Global Developments and Analysis: Weekly Monitor (07-13 August)

Economic

New US Rule on China Investments Creates ‘Agony’ of Ambiguity

Money managers, lobbyists and members of Congress had hoped President Joe Biden’s long-awaited restrictions on investment in China would make clear what was allowed and what was out of bounds. Instead, they got more questions than answers. “There’s a lot left to be worked out,” said Jeremy Zucker, head of the national security practice at law firm Dechert LLP. “It’s not clear where the government will draw the line between what’s prohibited and what will merely require notification. That will result in a certain amount of agony in the interim.” The order, released Aug 09, has been two years in the making as the administration sought to balance demands from China hawks focused on national security and the investment community seeking to avoid disruption. The White House wants to create a regime that will restrict US investments in semiconductors, quantum computing and artificial intelligence, particularly with military applications without risking the broader economic relationship. But the Treasury Department’s 46-page “advanced notice of proposed rule-making” released alongside the order — a rough road map for the order’s rules — includes at least 80 separate questions about how it should ultimately structure the program, which firms have 45 days to comment on. Click here to read... [2]

Tech war: new US investment curbs to have limited impact on China’s targeted semiconductors, quantum computing and AI sectors, analysts say

New American investment restrictions overseas under US President Joe Biden’s latest executive order are expected to have a limited impact on the targeted tech sectors in China, according to analysts, although it could disrupt the flow of fresh funds to the country’s private sector amid a weakening economic recovery. That directive, however, was “more smoke than actual fire” because it only “regulates US investment in a small number of tech sectors”, said Brock Silvers, chief investment officer at private equity firm Kaiyuan Capital in Hong Kong. “China can expect this long-awaited executive order to be fairly unobtrusive,” Silvers said. While Biden’s new directive underscored the escalating tensions between Beijing and Washington, some Chinese investors downplayed the impact of new US investment curbs on funding for the targeted China tech sectors. “US investment in China’s chip sector has gradually dried up since 2019,” Zheng Haowei, a manager at Sino IC Leasing, said in an interview on the sidelines of the three-day China Semiconductor Equipment Annual Conference, which opened on Aug 09 in the city of Wuxi in eastern Jiangsu province. “Chinese semiconductor companies are basically supported by Chinese domestic capital,” Zheng said. Shanghai-based Sino IC Leasing buys semiconductor-manufacturing equipment that it leases to local chip fabrication enterprises. Click here to read... [3]

China companies' R&D investment more than doubles over 5 years

Chinese companies are stepping up investments to develop products on their own without mimicking those acquired from Japanese, U.S. and European peers. Companies listed in China spent 1.64 trillion yuan ($228 billion) on research and development programs in 2022, marking a 2.6-fold increase over the past five years. "We have captured a market share of 90% in the U.S. and Europe," said Wu Jing, vice president of Jiangsu Shemar Electric, which listed on the Shanghai Stock Exchange in 2019. With ceramic insulators of electric power cables being rapidly replaced with those of safer composite materials, Jiangsu Shemar has developed a safer, lighter polymer insulator that has a longer life. This new insulator has made Jiangsu Shemar a world-leading company in the field. Chinese companies have so far introduced cutting-edge technologies from Japanese, American and European firms and based their manufacturing technologies on them. They have been able to boost sales thanks to huge markets in China. But as the copycat strategy is not feasible overseas, they are starting to see limits to growth. China's listed companies have a total of 3.08 million researchers and other staff working in R&D. Jiangsu Shemar has 216 of them, accounting for 14% of its workforce. Chinese automaker BYD has the biggest R&D team of 69,697 staff, including 590 holders of doctorate degrees and 7,827 with master's degrees. Click here to read... [4]

China’s private-sector crisis: everything you need to know about the mess and what Beijing is doing to clean it up

China has recently announced a series of initiatives to prop up the country’s private economy, which the leadership sees as crucial in curbing downward risks in the nation’s economic rebound. The private sector, which serves as the backbone of China’s 121-trillion-yuan (US$16.8 trillion) economy, was battered hardest during the pandemic and has remained subdued this year amid the slower-than-expected recovery. Addressing overdue payments. The State Council, China’s cabinet, emphasised the need to speed up addressing the issue of overdue payments to businesses, aiming at “stimulating the vitality of private investment”. Chinese companies were plagued by the most prolonged payment delays among major Asian economies, according to a recent report by global trade credit insurance group Coface. Given higher raw material prices and fierce market competition, customers with a business slump could face financial difficulties that lead to late or partial payments. Financial support and fair market access. Before the NDRC’s 28-point action plan, the Central Committee, the ruling Communist Party’s top leadership body, together with the State Council, in the most comprehensive policy package issued since President Xi Jinping started his third presidential term in March, had reiterated vows to foster an environment of equal treatment, offering up solid political backing to tear down market-entry barriers for private entrepreneurs. Click here to read... [5]

