Global Developments and Analysis: Weekly Monitor (15-21 January 2024)

Economic

China confirms GDP rose 5.2% in 2023 on higher government spending

China's economy grew 5.2% on the year in 2023, the National Bureau of Statistics said on Jan 17, confirming an unusual early revelation Premier Li Qiang had made the previous day. The result beat an official forecast of a roughly 5% expansion, set after pandemic lockdowns caused growth to slow to 3% in 2022. The growth rate for the October to December quarter was also 5.2% on the year, up from 4.9% for the previous period, as government spending helped spur a recovery from the COVID-19 pandemic. On a quarterly basis, the final term's GDP expanded 1%, lower than the 1.3% recorded for the previous term. In a rare move, Premier Li had flagged the annual result in his speech at the World Economic Forum's Davos conference on Jan 16, as he sought to ease investor concerns about China after an uneven year characterized by instability in the property sector. Another surprise was included in China's data release on Jan 17: The government resumed reporting of the youth jobless rate, which had been suspended after it hit a record high of 21.3% in June. The rate at the end of December was 14.9%, not including fresh graduates looking for work. Overall, the national unemployment rate remained stable at 5.2%. Click here to read… [2]

More risk ahead as East Asian companies face debt deadlines

East Asian companies are more leveraged than their global counterparts. For the 10 member states of ASEAN, the ratio of corporate debt to gross domestic product stood at 80.7% as of March 2023. For mainland China, Hong Kong, Japan and South Korea as a group, the figure was 171.6%. In both cases, the ratios were significantly higher than those of peer economies in other regions. Companies usually take on debt to finance expansion, research and development or other growth initiatives. But poorly managed leverage and challenges from the external environment, including elevated interest rates, can make this approach riskier.East Asian companies are subject to greater financial strains from increased borrowing costs in an elevated interest rate environment than companies elsewhere. Excessive debt may threaten financial stability and hinder economic growth by distorting resource allocation and dragging on demand. As Warren Buffett has said, "I do not like debt and do not like to invest in companies that have too much debt." Before the COVID-19 pandemic, East Asia experienced robust growth thanks to rapid industrialization and easy financial conditions that encouraged lending by banks. However, output across the region has not yet returned to the pre-pandemic trajectory. Click here to read… [3]

China and India lead Asia race to expand spy satellite networks

Faced with an increasingly complex security environment, China, India and other Asian countries are bolstering satellite networks to monitor military moves in the region. Reconnaissance satellites observe developments -- from troop movements to missile launches -- at an altitude of 500 kilometers. The information can help countries accurately target enemy assets during a military conflict. China operated 136 reconnaissance satellites in 2022, up from 66 in 2019, according to the Military Balance report published by the London-based International Institute for Strategic Studies. In addition to satellites that photograph Earth's surface, Beijing is also expanding its fleet of electronic intelligence (ELINT) and signals intelligence (SIGINT) satellites, which can intercept electronic information. Intelligence, surveillance and reconnaissance satellites operated by the People's Liberation Army "could support monitoring, tracking, and targeting of U.S. and allied forces worldwide, especially throughout the Indo-Pacific region," according to an October report by the U.S. Defense Department. "These satellites also allow the PLA to monitor potential regional flashpoints, including the Korean Peninsula, Taiwan, Indian Ocean" and the South China Sea, it said. North Korea considers spy satellites as a top military priority along with nuclear and missile technology, allowing it to monitor U.S. aircraft carriers in real time. Two satellite launches failed in 2023, but a third launch in November was successful. Click here to read… [4]

Japan set to drop to 4th largest economy after Germany

Germany almost certainly overtook Japan as boasting the world's third-largest economy in 2023, according to newly released German economic data. Japan’s gross domestic product, as measured by the U.S. dollar, was curtailed by the yen’s depreciation against the greenback, while the German GDP was boosted by inflation. Germany announced on Jan. 15 that its nominal GDP for 2023 increased 6.3 percent from a year earlier to about 4.12 trillion euros. The figure translates into about 4.5 trillion dollars based on the Bank of Japan’s average exchange rate for 2023. Japan’s GDP statistics for the October-December period will be announced by the Cabinet Office in February. But Mitsubishi UFJ Research and Consulting Co. estimates the country’s nominal GDP for 2023 at 591 trillion yen, or about 4.2 trillion dollars. The figure represents a 5.7-percent year-on-year increase in yen terms but a 1.2-percent decrease in dollar terms due to the yen’s weakening. Japan’s annual nominal GDP will match Germany’s if the figure for the final quarter of 2023 is about 190 trillion yen. But it appears unlikely given that the figure for the October-December period of 2022 was about 147 trillion yen. Nominal GDP is the total added value of goods and services produced by each country. It is a key indicator used to compare the size of a country’s economy. Click here to read… [5]

