Global Developments and Analysis: Weekly Monitor (18-24 September)

Economic

Global growth forecast slashed

Growth in the global economy will remain anemic as rising interest rates squeeze business activity, while China's recovery from the pandemic has proved weaker than expected, the Organization for Economic Cooperation and Development (OECD) announced on Sept 19. In its latest Economic Outlook report, the OECD revised downwards its global economic forecast for 2024, expecting growth to slide to 2.7% next year, down by 0.2% from its June estimate, after an already "sub-par" expansion of 3% this year. The world economy will face its weakest annual growth next year, excluding 2020, when Covid-19 struck, since the global financial crisis, the Paris-based organization predicted. "While high inflation continues to unwind the world economy remains in a difficult place," OECD chief economist Clare Lombardelli told reporters on Sept 19. "We're confronting the double challenges of inflation and low growth." Interest-rate hikes aimed at curbing inflation are taking their toll and are expected to have a further negative impact on economies worldwide, the OECD warned. Meanwhile price growth shows little sign of easing, leaving "limited scope for any rate cuts until well into 2024." "After a stronger-than-expected start to 2023, helped by lower energy prices and the reopening of China, global growth is expected to moderate," the OECD said. "The impact of tighter monetary policy is becoming increasingly visible, business and consumer confidence have turned down, and the rebound in China has faded."Click here to read… [2]

Wall Street Is Hoping $100 Oil Ain’t What It Used to Be

A string of inflationary shocks has challenged the Federal Reserve’s effort to control price increases. Investors are worried the latest could be $100-a-barrel oil. Crude’s march closer to that mark has made Americans’ commutes more expensive. Truckers who haul food cross-country are charging grocery stores more for diesel. Jet-fuel-reliant airlines are demanding higher fares. And manufacturers of everything from plastic toys to asphalt could face costlier ingredients. Oil’s rise has inspired fresh fears from Washington to Wall Street that energy, which the Fed largely excludes in its policy calculus, could throw off central bankers’ attempted soft landing of the fuel-hungry American economy. Some investors and economists have compared the moment to previous periods in which booming oil prices have helped tip the country into recession. “It makes things harder,” said Rob Kaplan, former president of the Dallas Fed. “Just because the agencies or analysts or economists will ‘x’ out oil, the middle-class family doesn’t get to ‘x’ it out.” A gallon of regular gasoline averaged $3.88 across the U.S. last week, according to federal record-keepers, up more than 25% since the start of the year. An August surge propelled consumer prices higher at their fastest pace in more than a year.Click here to read… [3]

China, US de-escalate with talks, metals concession

The newly announced establishment of two economic and financial working groups between China and the United States is expected to help push forward a possible meeting between the two nations’ leaders in November. The US Treasury Department said on September 22 that it will set up an economic working group with the Chinese Ministry of Finance and a financial working group with the People’s Bank of China (PBoC). It said the two groups will meet at the vice-minister level at regular intervals and report to US Treasury Secretary Janet Yellen and Chinese Vice-Premier He Lifeng. This came after the two economic officials met in Beijing on July 8 and agreed to boost communication on economic matters. Beijing also showed friendly gestures to the US by issuing export licenses to the China-based units of AXT, a California-based semiconductor manufacturing company, so they can export their products that contain China’s gallium and germanium, Reuters reported. “Why did the two countries set up working groups? It’s simple – they felt the pain caused by their fight, and now they are trying to ease their pain,” a Shanghai-based columnist says in an article published on Sept 25. “After several years of conflicts, both sides feel that they cannot win against one another in the short run while they are facing huge risks in their own economy,” he says.Click here to read… [4]

EU trade chief says 'no intention' to decouple from China amid rising tension

The European Union has no intention to decouple from China but needs to protect itself in situations when its openness is abused, the bloc's Executive Vice-President Valdis Dombrovskis said on Sep 23. The bloc posted record bilateral trade with China last year, but it is "very unbalanced", he said in a speech at the annual Bund Summit conference in Shanghai, citing a trade deficit of almost €400 billion (US$426 billion). Dombrovskis is on a four-day visit to China seeking more balanced economic ties with the EU. He arrived just over a week after the European Commission said it would investigate whether to impose punitive tariffs to protect European producers from cheaper Chinese electric vehicle imports it says are benefiting from state subsidies. The trip is designed to renew dialogue with China after the COVID-19 pandemic and as EU wariness grows over Beijing's closer ties with Moscow following Russia's 2022 invasion of Ukraine.Click here to read… [5]

