Global Developments and Analysis: Weekly Monitor, 27 February- 05 March, 2023

Economic

Foreign investment in China slumps to 18-year low

Investment by foreign companies in China tumbled to its lowest level in 18 years in the second half of last year, buffeted by tensions with the U.S., a dimming growth outlook and fears of possible backsliding on economic reforms. Foreign direct investment into China totaled $42.5 billion between July and December 2022, according to an official balance of payments. That constituted a 73% decline on the year, the sharpest drop dating back to data in 1999. Half-year totals had averaged more than $160 billion between late 2020 and early 2022. Meanwhile, foreign direct investment by Chinese companies grew 21% to $84.2 billion. The $41.7 billion net outflow marked the first in five and a half years. Companies' reluctance to make new investments in China has been fueled in part by fallout from the country's zero-COVID policy. Actually utilized foreign direct investment -- which includes reinvested profits -- in the last quarter of 2022 fell 35% on the year to $33.8 billion, the steepest drop since the availability of comparable data in 1996, according to the Ministry of Commerce. Recent years have seen almost no new entries by European companies, according to an analysis of investment into China by New York-based Rhodium Group. And among businesses that continue to invest in China, the research firm noted a trend of "internal decoupling," with companies including large automakers segregating their Chinese and non-Chinese supply chains to limit risks such as technology leaks. Click here to read... [2]

China sets GDP target at around 5% for 2023, eyes quality growth

China has set its annual GDP growth target at around 5 percent for 2023, as the country embarked on a rapid economic recovery after a decisive victory against COVID-19, while putting emphasis on ensuring economic stability and high-quality growth, sustainable development amid global economic volatility and geopolitical uncertainty. While the growth target is reportedly the lowest in dozens of years, it still means China will continue to be one of the world's fastest-growing major economies, as the global economy is widely expected to further slowdown this year and major economies such as the US and the EU are grappling with the risks of recession, analysts noted. Many economists said that the world's second-largest economy will likely outperform the target despite facing a series of external risks and challenges, pointing to the country's accelerating recovery and solid economic fundamentals, as well as sufficient policy tools to tackle those risks and challenges. The GDP growth target, along with other economic development goals, was released in the Government Work Report delivered by Premier Li Keqiang on March 05 to the first session of the 14th National People's Congress (NPC). "This year, it is essential to prioritize economic stability and pursue progress while ensuring stability. Policies should be kept consistent and targeted, and they should be carried out in a more coordinated way to create synergy for high-quality development," Premier Li said in the Government Work Report. Click here to read... [3]

Motions, proposals at two sessions focus on high-quality development of vital manufacturing sector

Shares of companies involved in 6G, solar energy, shipyards, and instruments and gauges rose on March 06 on Chinese stock markets, in response to the Government Work Report which put an emphasis on pooling resources to achieve breakthroughs in core technologies in manufacturing amid national efforts toward high-quality development. The nation's commitment to further its manufacturing prowess was also underlined by President Xi Jinping's remarks on sticking to the development of manufacturing, as he took part in a deliberation with his fellow deputies from the delegation of Jiangsu Province, at the first session of the 14th National People's Congress, China's national legislature, on March 05. Xi is a deputy of the delegation. Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, on March 05 afternoon said that the manufacturing industry is an indispensable sector for China at all times, and China will strive to develop high-end manufacturing to realize all-around improvement, and provide full support for its development. China has the world's most complete industrial chain and the most developed transportation and logistics system, with 41 major industrial categories, 207 medium-sized industrial categories and 666 small industrial categories. Still, the world's manufacturing has some weak links amid anti-globalization headwinds and efforts by the US to decouple from and crack down on China. Click here to read... [4]

Myanmar's natural gas income in jeopardy as foreign firms exit

The Myanmar government is facing a potential crisis of dwindling revenue, as overseas energy companies pull out of natural gas operations in the country one after another, squeezing the ruling military's primary source of foreign income. PTT Exploration and Production (PTTEP), a subsidiary of Thailand's state-backed energy company PTT, has postponed a project where investments were slated to reach $2 billion, including power generation. Western companies including Chevron have almost exited the country entirely, pushed in part by pressure from human rights campaigners after the military took control of the Southeast Asian country in February 2021. PTTEP was a major natural gas development project in an offshore drilling area known as the M3 Block. The postponed project, originally agreed to with Myanmar's government before the military takeover, included the building and operation of thermal power plants as well as pipelines to transport gas to land. PTTEP, which is the sole shareholder in the M3 Block, indicated in a document for investors that the project would be delayed due to "local situation in Myanmar." PTT also announced in December that PTT Oil and Retail Business, which operates gas stations, would suspend its fuel storage business in Myanmar. Click here to read... [5]