Taiwan pitches deeper Europe engagement after TSMC Germany investment

Taiwan chipmaker TSMC’s 3.5 billion euros ($3.83 billion) investment in Germany will drive deeper engagement between the island and Europe, Taiwan’s economy minister said on Aug 09, pitching the political benefits of the deal. For Taiwan, under increasing pressure from Beijing to accept China’s sovereignty claims over the island, the investment in a new factory is a show of goodwill towards Europe, even as the European Union has shown no desire to proceed with a Bilateral Investment Agreement, or BIA, Taipei has long hoped for. “TSMC’s investment in Europe will help bring even closer cooperation between Taiwan and the EU,” Taiwan Economy Minister Wang Mei-hua told reporters in Taipei, when asked if signing the BIA would get more Taiwanese chipmakers to the bloc. “Just like how Taiwan and the United States are continuing to strengthen cooperation, like the ‘21st Century’ trade initiative and double tax avoidance, TSMC going to Europe will certainly strengthen bilateral relations in the future,” she added, referring to a recently signed trade deal with Washington. Taiwanese officials, while pointing out TSMC’s investments are a company decision, have also said that European countries should strengthen ties with Taiwan if they want continued semiconductor cooperation. Taiwan has repeatedly called for progress on a BIA with the European Union. The EU included Taiwan on its list of trade partners for a potential bilateral investment agreement in 2015. Click here to read... [6]

From Unknown To Unstoppable: New Traders Redefine Russia's Oil Landscape

Little-known and newly-incorporated trading companies have handled large volumes of Russian crude oil and products since the Russian invasion of Ukraine and the withdrawal of Western firms from trades with Russia’s oil. The little-known oil trading companies that have mushroomed are incorporated in jurisdictions outside of Europe and are often notoriously opaque in their management and dealings. Some of those companies are said to have some representatives in common, according to documents reviewed by Bloomberg. Two of the new large traders of Russian crude and refined petroleum products – Coral Energy and Nord Axis Ltd – have had representatives in common. One representative for Coral Energy and a lawyer who has done work for Coral have both been directors of Nord Axis, per the documents dated 2022 Bloomberg has reviewed. Nord Axis is not as unknown as many other oil traders that have sprung up and started trading Russia’s oil. Nord Axis, a Hong Kong-registered trading company, acquired the 10 percent non-operational, passive shareholding of oil trading giant Trafigura in the Vostok Oil project last year. Back then, Western majors were quitting en masse operations and non-operational stakes in Russian energy projects. According to KSE Institute’s study on the sanctions on Russian oil, Russia continues to earn around $425 million per day from oil exports. Click here to read... [7]

Global Carbon Emissions Hit New Record Despite Green Energy Push

For the past 70 years, BP has annually published the Statistical Review of World Energy. According to a company spokesperson, BP decided to transfer the publication of the report to the Energy Institute (EI) to allow Chief Economist Spencer Dale’s team to prioritize Chief Executive Bernard Looney’s initiatives in transitioning the oil and gas company towards renewables and low-carbon energy, thereby freeing up time and resources. In late June, the EI published its inaugural version of the report, which is the 72nd Edition of the Statistical Review of World Energy. The full report and all data can be found at this link. Today, I will cover the report’s findings on carbon emissions. The 2023 Review shows the world remains heavily reliant on fossil fuels for energy needs, even as renewables like solar and wind continue rapid growth. While renewable power expanded at record rates, fossil fuels maintained an 82% share of total primary energy consumption. Natural gas and coal demand stayed nearly flat with oil rebounding close to pre-pandemic levels. Carbon dioxide emissions from energy rose 0.9% in 2022 to a new high of 34.4 billion metric tons, indicating lack of progress in curbing worldwide carbon output. Emissions have moved further away from the reductions called for in the Paris Agreement. Click here to read... [8]

Crude Inventories To Sink To 8-Year Low This Year: Nuttall

Inventories of crude oil will reach an 8-year low by the end of this year, Eric Nuttal, partner and Senior Portfolio Manager at Ninepoint Partners, told BNN Bloomberg TV on Aug 08. While persistent fear of China’s stuttering crude oil demand and the boogeyman of high interest rates are periodically dragging down oil prices, the recent price rally in crude oil has been fairly substantial. “When you boil it all down, our measurement of the health of the oil market comes down to oil inventories—globally,” Nuttall explained. Using Kpler tracking data, “real time data as of this morning: global oil inventories are at an 8-month low. We expect between now and year end they will fall to an 8-year low due to strong demand still,” says Nuttal, who added that demand can be measured in real time. Nuttal also referenced last weeks’ biggest crude oil inventory draw in the history of the United States. “When we look between now and year end, there’s a strong fundamental support—we think at about $80 given where inventories are now—and we think we should strengthen as we go throughout the year.” When speaking about recession fears, Nuttal pointed out that only twice in history has oil demand faltered—during Covid and during the Great Financial Crisis. All other recessions merely saw a slowdown in oil demand growth, not a dip in oil demand itself. Click here to read... [9]