Labour shortages hamper relief activities in disaster zones in Japan

Labour shortages exacerbated by the Jan. 1 earthquake have impeded efforts to provide relief services for survivors and evacuees in disaster zones. The Ishikawa prefectural government has continued to discourage would-be volunteers from entering the areas, citing the need to give priority to vehicles of the Self-Defense Forces and firefighters. But even with the professional help arriving, relief work is slow going partly because government officials apparently underestimated the extent of the damage in the early stages, according to one expert. The Wajima city government’s branch office in the Monzen district is distributing relief supplies to 44 locations with support from SDF personnel. Many of these facilities, often lacking even temporary toilets, are occupied by residents who have voluntarily stayed away from designated evacuation centers mainly because of overcrowding. A city official said both delivery staff and relief goods, such as food, are in critically short supply. “If the SDF leaves in the future, it will be impossible for us to keep going,” the official said.The disaster has also affected many local government employees.Many of them have been unable to return to their duties in Suzu, another hard-hit city at the northern tip of the Noto Peninsula. “Even in ordinary times, it becomes difficult to get by if we are short of one employee,” a senior city official said. Click here to read… [6]

EU faces 2024 immigration surge – think tank

Immigration to the EU in 2024 will increase beyond record levels set in 2016, an Austrian-based think-tank has warned. With opposition parties across the continent threatening a crackdown on illegal arrivals, the International Center for Migration Policy Development (ICMPD) has predicted a rush to get in before the doors close. More than a million people claimed asylum in the EU last year, the think tank stated in a press release on Jan 17, citing preliminary bloc data. When all people who legally entered are added, the total suggests that 3.5 million people migrated to the EU in 2023. Ahead of a full report on the issue due for release next week, the ICMPD predicted that war and conflict would cause “record displacement levels” around the world this year. At the same time, more economic migrants will journey to Europe seeking employment before European countries potentially introduce restrictions following elections this year. “I call it the closed-shop effect. People will hear all these measures on migration announced in election campaigns and will think they have to be here before they come into force,” Michael Spindelegger, the director general of the ICMPD, told The Guardian. Legislative elections will be held this year in Austria, Belgium, Croatia, Lithuania, Portugal, and Romania, while regional elections are scheduled in Germany and Ireland. Click here to read… [7]

UK to become only G20 member without steel production

Steel producer Tata Steel plans to close blast furnaces at its Port Talbot plant in South Wales and lay off nearly 3,000 workers, according to media reports. The move, which is part of a major restructuring of the company’s UK operations, will reportedly leave the UK as the only G20 economy unable to make steel from scratch. The planned move, which was first reported by the Financial Times this week, is part of Indian-owned Tata Steel’s four-year transition to a greener form of steelmaking at the company’s UK steel operations, which employ 8,000 people, and involve sites elsewhere in Wales and the Midlands. While the blast furnaces at Port Talbot will be shut down, the company intends to build electric arc furnaces, which make steel from recycled scrap. The government has promised up to £500 million ($634 million) to help with the transition. Meanwhile, the two other remaining blast furnaces in the UK, both of which belong to the Chinese-owned company British Steel, are also slated for shutdown as the parent entity plans to replace them with two electric arc facilities, which could be operational as early as 2025. “That would leave the UK as the only G20 country that cannot make steel from raw materials,” The Guardian wrote. Click here to read… [8]

Oil supply tightens in Europe over Red Sea disruptions

The structure of the global benchmark Brent crude futures market and some physical markets in Europe and Africa have been reflecting tighter supply partly over concerns about shipping delays as vessels avoid the Red Sea due to missile and drone attacks. The disruptions – which have been the largest to global trade since the COVID-19 pandemic – have combined with other factors such as rising Chinese demand to increase competition for crude supply that does not have to transit the Suez Canal, and analysts say this is most evident in European markets. In a sign of tighter supply, the market structure of Brent – which is used to price nearly 80 percent of the world’s traded oil – hit its most bullish in two months on Jan 19, as tankers diverted from the Red Sea following recent air strikes by the United States and United Kingdom on targets in Yemen. In response to Israel’s war on Gaza, rebels from the Iran-aligned group that controls northern Yemen and its western coastline have launched a wave of assaults on ships in the Red Sea. By targeting vessels with perceived links to Israel, the Houthis are attempting to force Tel Aviv to stop the war and allow humanitarian aid into the Gaza Strip. Houthi activity has so far been concentrated in the narrow strait of Bab al-Mandeb, which connects the Gulf of Aden to the Red Sea. Click here to read… [9]