Chinese cars, phones gain ground in Russia's sanctions-hit economy

Western sanctions imposed on Russia during the Ukraine war have created an opening for Chinese-made autos and electronics to expand their market share in the country. The Chinese groups Chery Automobile, Great Wall Motor and Geely Automobile captured a combined 16.5% of sales of new passenger cars and small commercial vehicles in Russia for 2022, up from 6.3% the year before, the Association of European Businesses reports. Chery increased Russian sales by 31% to 53,000 autos, though Geely's volume slipped by 0.7% to 24,000 vehicles. Chinese brands' market share is on track to surpass one-quarter this year, Russian media report, as the automakers benefit from the ease of maintaining parts supplies from China. Like India and many other countries, China has not joined the Western-led sanctions against Russia. Russian-Chinese relations "are progressing and growing steadily, and we are reaching new milestones," President Vladimir Putin said at a meeting with top Chinese diplomat Wang Yi in Moscow last week. Trade between the two countries jumped 30% last year, China's General Administration of Customs reports, reaching a second consecutive annual record. Since Moscow invaded Ukraine a year ago, most foreign automakers have halted production in Russia. Mercedes-Benz Group and Toyota Motor are among the companies that have said they will exit the Russian market. Overall, new-auto sales in Russia plunged by 59% last year to roughly 690,000 autos. Sales of foreign makes fell by about 80%, benefiting Chinese and Russian brands. Click here to read... [6]

Huawei's rebirth as cloud provider faces total U.S. export ban threat

Huawei Technologies' pivot away from smartphones toward cloud technology and other business solutions faces a new threat: U.S. sanctions that now cover just high-performance semiconductors could be extended to all products. At this year's Mobile World Congress in Barcelona, which wrapped up March 02, Huawei easily occupied the largest space among exhibitors, filling 9,000 sq. meters right near the entrance. Presenters guided attendees through the Chinese company's forays into digitizing ports and other infrastructure, as well as the company's work in health tech. One British employee of a software development company said the advanced technology on display was unlike anything he has ever seen. But there was one thing missing from Huawei's demos at the four-day event: new smartphones. The expo had been a stage for the company's splashy mobile phone launches in previous years. This year, consumer devices were barely a part of displays, an absence explained by U.S. trade restrictions imposed on Huawei. The U.S. Commerce Department first slapped Huawei with export controls against the company's suppliers in 2019, with officials citing national security risks over the possibility that the Chinese government could access sensitive data. Although Huawei has rejected the rationale for the controls, Washington toughened restrictions in September 2020 by banning the export of semiconductors produced with U.S. technology. That move cut Huawei's access to high-performance semiconductors needed for 5G-compatible smartphones, a devastating blow to all of its mobile operations. Click here to read... [7]

U.S. Prepares New Rules on Investment in China

The Biden administration is preparing a new program that could prohibit U.S. investment in certain sectors in China, a new step to guard U.S. technology advantages during a growing competition between the world’s two largest economies. In reports provided to lawmakers March 03 on Capitol Hill, the Treasury and Commerce departments said they were considering a new regulatory system to address U.S. investment in advanced technologies abroad that could pose national security risks, according to copies of the reports viewed by The Wall Street Journal. The reports said the Biden administration may prohibit some investments while also potentially collecting information about other investments to inform future steps. While the reports didn’t identify specific technology sectors the Biden administration views as risky, it said sectors that could advance rivals’ military capabilities would be a focus of the program. People familiar with the work on the new program expect it to cover private-equity and venture-capital investments in advanced semiconductors, quantum computing and some forms of artificial intelligence. U.S. officials want to prevent American investors from providing funding and expertise to Chinese companies that could improve the speed and accuracy of Beijing’s military decisions, for example. The reports also don’t identify which countries would fall under the new rules, though the people familiar with the matter say they expect the Biden administration’s work on the new rules would in practice largely deal with U.S. investments in China. Click here to read... [8]