High Oil Prices Help GCC Sovereign Wealth Funds Grow To $4 Trillion

Assets under management of sovereign wealth funds in the Gulf Cooperation Council have expanded to $4 trillion over the past two years driven by higher oil prices. This is the outtake of a report from S&P Global, as carried by The National, which noted that the amount is greater than the combined sovereign wealth fund assets of Asia, Latin America, and sub-Saharan Africa. “GCC sovereign wealth funds have largely benefitted from external surpluses generated by the latest energy revenue windfall across the region to increase their global footprint and deepen their foray into global markets through diversified sectoral buys,” S&P Global Market Intelligence MENA principal economist Jamil Naayem said, as quoted by The National. Last year, of the 10 largest investment deals with the participation of state entities, five came from GCC sovereign wealth funds. Of these, the UAE accounted for 62% of the total capital poured into these investments, while Saudi Arabia accounted for 28%. Qatar accounted for 10%. “Although investments in large advanced economies and prominent emerging markets are likely to continue in the next few years, GCC SWFs will also recycle part of the petrodollar inflows in peer Middle East and North African economies in need of external financing. Egypt and Turkey are a case in point,” S&P’s Naayem also said. Click here to read... [10]

Chinese cyberattacks on Japan prompts U.S. push for stronger defenses

Revelations that Chinese hackers have accessed Japanese defense secrets are causing concern in the U.S., which is poised to share more defense-related information with its Asian ally. Chinese cyberattacks on key infrastructure that could hinder response times during crisis is a separate concern. Washington has warned allies to bolster digital defenses. Renewed scrutiny of cyberattacks carried out against the U.S. and its allies follows a Washington Post report this week that highlighted a breach of Japanese defense secrets by hackers from the Chinese military. The breach, carried out in fall 2020, was discovered by the U.S. government. U.S. Defense Secretary Lloyd Austin indicated to Tokyo that data sharing between the two countries could be disrupted unless Japan bolstered its cybersecurity, according to the report. Addressing the report on Aug 09, deputy Pentagon press secretary Sabrina Singh told reporters, "We feel confident in our relationship and the intelligence sharing that we do with Japan." However, she shied away from commenting on specific Japanese capabilities, saying only "We feel very confident that Japan will be able to address any security concerns that they have." China denies carrying out cyberattacks against other countries. But James Lewis, senior vice president at the Washington-based Center for Strategic and International Studies, said: "Japan is a primary target for Chinese cyber activities both for traditional political/military intelligence gathering, and also for economic espionage." Click here to read... [11]

Foreign investment in China falls to lowest level on record

Foreign investment in China continued on its downward slope in the April-June quarter, reaching the lowest level on record. In addition to concerns about the U.S.-China technology standoff, doubts about China's willingness to open up more to the outside world are also hindering cash flows into to the country. If decoupling with the West due the drop foreign investment continues, the effect could be felt beyond the Chinese economy to throughout the world. Direct investment by foreign companies in China in the second quarter totaled $4.9 billion, an 87% decrease on the year, the largest drop since 1998 when comparable data first became available, according to figures released this month by the State Administration of Foreign Exchange of China. The drying up of foreign cash is not new. FDI in China has dropped by more than 50% since the April-June quarter of last year. China's strict zero-COVID policy, which locked down commercial hub Shanghai for large parts of last year, increased foreign uncertainty and contributed to the loss of investment momentum. Economic activity has normalized since the zero-COVID policy was dropped in January, but foreign direct investment has continued to decline. According to China's Commerce Ministry, foreign companies invested 2.7% less in terms of yuan, including reinvestment, in the first six months of 2023 than in the same period last year. Click here to read... [12]

Regulatory squeeze to kill a third of China’s hedge funds

One-third of all Chinese hedge funds likely face liquidation next month when new minimum net asset values come into force. The measures mark Beijing’s latest regulatory squeeze on a key, fast-growing industry. Hedge funds must maintain a net asset value of at least 10 million yuan (US$1.2 million) for 60 consecutive trading days or face liquidation, according to the Regulations on the Supervision and Administration of Private Equity Investment Funds. The new minimum capital requirements were unveiled by the China Securities Regulatory Commission (CSRC) and Ministry of Justice on July 9 and will take effect on September 1. The new regulations will cap leverage levels at 200% and the size of investments hedge funds can make in single securities at 25% of total assets under management. Beijing seeks to weed out the smaller and often less professional players responsible for extreme volatility in a sector that has grown sevenfold over the last decade. Around 93,000 hedge funds valued at 5.6 trillion yuan were in operation across China at the end of 2022, according to the Asset Management Association of China (AMAC), a self-regulatory fund management industry group. Shanghai Suntime Information Technology Co, a financial data provider, says that nearly 35,000 products, or 37% of the total hedge fund industry, have less than 5 million yuan of assets under management. Click here to read... [13]