Key Russian LNG plant resumes full-scale production

The Sakhalin-2 liquefied natural gas (LNG) project in Russia’s Far East has returned to full-scale operations after the completion of planned maintenance work, Gazprom Deputy CEO Vitaly Markelov confirmed to the Interfax news agency last week. Maintenance began in July and involved all the site’s production facilities, according to Markelov. The Sakhalin-2 LNG plant launched production in 2009 and currently has a capacity of 11.5 million tons of LNG annually. Energy majors including Britain’s Shell opted to leave the project after the West sanctioned Russia over its military operation in Ukraine, although Japan’s Mitsui and Mitsubishi retained their 22.5% combined stake. Other long-term Asian LNG buyers from Sakhalin-2, including South Korea, have continued to import gas from the venture. Last year, Japan accounted for 60.6% of all LNG shipments from the Russian plant. South Korea imported 15.8%, China 17.9%, and Taiwan 4.5%, while Indonesia accounted for 1.2% of imports as Russia supplied the country with LNG for the first time. Russian LNG exports have been steadily growing since the beginning of the year, with demand on the rise in Europe and Asia, according to Russian Energy Minister Nikolay Shulginov. While the EU has banned seaborne exports of Russian oil, LNG is not prohibited by the sanctions.Click here to read… [6]

McCarthy Plan to Avert Shutdown Dealt Twin Blows From Hardliners

Republican hardliners on Sept 20 dealt House Speaker Kevin McCarthy’s plans to avert an Oct. 1 US government shutdown twin blows, further ratcheting up the risk of a disruptive federal funding lapse. Amid backlash from his right flank, McCarthy abruptly cancelled plans to advance a short-term spending bill that would fund the government for 31 days while changing US immigration rules and cutting domestic agencies by 8%. Later in the day, five ultraconservatives, in protest of the broader spending negotiations, joined Democrats to block consideration of a military spending package laden with conservative priorities. “I won’t give up,” McCarthy told reporters afterward. “I like a challenge.” But some veteran House Republicans concede it may be time to start negotiating with Democrats to get a bill that can pass both the House and the Democratic-led Senate. “There are 200 of us being dragged around by five of them,” Idaho Republican Mike Simpson said of the Republicans who voted against the defense bill. Behind the scenes, McCarthy’s lieutenants conducted hours of meetings with far-right holdouts over possible additional spending cuts to win their support. Members of the bipartisan Problem Solvers Caucus say they’re discussing a backup plan to keep the government open using a bill stripped of ultra-conservatives demands.Click here to read… [7]

China's trillion-dollar dilemma of local government 'hidden debt'

China's financial system remains plagued by trillions of dollars in local governments' hidden debt, as they have long turned to off-the-books borrowing to plug funding shortfalls, which have grown significantly due to the pandemic and property crisis. To solve the problem, policymakers may need to take drastic measures, such as allowing local governments to sell bad debt to asset managers and giving them a bigger slice of tax revenue, financial scholars said. The scholars gathered to discuss the challenges posed by local government borrowings, especially off-balance-sheet debt, as well as possible solutions, at a seminar hosted by the National School of Development (NSD) of Peking University on Sept. 9. China's local authorities have accumulated trillions of dollars of liabilities off the books. They mainly include bonds issued by local government financing vehicles (LGFVs), state-owned companies set up to finance local investment such as building infrastructure. Debt is also hidden in public-private partnership projects, shady loan contracts and other channels used by local governments to raise money. There is no publicly available official data on the current scale of the hidden debt. Outstanding local government debt on the books totaled 38 trillion yuan as of the end of July, official data showed.Click here to read… [8]

China 'mixed messages' dent foreign business confidence: chambers

Foreign businesses in China are urging authorities to improve the regulatory environment and ensure access to legitimate economic data as fresh survey results highlight deteriorating confidence. In a position paper released on Sept 19, the European Chamber of Commerce in China called on businesses to exercise "even more caution," despite government promises of greater liberalization to boost foreign investment and trade. "Mixed messaging from the Chinese government only adds to the growing sense of uncertainty, further eroding confidence in this important market," chamber President Jens Eskelund said. The report came the same day the American Chamber of Commerce in Shanghai released its 2023 China Business Report, showing that 52% of 325 respondents expressed optimism over the business outlook in China for the next five years -- down 3 percentage points from last year to the lowest level on record. China's position as the top choice for investment by respondents' headquarters fell to 17%, down from 27% in 2021, despite the shift away from tight COVID-19 restrictions late last year. The survey was conducted in June. "China is becoming more challenging for foreign investors," said Sean Stein, chairman of AmCham Shanghai. "What businesses need above all else is clarity and predictability, yet across many sectors companies report that China's legal and regulatory environment is becoming less transparent and more uncertain."Click here to read… [9]