Cabinet approves bill for nuclear reactors to run past 60 years in Japan

The Cabinet approved a bill on Feb. 28 that would allow nuclear reactors to operate beyond 60 years despite strong opposition over safety concerns. The bill would extend the limit on the reactors’ operational periods, which was introduced following the triple meltdown at the Fukushima No. 1 nuclear power plant in 2011. However, the bill is expected to be hotly debated at the Diet as a member of the Nuclear Regulation Authority and opposition parties have voiced objections about its contents and how the government has ignored their concerns. The bill would revise five laws, including the Atomic Energy Basic Law, the Law on the Regulation of Nuclear Reactors and the Electricity Business Law. Lawmakers will discuss the revisions of these laws all together at the Diet. After the 2011 disaster, the Law on the Regulation of Nuclear Reactors’ revision determined that the life span of nuclear reactors should be 40 years, in principle, while allowing an extension of up to 20 years with NRA approval. The government’s bill preserves this framework--the operational period of 40 years, in principle, and an extension of up to 20 years. However, it also allows nuclear reactors to operate beyond 60 years by excluding the time during which nuclear reactors are shut down for safety inspections or court-issued injunctions. Click here to read... [9]

Japan stuck in crisis mode for decades over falling birthrate

Shocked by the record low fertility rate of 1.57 in 1989, the government embarked on a number of emergency measures to lift the birthrate. The result? The fertility rate, or the average number of children a woman is expected to give birth to in her lifetime, continued to decline, reaching 1.3 in 2021. And the number of births in 2022 fell under 800,000 for the first time. Such numbers paint a bleak future for the nation, especially its senior citizens. Katsunobu Kato, the welfare minister, said the nation faced “a crisis that will greatly shake the very foundation of the economy and society.” The crisis appears more dire today. Takuya Hoshino, a senior economist at Dai-ichi Life Research Institute, has predicted that Japan’s working population will shrink to under 63 million in 2040 from about 69 million in 2019. That will, in turn, pull down the gross domestic product growth rate to under 0.5 percent in the 2030s, and economic shrinkage in the following decade, according to Hoshino. A 2019 government estimate of future pension payments projected a 20-percent decrease in fiscal 2047 over the amount paid in fiscal 2019. But that projection was based on the precondition of high economic growth as well as population trends that did not take into account the fast pace at which births are actually decreasing. Click here to read... [10]

Cuts at Amazon, Other Tech Companies Don’t Spell Recession Yet

Amazon.com Inc.’s halt to construction of a new headquarters, on top of a parade of high-profile tech layoffs, looks ominous for the economy. But the damage will need to spread much further to signal full-blown recession. When the U.S. has entered recession in the past, weakness has often started in one sector and then spread like brushfire, pulling down a widening array of industries and the people who work in them. Downturns in 2001 and 2007-09 were apt examples. The deflated internet and telecommunications bubble in the early 2000s and then the mortgage and housing crunch of the mid-2000s emanated outward, damaging financial companies, consumer spending and business investment. That ultimately led to economy wide recessions and widespread layoffs. Yet a close read of recent history is more reassuring. Some industry fires don’t spread. In 2015, a fracking bust took down the energy sector but the economic expansion went on to become the longest on record. The problems of some sectors, like in 2015, have thus far remained contained—though signs of broader vulnerability remain. Perhaps the biggest threat is the Federal Reserve’s ongoing interest rate increases, which touch nearly every household and business. Click here to read... [11]

Russian airlines surviving sanctions – Bloomberg

Sanctions against Russian aviation have led to mixed results but have failed to cause the significant pain to the sector that was expected by Western countries, Bloomberg reported on March 01, citing industry analysts. The Ukraine-related sanctions forced two of the world’s largest aircraft manufacturers, Boeing and Airbus, to stop doing business in Russia. At the time, over 40% of the aircraft operating in Russia were owned by foreign lessors, which demanded their property back shortly after the restrictions were introduced. However, Russian air carriers are still operating 467 Airbus and Boeing jets versus the 544 a year ago, according to data from researcher Cirium, as cited by the news agency. The country’s airlines reportedly keep flying the jets without software updates and other forms of support from Boeing and Airbus. Both manufacturers told the agency that they had stopped providing parts, maintenance or technical support to airlines or maintenance companies in Russia. In February, Russian Federal Air Transport Agency head Alexander Neradko said that Boeing and Airbus planes operated by Russian airlines will be able to fly safely until 2030 if properly maintained. According to Cirium estimates, Russian airports are now served by some 270 international flights daily compared to 300 a year ago. Click here to read... [12]