Why AU wants credit rating body for Africa

The African Union (AU) has initiated discussions about the proposed African Credit Rating Agency (ACRA) to offer more accurate, balanced and comprehensive opinions on African credit instruments. The global credit rating landscape is largely dominated by three major agencies ― Moody's, Fitch and S&P Global. These entities wield considerable influence over international financing decisions and the flow of capital. However, recent events have underscored the fallibility of these agencies' ratings, casting doubt on their accuracy and objectivity. According to the African Sovereign Credit Review 2023 Mid-Year Outlook, during the first half this year, rating actions were predominantly negative. The report is issued jointly by the Economic Commission for Africa (ECA) and the African Peer Review Mechanism (APRM). "A total of thirteen negative rating actions ― seven downgrades and six negative changes in outlooks ― were assigned to eleven countries," the report reads in part. "This trend has raised questions about why Africa's credit ratings are not reflective of the current global 'economic recovery phase'," it adds. The report states that the "Big Three" agencies have continued to make significant errors in their ratings, yet they continue to influence global financing decisions and the flow of capital. These concerns led to calls by the AU to examine the feasibility of establishing a local agency, the ACRA, as an independent entity of the union to provide alternative credit ratings to the "Big Three." Click here to read... [14]

Russia’s pipeline gas exports in decline – media

Exports of Russian piped gas will decline this year by as much as 34% on the year before, business daily RBK reported on Aug 07, citing the latest projections issued by strategy consultancy Yakov & Partners. The delivery of Russian natural gas via pipelines dropped by nearly 50% in 2022, from 206 billion cubic meters (bcm) in 2021 to 122 bcm, according to analysts, who attribute the decline to the pressure of Ukraine-related sanctions and to Moscow’s requirements for EU buyers to pay for Russian gas supplies in rubles instead of dollars or euro. This year, the pipeline gas flows are expected to drop further to 80 bcm, experts predicted, adding that the loss of the EU market is seen as the key reason for the drop. “The enforced decline in gas production in 2023 amid the loss of the EU as a key export market could amount to nearly 30 bcm,” the consultancy added. In 2022, Russia’s gas export revenues soared to $138 billion, due to skyrocketing prices for the fuel in the EU and uncertainty concerning the shift in supplies to new markets. This year, gas export revenues are expected to fall by 68.8% to $43 billion amid declining prices for the fuel and decreased sales volumes. In addition, analysts expect export earnings to recover to only $55 billion by 2030. Click here to read... [15]

July hottest month ever – meteorologists

July was the hottest month in recorded history, the European meteorological authority Copernicus reported on Aug 08. This year has been the third-hottest on record thus far, the weather experts said, suggesting 2023 has a chance of beating 2016 as the hottest year in recorded history. “These records have dire consequences for both people and the planet exposed to ever more frequent and intense extreme events,” Copernicus Deputy Director Samantha Burgess told the Financial Times on Aug 08. The month’s global average temperature of 16.95 degrees Celsius (62.51 degrees Fahrenheit) was about 0.3 degrees C (0.6 degrees F) warmer than July 2019, the previous record holder according to Copernicus, and 0.7 degrees C (1.3 degrees F) hotter than the average July from 1991 to 2020. The announcement confirmed predictions made by the EU body and also by the World Meteorological Organization last month that this July’s temperatures would significantly exceed the existing record. The two groups claimed the first three weeks of July constituted the warmest three-week period ever recorded globally, with July 6 being the single hottest day. Additionally, global average sea surface temperatures hit a record high in July, Copernicus reported, noting that the oceans were half a degree C (0.9 degrees F) hotter than the previous 30 years, while Antarctic sea ice cover was measured at less than any previous July on record, 15% below the average for this time of year. Click here to read... [16]

Strategic

US deploys 3,000 troops to Middle East

The US military has deployed thousands of troops and additional naval assets to the Middle East to “deter” Iranian forces, after Washington accused Tehran of harassing commercial vessels and other “destabilizing” actions. The US Navy’s 5th Fleet announced the decision on Aug 07, noting that more than 3,000 marines and sailors had arrived in the Red Sea aboard an amphibious assault ship and a dock landing vessel the day before. “These units add significant operational flexibility and capability as we work alongside international partners to deter destabilizing activity and deescalate regional tensions caused by Iran’s harassment and seizures of merchant vessels earlier this year,” 5th Fleet spokesman Commander Tim Hawkins told The Hill in a statement. The amphibious assault ship sent in the latest deployment, the USS Bataan, also carried additional air assets, the Navy added. Though it did not specify the systems on board, the military said that the ship can carry more than two dozen rotary-wing and fixed-wing aircraft, including the Osprey tilt-rotor aircraft and AV-8B Harrier attack jets, in addition to a number of landing craft. The smaller USS Carter Hall, a docking ship, will act as a support vessel for operations involving landings or amphibious attacks. Click here to read... [17]