Russian central bank reveals major fall in energy revenues

Russian export revenues dropped by almost a third in 2023, according to the preliminary assessment released by the Bank of Russia, which cites a decline in prices for crude oil as one of the key reasons for the decrease.Last year, export revenues amounted to $422.7 billion compared to $592.1 billion in record-breaking 2022, marking a decline by at least 30%, the regulator said, adding that the figure is the lowest in four years. At the same time, the country’s imports in monetary terms totalled $304.4 billion, scoring a year-on-year growth of 10%. They returned to the levels recorded in 2021, before the launch of the military operation in Ukraine. As a result, the trade surplus in 2023 amounted to $50.2 billion, compared to $238 billion recorded in the previous year. According to the data tracked by the Russian Ministry of Finance, the average price of Russia’s flagship Urals blend was hovering around $63 per barrel, 17% lower compared to an average of $76.1 recorded in 2022. Earlier this week, Maksim Oreshkin, the top economic adviser to President Vladimir Putin, said that hydrocarbons remain a vital part of the country’s economy and provide a significant share of budget revenue. However, he cautioned that energy exports are not promising in the long term. Click here to read… [10]

South Korea lays out US$470 billion plan to build chipmaking hub

South Korea unveiled plans by leading firms such as Samsung Electronics and SK Hynix to spend more than US$470 billion establishing the world’s largest chipmaking cluster, joining a global race to safeguard domestic supply. The government on Jan 15 outlined a blueprint involving investment of 622 trillion won (US$471 billion) from the private sector in the years leading up to 2047. South Korea will spend the money to build 13 new chip plants and three research facilities, on top of an existing 21 fabs. Spanning Pyeongtaek to Yongin, the area is expected to be the largest in the world, capable of producing 7.7 million wafers monthly by 2030. The envisioned investment is up sharply from when Seoul first unveiled Samsung’s and Hynix’s plans in 2023. South Korea’s government, which works closely with private firms on national imperatives, has been boosting its support for a domestic chip sector that accounts for about 16 per cent of total exports. It is pledged to protect a linchpin of its economy while grappling with rising global competition. As Japan and Taiwan aggressively invest in their own chip sectors, the South Korean government is committing to extending big tax breaks to local chip firms. As part of the two-decade plan, Samsung and Hynix are set to build their most sophisticated chip plants at home. Click here to read… [11]

China’s gallium and germanium exports tumble as controls on shipments to the West take toll

Chinese exports of two critical semiconductor metals plunged last year under the weight of Beijing’s controls on shipments to the United States and its allies. Analysts said the drop-off could just be the start as Beijing amasses weapons of retaliation against tech curbs by Washington and its allies. According to the General Administration of Customs, the full-year value of gallium exports fell by two-thirds to US$8.47 million in 2023 while sales of germanium were down 8 per cent to US$48.42 million. China dominates both markets, accounting for over 95 per cent of the world’s gallium production and about 60 per cent of germanium output. Beijing imposed restrictions on exports of the raw materials and several of their compounds in August in apparent response to Washington-led restrictions on Chinese access to advanced technology. Exports of the two raw materials to the US stopped from July, with annual gallium shipments to the United States dropping by just over 20 per cent for the full year to US$352,710 while germanium increased by 51 per cent to US$6.98 million. The drop in annual export value was even greater in relation to Japan, where gallium shipments fell by nearly three-quarters to US$3.68 million and germanium deliveries decreased by roughly a third to US$3.76 million. Click here to read… [12]

The World’s Top 50 Power-Hungry Data Center Markets

We live in an information-abundant digital world, where data is the new currency, and data centers are the vaults that protect and power it. The amount of data created each year has skyrocketed from 2 zettabytes in 2010 to 44 zettabytes (44 trillion gigabytes) in 2020. This has surged demand for data storage and processing, leading to the construction of massive data centers around the world. Today, it is estimated that there are over 8,000 data centers in the world. Many of these centers end up clustered together due to beneficial infrastructure and provisions from local governments and utilities. They also need lots of power, often at least 100 MW for each center, making power consumption one of the best ways to measure total market size. While a majority of these data center markets are in the United States, some of them are scattered across Asia and Europe. With nearly 300 data centers, including many AWS servers, the Northern Virginia data center market is the largest in the world. Data centers in the region are estimated to handle more than one-third of global online traffic. In 2023, Northern Virginia data centers had a combined power consumption capacity of 2,552 MW. The second-biggest market, Beijing, has a measured capacity of 1,799 MW. Though it is currently the only market with an operational capacity of over 1,000 MW in the Asia Pacific Region, Tokyo (865 MW) appears to be catching up fast. Click here to read… [13]

