Economic
Jackson Hole summit has market holding its breath, and China has financial war with US on its mind
As the market sniffs for any clues about what sort of rate decisions the US Federal Reserve is favouring at the Jackson Hole summit of central bankers, Beijing’s policymakers and advisers are reviewing their own playbook, with geopolitical tensions and financial war on their minds. Some of the more circulated hawkish views have already made it clear – there’s a massive divergence in the economy-management practices of China and the United States. St. Louis Federal Reserve president James Bullard has stated that interest rates will continue to rise as inflation continues, and that officials should lift their policy benchmark interest rate to a range of between 3.75 and 4 per cent by year’s end. So, while the Jackson Hole Economic Symposium – one of the longest-held central banking conferences in the world – is being watched closely by investors interested in monetary policy, China’s economic experts have also been meeting and discussing what could be long-term ramifications of the decisions that emerge from the summit in the US state of Wyoming. At a closed-door session in Beijing last week – according to a transcript released this week – there were growing worries of a potential global recession, financial shocks and worsening China-US relations. “Global financial risks fuelled by the United States are fast expanding,” Dai Xianglong, who was at the helm of the People’s Bank of China from 1995-2002, warned at the gathering. Click here to read…
China to give US access to audit data to stave off mass expulsion of Chinese companies from US exchanges
China and the United States signed an accord granting the US accounting oversight board access to Chinese audit data, ending an impasse that has wiped billions of dollars off Chinese stocks with the spectre of mass expulsion from US exchanges. The China Securities Regulatory Commission (CSRC) and the US Public Company Accounting Oversight Board (PCAOB) signed an accord on audit cooperation, the two bodies said separately on Aug 26. The US signed similar accords with France and Belgium in 2021. “The cooperation will start soon,” the CSRC said. The agreement “has also been reached on the cooperation framework for regulatory inspection and investigation activities to be conducted by accounting firms, which will meet the rules and regulations of both sides”, it said. Before the signing of the agreement, the CSRC had been working on a new approach to end the impasse with the PCAOB, including a plan for the access to be conducted in Hong Kong, sources told the South China Morning Post. The CSRC, mandated by a 2019 law to work with overseas regulators on the transfer of securities-related documents, is agreeable to the audit papers of Chinese companies being inspected by foreign regulators, provided certain names and address of factories, customers and vendors are redacted before the papers are released, sources said. Click here to read…
U.S. adds 7 China-related entities to export control list
The U.S. has added seven China-related entities, mostly related to aerospace, to its export control list, citing national security and foreign policy concerns, according to a U.S. Commerce Department notice published online on Aug 23. According to a notification posted to the Federal Register, China Aerospace Science and Technology Corp. 9th Academy 771 Research Institute, China Aerospace Science and Technology Corp. 9th Academy 772 Research Institute, China Academy of Space Technology 502 Research Institute, China Academy of Space Technology 513 Research Institute, China Electronics Technology Group Corp. 43 Research Institute, China Electronics Technology Group Corp. 58 Research Institute and Zhuhai Orbita Control Systems were added to the list, indicating suppliers of U.S. materials or services to these entities will need a license before shipping any goods. Commerce said the entities were added for “acquiring and attempting to acquire U.S.-origin items in support of China’s military modernization efforts.” Click here to read…
UN faced with record aid funding deficit due to Ukraine crisis – NYT
The UN is struggling to tackle global humanitarian crises due to a record funding deficit, while many major powers are prioritizing the Ukraine conflict, the New York Times reported on Aug 22. The international organization receives the bulk of its funding from several major donors, including the US, EU, Japan, and Canada. While they may allow the UN to use the money as it sees fit, they also have the right to earmark contributions for specific programs. According to the report, there has been no severe funding shortfall for Ukraine, while other countries have not received much-needed aid. Although wealthy countries have increased their contributions to the UN, the amounts remain inadequate as the demand for humanitarian assistance has swelled due to the Covid-19 pandemic and drought, the outlet says. “This is the biggest funding gap we’ve ever seen, mostly because the number of vulnerable people who need support is increasing fast,” Martin Griffiths, chief of the UN’s humanitarian and emergency relief office, said. He added that this year, the UN and private groups need $48.7 billion to help more than 200 million people, but they have managed to accumulate less than one-third of the necessary sum. In 2022, the UN humanitarian office asked for more than $6 billion to help Ukrainians, and the request was almost fully met. At the same time, much smaller appeals were less than 20% funded – for Haiti, El Salvador, Burundi, and MyanmarClick here to read…