Iran Slows Buildup of Uranium Needed for Weapon

Iran has significantly slowed the pace at which it is accumulating near-weapons-grade enriched uranium and has diluted some of its stockpile, people briefed on the matter said Aug 11, moves that could help ease tensions with the U.S. and allow the resumption of broader talks over its controversial nuclear program. The more slowly Tehran accumulates highly enriched uranium, the less potential fissile material it has for nuclear weapons. The news comes a day after Iran released four U.S. citizens from prison into house arrest, the first step in a planned prisoner swap that Washington expects will eventually see them return home. If the U.S. detainees are set free, Iran will gain access to billions of dollars of oil revenues trapped in South Korea under U.S. sanctions. U.S. and European officials have told Iran that if there is de-escalation of tensions over the summer, they would be open to broader talks later this year, including on Iran’s nuclear program. “If Iran were to take de-escalating steps with respect to their nuclear ambitions again, that would all be to the good,” John Kirby, a spokesman for the White House National Security Council, said Aug 11. “We’re not in active negotiations about the nuclear program, but certainly, those sorts of steps…would be welcome.” Click here to read... [18]

Israel says no Jerusalem base for Saudi envoy to Palestinian Authority

Israel has rejected the idea of a diplomatic base in Jerusalem for Saudi Arabia’s envoy to the Palestinian Authority (PA), who recently presented his credentials to Palestinian President Mahmoud Abbas’s diplomatic adviser Majdi al-Khalidi. Ambassador Nayef al-Sudairi, the kingdom’s current ambassador to Jordan, was named as non-resident envoy to Palestine and consul general in Jerusalem on Aug 12 at the Palestinian embassy in Amman. Israeli Foreign Minister Eli Cohen told Tel Aviv radio station 103 FM on Aug 13 that the new ambassador, Nayef al-Sudairi, could meet representatives of the PA but would have no fixed presence. “Will there be an official physically sitting in Jerusalem? This we will not allow,” Cohen said. Normalisation in the background? The file for the Palestinian territory has traditionally been handled by Saudi Arabia’s embassy in Amman. The Saudi move appeared to be in line with the longstanding and so-far fruitless Palestinian goal of founding a state in territories occupied by Israel in a 1967 war, with East Jerusalem as the capital. Israel deems Jerusalem its own capital, a status recognised by the United States under then-President Donald Trump in 2017 but not by other world powers. Israeli authorities bar Palestinian diplomatic activity in the city. Click here to read... [19]

Japan, China eye fall summit as tensions shadow treaty anniversary

The Japanese and Chinese governments are exploring an opportunity for their leaders to meet face to face this autumn, hoping to improve chilled relations as the two countries mark the 45th anniversary of their peace treaty on Aug 12. Japanese Prime Minister Fumio Kishida and Chinese President Xi Jinping are expected to attend the Group of 20 summit in India this September. The two sides are weighing a potential meeting on the sidelines of the event. Another option is for Kishida and Xi to meet at the Asia-Pacific Economic Cooperation summit in the U.S. this November. Kishida will consider meeting with Chinese Premier Li Qiang as well in September. China puts heavy weight on diplomacy in key anniversary years. It sent then-Premier Li Keqiang to Japan in May 2018 for the 40th anniversary of the peace treaty. Xi also met with then-Japanese Prime Minister Shinzo Abe in China that October. Plans for the fall summit come at a delicate time as Japan and China struggle to thaw their frosty ties. "China wants to eliminate U.S. influence in the East and South China seas, while Japan, South Korea and Southeast Asian countries want the U.S. to stay close," said University of Tokyo professor Akio Takahara, who studies contemporary Chinese politics. "That's where a lot of tensions come from." Click here to read... [20]

China's foreign minister visits Cambodia days after incumbent premier hands off the job to his son

China's foreign minister visited Cambodia over the weekend to reaffirm his country's commitment to the southeast Asian country after its incumbent prime minister handed off the job to his son following a one-sided election last month, officials said. Wang Yi is the first foreign leader to visit Cambodia, days after Hun Sen’s announcement that his 45-year-old son and the country’s army chief, Hun Manet, is replacing him. A video of the meeting was posted on Hun Sen's Telegram channel on Aug 13. Eang Sophalleth, Hun Sen's spokesman, told reporters after the meeting that Wang Yi expressed China's willingness to cooperate with the newly-appointed prime minister. Cambodia's foreign ministry later released a statement citing Wang Yi as expressing China’s support for "the Kingdom's emerging government leadership." Hun Sen, the longest-serving government head in Asia, and his party sealed a landslide victory in the country's general election after barring the main opposition group —the Candlelight Party— from contesting the polls on a technicality. Western nations and rights groups criticized the election saying it was neither "free" nor "fair.” Wang Yi met with both Hun Sen, his newly appointed son as well as Foreign Minister Prak Sokhonn. He praised the election saying it was free and fair, with more than 80% of Cambodians participating in the presence of several dozens of foreign observers. Click here to read... [21]