EU Seeks to Stem Growing Farmer Discontent Ahead of Elections

European Commission President Ursula von der Leyen will kick off meetings with the agricultural sector next week in an attempt to placate growing farmer fury over green policies and subsidy cuts that are putting pressure on the industry, according to people familiar with the matter. The so-called strategic dialog starts on Jan. 25 and will be a forum for von der Leyen to listen to farmers’ concerns before protests spread further, said the people, who spoke on the condition of anonymity. Farmers’ demonstrations have come to the forefront in countries including Germany, France and The Netherlands over the approval of European laws to protect the environment and the paring back of subsidies. Far-right parties have latched onto similar issues and are expected to make gains in European elections that will be held in June. “Protests have had a strong national angle, but the common element is that farmers have not been taken seriously,” said Pekka Pesonen, secretary general of the agriculture organization Copa Cogeca. “The consequences of these proposals will have severe impact on farmers’ livelihoods.” Organizations have also warned of the impact trade liberalization measures meant to support Ukraine will have on neighbouring countries. The commission, the European Union’s executive arm, is set to prolong measures to facilitate the import of Ukrainian agri-food products in the coming days. Click here to read… [14]

Taiwan’s Investment Into China Plunges to Lowest in Two Decades

Taiwanese firms slashed investment into China last year to the lowest since 2001, a sign the companies are moving to protect themselves as tech disputes between Washington and Beijing escalate. New spending into China by Taiwan companies declined 39.8% year-on-year to $3.04 billion, the Ministry of Economic Affairs in Taipei said in a statement. The data show the island’s businesses have “adapted to the restructuring of global supply chains, are adjusting their overseas exposure,” and are boosting investment in the US, Europe, Japan and other countries to diversify production risks, the ministry said on Jan 15. Taiwanese companies have traditionally been among the biggest investors in China but have been cutting new capital expenditure in the world’s second-largest economy since investment peaked at $14.6 billion in 2010.The US is curbing China’s access to leading technologies, saying they could provide a military edge. The value of China’s chip imports suffered their steepest drop on record last year, partly due to the US’s export controls. The regular release of the investment data comes just after Taiwan elected Vice-President Lai Ching-te of the ruling Democratic Progressive Party as its new leader. Lai said on the campaign trail that he wouldn’t stop Taiwan Semiconductor Manufacturing Co., the world’s leading chipmaker, from building more fabs in the US or other countries if he was elected. Click here to read… [15]

Winter Storms and Dangerous Cold Hammer Much of the U.S.

More than 93 million people were under windchill advisories Jan 15, as Arctic cold and winter storms hammered much of the country. Brutally cold weather from a cold front spilling out of Canada continued across many parts of the country. Snow and freezing rain spread to the Mid-Atlantic and stretched over the Southern U.S. before the arrival of yet another arctic blast forecast later this week. Freezing rain was expected as far south as the Gulf Coast of Texas and Louisiana on Jan 15, while heavy snow could stretch from Tennessee to the Mid-Atlantic, according to the National Weather Service. More than 2,600 flights were cancelled within, into or out of the U.S. on Jan 15 as of 5 p.m. ET, according to flight-tracking service FlightAware. More than 7,000 flights were delayed. Weather-related problems snarled traffic at most major airports. Frigid conditions are expected to continue casting a chill on Iowa’s presidential caucuses. Forecasts show temperatures in the state capital of Des Moines to be around zero on Jan 15, the day of the caucuses. Temperatures could fall even lower by 7 p.m. local time, when Republican precinct meetings convene, with winds making it feel even colder. Several cities cancelled or postponed their Martin Luther King Jr. Day celebrations scheduled for Jan 15 as a result of the weather. Baltimore cancelled its celebrations amid freezing temperatures and accumulating snow. Click here to read… [16]

Strategic

Pakistan, Iran agree to ‘de-escalate’ tensions after tit-for-tat attacks

Pakistan and Iran have agreed to “de-escalate” tensions after an exchange of missile and drone attacks this week raised fears of further instability in the region, Islamabad said. Pakistan’s Foreign Minister Jalil Abbas Jilani and the foreign minister of Iran, Hossein Amir-Abdollahian, spoke via phone on Jan 19, Pakistan’s foreign ministry said in a statement. “The two foreign ministers agreed that working level cooperation and close coordination on counter terrorism and other aspects of mutual concern should be strengthened. They also agreed to de-escalate the situation,” the statement read. “The return of ambassadors of the two countries to their respective capitals was also discussed,” it added. On Jan 16 night, Iran carried out a missile and drone attack against the armed group Jaish al-Adl in Pakistan’s southwestern border province of Balochistan. Pakistan in turn struck armed-group targets inside Iran on Jan 18. Pakistan recalled its ambassador from Tehran and said Iran’s envoy – on a visit home – was blocked from returning to Islamabad. Al Jazeera’s Osama bin Javid, reporting from Islamabad, said there has been “a lot of diplomacy in the last 24 hours from both sides” to try and come out of the growing tensions. “For the first time, we’re seeing both countries’ militaries get involved in what has been a slow-burner proxy war that has continued in these two provinces of Balochistan and Sistan-Balochistan.” Click here to read… [17]