Russia Confounds the West by Recapturing Its Oil Riches
Russia pumps almost as much oil into the global market as it did before its invasion of Ukraine. With oil prices up, Moscow is also making more money. Demand from some of the world’s largest economies has given Russian President Vladimir Putin the upper hand in the energy battle that shadows the war in Ukraine and has confounded the West’s bid to cripple Russia’s economy with sanctions. Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels. And new trade arrangements have given Mr. Putin cover to use natural-gas exports as an economic weapon against Ukraine’s European allies. Before the war, Russia supplied Europe with 40% of its gas. It has since throttled flows through the Nord Stream pipeline to Germany and other conduits, driving prices higher and putting pressure on European households and businesses. Oil revenue more than makes up the difference. “Russia is swimming in cash,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. Moscow earned $97 billion from oil and gas sales through July this year, about $74 billion of that from oil, she said. The country exported 7.4 million barrels of crude and products such as diesel and gasoline each day in July, according to the International Energy Agency, down only about 600,000 barrels a day since the start of the year. Click here to read…
Russia and Iran move to create global gas cartel – media
Moscow and Tehran are taking serious steps toward forming an OPEC-style cartel for natural gas that would allow them to coordinate an ‘extraordinary’ proportion of reserves and control over prices, OilPrice reported on Aug 23. “Occupying the number one and number two positions in the world’s largest gas reserves table, respectively – Russia with just under 48 trillion cubic meters (tcm) and Iran with nearly 34 tcm – the two countries are in an ideal position to do this,” the report stated. It described the $40 billion memorandum of understanding (MoU) signed last month between Russia’s Gazprom and the National Iranian Oil Company (NIOC) as “a steppingstone to enabling Russia and Iran to implement their long-held plan to be the core participants in a global cartel for gas suppliers in the same mold as the Organization of the Petroleum Exporting Countries (OPEC) for oil suppliers.” The chairman of Iran’s Oil, Gas, and Petrochemical Products Exporters’ Union, Hamid Hosseini, reportedly said after the MoU had been signed: “Now the Russians have come to the conclusion that the consumption of gas in the world will increase and the tendency towards consumption of LNG has increased and they alone are not able to meet the world’s demand, so there is no room left for gas competition [between Russia and Iran].” According to OilPrice, major global LNG supplier Qatar – which has the third-largest gas reserves of just under 24 tcm – could be a prime candidate to join the Russia-Iran gas cartel. Click here to read…
Japan, Korea defy US with big Russian energy deals
US-led efforts to suppress and contain Russia’s energy-centric economy suffered their latest blows yesterday – blows dealt by its two leading East Asian allies. In the latest sign of the unwillingness of US-allied capitals to sever energy ties with Russia, South Korea and Japan are, respectively, entering and maintaining energy deals with Russian players.
South Korea yesterday (August 25) announced that the state-owned Korea Hydro & Nuclear Power Co (KHNP) would supply US$2.25 billion worth of components and engineering for a Russia-built nuclear power plant to be raised in Egypt. Separately, two major Japanese trading firms yesterday confirmed that they will retain their stakes in Russia’s Sakhalin II natural gas project. Those developments followed related news on the opposite side of the balance earlier in the week. Staunch US ally the UK, a major supplier of both arms and political support to Ukraine, is on target to terminate all Russian energy imports by year’s end. Official data found that London had ended Russian oil imports in June, though some natural gas imports lingered. But the UK is fortunate to have access to local energy supplies. Amid the Ukraine crisis, the UK’s now ex-leader Boris Johnson has said that London will give its North Sea fields, “a new lease of life.” Click here to read…
China throws Europe an energy lifeline with LNG resales
Europe’s fears of gas shortages heading into winter may have been circumvented, thanks to an unexpected white knight: China. The world’s largest buyer of liquefied natural gas is reselling some of its surplus LNG cargoes due to weak energy demand at home. This has provided the spot market with an ample supply that Europe has tapped, despite the higher prices. As a result, Europe’s imports of LNG grew 60% year-on-year in the first six months of the year, according to research firm Kpler. The 53 million tonnes that the bloc purchased surpasses imports by China and Japan and has brought Europe’s gas-storage occupancy rate up to 77%. If this current trajectory continues, Europe is likely to reach its stated goal of filling up 80% of its gas storage facilities by November. But while China’s economic slump has brought much-needed relief to Europe, it comes with a major footnote. As soon as economic activity bounces back in the communist nation, the situation will quickly reverse. It also makes Europe dependent on Beijing for its energy, which bucks the geopolitical trend whereby the U.S. and its allies are seeking to defend a liberal international order. For now, however, Europe has been able to avoid an energy crisis. China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer. Click here to read…