Japan to launch special investment zones where only English is needed

Japanese Prime Minister Fumio Kishida on Sept 21 announced the creation of special business zones for asset management companies, seeking to encourage overseas players to set up shop in the country. Kishida considers it a priority to bolster Japan's asset management sector and tap the more than 2.1 quadrillion yen ($14.2 trillion) in assets held by Japanese households. But the language barrier has been a major obstacle in attracting overseas talent. "We will establish special business zones tailored specifically for the asset management business where administrative procedures can be completed solely in English," Kishida said in a speech to investors at the Economic Club of New York. "We will take measures to improve the business and living environment tailored to needs of overseas asset managers" in these zones, he said. He also said he will "promote deregulation to enable asset management firms to outsource their back-office operations." To help newcomers raise funds, Kishida will promote initiatives like the emerging manager programs in the U.S. and France, which set aside cash from pension funds and endowments specifically for emerging managers. He will set up a forum of mainly U.S. and Japanese asset management institutions to ensure planned policies reflect the needs of global investors.Click here to read… [10]

China factories with Asean aspirations are lining up for a look at Vietnam, and industrial parks are cashing in

The number of Chinese manufacturers waiting to inquire about moving their factories to Vietnam was like no other at a just-concluded annual expo of Southeast Asian businesses. Nguyen Thi Nga, a sales executive for Vietnam’s Deep C Industrial Zones, still had more than a dozen potential Chinese clients waiting for her to take questions after an hour-long business-networking session attended by more than 300 people on Sunday. “There has really been a lot more interest from Chinese businesses since last year,” Nguyen said in fluent Mandarin at the four-day China-Association of Southeast Asian Nations (Asean) Expo. “It has especially boomed this year, after the pandemic.” Nguyen was representing one of Vietnam’s biggest industrial zone developers at the event, which ended on Tuesday in Nanning, the capital of the Guangxi Zhuang autonomous region. More than 2,000 businesses from the 10-member Asean and China attended the annual forum, with many seeking to secure new business opportunities. The sales executive said that half of around 30 Chinese clients - including chemical, electronic and solar panel manufacturers - in all of Deep C’s five zones, have only been on board since 2022. “We are expecting more to join,” Nguyen said, adding that seven to eight more Chinese investors will move in by the end of this year.Click here to read… [11]

New China-Nepal trade route to open soon as Tibet facility gets green light

A new trading facility in a Tibetan village on the border with Nepal has been given the go-ahead, as China seeks to expand economic ties with its Himalayan neighbour. Construction work on the Lizi Port – which sits at 4,600 metres (15,000ft) above sea level – has been completed and it passed an inspection by the commerce ministry on Sept 20, according to Chinese state media. The inspection found that the facility is ready to start operations, the official China News Service reported. It did not say when Lizi Port would open, but that it would “spur Tibet’s opening to the outside world, improve connectivity between China and Nepal, deepen China-Nepal friendly exchanges and cooperation, and promote high-quality economic and social development in Tibet”. The facility has been built in the village of Lizi, in Yagra, Zhongba county in the Tibetan prefecture of Shigatse. It is some 935km (580 miles) from the Tibetan capital Lhasa, and 499km from Nepal’s capital, Kathmandu. Lizi sits on the Korala mountain pass and for centuries has been a market hub where Himalayan residents have traded grain, salt and goats. A facility called Nechung has also been built 12km away on the Nepalese side of the border, in the district of Mustang. A road link to other parts of Nepal has already been completed.Click here to read… [12]

Pakistan army trades tanks for tractors in food-security push

Pakistan's army is taking over vast swaths of government-owned land to grow food but the moves are fanning concerns about the powerful military's pervasive presence in a country facing economic collapse. The plan -- two decades after pay disputes at an army-run farm sparked a deadly revolt -- comes as the South Asian nation grapples with dwindling foreign currency reserves that hamper its ability to pay for imported food and key commodities. Tens of thousands have taken to the streets over soaring electricity bills linked to the terms of an International Monetary Fund bailout. Launched earlier this year by a joint civil-military investment body, the new food security plan aims to boost production through army-run farms on leased state land. Backers promise it will generate better crop yields and save water. But the blueprint is facing a court challenge and criticism that it will hive off profits to a military ill-equipped for a task that could go to some of Pakistan's 25 million rural landless poor. Land is routinely given to serving and retired military personnel for private use, but the latest transfer could cement Pakistan's military as the country's single-biggest landowner, critics say.Click here to read… [13]