U.S. eyeing Japanese shipyards for warship overhauls, says U.S. ambassador

The United States and Japan will look at the viability of using Japanese shipyards to overhaul U.S. navy warships that patrol East Asian waters, the U.S. Ambassador to Japan Rahm Emanuel said on Jan 19 at the Yokosuka naval base near Tokyo. Doing refits in Japan could help the U.S. keep more of its ships battle-ready in East Asia where China is expanding its naval power. The U.S. navy currently sends its ships back across the Pacific to shipyards at home that are wrestling with a backlog of maintenance contracts. The U.S. Navy will need more maintenance capacity as it expands its fleet over the coming decades. Japan hosts the biggest overseas concentration of U.S. military power, including the only forward-deployed carrier strike group, which operates from Yokosuka. The Seventh Fleet, of which it is a part, commands up to 70 ships and submarines, most of them based in Japan. Click here to read… [18]

In Taiwan election wake, PLA resumes regular military activities near island

After a brief lull around the elections on the weekend, the People’s Liberation Army has resumed military activities around Taiwan – although not at higher levels. The PLA sent no planes near Taiwan as part of its regular activities around Taiwan on Jan 13, when independence-leaning William Lai Ching-te won a three-way race for the island’s presidency. But by Jan 16, mainland Chinese military activities had returned to usual levels, with PLA planes making 15 trips near Taiwan in the 24 hours until 6am on Jan 16, according to the Taiwanese defence ministry. It was the highest number of sorties in five days. The last time the PLA did not send any planes was nearly a month ago on December 16. Beijing has been sending fighter jets, drones and warships near Taiwan nearly every day, in addition to drills targeting the island to signal objections to Taiwanese and US engagement. Some observers expected Lai’s win to prompt an uptick in the PLA activity.Beijing has long branded Lai as a “troublemaker” for his position that Taiwan was already a sovereign country. Jean-Pierre Cabestan, an emeritus professor at Hong Kong Baptist University, said the PLA’s election day lull “was aimed to let people vote”. Click here to read… [19]

Japan's ruling LDP explores future without powerful factions

Japan's snowballing slush fund scandal is forcing the ruling Liberal Democratic Party to consider disbanding factions that have long held sway over party affairs, but its attempt at reform could crumble without an alternative mechanism. "In order to dispel concerns and restore trust, we must come up with rules governing policy groups," Prime Minister Fumio Kishida, the LDP's president, said Jan 19. The party is under scrutiny after influential factions, including its largest, Seiwaken, once led by former Prime Minister Shinzo Abe, allegedly concealed fundraising revenue, which was then distributed to members as kickbacks. Tokyo prosecutors indicted current or former accountants from three of six LDP factions, including those led by Kishida and party heavyweight Toshihiro Nikai. Those led by Kishida and Nikai, as well as Seiwaken, have announced plans to disband. The remaining factions include those led by LDP Vice President Taro Aso and Secretary-General Toshimitsu Motegi. Although their members are not facing indictment, they are also under pressure to act as public criticism mounts. LDP factions, which bring together lawmakers with similar policy goals, lobby the leadership for top party posts and cabinet appointments and raise money for their members.If a faction's leader becomes prime minister, then it will have a greater say on appointments and can extend perks to members, which in turn helps recruit new members. Click here to read… [20]

Japan, NATO weigh a dedicated line for sharing security information

Japan and NATO are in talks to establish a secure dedicated communication line for quickly sharing sensitive security information, Nikkei has learned. The new mechanism under consideration is intended to respond to possible cyberattacks and disinformation plots by countries such as China and Russia. Japan and NATO will likely implement a system similar to one used by NATO members, called BICES. That system is said to have high security capabilities and can share information from remote locations. Tokyo and NATO will consider multiple options, including connecting the hotline to BICES. The new communication line would be used for discussions on security-related information from the staff level up to government heads. The two sides do not have a fixed time frame for setting up the hotline but will move forward as soon as possible. Tokyo and Brussels currently must rely on face-to-face communication when discussing sensitive issues. This has made it difficult for them to take coordinated action because the need to visit each other's offices creates delays in sharing information, which could bring serious risks during a crisis. Japan and NATO agreed on a new cooperation plan last July. In recent years, China and Russia have increased their presence in new areas where security is a concern, including space, and threats of cyberattacks from the two countries have intensified. Both Japan and NATO are trying to address these issues. Click here to read… [21]