EU, ASEAN to hold summit in December to develop supply chain
The European Union and the Association of Southeast Asian Nations will hold a summit of national leaders in December for the first time to discuss expanding trade and infrastructure assistance as the EU seeks to strengthen ties with the Asian bloc and counter Russian and Chinese influence. The interbloc summit of this type opens Dec. 14 in Brussels, an EU official told Nikkei. Previous summits between the two groups were attended by chiefs and senior officials representing the EU’s executive body. This time, heads of state and other national leaders from ASEAN and EU countries will attend. Myanmar’s leader, Senior Gen. Min Aung Hlaing, is unlikely to join the summit, given his military government’s fraught relations with fellow ASEAN members and the EU. This year marks the 45th anniversary of the European Economic Community, the EU’s predecessor, establishing formal relations with ASEAN. Overshadowing the occasion are the heightened tensions between the EU and Russia as well as cooler relations between the European bloc and China, which has positioned itself close to Moscow. For those reasons, ASEAN takes on greater significance to Europe on the economic, diplomatic and security fronts. Josep Borrell, the EU’s high representative for foreign affairs and security policy, said during an Aug. 4 ministerial meeting with ASEAN counterparts that his bloc is committed to engaging in the region and sees the Southeast Asian group as a “strategic partner.” Click here to read…
China greenlights $70bn-plus in infrastructure bonds to lift economy
Chinese regional governments are now authorized to issue more than 500 billion yuan ($72.9 billion) in infrastructure bonds by the end of October as President Xi Jinping aims to counter the economic blow of zero-COVID restrictions. The State Council approved the additional issuance at a meeting Aug 24, the official China Central Television reported. Much of the new bonds will be allocated to major cities like Beijing and Shanghai, as well as coastal provinces responsible for a large portion of Chinese economic activity. The National People’s Congress had previously set a 3.65 trillion yuan quota for new infrastructure bond issuances for the year in March. Almost all, except for 200 billion yuan to fund capital injections into small and midsize banks, had been used up as of the end of July. The flurry of issuances in the first half came in response to China’s sharp economic slowdown, stemming from the monthslong lockdown in Shanghai and other COVID-19 restrictions aimed at keeping infections down ahead of the ruling Communist Party’s twice-a-decade congress this fall. Thanks to the bonds, investment in infrastructure jumped 7.4% on the year for the January-July period — the largest increase for the period in five years. But employment and private-sector demand have yet to bounce back. Click here to read…
Why was NASA’s Artemis 1 launch scrubbed and what’s next?
A problem with one engine caused NASA to postpone the launch of its next generation rocketship on a long-awaited first test journey around the moon and back, delaying the Artemis 1 mission half a century after Apollo’s last lunar operation. The 98-metre (322-foot) two-stage Space Launch System (SLS) rocket and its Orion crew capsule were waiting for liftoff from the Kennedy Space Center at Cape Canaveral, Florida in the United States on Aug 29 when the countdown was halted 40 minutes before the launch window opened at 8:33am EDT (12:33 GMT). The next launch opportunity available for the Artemis 1 mission is Sept 02 at 12:48pm EDT (16:48 GMT), depending on whether the launch team can solve the engine problem, described as an “engine bleed issue” by Spaceflight Now, which closely follows rocket launches. Why Artemis did not launch and why it matters. On Aug 29, launch workers had started to fill the rocket’s core fuel tanks with super-cooled liquid oxygen and hydrogen propellants when they identified an issue with one of the rocket’s main engines. According to NASA, mission engineers had trouble getting that engine number three’s temperature up to launch-ready levels. The launch of the SLS-first Orion heralds the official start of the highly anticipated moon-to-Mars Artemis programme, the space agency’s replacement for the Apollo lunar missions of the 1960s and 1970s. Click here to read…
Japan to invest $30 billion in Africa to develop human resources
Japan pledged to invest $30 billion (4 trillion yen) in Africa over the next three years to spur development with a focus on human resources to shore up startups as well as industries ranging from heath care to agriculture. The announcement, made online by Prime Minister Fumio Kishida on Aug. 27, came at the business forum of the 8th Tokyo International Conference on African Development that opened here that day. “Japan and Africa are ‘partners who grow together’ and who also work together to tackle the various social challenges faced in Africa,” Kishida said of the investment package to be financed by the Japanese government and private sector. Kishida was initially scheduled to attend the two-day conference in Tunis but had to bow out after he was confirmed to be infected with the novel coronavirus on Aug. 21. Foreign Minister Yoshimasa Hayashi attended the conference on his behalf. The conference was established in 1993 at the urging of Japan working in tandem with the United Nations and the World Bank. In his address, Kishida underscored Japan’s assistance to support startups set up by young people, as well as providing training to 300,000 Africans over three years in the fields of businesses, health care and medicine, education and agriculture. Japan’s emphasis on the development of human resources, rather than the sum of the investment, reflects its goal of maintaining a distance from initiatives taken by China in Africa. Click here to read…