Saudi Arabia pushes to join fighter jet project with U.K., Italy, Japan

Saudi Arabia is pushing the U.K., Japan and Italy to allow it to become a full partner in the landmark next-generation fighter jet project that the three countries signed in December. The request, confirmed by five senior officials in London, Tokyo and Rome, has already created strains within the tri-national alliance. While the U.K. and Italy are open to the idea of Saudi membership, Japan is firmly opposed and has made its position clear to the other two. The Global Combat Air Programme (GCAP), which seeks to deliver a highly advanced and exportable combat aircraft by 2035, was a significant advance for all three signatories, particularly for Japan which had historically restricted defense exports and never collaborated on a program of this scale and complexity. Efforts by Saudi Arabia to join GCAP and expand the program into a four-nation project have intensified significantly in recent weeks, according to officials in London and Tokyo. These efforts have included a direct request to the government of Japan in July when Prime Minister Fumio Kishida met Crown Prince Mohammed bin Salman in Jeddah. The Saudi involvement would also involve a potentially significant financial contribution to a project whose costs are estimated in the tens of billions of dollars, said people briefed on the matter. Click here to read... [22]

Pakistan parliament dissolved as PM Sharif makes way for caretaker

Pakistani Prime Minister Shehbaz Sharif late on Aug 09 dissolved his cabinet and the National Assembly, paving the way for a caretaker administration to steer the country toward elections that are shrouded in uncertainty. Sharif advised President Arif Alvi to authorize the dissolution of the legislature, who did so just minutes before midnight local time. This marks only the third time in Pakistan's 76-year history that the lower house has completed its five-year term, although that term was rocked by the ouster of former Prime Minister Imran Khan and more than a year of political turmoil afterward. It remains uncertain who will replace Sharif as the caretaker prime minister. Pakistan's constitution mandates that a caretaker government oversee elections, which must be held within 90 days of dissolution. But the government has already laid the groundwork for delaying the polls well beyond the November deadline, while the ruling establishment's chief rival Khan is now serving a three-year jail sentence for corruption. Earlier on Aug 09, a farewell session of the National Assembly was convened, during which government parties criticized Khan and lauded their own performance over the last 16 months. But experts give the Sharif-led coalition government mixed reviews for its stewardship since Khan was removed in a no-confidence vote in April 2022. Click here to read... [23]

Trans-Caspian route reshaping Europe-Central Asia trade

The EU and European Bank for Reconstruction and Development (EBRD) have recognized the strategic potential of the Trans-Caspian International Trade Route (TITR) to revolutionize Eurasian trade. In particular, they have identified a “Central Trans-Caspian Network” (CTCN), running through southern Kazakhstan, as the most sustainable of three container-transit options for linking Central Asia and Europe. The TITR is sometimes assumed to be or treated as part of China’s Belt and Road Initiative (BRI), simply because it runs from Asia to Europe. However, this is not the case. The geopolitical weight of the TITR lies in the fact that it provides a viable alternative to the BRI by focusing on a “Middle Corridor.” This corridor, which includes a trans-Caspian segment, bypasses the BRI’s northern route through Russia and its southern, maritime route. Azerbaijan and Kazakhstan have been working intensively on the Middle Corridor segment of the TITR since the mid- to late 2010s. The CTCN newly identified by the European Union and EBRD is in essence a detailed specification of the TITR’s segment in Central Asia. The Middle Corridor is the segment of the route that stretches across the Caspian Sea from Kazakhstan to Azerbaijan, and thence through Georgia (and Armenia if there is peace) to Turkey. In June, the EU and the EBRD presented a detailed joint study of the CTCN and associated projects in Almaty, projecting a sevenfold increase in transit volumes by 2040. Click here to read... [24]

Amazon nations fail to agree on deforestation goal at summit

Eight Amazon nations agreed to a list of unified environmental policies and measures to bolster regional cooperation at a major rainforest summit in Brazil on Aug 08, but failed to agree on a common goal for ending deforestation. Brazilian President Luiz Inacio Lula da Silva, who has staked his international reputation on improving Brazil's environmental standing, had been pushing for the region to unite behind a common policy of ending deforestation by 2030 - one he has already adopted. Instead, the joint declaration issued on Aug 08 in the Brazilian city of Belem created an alliance for combating forest destruction, with countries left to pursue their own individual deforestation goals. The failure of the eight Amazon countries to agree on a pact to protect their own forests points to the larger, global difficulties of forging an agreement to combat climate change. Many scientists say policymakers are acting too slowly to head off catastrophic global warming. Lula and other national leaders left Aug 08's meeting without commenting on the declaration. Presidents from Bolivia, Brazil, Colombia and Peru attended the summit, while Ecuador, Guyana, Suriname and Venezuela sent other top officials. Bolivia and Venezuela are the only Amazon countries not to sign onto a 2021 agreement among more than 100 countries to work toward halting deforestation by 2030. Click here to read... [25]