Saudi Uranium Enrichment Floated Under Possible Israel Deal

Israeli officials are quietly working with the Biden administration on a polarizing proposal to set up a U.S.-run uranium-enrichment operation in Saudi Arabia as part of a complex three-way deal to establish official diplomatic relations between the two Middle Eastern countries, according to U.S. and Israeli officials. Israeli Prime Minister Benjamin Netanyahu directed top Israeli nuclear and security specialists to cooperate with U.S. negotiators as they try to reach a compromise that could allow Saudi Arabia to become the second country in the Middle East, after Iran, to openly enrich uranium, the officials said. The U.S. and Saudi Arabia have been negotiating the contours of a deal for Saudi Arabia to recognize Israel in exchange for helping the kingdom develop a civilian nuclear program with uranium enrichment on Saudi soil, among other concessions. Other aspects of the evolving deal are expected to include concessions for the Palestinians and U.S. security guarantees. If Saudi Arabia agrees to establish diplomatic relations with Israel, it would pave the way for other Arab and Muslim nations to follow suit, effectively ending decades of ostracism for the Jewish state founded in 1948. While neither the U.S. nor Israel has so far agreed on a plan that would allow uranium enrichment in Saudi Arabia, doing so would represent a turnabout in decades of policy in both countries, where leaders across the political spectrum have worked to prevent Middle Eastern countries from developing the capability.Click here to read… [14]

Europeans Love Green Policies—Until the Bill Comes Due

For years, Europe has been at the forefront of the global drive to curb carbon emissions and slow climate change, pledging to reach net zero emissions by 2050. Overwhelming numbers of Europeans say they like the idea. Now, however, a small but growing backlash suggests a more complicated truth: Voters may like the idea more than the reality. As the time draws near to take concrete actions and the costs of the transition become more visible, some members of the public and politicians will get cold feet. This week, the U.K. said it would delay a planned ban on the sale of new gasoline-powered cars and vans to 2035 from 2030, and ease plans to force households to scrap their gas-powered boilers for pricier but cleaner heat pumps. It also promised never to impose a carbon tax on meat or aviation, two other sources of emissions. “The risk here for those of us who care about reaching net zero by 2050 is if we continue down this path, we risk losing the consent of the British people,” Prime Minister Rishi Sunak said, arguing that politicians hadn’t been honest with working families about the costs. Germany, run by a coalition that includes the Green Party, also recently watered down its plans to ban new gas heaters for homes after a backlash from homeowners and opposition politicians.Click here to read… [15]

US offered Pakistan IMF sweetener for Ukraine weapons – media

The United States brokered a loan from the International Monetary Fund (IMF) to crisis-ridden Pakistan in exchange for a secret arms deal, The Intercept reported on Sept 17. The outlet, citing sources “with knowledge of the arrangement” and government documents on both sides, claimed that the weapons were meant to supply the Ukrainian military amid its ongoing conflict with Russia. According to The Intercept, earlier this year, an insider within the Pakistani military leaked records of arms deals between the United States and Pakistan spanning from the summer of 2022 to the spring of 2023. The exchange was facilitated by Global Military Products, a subsidiary of Global Ordnance, a company seemingly connected to Ukraine. The leaked documents showed American and Pakistani contracts, licensing, and requisition documents “related to US-brokered deals to buy Pakistani military weapons for Ukraine,” according to the Intercept. The arms sale not only provided much-needed liquidity but also garnered significant political support from Washington, ultimately playing a “key role” in Pakistan’s securing a crucial bailout from the IMF. The IMF had set specific financing and refinancing targets for Pakistan, particularly concerning its debt and foreign investments. According to The Intercept, the proceeds from the munitions sale earmarked for Ukraine went a “long way” in bridging the financial gap that Pakistan was grappling with.Click here to read… [16]

Strategic

Blinken meets Chinese VP as U.S.-China contacts increase ahead of possible summit

Secretary of State Antony Blinken met Sept 18 with China’s vice president on the sidelines of the U.N. General Assembly as the Biden administration and Beijing step up high-level contacts ahead of what could be a leader-level summit this fall. Blinken and Vice President Han Zheng held talks Sept 18 at the Chinese mission to the United Nations. Their discussion came as China’s Foreign Minister Wang Yi was in Moscow meeting Russian Foreign Minister Sergey Lavrov after wrapping up two days of talks with U.S. national security adviser Jake Sullivan in Malta. The quick succession of U.S.-China contacts is fueling speculation that President Joe Biden may meet his Chinese counterpart Xi Jinping in November at an Asia-Pacific Economic conference in San Francisco. “I think it’s a good thing that we have this opportunity to build on the recent high-level engagements that our countries have had to make sure that we’re maintaining open communications and demonstrate that we are responsibly managing the relationship between our two countries,” Blinken said in brief remarks at the top of the meeting. Han told Blinken that U.S.-China relations face “difficulties and challenges” that require both countries to show “more sincerity” and make additional efforts to “meet each other halfway.”Click here to read… [17]