Earthquake damage in Turkey set to exceed $100bn, UN says

Damage caused by last month’s devastating earthquakes in Turkey will exceed $100bn, a United Nations Development Programme (UNDP) official has said, ahead of a major donor conference next week. “It’s clear from the calculations being done to date that the damage figure presented by the government and supported by … international partners would be in excess of $100bn,” the UNDP’s Louisa Vinton said at a news briefing on March 07 by video link from Gaziantep, a Turkish city that suffered severe damage in the quakes. More than 52,000 people were killed in southern Turkey and northwestern Syria by the February 6 tremors. Many were crushed or buried as they slept. The provisional damage figure, which Vinton said covers only Turkey, is being used as a basis for a donor conference on March 16 in Brussels to raise money for survivors and reconstruction. The World Bank previously estimated the direct damage in Turkey at $34.2bn, but it said recovery and reconstruction costs will be much higher and losses to Turkey’s gross domestic product associated with economic disruptions caused by the quakes will also add to the cost. Vinton said the Turkish government with support from the UNDP, the World Bank and the European Union had calculated far higher damage. Once this estimate is completed, it will become the basis for the recovery and reconstruction donor conference next week, she said. Click here to read... [13]

Why the fourth industrial revolution still hasn’t arrived

It’s nearly a decade since the term “fourth industrial revolution” was coined, yet many people won’t have heard of it, or know what it refers to. A supply chain describes the entire system for producing a product, from raw materials to delivering the finished article to a consumer. So it’s useful to look at the impact industry 4.0 technologies have had on these chains. It’s difficult to measure how much of an effect specific technologies might be having on the economy. However, one thing we can do is see what impact they have made on decision-makers in companies. One of us (Ralf Seifert) recently published a survey of several hundred senior executives conducted. The survey asked the executives their views on managing supply chains. None of the top priorities listed by the executives relate to industry 4.0. Headline-grabbing technologies strongly associated with the fourth industrial revolution, such as AI and machine learning, the internet of things, robotics and 3D printing are in the bottom third of priorities. A look at online trends also reveals that searches for “industry 4.0” peaked in 2019, but have since dropped to a significantly lower level. For many businesses, the benefits of other important technologies remain obscure. The daily pressures of service and cost take precedence, so it takes effort to move away from familiar solutions. Click here to read... [14]

FAO publishes global indicators on cost of healthy diet

New data released March 01 by the United Nations Food and Agriculture Organization (FAO) shows that while billions of people around the world cannot afford a healthy diet, the cost of such a diet varies significantly between regions. The agency, headquartered in Rome, based its findings on research carried out by the World Bank and U.S.-based Tufts University, as well as its own internal analyses. In a statement, FAO said the report "serves as a reminder that even if the world has made progress towards providing enough calories to feed the global population, there remains a long road ahead to sustainably nourishing all people." The report shows that a healthy diet cost the most in Latin America and the Caribbean at 3.89 U.S. dollars per person per day in 2020, with Asia a close second at 3.72 dollars. In Africa, the cost of a healthy diet was lower at 3.46 dollars per person per day, followed by North America and Europe at 3.19 dollars and Oceania at 3.07 dollars. In the year leading up to the findings, Asia saw the biggest increase -- 4 percent -- in the cost of a healthy diet. In Africa, the increase was the smallest, only 2.5 percent. But the cost of a healthy diet is not the only relevant factor, the FAO said, noting that in 12 African countries a healthy diet was beyond the reach of 90 percent of the population. Click here to read... [15]

Global biomass of livestock 10 times heavier than wild mammals: study

The researchers found the total weight of livestock and other domesticated mammals is more than ten times heavier than that of all wild mammals in the world, according to a new Israeli study published on Feb 27. In the study, published in the journal PNAS, researchers from the Weizmann Institute of Science (WIS) in central Israel found that the biomass of domesticated mammals, including cattle, sheep and pigs, has reached about 630 million tons, over 30 times the weight of all wild terrestrial mammals, about 20 million tons, and over 15 times that of wild marine mammals, which totals 40 million tons. They also found that the total weight of wild mammals is less than 6 percent of the weight of all mammals, including the total human weight of 390 million tons. This finding reveals the extent to which the natural world, along with its most iconic mammals, is vanishing under the impact of human activity, the WIS said. The study proves the urgency of nature conservation efforts, and can also assist in evaluating the risk posed by diseases that spread from other mammals to humans, according to the researchers. Click here to read... [16]