West African bloc scraps crisis meeting on Niger coup

An emergency meeting of West African nations on the coup in Niger has been postponed indefinitely as concerns over the health of detained President Mohammed Bazoum increase. Members of the Economic Cooperation of West African Nations (ECOWAS) were due to meet in the Ghanaian capital, Accra, on Saturday to discuss how to tackle the Niger crisis after they approved the deployment of a stand-by force to restore constitutional order. But the meeting was indefinitely suspended for “technical reasons”. Sources said the meeting was initially set to inform the organisation’s leaders about “the best options” for activating and deploying a military force. “The military option seriously envisaged by ECOWAS is not a war against Niger and its people but a police operation against hostage-takers and their accomplices,” Niger’s Foreign Minister Hassoumi Massaoudou said. ECOWAS is determined to stop the sixth military takeover in the region in just three years and has severed financial transactions and electricity supplies and closed borders with landlocked Niger, blocking much-needed imports to one of the world’s poorest countries. At a previous summit last week, ECOWAS warned it could intervene militarily and set August 6 as a deadline for the military to restore democracy and free Bazoum. However, no military action followed when the deadline lapsed. The coup leaders have since named a 21-member cabinet, which met for the first time on Aug 11. Click here to read... [26]

Biden's 'ticking time bomb' remark referred to China's internal tensions: White House

President Joe Biden's comment about China being a "ticking time bomb" referred to internal economic and social tensions that could have an effect on how Beijing interacts with the world, a White House official said Aug 11. White House spokesperson John Kirby told reporters that one area of concern regarding China was "the way that they bully and coerce and intimidate countries around the world" by offering high-interest infrastructure loans and then seizing assets when countries defaulted. He said that concern explained the administration's request for supplemental funding of $3.3 billion to boost the World Bank's lending to developing countries and provide a credible alternative to what he called China's "dangerous" loans. The request was unusual since supplemental budgets are usually reserved for emergency needs, including wars and disasters. Kirby defended the funding request, saying, "Yes, this is an urgent need for us to be able to provide an alternative." Biden's comments on China, made during a political fundraiser in Utah, drew a sharp response. Chinese embassy spokesperson Liu Pengyu warned Washington against "scapegoating" Beijing and fanning "division and confrontation." "We oppose the U.S. side seeking to make an issue of China, smearing China or talking down China's prospects," he said in a statement to Reuters on Aug 11, without mentioning Biden. Biden told donors: "China is a ticking time bomb ... China is in trouble. China was growing at 8 percent a year to maintain growth. Now close to 2 percent a year," he said, misstating its growth rate. Click here to read... [27]

India, Japan, U.S., Australia hold naval exercise off Sydney coast

India, Japan, the United States and Australia will hold the Malabar navy exercise off the coast of Sydney on Aug 11, the first time the war games previously held in the Indian Ocean have taken place in Australia. Japanese and Indian navy vessels stopped in Pacific Island countries Solomon Islands and Papua New Guinea on the way to Sydney, highlighting the strategic importance of the region at a time of friction between China and the United States. Vice Adm. Karl Thomas, Commander of the U.S. Navy's Seventh Fleet, said at a news conference on Aug 10 in Sydney that the exercise was "not pointed toward any one country" and would improve the ability of the four forces to work with each other. "The deterrence that our four nations provide as we operate together as a Quad is a foundation for all the other nations operating in this region," Thomas said. "Oceania, the island nations that are just northeast of Australia ... all of our nations now are focusing on those countries," he added. Indian Navy Vice Adm. Dinesh Tripathi said there had been large changes in the world since the United States and India held the first Malabar Exercise in 1992 at the end of the Cold War. Click here to read... [28]

China’s increase in military exercises helps aid diplomacy efforts

In the past decade, China’s People’s Liberation Army (PLA) has expanded its diplomatic outreach under President Xi Jinping’s drive to modernise the country’s military and win global respect. Analysing articles published by state news agency Xinhua, the South China Morning Post found that since 2013, the number of military exercises held by China with foreign militaries has more than doubled. Its navy has also made more port visits, especially to nations in the Global South. Military officials in the Central Military Commission, China’s top military command, have also visited more foreign counterparts. But while the PLA, which turned 96 last week, has made these efforts to put forward an image as a force for peace, it has also become more capable of deploying its troops further from its shores. It is something which has drawn suspicion from the US and some others in the West, who have accused China of wanting to reshape the international order against liberal democratic values. The docking of the PLA’s Yuan Wang 5 tracking ship in Sri Lanka in 2022 drew heavy protests from India, its first foreign base in Djibouti in the Horn of Africa caused concern, and more recently, the Ream naval base in Cambodia that China helped build drew fears that the Chinese navy could establish a presence there, despite Beijing’s repeated denials. Click here to read... [29]