Ukraine war: Zelensky showing the strain as allies turn up the pressure

The pressure is starting to take its toll on Volodymyr Zelensky. The Ukrainian president allowed a dispute with one of his biggest allies to spin out of control at the United Nations General Assembly this week, and that’s just a hint of the tensions building behind the scenes. Zelensky has been leading his country through Russia’s brutal assault for 19 months, all the time fighting on another front to wring the weapons and finance he needs from his US and European supporters. Now he suspects that US President Joe Biden’s commitment is wavering and other leaders may be taking their cue from the United States, according to a person who met with him recently. He grew very emotional at times during that discussion, the person said, and was scathing in his criticism of nations that he said weren’t delivering weapons quickly enough. Ukraine’s allies are privately pushing the 45-year-old president to turn his attention to what kind of country will emerge from the war, even as his troops struggle for a breakthrough on the battlefield, according to other people familiar with the matter. As an incentive to tackle the corruption that has plagued Ukraine for years, several countries are even set to link future financial aid to specific reforms including bolstering the anti-corruption prosecutor’s office, the people said, asking not to be named discussing private conversations.Click here to read… [18]

Taiwan says 103 Chinese warplanes flew toward the island in a new daily high in recent times

China’s military sent 103 warplanes toward Taiwan in a 24-hour period in what the island’s defense ministry said Sept 18 was the most for a day in recent times. The planes were detected between 6 a.m. on Sunday and 6 a.m. on Sept 18, the ministry said. As is customary, they turned back before reaching Taiwan. China, which claims Taiwan as part of its territory, has conducted increasingly large military drills in the air and waters around Taiwan as tensions have grown between the two and with the United States. The U.S. is Taiwan’s main supplier of arms and opposes any attempt to change Taiwan’s status by force. Taiwan’s Defense Ministry said that 40 of the planes crossed the symbolic halfway point between mainland China and the island. It also reported nine naval vessels in the previous 24 hours. The ministry called the Chinese military action “harassment” that it warned could escalate in the current tense atmosphere. “We urge the Beijing authorities to bear responsibility and immediately stop such kind of destructive military activities,” it said in a statement.Click here to read… [19]

Chinese leader Xi Jinping calls for lifting of ‘illegal’ sanctions on Syria as he welcomes Bashar al-Assad to Asian Games

Chinese President Xi Jinping criticised the West’s “illegal sanctions” and pledged more support for Syria as he kicked off a string of meetings with foreign counterparts attending the opening of the Asian Games in Hangzhou on Sept 23. Xi said China would help rebuild Syria’s economy and counter domestic unrest as he announced the upgrading of relations to a strategic partnership in a meeting with President Bashar al-Assad. “China opposes interference by external forces in Syria’s internal affairs ... and urges all relevant countries to lift illegal unilateral sanctions against Syria,” a joint statement published by the Chinese foreign ministry on Sept 22 said. “China will try its best to provide assistance to Syria and support the rebuilding work and development of Syria as it recovers.” The statement also noted the Syrian government applauded China’s “contributions” to fostering “peace and stability” in the Middle East, while China also pledged to help Syria “improve relations with other Arab countries and play a greater role in international and regional affairs”. At a Sept 23 lunch banquet, Xi criticised the “cold war mentality and bloc confrontation”, and pledged to make Asia the “anchor for peace in the world.”Click here to read… [20]

U.K. 'exploring' Saudi entry to fighter jet project with Italy and Japan

The U.K. is "exploring" Saudi participation in the joint next-generation fighter jet project with Italy and Japan, its British point man told Nikkei in a recent interview. Launched in December, the Global Combat Air Programme (GCAP) is a public-private initiative centered around Britain's BAE Systems, Italy's Leonardo and Japan's Mitsubishi Heavy Industries. It aims to deliver an advanced jet by 2035. The Financial Times reported last month that Saudi Arabia has requested to join the program. "The current status is that we are exploring possibilities, but no decisions have been made," Richard Berthon, the British Ministry of Defence director future combat air, said in London. He did acknowledge Saudi Arabia's interest in the project. "The U.K. has a very long-standing and very successful relationship with the kingdom of Saudi Arabia in a range of things specifically in combat air," he said. In March, the U.K. and Saudi Arabia said they will study ways to cooperate more widely on combat air capabilities. Berthon said this was important for understanding "what the Saudis are looking for -- the mix of their current capabilities and future capabilities, and what they want to achieve in terms of military and industrial prosperity benefit." He predicted the study will take until March 2024.Click here to read… [21]