Strategic

China’s ‘two sessions’ 2023: new laws to counter foreign sanctions planned

China will use legal means to counter the impact of foreign sanctions, according to a spokesman for the country’s legislature. Wang Chao, a spokesman for the National People’s Congress, said on March 04 that the parliament has already started working on foreign policy legislation. Beijing is focusing more on international legal studies to advance its interests internationally as it comes under increasing sanctions pressure from the United States and Europe. The US is reportedly working with its allies to impose sanctions on China if it provides military support for Russia in its war against Ukraine. Chinese firms have already been sanctioned for their ties with Russia and other grounds such as the surveillance of ethnic minorities and for facilitating Iran’s energy trade in violation of US restrictions. “Some countries have kept abusing the extraterritorial application of their domestic laws in violation of international law, with the aim of taking down foreign entities and individuals and serving their own interests. “Such bullying acts are widely criticised in the international community as long-arm jurisdiction. China stands firmly against such practices,” Wang said. “It is necessary for the law to make the principle stipulation to counter and repeal such measures. China’s core interests allow no infringement,” he said. Click here to read... [17]

Analysis: Xi wants China's security apparatus under his direct grip

It has been 10 years since Zhou Yongkang, the former Politburo Standing Committee member and boss of China's internal security apparatus, was purged. So enormous was his influence at one point that even the country's top leader, then-President Hu Jintao, was unable to directly intervene in public security and police matters. Now there are signs that the domestic security domain will be strengthened in a significant way, under Chinese President and Communist Party General Secretary Xi Jinping. Clues were laid in a communique issued Feb 28 after a three-day session of the party's leadership -- known as the second plenary session of the party's 20th Central Committee. It talked of "a plan for the reform of Party and state institutions," without giving specifics. It only said that the plan will be deliberated in accordance with due legal procedures at the upcoming annual session of the National People's Congress, China's parliament, which begins on March 05. Earlier at a separate meeting, Xi had said the reform would focus on resolving difficult issues that are serious and of social concern. He hinted at a sweeping overhaul of party and state organizations. Some party sources have expressed concern, worrying that China is at risk of becoming a suffocating police state like the former Soviet Union. Click here to read... [18]

China's Li cites 'stability' 33 times in congress work report

Chinese Premier Li Keqiang mentioned "stability" 33 times in his government work report on March 05, underscoring Beijing's resolve to stabilize an economy battered by the coronavirus. The work report delivered to the National People's Congress every March by the premier summarizes China's key policies in the previous year and explains policies for the current year. Nikkei examined all the work reports since Xi Jinping began his leadership in autumn 2012 as general secretary and tabulated the frequency of keywords in those speeches. "Stability" was mentioned 38% more times this year than in 2022, marking the most frequent use of the keyword under Xi, who became president early in 2013. Li stressed that China will stabilize prices, employment and supply chains. China's lockdowns of major cities such as Shanghai under its zero-COVID policy last year helped slow the nation's economic growth to 3%, compared with the government target of roughly 5.5%. Unemployment has remained high among young people. China experienced rare protests last autumn, at which people held up blank sheets of paper to object to the zero-COVID policy. The country's leaders appear to see economic recovery as a way to stabilize society. The government ended zero-COVID in January, and that term went unmentioned in the latest report, possibly due to its unpopularity among the public. Click here to read... [19]

South Korea offers plan to end wartime labor dispute with Japan

South Korea announced on March 06 that it will compensate Korean laborers forced to work for Japanese companies during World War II, in an attempt to resolve one of the thorny historical issues that has plagued relations with Japan. Foreign Minister Park Jin said a government foundation will compensate 15 victims who won legal cases against Mitsubishi Heavy Industries and Nippon Steel in 2018. A government-backed fund in charge of compensation will use donations from the private sector. "The government hopes that both South Korea and Japan work together to develop future-oriented relations based on reconciliation and friendly cooperation, overcoming unfortunate history in the past," said Park in a briefing. "This solution matches the Republic of Korea's boosted state power and status. The government will not overlook this matter and [will] embrace our people's sufferings." South Korea's trade ministry said later March 06 it would suspend its World Trade Organization dispute process on Japan's export control measures, while Japan's Ministry of Economy, Trade and Industry announced it would hold talks with South Korea on the issue. The announcement comes less than a week after South Korean President Yoon Suk Yeol said that Japan had transformed from the militaristic aggressor of the past into a partner that shares the same universal values with South Korea. Click here to read... [20]

US House Speaker McCarthy plans to meet Taiwan's president in US: sources

U.S. House Speaker Kevin McCarthy plans to meet Taiwan's President Tsai Ing-wen in the U.S. in coming weeks, two sources told Reuters on March 06, a move that could replace the Republican Speaker's anticipated but sensitive trip to the democratically governed island claimed by China. The sources, who spoke on condition of anonymity, said Tsai had been invited to speak at the Ronald Reagan Presidential Library during a transit through California on a planned visit to Central America, and that McCarthy was likely to meet her in the United States. One of the sources said should the U.S. meeting go forward ― likely in April ― it did not necessarily rule out McCarthy visiting Taiwan in the future. McCarthy's office did not respond immediately to Reuters' questions on the matter, including whether the planned meeting was an effort to avoid raising tensions with China, which was angered by then-House Speaker Nancy Pelosi's visit to Taiwan in August. The Financial Times first reported the plans to meet in California. During a CNBC interview earlier on March 06, McCarthy declined to answer whether he would visit Taiwan, saying he would announce any travel plans when he had them. Click here to read... [21]