Multiple regions across China reinforce education on Counter-Espionage Law

From urban communities to villages in remote areas in China, officials have been working on frontline to fortify national security education to the public, in order to improve public awareness and engagement. Such public awareness campaigns have been enhanced after the newly revised Counter-Espionage Law came into effect on July 1. "It is a fundamental and long-term strategy for national security to strengthen public awareness over the issue," according to one official from China's Ministry of State Security (MSS). Over recent years, from officials at all levels to individuals in the theoretical fields, from students to the public, national security literacy and awareness has been enhanced at all levels, according to an article published on MSS' official WeChat account on Aug 09. Chinese lawmakers voted to adopt a revised Counter-Espionage Law in April, which came into effect on July 1, one of the country's number of measures to safeguard national security in the face of an increasingly complex counter-espionage situation. The MSS said in its first article published on its official WeChat account on August 1 that counter-espionage work requires the mobilization of all sections of society. The ministry on August 4 stressed that it is a common international practice to prevent and combat espionage activities and safeguard national security through legislation in response to individual foreign media's misinterpretation of the revised Counter-Espionage Law. Click here to read... [30]

Thai Poll Winner Faces Dilemma Over Support for Tycoon’s PM Bid

Move Forward Party, the surprise winner in Thailand’s May election, is in a quandary over whether to back or oppose a former ally’s candidate for prime minister after its own leader was rejected in his bids for the position. A new coalition that’s being formed by Pheu Thai Party plans to nominate property tycoon Srettha Thavisin as its choice for prime minister. Voting against Srettha risks pushing Pheu Thai toward conservative adversaries and pro-royalist senators, who thwarted Move Forward’s efforts to form a government under Pita Limjaroenrat. Move Forward’s lawmakers are gauging the mood among its supporters — largely urban and young voters — to decide its strategy. While Pita has said the party is in no hurry to decide, Piyabutr Saengkanokkul, a co-founder of disbanded predecessor Future Forward Party, said Move Forward should unequivocally state its resolve to sit in the opposition and rule out support for Pheu Thai’s coalition. “Move Forward will likely upset many of its supporters if they vote for a Pheu Thai premier candidate who will lead a reconciliation pact with conservatives,” said Peter Mumford, Southeast Asia practice head at consultancy Eurasia Group. A policy paralysis has hurt investor confidence in Thailand, which has been under a caretaker government since March with no major powers. Click here to read... [31]

Health

Sharp rise in American suicides – CDC

The US suicide rate increased by 2.6% in 2022 to 49,449 people, according to statistics released this week by the Centers for Disease Control and Prevention (CDC), as official data continues to show an upward trend after numbers fell in 2019 and 2020. The rise in 2022 follows a 5% increase in US citizens taking their own lives in 2021, with campaigners suggesting the figures reveal a worsening mental health crisis in the United States. “Mental health has become the defining public health and societal challenge of our time,” Surgeon General Dr. Vivek Murthy said in a statement about the new findings. He called the numbers a “sobering reminder of how urgent it is that we further expand access to mental health care [and] addressing the root causes of mental health struggles.” US adults aged 65 and above saw a precipitous 8.1% rise in suicides in 2022, to 10,433 cases. This reflects a continuation of historical data showing that the suicide rate in the 65+ age group has risen by 62% between 2007 and 2021, according to the CDC in June. The research also indicated that the mental health crisis in the United States is an issue affecting all age groups. A survey conducted by the CDC in March shows that around one in three teenage high school girls said that they have contemplated ending their lives at some point. Click here to read... [32]

New Ultrasound Therapy Could Help Treat Alzheimer’s, Cancer

Ultrasound, the decades-old technology known for giving early glimpses of unborn babies, could hold a key to a problem that has long challenged drug developers: getting medicines to hard-to-reach places to treat diseases like Alzheimer’s and cancer. A cutting-edge approach that combines ultrasound waves with tiny bubbles of inert gas injected into the bloodstream can get more chemotherapy to tumor cells and enable drugs to breach one of the most stubborn frontiers in the human body—the blood-brain barrier. It is also being explored as a new way to deliver gene therapy. “There’s an extremely wide variety of where this sort of drug delivery or augmentation with ultrasound and bubbles can take us,” says Flemming Forsberg, professor of radiology and director of ultrasound physics at Thomas Jefferson University in Philadelphia. The effectiveness of drugs in treating diseases like cancer, Alzheimer’s and Parkinson’s is often limited by poor penetration into tissues, he says, whether in the brain or in tumors in other parts of the body. To get to the places they are needed, many drugs must move from the bloodstream into surrounding tissue. The medicines have to travel through the thin walls of the capillaries, the body’s smallest blood vessels, and reach the target cells. This is tougher in some parts of the body than others. Click here to read... [33]