China accuses U.S. of hacking Huawei servers since 2009

China has accused the U.S. of continuously hacking Huawei's servers and conducting cyberattacks to steal other critical data since 2009, the latest salvo between Beijing and Washington as tensions further escalate. China's Ministry of State Security on Sept 20 released a post on its official WeChat account titled "Revealing key despicable methods by U.S. intelligence agencies in cyberespionage and theft." The post explicitly points to U.S. government efforts against Chinese national tech champion Huawei Technologies. It also accuses Washington of having big, influential tech companies install backdoors in software, applications and equipment so it can steal vital data from countries including China and Russia. "In 2009, the Office of Tailored Access Operations started to infiltrate servers at Huawei's headquarters and continued conducting such surveillance operations," the post says. The U.S. Department of State has yet to respond to a request for comment. As geopolitical tensions mount, the U.S. and China have been expanding their global spying operations. The Wall Street Journal in July reported that Beijing-linked hackers had accessed the email account of the U.S. ambassador to China in an operation that is believed to have exposed hundreds of emails.Click here to read… [22]

India suspends visa services for Canadians due to 'security threats'

India's government on Sept 21 confirmed that it has "temporarily" stopped issuing visas for Canadian citizens due to "security threats being faced by our High Commission and consulates in Canada," marking an escalation of the two countries' war of words over the killing of a Sikh separatist. India's Ministry of External Affairs spokesman Arindam Bagchi told reporters that the threats have "disrupted [the offices'] normal functioning." Before the news conference, the outsourcing provider that handles the applications had put up a scrolling notice on its website. "Due to operational reasons, with effect from 21 September 2023, Indian visa services have been suspended till further notice," said the message on the homepage of contractor BLS International's Indian visa application center in Canada. India's decision to halt the services comes days after Canadian Prime Minister Justin Trudeau revealed an investigation into "credible allegations of a potential link between agents of the government of India and the killing of a Canadian citizen, Hardeep Singh Nijjar." New Delhi called the assertion "absurd and motivated." The India-born Nijjar, who advocated carving out from India a Sikh homeland known as Khalistan, was gunned down by unidentified attackers outside his temple in Canada's western province of British Columbia in June. New Delhi had declared him a "designated terrorist" in 2020.Click here to read… [23]

ASEAN troops launch maritime drills amid South China Sea tension

Troops from across Southeast Asia launched their first joint maritime exercises in Indonesia on Sept 19 as tensions soar over Beijing's claim to the South China Sea. ASEAN has previously conducted drills with the U.S. and other partner countries, but this week's exercises mark a first for the 10-country bloc. Hundreds of troops are participating in the ASEX 01-Natuna exercises, which will run through Sept 23, with five warships from Indonesia, Brunei, Malaysia and Singapore expected to sail from the island of Batam to an area near the Natuna Islands -- facing disputed waters in the South China Sea. The Indonesian air force will also have a support helicopter taking part. "I would like to emphasize that the unity of ASEAN will never and will always be well maintained," Admiral Yudo Margono, commander of Indonesia's armed forces, told the event's opening ceremony. "As we complement each other and learn from each other, this will strengthen our abilities and capabilities to sustain regional peace, prosperity, and security." Indonesia is not a South China Sea claimant, but it has dealt with incursions into its exclusive economic zone in recent years. China has overlapping claims with several Southeast Asian countries in the resource-rich waters, with tensions intensifying this month after Beijing unveiled a new map of the disputed sea.Click here to read… [24]

US revives Cold War submarine spy programme to counter China

On a windswept island 50 miles (80.5km) north of Seattle sits a US Navy monitoring station. For years, it was kept busy tracking whale movements and measuring rising sea temperatures. Last October, the Navy gave the unit a new name that better reflects its current mission: Theater Undersea Surveillance Command. The renaming of the spy station at the Whidbey Island naval base is a nod to a much larger US military project, according to three people with direct knowledge of the plans: Conducting the biggest reconstruction of America’s anti-submarine spy programme since the end of the Cold War. The revival of the multibillion-dollar effort, known as the Integrated Undersea Surveillance System (IUSS), comes as China has ramped up military exercises around Taiwan, heightening concerns about a potential conflict over the democratically ruled territory, which Beijing wants brought under its control. The IUSS revamp project has not previously been reported. It involves modernising America’s existing network of underwater acoustic spy cables and retrofitting a fleet of surveillance ships with cutting-edge sensors and subsea microphones, moves aimed at boosting the military’s ability to spy on its foes. The United States has agreed to sell Australia similar technology to help bolster allied defences in the Pacific region. The most innovative change in the Navy’s ocean reconnaissance system is an investment in new technologies to miniaturise and globalise traditional maritime surveillance tools.Click here to read… [25]