China’s Foreign Minister Says Ties with U.S. Risk Going off the Rails

China’s foreign minister warned that the U.S. strategy toward China risked plunging the countries into a conflict in remarks a day after Chinese leader Xi Jinping unleashed a similar verbal salvo at Washington, signalling a deepening rift between the world’s two largest economies. In a news conference March 07 on the sidelines of China’s annual gathering of its National People’s Congress in Beijing, Qin Gang said the Biden administration was insincere in saying it wanted to preserve relations and warned the U.S. against engaging in what he called new McCarthyism. The blunt remarks by Mr. Qin, who until recently served as Beijing’s ambassador to Washington, followed a similar broadside on Monday from Mr. Xi, who criticized what he termed a U.S. policy of “all-round containment, encirclement and suppression” of China. Mr. Xi’s comments were a rare instance of China’s top official taking direct aim at the U.S. The Chinese leader has generally refrained from directly criticizing the U.S. in public remarks—even as his decadelong leadership has demonstrated a pessimistic view of the bilateral relationship. Mr. Xi’s accusation on March 06 that the U.S. was seeking containment of China, a term loaded with Cold War meaning, and Mr. Qin’s warning on March 07 suggest a higher willingness by top leaders to resort to the type of nationalist rhetoric attacking Washington that has already been widely used by lower-ranking officials and state media. Click here to read... [22]

New China committee debuts, warns of ‘existential struggle’

A special House committee dedicated to countering China began its work Feb 28 with a prime-time hearing in which the panel’s chairman called on lawmakers to act with urgency and framed the competition between the U.S. and China as “an existential struggle over what life will look like in the 21st century.” While some critics have expressed concern the hearings could escalate U.S.-Chinese tensions, lawmakers sought to demonstrate unity and the panel’s top Democrat made clear that he doesn’t want a “clash of civilizations” but a durable peace. Tensions between the U.S. and China have been rising for years, with both countries enacting retaliatory tariffs on an array of imports during President Donald Trump’s time in office. China’s opaque response to the COVID-19 pandemic, its aggression toward Taiwan and the recent flight of a possible spy balloon over the U.S. have fueled lawmakers’ desire to do more to counter the Chinese government. The new Select Committee on the Chinese Communist Party is expected to be at the center of many of their efforts over the next two years. The committee’s chairman, Rep. Mike Gallagher, R-Wis., opened the hearing with a call for action. Addressing the difficulty of finding common ground on China-focused legislation, he said the Chinese government has found friends on Wall Street and in lobbyists on Washington’s K Street who are ready to oppose the committee’s efforts. Click here to read... [23]

China expands defense budget 7.2%, marking slight increase

China on March 05 announced a 7.2% increase in its defense budget for the coming year, up slightly from last year's 7.1% rate of increase. That marks the eighth consecutive year of single-digit percentage point increases in what is now the world’s second-largest military budget. The 2023 figure was given as 1.55 trillion yuan ($224 billion), roughly double the figure from 2013. Along with the world’s biggest standing army, China has the world’s largest navy and recently launched its third aircraft carrier. According to the U.S., it also has the largest aviation force in the Indo-Pacific, with more than half of its fighter planes consisting of fourth or fifth generation models. China also boasts a massive stockpile of missiles, along with stealth aircraft, bombers capable of delivering nuclear weapons, advanced surface ships and nuclear powered submarines. The 2 million-member People's Liberation Army is the military wing of the ruling Communist Party, commanded by a party commission led by president and party leader Xi Jinping. In his report March 05 to the annual session of China's rubber-stamp parliament, Premier Li Keqiang said that over the past year, “We remained committed to the Party’s absolute leadership over the people’s armed forces.” “The people’s armed forces intensified efforts to enhance their political loyalty, to strengthen themselves through reform, scientific and technological advances, and personnel training, and to practice law-based governance,” Li said. Click here to read... [24]