Kishida urges panel to consider next-generation nuke reactors
In a major policy shift, Prime Minister Fumio Kishida on Aug. 24 directed a government panel tasked with finding ways to move to a carbon-neutral society to consider the development and construction of next-generation nuclear reactors. If the government decides to add new reactors, it would represent a major turning point in the country’s energy policy since the triple meltdown at the Fukushima No. 1 nuclear power plant in 2011. Kishida told the green-transformation council to present a report on its conclusions by the year-end. The council was formed last month to examine ways to achieve decarbonization by 2050, identifying challenges that the government should tackle as a top priority for the next 10 years. Kishida told the council at its first meeting in July that the panel should specify nuclear energy-related areas that require political consideration to achieve a stable supply of power and gas in the nation. At the council’s Aug. 24 meeting, Kishida also told members that the government plans to bring seven more nuclear reactors back online from next summer, in addition to the current fleet of 10 reactors that have restarted. Among the seven reactors are Tokyo Electric Power Co.’s Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture. The successive Japanese governments since the Fukushima nuclear disaster have adhered to the policy of reducing the nation’s reliance on nuclear energy. Click here to read…
Pakistan declares emergency as millions affected by floods
Heavy rain pounded parts of Pakistan on Aug 26 after the government declared an emergency to deal with monsoon flooding that it said had affected more than four million people. The annual monsoon is essential for irrigating crops and replenishing lakes and dams across the Indian subcontinent, but each year it also brings a wave of destruction. The National Disaster Management Agency (NDMA) said on Aug 26 that more than 900 people had been killed this year – including 34 in the last 24 hours – as a result of the monsoon rains that began in June. Officials say this year’s floods are comparable to 2010 – the worst on record – when over 2,000 people died and nearly a fifth of the country was under water. “I have never seen such huge flooding because of rains in my life,” octogenarian farmer Rahim Bakhsh Brohi told AFP near Sukkur, in southern Sindh province. Like thousands of others in rural Pakistan, Brohi was seeking shelter beside the national highway, as the elevated roads are among the few dry places in the endless landscapes of water. The disaster agency said over 4.2 million people were “affected” by the flooding, with nearly 220,000 homes destroyed and half a million more badly damaged. Click here to read…
China slowly undercutting US influence in Latin America with 5 ‘new factor’ trade deals
China stands to secure prized natural resources while vying with the United States for allies through five potential new trade deals with countries in Latin America, which was once mainly a US backyard, analysts believe. Officials from Beijing kicked off talks with Ecuador in June, the government’s trade ministry said, and South American media reports point to Uruguay pursuing its own trade agreement with China – despite blowback from the Mercosur or Southern Common Market negotiating bloc to which it belongs with the likes of Argentina, Brazil and Paraguay. A deal with Panama is “under negotiation”, according to the Chinese Ministry of Commerce website, and China is conducting a joint feasibility study toward a pact with Colombia. China and Nicaragua last month signed an “early harvest arrangement” for a free-trade deal, the ministry said. Chile, Costa Rica and Peru have already signed trade deals with China, starting from Chile in 2005, with the pacts potentially offering a reduction in import tariffs while also opening key sectors to the other country’s investment. “China’s presence in the region in the new century is perhaps the most significant new factor in Latin America’s international political economy in its two centuries of independent history,” said Jorge Heine, author and a former Chilean ambassador to China. Click here to read…
Strategic
Xi Jinping looks to take China beyond Deng Xiaoping’s ‘get rich’ era with historic third term
Since taking office in 2013, Xi has expanded China’s economic influence abroad through the Belt and Road Initiative and introduced an inward-looking economic strategy at home. He has shaken up key industries and stared down US threats of decoupling. As president, he has left his mark on the economy like few before him. “Xi Jinping is about taking China to a new era and a new direction of travel, under the guidance of his thought, not under Deng Xiaoping’s policy line,” said Steve Tsang, director of the SOAS China Institute in London. “Whether he will succeed or not is of course another matter.” Xi’s economic philosophy will be in the spotlight at the 20th Party Congress in autumn, where he is likely to be sworn in for a third term. Historically, the event is a chance for Chinese leaders to review past policies and set the direction for new development. The economy, from which the Communist Party draws its ruling legitimacy, often dominates discussions, despite the congress being most well-known for ushering in a new group of leaders every five years. How China will realise Xi’s goal of doubling GDP, as well as per capita income, by 2035 will be high on the agenda at this year’s 20th Party Congress. Click here to read…