Russia's Putin willing to visit Pyongyang soon, North Korea says

Russian President Vladimir Putin expressed his willingness to visit Pyongyang soon when he met with North Korean Foreign Minister Choe Son Hui in Russia last week, North Korea's state news agency KCNA reported on Jan 21. Putin also thanked North Korean leader Kim Jong Un for his invitation to visit, KCNA said, citing North Korea's foreign minister's assistant office. It would be the Russian leader's first trip to North Korea in more than two decades. Kremlin spokesman Dmitry Peskov said on Jan 22 that Russia hoped a Putin visit to North Korea, at Kim's invitation, would take place "in the foreseeable future", but he said no date had yet been agreed. KCNA's Korean-language report on Jan 21 suggested Putin intended to visit soon, but its later English report said he was "willing" to do so at an early date. During Choe's visit, Russia thanked North Korea for its support and solidarity in its Ukraine military operation, KCNA said. Moscow and Pyongyang also expressed serious concern over provocative acts by the United States and its allies against North Korea's sovereign rights, while agreeing to cooperate in dealing with the regional situation, the report said. The cooperation between Pyongyang and Moscow will be in line with the spirit of the U.N. Charter and other international laws, it added. Click here to read… [22]

North Korea's Kim seeks to define South as enemy under Constitution

North Korean leader Kim Jong Un has called for a constitutional change to define South Korea as a "primary foe and invariable principal enemy," with the top legislature deciding to abolish entities that promote dialogue with the South, state-run media said Jan 16.In a speech at a session of the Supreme People's Assembly on Jan 15, Kim said his country should not refer to South Korean people as "fellow countrymen" and the supreme law should call for intensified education to spread the idea that they are an enemy, the official Korean Central News Agency said. The leader said the constitutional revision should be discussed at the next parliamentary session. His remarks were made amid escalating tensions on the Korean Peninsula. Pyongyang recently fired a barrage of artillery shells near the disputed western maritime boundary with South Korea, followed by Seoul conducting a military exercise in retaliation. South Korean President Yoon Suk Yeol criticized the North's move during a Cabinet meeting Jan 16, saying defining the Koreas as hostile to each other shows Pyongyang's "anti-national and ahistorical" nature. Kim also said Pyongyang can specify in its Constitution "the issue of completely occupying, subjugating and reclaiming" South Korea and annex it as a part of the North's territory in case of a war breaking out on the Korean Peninsula. Click here to read… [23]

North Korean Missiles Face Reality Check in Putin’s Battles

North Korea’s new arsenal of ballistic missiles is set for their first real-world test on the battlefield in Ukraine. But based on the success of US interceptor systems in that conflict, Kim Jong Un may be worried. Burning through his stockpiles as the war in Ukraine nears the two-year mark, Russian President Vladimir Putin has turned to Kim to provide short-range ballistic missiles and more than 1 million rounds of artillery. The North Korean missiles sent so far are similar in size and flight dynamics to Russia’s Iskander series, weapons experts have said. A report by the Center for Strategic and International Studies showed that the US Patriot air defense system has so far been largely effective in countering Russia’s missiles. In June, when Russia tried to take out a Patriot battery protecting Kyiv, the system shot down all of the 34 Iskander and Kinzhal missiles Russia fired, CSIS said. That’s a warning to Putin about the KN-23 and KN-24 missiles Kim is believed to be supplying. The systems are designed to be deployed quickly, manoeuverable in flight and reliably hit targets with a degree of precision. That might not be enough. “The Patriot missile defense system should be able to intercept North Korea’s short-range ballistic missiles, given its effectiveness against Russian Iskanders,” said Shaan Shaikh, a fellow in the Missile Defense Project at CSIS, a Washington-based think tank. Click here to read… [24]

Non-Aligned Movement criticises Israel’s war on Gaza at Kampala summit

Leaders of Non-Aligned Movement (NAM) countries have denounced Israel’s military campaign on the Gaza Strip and demanded an immediate ceasefire during a summit of the 120-member bloc. “Since October 7, we have witnessed one of the cruellest genocidal acts ever to be recorded by history,” Cuba’s vice president, Salvador Valdes Mesa, said in a speech to delegates on Jan 19 in Uganda’s capital, Kampala. “How can the Western countries, who claim to be so civilised, justify the murder of women and children in Gaza, the indiscriminate bombings of hospitals and schools and deprivation of access to safe water and food?” he questioned. Moussa Faki Mahamat, chairperson of the African Union Commission, called for an immediate end to what he called the “unjust war against the Palestinian people”. Nearly all African countries belong to the NAM, comprising nearly half its members, but its membership includes countries around the globe, from India and Indonesia to Saudi Arabia, Iran, Chile, Peru and Colombia. The organisation was founded in 1965 by countries opposed to joining either of the two major Cold War-era military and political blocs and is the largest global bloc after the UN. It is expected to grant membership to South Sudan, the world’s youngest nation, on Jan 19. Click here to read… [25]