Vietnam's parliament elects Thuong as new president

Vietnam's National Assembly on March 02 elected Vo Van Thuong as the country's new president in an extraordinary session following the abrupt resignation of his predecessor, Nguyen Xuan Phuc, and Thuong's nomination by the Communist Party Central Committee as his successor at a special meeting the previous day. Thuong, 52, is the youngest member of the 16-member Politburo, Vietnam's top decision-making body. He is also a loyal ally of Nguyen Phu Trong, the Communist Party chief who has pushed out internal rivals in an anti-graft crackdown. Born in Vinh Long Province in the southern half of Vietnam, Thuong rose through the ranks of the party, his resume including a stint as the party boss of Quang Ngai Province. In 2016, Thuong entered the Politburo, then in 2021 he was moved to the No. 5 position of Central Committee secretary, the post he currently holds. Once confirmed, Thuong will replace Vo Thi Anh Xuan, the vice president who has been serving as acting president. Thuong's appointment to the presidency will further solidify Trong's power structure. Trong, who has served as the party's general secretary since 2011, had pushed forward an anticorruption campaign that has resulted in the departure of high-profile politicians. Click here to read... [25]

Kishida: Japan will buy 400 Tomahawk cruise missiles

Prime Minister Fumio Kishida said on Feb. 27 that Japan will buy 400 Tomahawk cruise missiles, breaking his silence on the size of the weapons deal with the United States. He revealed the figure at the Lower House Budget Committee session. “People are highly interested in (the topic),” Kishida said about why he announced the number. “In the United States, the maximum number (of Tomahawk missiles) that could be sold will be published.” The Defense Ministry had earlier said it planned to buy up to 500 Tomahawk missiles. However, Kishida did not confirm a number, saying the government “will not reveal its hand.” The government has earmarked 211.3 billion yen ($1.55 billion) in the initial budget plan for fiscal 2023 to buy Tomahawk missiles to enhance Japan’s defense capabilities. The U.S.-made missiles could be used to strike enemy bases that are planning an attack against Japan. Kishida did not reveal how much Japan would pay for each Tomahawk missile. Click here to read... [26]

Saudi Arabia and U.A.E. Clash Over Oil, Yemen as Rift Grows

When Abu Dhabi hosted a summit of Middle East leaders at a seaside palace in January, there was a glaring absence: Saudi Crown Prince Mohammed bin Salman. A month before, the United Arab Emirates’ top leaders skipped a high-profile China-Arab summit in Riyadh. Prince Mohammed and U.A.E. President Sheikh Mohamed bin Zayed al Nahyan steered clear of each other’s events intentionally, Gulf officials said, even as the rulers of Jordan, Egypt, Qatar and others attended. The snubs exposed a growing rift between neighboring U.S. security partners that for years marched in lockstep on Middle East foreign policy. Still formally allies, Saudi Arabia and the U.A.E. have diverged on several fronts, competing for foreign investment and influence in global oil markets and clashing on the direction of the Yemen war. The disagreements once unfolded behind closed doors but are increasingly spilling out into the open, threatening to reorder alliances in the energy-rich Persian Gulf at a time when Iran is trying to exert more sway across the region and Russia’s war in Ukraine has raised crude prices and roiled OPEC decision-making. U.A.E. national security adviser Sheikh Tahnoun bin Zayed al Nahyan, who is close to Prince Mohammed, has repeatedly traveled to the Saudi kingdom to meet its 37-year-old de facto leader, but that has failed to ease tensions, said people familiar with the trips. Click here to read... [27]

UN nuclear chief says Iran pledges more access for inspectors

Iran has agreed to reconnect cameras and other monitoring equipment at its nuclear sites and increase the pace of inspections, according to the head of the United Nations atomic agency. Rafael Grossi made the announcement on Feb 04 after meeting Iranian President Ebrahim Raisi and other top officials in Tehran. His visit followed the discovery of uranium particles enriched to near weapons-grade level at an underground Iranian facility and came just two days before a quarterly meeting of the International Atomic Energy Agency’s (IAEA) 35-nation board of governors. “Over the past few months, there was a reduction in some of the monitoring activities” related to cameras and other equipment “which were not operating,” Grossi told reporters upon his return to Vienna, Austria, where the agency has its headquarters. “We have agreed that those will be operating again.” He did not provide details about which equipment would be restored or how soon it would happen but appeared to be referring to Iran’s removal of surveillance cameras from its nuclear sites in June 2022, during an earlier standoff with the IAEA. “These are not words. This is very concrete,” Grossi said of the assurances he received in Tehran. The IAEA and Iran also issued a joint statement following Grossi’s visit, saying Tehran has “expressed its readiness to … provide further information and access to address the outstanding safeguards issues”. Click here to read... [28]