Meeting of CPC Central Committee Political Bureau proposes convening 20th CPC National Congress on Oct. 16 in Beijing
The Political Bureau of the Communist Party of China (CPC) Central Committee on Aug 30 held a meeting on the preparatory work for the seventh plenary session of the 19th CPC Central Committee, and the 20th CPC National Congress. Xi Jinping, general secretary of the CPC Central Committee, presided over the meeting. The meeting decided that the seventh plenary session of the 19th CPC Central Committee is to be convened on Oct. 9 in Beijing. The Political Bureau of the CPC Central Committee will propose to the plenary session that the 20th CPC National Congress be convened on Oct. 16 in Beijing. It was stressed at the meeting that the 20th CPC National Congress is a congress of great significance to be convened at a crucial moment, as the whole Party and the entire nation embark on a new journey toward building a modern socialist country in all respects and advance toward the Second Centenary Goal. The congress will hold high the great banner of socialism with Chinese characteristics, uphold Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of Three Represents and the Scientific Outlook on Development, and thoroughly implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. The congress will take stock of the Party’s work over the past five years, as well as major achievements and valuable experience of the Party’s Central Committee with Comrade Xi Jinping at its core. Click here to read…
Biden announces biggest Ukraine arms package yet
US President Joe Biden announced on Aug 24 that the US will send an additional $2.98 billion worth of weapons to Kiev. In an announcement coinciding with Ukraine’s Independence Day, Biden said that the US envisions Kiev fighting for some time to come. According to a White House statement, Ukraine will receive “air defense systems, artillery systems and munitions, counter-unmanned aerial systems, and radars to ensure it can continue to defend itself over the long term.” On Aug 24, US officials told the Associated Press, Reuters and CBS that the package would include at least three different drone systems, such as the hand-launched Puma drone, the longer-range ScanEagle surveillance vehicle, as well as the UK-made Vampire drone, which has not previously been provided to Kiev. Referencing Ukraine’s independence day, which celebrates its split from the Soviet Union in 1991, Biden said that “today is not only a celebration of the past, but a resounding affirmation that Ukraine proudly remains – and will remain – a sovereign and independent nation.” However, several US media outlets reported on Aug 23 that the contents of Aug 24’s arms package may not reach the battlefield for months or even years. Click here to read…
EU mulls military training mission for Ukraine
European Union countries have not yet reached a unanimous agreement needed to launch a military training mission for Ukraine, but said they are working out the details. Defense ministers from the 27 EU countries discussed the possibility of the mission during a meeting on Aug 30 in Prague. “We have to create the basis of an army which has to fight and will have to fight for quite a long time,” said EU foreign policy chief Josep Borrell, who has spoken publicly in favor of creating such a mission. “Most of the member states agreed that it can be done better together. We are going to study to define the parameters of a potential mission,” Borrell added. But for EU countries, this is not necessarily a given. “Even if there is any possibility of such a mission existing in the future, further discussions regarding any specific involvement of the Czech Republic would be needed,” the Czech Ministry of Defense press office told DW News in a written statement after the meeting. After over 6 months of war, rebuilding the capacities of the Ukrainian army is becoming a priority. The UK is currently running a 90-day basic training mission for 10,000 soldiers who are joining the Ukrainian army to fight. Several EU countries, including Germany, have been providing smaller scale trainings directly with Ukraine on German soil. The US has also been training troops on the weapons and equipment it has been sending to the war. Click here to read…
Taiwan raises defense budget 14.9% amid military reform debate
Taiwan’s government proposed a record defense budget for 2023 on Aug 25, as its military remains keen to develop conventional weapons despite growing domestic and U.S. calls to focus on asymmetrical warfare. The proposed budget of NT$523.4 billion ($17.3 billion) is a 14.9% increase from this year’s total allocation. The figure includes NT$108.3 for new advanced combat jets and programs for elevating sea and air combat capability. The total budget would reach NT$586.3 billion if another special fund is included. The budget now goes for approval to the Legislative Yuan, which begins a new session next month. Taiwan is grappling with increasing Chinese aggression, with concerns growing over the island’s ability to defend itself after Beijing conducted its biggest-ever military drills surrounding its neighbor earlier this month. The People’s Liberation Army sent aircraft, drones, missiles and warships around Taiwan and its outlying islands after a visit by U.S. House Speaker Nancy Pelosi. In January, Taiwanese lawmakers passed an extra spending bill of around $8.6 billion for a five-year special defense budget on top of the annual defense budget. This year, Chinese defense spending has risen by 7.1% to 1.45 trillion yuan ($211 billion), faster than the 6.8% increase in 2021. Click here to read…
