first half of the 20th century. Affecting mainly children under five, it is often asymptomatic but can also cause symptoms including fever and vomiting. About one in 200 infections leads to irreversible paralysis, and among those patients, up to 10 per cent die. There is no cure, but since a vaccine was found in the 1950s, polio is entirely preventable. Globally, the wild form of the disease has almost disappeared. Afghanistan and Pakistan are now the only countries where the highly infectious disease, spread mainly through contact with faecal matter, remains endemic. But this year, imported cases were also found in Malawi and Mozambique, the first in those countries since the 1990s. There are two main forms of poliovirus. Alongside the wild-type outlined above, there are also rare cases of what is known as vaccine-derived polio. It is this second form detected in wastewater in the British capital, London, and in New York in the United States, with one case of paralysis reported in New York state. Genetically similar virus has also been found in Jerusalem, Israel, and scientists are working to understand the link, the Global Polio Eradication Initiative (GPEI) said. Click here to read... [32]

China's ex-COVID patients live under 'dark shadow' of stigma

Using snap lockdowns and mass testing, China is the last major economy still pursuing the goal of stamping out the virus completely. Those who test positive, as well as their contacts, are all sent to central quarantine facilities, while a flare-up in a factory can grind production to a halt. Rights groups say the strict rules are feeding COVID-19-related discrimination and shutting out thousands of people from China's already bleak job market - with migrant workers and young people hit hardest. "People are afraid they might contract the virus from us, so they shun us," said Zuo, who only gave her last name for fear of retribution for speaking to AFP. "Recruiters check COVID-19 testing history going back several months during an interview." China's strict control measures have led to stigma against not just recovered patients, but also their families, neighbours, friends and even frontline healthcare workers, said Jin Dongyan from the School of Biomedical Sciences at Hong Kong University. "It is unscientific to think that people who were infected once will continue to carry the virus and be infectious long after recovering," Jin told AFP. "Due to the lack of awareness, some fear that those who have been infected are more susceptible to being reinfected, but in reality, it's the opposite." Click here to read... [33]