All eyes on Srettha’s delicate balancing act in Thailand

China’s navy quietly sailed into the shallow, energy-rich Gulf of Thailand earlier this month for Blue Strike 2023, a joint naval exercise to increase Beijing’s influence with Thailand’s newly elected, military-backed civilian government. Meanwhile, in his first political foray onto the international stage, Prime Minister Srettha Thavisin flew to New York and attended the UN General Assembly September 18-24, where he met US President Joe Biden and other politicians along with Google, Microsoft, Tesla, the US Chamber of Commerce, and the US-ASEAN Business Council. Chinese President Xi Jinping is also eager to scrutinize and charm Thailand’s new prime minister, and invited Srettha to visit Beijing October 8-10. The US and China are eyeing the new administration and its views on international investment, tourism, trade, and weapons purchases. On August 22, Parliament ended three months of bickering and agreed on a pliant civilian-led, 11-party coalition government fronted by Srettha, a real estate tycoon. “Thailand is like a sick person,” Srettha said on September 11 in his first policy statement to Parliament. “Tourism and spending are recovering so slowly, that there is the risk of economic recession,” he said.Click here to read… [26]

Chinese satellite ground stations installed on disputed South China Sea reefs

China has built two ground stations for its BeiDou satellite system on disputed South China Sea reefs, according to state television. The stations, connected to China’s land-based ship automatic identification system (AIS), are installed at lighthouses located on North Reef and Bombay Reef in the Paracel Islands, which are also claimed by Vietnam and Taipei. They use the BeiDou satellite network – completed in 2020 as a rival to the US global positioning system (GPS) – to locate the vessels and transmit signals, state broadcaster CCTV reported on Sept 19. China’s maritime administration requires all ships to have an AIS transponder and to keep the signal on at all times within its jurisdiction, so that the authorities and other ships can identify and track vessels. The two ground stations began operating on Sept 15 and “solve the problem of a blind spot in the country’s shore-based ship AIS in the waters around the Paracels”, the CCTV report said, citing the Maritime Safety Administration. The report said the stations would “serve as strong support” to monitor ships in the area, for “ecological protection of the islands and reefs of Sansha and to provide safer and more reliable navigational guidance for ships in the South China Sea”.Click here to read… [27]

DR Congo President Tshisekedi seeks withdrawal of UN peacekeepers this year

President Felix Tshisekedi of the Democratic Republic of the Congo (DRC) says he has asked his government to fast-track the withdrawal of a United Nations peacekeeping mission to ensure it begins at the end of the year. The mission, called MONUSCO, took over from an earlier UN operation in 2010 to help quell insecurity in the DRC’s east where armed groups fight over territory and resources. But its presence has become increasingly unpopular in recent years for what critics have said is a failure to protect civilians from violence, sparking deadly protests. “It is to be deplored that peacekeeping missions deployed for 25 years … have failed to cope with the rebellions and armed conflicts,” Tshisekedi, who is seeking re-election in polls planned for December, told the UN General Assembly on Sept 20. “This is why … I instructed the government of the republic to begin discussions with the UN authorities for an accelerated withdrawal of MONUSCO … by bringing forward the start of this progressive withdrawal from December 2024 to December 2023,” he said. At least 56 people were killed and dozens wounded in an army crackdown on violent anti-UN demonstrations in the eastern city of Goma last month. Another protest in July 2022 resulted in more than 15 deaths, including three peacekeepers in Goma and the city of Butembo.Click here to read… [28]