US President Joe Biden plans to ask Congress to approve US$1.1 billion arms sale to Taiwan: Report
The Joe Biden administration plans to ask the United States Congress to approve an estimated US$1.1 billion arms sale to Taiwan, including 60 anti-ship missiles and 100 air-to-air missiles, Politico reported on Aug 29, citing sources, amid heightened tensions with China. China carried out its largest war games around the democratically governed island after a visit this month by US House Speaker Nancy Pelosi. Beijing has not ruled out using force to bring the island under its control. China on Aug 29 dismissed complaints from Taiwan about repeated harassment by Chinese drones very close to Taiwanese-controlled islands as not anything “to make a fuss about”, prompting Taipei to label Beijing as thieves. President Joe Biden’s administration and US lawmakers stress their ongoing support for the government in Taipei, and there are items in the approval pipeline for Taiwan that could be announced in the coming weeks or months, Reuters reported last week. But the focus will be on sustaining Taiwan’s current military systems and fulfilling existing orders – rather than offering new capabilities more likely to inflame already red-hot tensions with China, according to three sources, who requested anonymity due to the sensitivity of the issue. The White House did not immediately respond to a request for comment on the Politico report. Click here to read…
China’s navy begins to erase imaginary Taiwan Strait median line
For nearly 70 years an imagined line running down the Taiwan Strait between Taiwan and China has helped keep the peace but the so-called median line is looking increasingly meaningless as China’s modernized navy asserts its strength. China has never officially recognized the line that a U.S. general devised in 1954 at the height of Cold War hostility between Communist China and U.S.-backed Taiwan although the People’s Liberation Army largely respected it. Now Taiwan is bracing for warships from China’s much larger navy routinely pushing over the line as part of the steps an angry Beijing has taken to protest against a visit to Taipei three weeks ago by U.S. House Speaker Nancy Pelosi. “They want to increase pressure on us with the end goal of us giving up the median line,” said one Taiwanese official familiar with security planning in the region. “They want to make that a fact,” said the official, who declined to be identified given the sensitivity of the issue. Some Taiwanese officials say it would be “impossible” for the island to abandon the concept of a buffer that the line represents. Foreign Minister Joseph Wu told a news conference this month a change in the status quo could not be tolerated. “We need to join our hands with likeminded partners to make sure that the median line is still there, to safeguard peace and stability across the Taiwan Strait,” Wu said. Click here to read…
South Korea and Poland ink $5.8bn contract for tanks, howitzers
Two South Korean companies have signed a $5.76 billion contract with Poland to export tanks and howitzers, Seoul’s arms procurement agency said on Aug 27, after Warsaw agreed to ramp up arms imports amid tensions with Russia. The contract, signed in Poland on Aug 26, is part of South Korea’s biggest ever arms deal, clinched last month with Poland, which has been seeking to beef up its military in the face of Russia’s invasion of neighboring Ukraine. Hyundai Rotem Co. will ship K2 Black Panther tanks, and Hanwha Defense, a unit of Hanwha Corp., will send K9 self-propelled howitzers to Poland, said the Defense Acquisition Program Administration (DAPA). The parties have not announced the value of the entire deal, which South Korean media estimated at up to 20 trillion won ($15 billion). “As defense exports are extremely important in terms of sharing weapon systems, mutual logistics support and strengthening security alliances, this export deal is expected to contribute to our efforts to build solidarity with European countries and expand the boundaries of our security capabilities,” DAPA said in a statement. South Korean President Yoon Suk-yeol, who took office in May, has vowed to beef up security cooperation with European countries sharing the values of democracy and market economies, while boosting the country’s defense industry amid North Korea’s evolving nuclear and military threats. Click here to read…
Experts warn of North Korea’s evolving cyberattack capabilities
One of the most underestimated security threats coming out of North Korea is its cyberattack capabilities. Hackers, many assume, can’t kill people. But they can. Cyberattackers could take control of a water treatment plant and change the chemical mixture to make it toxic, or they could penetrate the computer systems of a nuclear power plant to cause major malfunctions. In recent years, such cyberattacks have been attempted in many parts of the world, and some have succeeded, resulting in deaths or injuries indirectly. A group of experts warn that the North could make use of such attacks if war were to break out on the Korean Peninsula, in a RAND Corporation report titled, “Characterizing the Risks of North Korean Chemical and Biological Weapons, Electromagnetic Pulse, and Cyber Threats.” “The infrastructure in South Korea seems to be very vulnerable to the North’s cyberattacks. We have seen some cases in the banking systems … But what about other infrastructure like water supply or electricity? That would cause chaos,” Choi Kang, president of the Asan Institute for Policy Studies and one of the co-authors of the collaborative report written with policy think tank RAND Corporation, said at a press conference at the institute in Seoul, Aug 30. Click here to read…