Weapon replacement costs changing nature of Ukraine war

The amount of ammunition being consumed in the Russo-Ukrainian conflict has surpassed all estimates. This is starting to put pressure on the production and supply chains involved in the manufacture of ammunition for artillery guns among other weapons systems. This is not an unprecedented problem. In warfare throughout history, armies have often underestimated the level of force and destruction of equipment that will be encountered and the amount of ammunition that will be consumed. Time and again, this has affected military planning. For example, a lack of shells for British artillery in the First World War resulted in a crisis that led to the downfall of the government of Herbert Asquith. But the ability of protagonists of the two world wars to sustain their efforts despite huge levels of destruction comes down to the fact that weapons of that era were relatively simple to produce compared to today’s sophisticated military hardware. And the relative cheapness of the weapons allowed extensive numbers to be produced during the conflict. The Russo-Ukrainian war has not involved loss rates of equipment or consumption of material on the scale of the world wars. But, despite this, the destruction of major, technologically cutting-edge, equipment can cause a headache for military planners and strategists. Click here to read... [29]

UN chief welcomes agreement on text of UN ocean treaty

UN Secretary-General Antonio Guterres welcomes the finalization of a text of the United Nations (UN) Ocean Treaty to ensure the conservation and sustainable use of marine biological diversity of areas beyond national jurisdictions, his spokesman said March 04. "The secretary-general commends delegates for finalizing a text to ensure the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction," said an unnamed spokesperson for Guterres in a statement. "This breakthrough, which covers nearly two-thirds of the ocean, marks the culmination of nearly two decades of work and builds on the legacy of the United Nations Convention on the Law of the Sea." This action is a victory for multilateralism and for global efforts to counter the destructive trends facing ocean health, now and for generations to come. It is crucial for addressing the triple planetary crises of climate change, biodiversity loss and pollution. It is also vital for achieving ocean-related goals and targets of the 2030 Agenda for Sustainable Development and the Kunming-Montreal Global Biodiversity Framework, said the statement. Guterres commends all parties for their ambition, flexibility and perseverance and looks forward to continuing working with all parties to secure a healthier, more resilient, and more productive ocean, benefiting current and future generations, said the statement released late March 04 night. Click here to read... [30]

Health

FBI claim of lab leak likely sparking COVID draws China derision

The FBI has assessed that a leak from a laboratory in the central Chinese city of Wuhan likely caused the COVID pandemic, director Christopher Wray said on Feb 28, a claim China said had "no credibility whatsoever." "The FBI has for quite some time now assessed that the origins of the pandemic are most likely a potential lab incident in Wuhan," Wray told Fox News. His comments follow a Wall Street Journal report on Feb 26 that the U.S. Energy Department had assessed with low confidence the pandemic resulted from an unintended lab leak in China. Four other agencies, along with a national intelligence panel, still judge that the pandemic was likely the result of a natural transmission, and two are undecided, the Journal reported. White House national security spokesman John Kirby said on Feb 27 the U.S. government had not reached a definitive conclusion and consensus on the pandemic's origins. China denounced Wray's comments on March 01, saying it was firmly opposed to any form of "political manipulation" of the facts. "Based on the poor track record of fraud and deception of the U.S. intelligence community, the conclusions they draw have no credibility whatsoever," Chinese Foreign Ministry spokesperson Mao Ning told reporters in Beijing. "We urge the U.S. side to respect science and facts." Click here to read... [31]

World facing biggest cholera surge in 20 years – WHO

Factors including economic crises, climate change and the fallout from the Covid-19 pandemic have led to the ideal circumstances for cholera to flourish in high-risk countries, the World Health Organization (WHO) has warned after noting a sharp surge of the illness in at least 30 countries. The scale of the various outbreaks rose sharply in 2022 after several years of decline, the WHO said. Between January and October of last year, 29 countries reported cases of the disease, compared to 23 the year before – with those numbers set to rise in 2023. “The number of countries with these large outbreaks occurring at the same time, we have not seen it in at least 20 years,” Philippe Barboza, the head of the WHO’s cholera emergencies response unit, told The Telegraph. “Most of the major outbreaks we are looking at are all driven by major, unusual climate events,” he added, adding that southern African countries are particularly at risk as they face a third straight year of heavy rain and cyclones brought on by the La Nina weather phenomenon. Syria declared its first outbreak of the disease in 15 years last year, with the situation worsening following last month’s earthquakes. Lebanon is facing a similar problem for the first time in 30 years as it struggles to fight off the disease amid economic collapse. Click here to read... [32]