Somaliland rejects talk of unification with Somalia after Museveni comment

The breakaway region of Somaliland said it has no plans to discuss unity with Somalia, appearing to contradict Ugandan President Yoweri Museveni who said he would act as a “unification mediator” between the two. “The Somaliland Government affirms that any dialogue that transpires between Somaliland and Somalia will not discuss unification, but rather how the two previously united countries can move forward separately,” it said in a statement late on Sept 24, adding that it “has no plans for dialogue to discuss unity with Somalia”. Somaliland declared autonomy from Somalia in 1991 but has not gained widespread international recognition for independence. Some clan elders in disputed areas along Somaliland’s border with Somalia’s semi-autonomous Puntland state say they want to be part of Puntland rather than Somaliland. Heavy fighting broke out between Somaliland forces and militiamen in and around the town of Las Anod in one such area in February. More than 200,000 have been displaced since the violence began and according to data Al Jazeera received from hospitals in Las Anod in May, around 300 people had died and 1,913 were injured. Since its secession, Somaliland has remained largely peaceful but analysts say the recent violence has negatively affected that image.Click here to read… [29]

Armenia-Azerbaijan Conflict: What to Know About Nagorno-Karabakh

In the space of just over a week, Nagorno-Karabakh, a self-governing region established after the collapse of the Soviet Union, has effectively been dismantled. The ethnic-Armenian population living there has begun fleeing to Armenia, and Azerbaijan, the country in which the enclave sits, has reasserted control over the territory it has long claimed as its own. Azerbaijan launched an assault on Sept. 19 on Nagorno-Karabakh, a restive enclave that sits inside its territory. Within a day, Armenian separatists had agreed to lay down arms, paving the way for assimilation into Azerbaijan after three decades of resistance. On Sept 21, the separatist leaders signed a decree that dissolved their government and which they said meant “Nagorno-Karabakh ceases to exist.” What’s behind the conflict? Tensions between Azerbaijan and Armenia have been simmering since 2020, when Russia brokered a cease-fire between the two. Under the deal, ethnic Armenians kept control of Nagorno-Karabakh’s biggest city, Stepanakert, and its surroundings, while the Azerbaijani government pledged to guarantee the rights of Armenians in the territories it reclaimed. But Russia hasn’t been able to fully enforce the deal. Sporadic cross-border shelling has claimed the lives of service members on both sides. Armenia had warned for months of a possible bid by Azerbaijan to wrest back parts of Nagorno-Karabakh, saying Russia was no longer a guarantor of safety in the region because much of its military power was tied up in Ukraine.Click here to read… [30]

Health

China's 'batwoman' scientist warns another coronavirus outbreak is 'highly likely'

One of China's best-known virologists Shi Zhengli, also known as "batwoman," has warned that it is "highly likely" another coronavirus will appear in future. Shi, who gained her nickname because of her research into viruses that leap from animals ― especially bats ― to humans, warned in a recent paper written with colleagues that the world must be prepared for another disease like Covid-19 because "if a coronavirus caused diseases to emerge before, there is a high chance it will cause future outbreaks." Coronaviruses caused both the 2003 severe acute respiratory syndrome (Sars) outbreak that killed thousands of people worldwide, mainly in mainland China and Hong Kong, as well as Covid-19. In this study Shi's team from the Wuhan Institute of Virology, evaluated the human spillover risk of 40 coronavirus species and rated half of them as "highly risky." Of these, six are already known to have caused diseases that infected humans, while there is evidence that a further three caused disease or infected other animal species. "It is almost certain that there will be future disease emergence and it is highly likely a [coronavirus] disease again," the study warned. The study was based on an analysis of viral traits, including population, genetic diversity, host species and any previous history of zoonosis - diseases that jump from animals to humans.Click here to read… [31]

As eastern Libya reels from disastrous floods, a new threat emerges

More than a week after floods caused by Storm Daniel devastated eastern Libya, killing thousands and displacing many more, survivors are faced with another threat: water contamination. Health authorities have been sounding the alarm over the spread of waterborne diseases in the affected areas, particularly in the hard-hit city of Derna. Experts have warned that floodwaters have severely contaminated water sources with sewage, rendering them unsafe for consumption and exposing communities to grave health risks. What is water contamination? Water contamination occurs when germs and chemicals enter drinking water at its source – for example, groundwater or water from lakes or rivers – or during water’s course through a distribution system. According to the World Health Organization (WHO), contaminated water and poor sanitation are linked to the transmission of diseases such as cholera, diarrhoea, dysentery, hepatitis A, typhoid and polio. How is the problem dealt with in crisis-hit areas? Essentially, through a combination of short-term and long-term measures, said Jessica Moussan, spokesperson for the International Committee of the Red Cross (ICRC). The first step, Moussan explained, is to provide water that is safe for consumption – whether it is for drinking, cooking or hygiene purposes. In the long run, the focus is mainly on repairing necessary infrastructure, in addition to other measures that include the chlorination of public water sources and the dissemination of information on safe water practices.Click here to read… [32]