Iran steps up underground uranium enrichment, IAEA report says
Iran is pressing ahead with its rollout of an upgrade to its advanced uranium enrichment programme, a report by the UN nuclear watchdog seen by Reuters on Aug 29 showed, even as the West awaits Iran’s response on salvaging its 2015 nuclear deal. The first of three cascades, or clusters, of advanced IR-6 centrifuges recently installed at the underground Fuel Enrichment Plant (FEP) at Natanz is now enriching, the report said, the latest underground site at which the advanced machines have come onstream. Diplomats say the IR-6 is its most advanced model, far more efficient than the first-generation IR-1 – the only one the deal lets it enrich with. For more than a year Iran has been using IR-6 centrifuges to enrich uranium to up to 60 per cent purity, close to weapons-grade, at an above-ground plant at Natanz. Recently it has expanded its enrichment with IR-6 machines at other sites. Last month a second IR-6 cascade at Fordow, a site buried inside a mountain, started enriching to up to 20 per cent. In the confidential report to UN member states, the watchdog, the International Atomic Energy Agency, wrote: “On 28 August 2022, the Agency verified at FEP that Iran was feeding UF6 enriched up to 2 per cent U-235 into the IR-6 cascade … for the production of UF6 enriched up to 5 per cent U-235.” Click here to read…
UN session on high seas biodiversity ends without agreement
United Nations member states ended two weeks of negotiations on Aug 26 without a treaty to protect biodiversity in the high seas, an agreement that would have addressed growing environmental and economic challenges. After 15 years, including four prior formal sessions, negotiators have yet to reach a legally binding text to address the multitude of issues facing international waters – a zone that encompasses almost half the planet. “Although we did make excellent progress, we still do need a little bit more time to progress towards the finish line,” said conference chair Rena Lee. It will now be up to the UN General Assembly to resume the fifth session at a date still to be determined. Many had hoped the session, which began on Aug 15 at the UN headquarters in New York, would be the last and yield a final text on “the conservation and sustainable use of marine biodiversity beyond national jurisdiction”, or BBNJ for short. One of the most sensitive issues in the text revolved around the sharing of possible profits from the development of genetic resources in international waters, where pharmaceutical, chemical and cosmetic companies hope to find miracle drugs, products or cures. Click here to read…
NPT review confab winds up without accord for the 2nd time
Russian opposition kept parties to a review conference for the Nuclear Nonproliferation Treaty from reaching agreement on a final statement, the second consecutive time the proceedings have wound up inconclusively. The start of the final day of the review conference here on Aug. 26 was delayed by four hours or so as diplomats strived to hammer out wording so an agreement could be reached. Arms disarmament sources said Russia would not budge on its insistence that all references to Ukraine be deleted from the final document. That led to a breakdown in negotiations and no final statement was agreed upon. At the previous review conference held seven years ago, no final statement was reached due to differences over a plan to make the Middle East a nuclear-free region. The NPT regime itself now faces questions about its viability with the second straight failure to issue a final statement. This year’s review conference was delayed by two years due to the novel coronavirus pandemic. The review conference at U.N. headquarters began on Aug. 1, with the first week devoted to speeches by representatives of the participating nations. Prime Minister Fumio Kishida became the first Japanese leader to address the review conference when he spoke Aug. 1 and vowed that Japan would serve as a “guardian” of the NPT. Click here to read…
Russia and US reveal status of nuclear talks
Contacts between Moscow and Washington on the topic of strategic arms reduction have not been interrupted, and the necessary information is being exchanged through the proper channels, Russian diplomat Andrey Belousov told reporters in Geneva on Aug 25. Earlier in the day, however, his State Department counterpart said that further discussions on the New START treaty were not taking place at the moment. “Interactions between Russia and the US as parties to the New START treaty have not been interrupted,” said Belousov, who is the deputy Russian representative to the UN and other international organizations in Geneva. “We expect that such work will continue until the end of the treaty, which, as you know, was extended until February 2026,” he added. Belousov was addressing a question about whether Russia’s recent decision to withdraw from the inspection regime could be interpreted as leaving the treaty. Earlier this month, Moscow pointed out that US sanctions created a disparity between the working conditions of American and Russian inspectors, which was not appropriate. “Now Russia finds itself in a difficult position that prevents inspections on US territory. Meanwhile, the American side is in no hurry to change the situation,” Belousov said. “We will be ready to consider the issue of resuming inspection activities as soon as appropriate conditions are created for this.” As an example, Belousov cited the US announcement that some of its strategic bombers and missile-carrying submarines have been converted and could no longer be used to deploy nuclear weapons. Click here to read…