Russia And Iran Finalize 20-Year Deal That Will Change The Middle East Forever

Iran’s Supreme Leader, Ali Khamenei, gave his official approval on 18 January to a new 20-year comprehensive cooperation deal between the Islamic Republic of Iran and Russia, according to a senior energy source in Iran and a senior source in the European Union’s (E.U.) energy security complex, exclusively spoken to by OilPrice.com last week. The 20-year deal – ‘The Treaty on the Basis of Mutual Relations and Principles of Cooperation between Iran and Russia’ - was presented for his consideration on 11 December 2023. It will replace the 10-year-deal signed in March 2001 (extended twice by five years) and has been expanded not only in duration but also in scope and scale, particularly in the defense and energy sectors. In several respects, the new deal additionally complements key elements of the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and analysed in full in my new book on the new global oil market order. In the energy sector to begin with, the new deal gives Russia the first right of extraction in the Iranian section of the Caspian Sea, including the potentially huge Chalous field. The wider Caspian basins area, including both onshore and offshore fields, is conservatively estimated to have around 48 billion barrels of oil and 292 trillion cubic feet (tcf) of natural gas in proven and probable reserves. Click here to read… [26]

Divisions in Israel’s War Cabinet Emerge as Gaza Conflict Enters Pivotal Stage

Rifts among Israel’s war cabinet are spilling into public view, threatening to undermine the country’s military strategy in Gaza at a crucial stage in the conflict. The small collection of wartime decision makers—Prime Minister Benjamin Netanyahu, Defense Minister Yoav Gallant and former head of the Israeli military, Benny Gantz—is diverging publicly on the two biggest dilemmas they face: whether Israel should negotiate to end the conflict and free the hostages, and who should govern the bombed-out strip once the war is over. The divisions in Israel’s cabinet reflect longstanding personal and professional disagreements between the lawmakers, who came together after the Hamas attack on Oct. 7 that killed 1,200 Israelis to form a national unity government to prosecute the war and reassure Israelis. They were united by a common enemy in Hamas. But as pressure has mounted from the Biden administration to limit Palestinian civilian deaths in Gaza, and the government has failed to return all the hostages, divisions between the leaders have re-emerged. Gallant on Jan 15 said that “political indecision” about who would take responsibility for postwar Gaza would hurt the military campaign. In a plan he articulated this month, Gallant has called for Palestinian self-governance and a multinational task force led by the U.S., with European and Middle Eastern partners, to oversee the rehabilitation of the strip. Click here to read… [27]

Israel Vows to Control Security in the Gaza Strip After the War

Israel will insist on security control over the West Bank and Gaza Strip in the foreseeable future after the war, Prime Minister Benjamin Netanyahu said, rejecting rule by the Palestinian Authority despite calls from the US. “This is a mandatory condition, and it contradicts the idea of sovereignty,” Netanyahu told journalists in a broadcast briefing Jan 18. “Every piece of territory we leave becomes a place from which to launch terrible terrorism against us.” Netanyahu said he told the US of his position and “put the brakes” on what he called efforts to force a reality on Israel that would only hurt the country. “A prime minister of Israel must be able to say no — also to the closest of friends,” Netanyahu said. US Secretary of State Antony Blinken and other US officials have said a lasting peace wouldn’t be possible without an eventual state for Palestinians. “Israel must stop taking steps that undercut Palestinians’ ability to govern themselves effectively,” Blinken said in Tel Aviv this month. Asked about Netanyahu’s comments, US State Department spokesman Matthew Miller told reporters Jan 18 in Washington that there’s no way for Israel to solve its long-term challenges without establishing a Palestinian state. “There is a historic opportunity that Israel has to deal with challenges that it has faced since its founding, and we hope the country will take that opportunity,” he said. Click here to read… [28]

Russia Rejects U.S. Proposal to Reopen Arms-Control Dialogue

Russia has rejected an American proposal to reopen an arms-control dialogue with Washington, saying the U.S. was pursuing a hostile policy toward Moscow, U.S. officials said Jan 18. The absence of talks between the two sides on reducing nuclear risks and potential arms-control steps comes during the worst downturn in U.S.-Russia relations since the end of the Cold War and has raised fears of a new arms race.U.S. national security adviser Jake Sullivan said in a speech in June that the U.S. was prepared to begin the talks without preconditions. And the Biden administration followed up with a confidential paper a few months later proposing such talks and outlining ideas on how to manage nuclear risks. But Moscow responded with its own diplomatic paper in late December, saying that it wasn’t interested in resuming arms-control talks, complaining that the U.S. was seeking the strategic defeat of Russia through its support of Ukraine, U.S. officials say. Russian Foreign Minister Sergei Lavrov emphasized Russia’s position on Jan 18, telling a press conference in Moscow that the U.S. needed to revise its policy toward Russia before a dialogue on nuclear arms control could be held. The New Start treaty, which limits long-range U.S. and Russian nuclear weapons, is due to expire in February 2026 and other arms-control agreements have collapsed. Click here to read… [29]

Trump scores easy win in Iowa with DeSantis a distant second

Donald Trump cruised to victory in the Iowa Republican presidential caucuses, with Ron DeSantis finishing a distant second in a contest that established the former president as the party’s clear frontrunner. News organizations including the Associated Press, CNN and CBS News called the contest for Trump sooner than expected, about 30 minutes after caucuses opened at 7 p.m. Central time. Some caucus sites hadn’t even begun voting. AP said it was able to call the race quickly based on survey data from voters who planned to caucus and an analysis of early returns, both of which showed Trump with an insurmountable lead over his rivals. The former U.S. president’s margin of victory was more than double the previous record for the caucus. DeSantis beat polling forecasts that showed him losing his long-held status as the projected runner-up in the first-in-the-nation caucus. The AP called his second place finish after 10 p.m. local time. Trump was aiming for a resounding victory in the caucuses to further his pivot to a potential November general election rematch with President Joe Biden. Trump had a 51 per cent share of caucus goers’ votes as of 11:36 p m Central time in a contest that was gripped by sub-zero temperatures that weighed on voter turnout. “It really is an honor that, minutes after, they’ve announced I’ve won—against very credibly competition—great competition, actually,” Trump said in an interview with Fox News Digital. Click here to read… [30]

Nato to hold biggest war games since Cold War with 90,000 troops

Nato is launching its largest exercise since the Cold War, rehearsing how US troops could reinforce European allies in countries bordering Russia and on the alliance’s eastern flank if a conflict were to flare up with a “near-peer” adversary. Some 90,000 troops are due to join the Steadfast Defender 2024 drills that will run through May, the alliance’s top commander Chris Cavoli said on Jan 18. More than 50 ships from aircraft carriers to destroyers will take part, as well as more than 80 fighter jets, helicopters and drones and at least 1,100 combat vehicles including 133 tanks and 533 infantry fighting vehicles, Nato said. The exercises come as Russia’s war on Ukraine bogs down. Nato as an organisation is not directly involved in the conflict, except to supply Kyiv with non-lethal support, although many member countries send weapons and ammunition individually or in groups, and provide military training. Cavoli said the drills would rehearse Nato’s execution of its regional plans, the first defence plans the alliance has drawn up in decades, detailing how it would respond to a Russian attack. Nato did not mention Russia by name in its announcement. But its top strategic document identifies Russia as the most significant and direct threat to Nato members’ security. Click here to read… [31]

Health

Chinese Lab Mapped Deadly Coronavirus Two Weeks Before Beijing Told the World, Documents Show

Chinese researchers isolated and mapped the virus that causes Covid-19 in late December 2019, at least two weeks before Beijing revealed details of the deadly virus to the world, congressional investigators said, raising questions anew about what China knew in the pandemic’s crucial early days. Documents obtained from the U.S. Department of Health and Human Services by a House committee and reviewed by The Wall Street Journal show that a Chinese researcher in Beijing uploaded a nearly complete sequence of the virus’s structure to a U.S. government-run database on Dec. 28, 2019. Chinese officials at that time were still publicly describing the disease outbreak in Wuhan, China, as a viral pneumonia “of unknown cause” and had yet to close the Huanan Seafood Wholesale Market, site of one of the initial Covid-19 outbreaks. China only shared the virus’s sequence with the World Health Organization on Jan. 11, 2020, according to U.S. government timelines of the pandemic. The new information doesn’t shed light on the debate over whether Covid emerged from an infected animal or a lab leak, but it suggests that the world still doesn’t have a full accounting of the pandemic’s origin. The extra two weeks could have proved crucial in helping the international medical community pinpoint how Covid-19 spread, develop medical defenses and get started on an eventual vaccine, specialists have said. Click here to read… [32]

Covid vaccines no longer needed – Russian watchdog

Vaccination against COVID-19 is no longer needed, but people should remain vigilant, as the number of coronavirus hospital admissions in Russia is growing, the head of Russian consumer rights and wellbeing watchdog Rospotrebnadzor, Anna Popova, announced on Jan 17. Popova said the peak of the COVID-19 incidence wave had passed in Russia, and that rises in coronavirus cases were now seasonal. Russia will not launch a new mass vaccination campaign, Popova said in an interview with Rossiya 24, explaining that there had been “an upsurge in the autumn, but it has already gone.” Covid-19 is not the only respiratory disease currently circulating worldwide. The health official stressed that coronavirus has now given way to influenza and other respiratory viruses, the incidence of which has increased. Despite that fact, Covid-19 has been on a slow upward trend recently. Popova noted that hospitalizations of patients with coronavirus had increased by 40%. She interpreted the figure as meaning that people did not seek medical help and preferred self-treatment at home. When such patients eventually visit the doctor seeking assistance, it is sometimes “too late to receive outpatient treatment,” and they are taken to hospitals, she said. Click here to read… [33]