Ukraine War Is Depleting U.S. Ammunition Stockpiles, Sparking Pentagon Concern
The war in Ukraine has depleted American stocks of some types of ammunition and the Pentagon has been slow to replenish its arsenal, sparking concerns among U.S. officials that American military readiness could be jeopardized by the shortage. The U.S. has during the past six months supplied Ukraine with 16 U.S. rocket launchers, known as Himars, thousands of guns, drones, missiles and other equipment. Much of that, including ammunition, has come directly from U.S. inventory, depleting stockpiles intended for unexpected threats, defense officials say. One of the most lethal weapons the Pentagon has sent are howitzers that fire high-explosive 155mm ammunition weighing about 100 pounds each and able to accurately hit targets dozens of miles away. As of Aug. 24, the U.S. military said it had provided Ukraine with up to 806,000 rounds of 155mm ammunition. The U.S. military has declined to say how many rounds it had at the start of the year. In recent weeks, the level of 155mm combat rounds in U.S. military storage have become “uncomfortably low,” one defense official said. The levels aren’t yet critical because the U.S. isn’t engaged in any major military conflict, the official added. “It is not at the level we would like to go into combat,” the defense official said. The U.S. military used a howitzer as recently as last week to strike at Iranian-backed groups in Syria, and the depletion of 155mm ammunition is increasingly concerning for a military that seeks to plan for any scenario. Click here to read…
US, Australia discuss possibility of B-21 bomber deal, ‘posing serious threats to China’
Following the AUKUS nuclear-powered submarine deal, a senior US official reportedly said recently that the US would consider providing Australia with B-21 bombers, the in-development successor to the B-2 stealth bomber that experts said on Aug 24 would enable Australia to launch long-range strikes against China, thus posing serious threats to China. US Air Force Secretary Frank Kendall made the remark at a media briefing after meeting with newly minted Royal Australian Air Force chief Air Marshal Robert Chipman on August 22 in Canberra, The Strategist, a website affiliated with the Australian Strategic Policy Institute, reported on Aug 23. “We are in what I consider to be a race for military technological superiority with the Chinese,” Kendall said. Chipman underscored the importance of AUKUS, “where we work together to collaboratively develop and research and engineer new technologies so that we can stay abreast and competitive.” The US has been for years reluctant to equip its allies with the most cutting-edge military technologies and weapons of strategic significance, including strategic bombers, nuclear-powered submarines and the F-22 stealth fighter jets, but a deal under the framework of AUKUS would see Australia receiving nuclear-powered submarines. Click here to read…
Health
China tech hub Shenzhen on alert as new Omicron subvariant surfaces
The southern Chinese tech hub of Shenzhen has closed subway stations, banned restaurant dining and locked down shopping malls to battle a fresh coronavirus outbreak caused by a number of Omicron subvariants. The outbreak began last week and most of the cases have been caused by the subvariant BF.15, the first time the strain has been detected in mainland China. But Jin Dong-yan, a virologist from the University of Hong Kong, said the subvariant was much the same as other Omicron strains and control measures would not vary. “[The subvariant] is not a concern, it is very similar to other BA.5 subvariants,” Jin said. Shenzhen health authorities reported 35 new cases on Aug 30, 24 of them with symptoms. There is no official total for the outbreak so far. Six of the new cases were close contacts of earlier confirmed cases, 14 were detected through the screening of high-risk groups, three were detected when they sought treatment from doctors, and 12 cases were picked up through community screening. There were also five imported positive cases, three of them symptomatic. Apart from BF.15, three other Omicron variants – BA.5.2, BA.5.2.1 and BA.2.2 – were found among the cases. Click here to read…
Koike: Tokyo to maintain policy of reporting all COVID-19 cases
Tokyo Governor Yuriko Koike said Aug. 25 that doctors in the capital will continue to report all new COVID-19 cases every day, despite the central government’s decision to ease that burden on medical workers. Koike told a regular COVID-19 monitoring meeting that the existing requirement of having doctors submit reports on all new cases is useful for grasping the overall infection situation and patients’ conditions in Tokyo. She said medical services can make good use of this information. “We will take care of each individual patient,” Koike added. Doctors in Japan are currently required to submit the names, contact numbers and other details of all patients diagnosed with COVID-19 to public health offices run by local governments. However, Prime Minister Fumio Kishida on Aug. 24 told reporters that doctors in hard-hit areas will have the option of only reporting COVID-19 cases involving elderly patients and people with pre-existing conditions. For the other lower-risk cases, medical staff can simply submit numbers based on age group or other information, Kishida said. The central government changed its policy after local officials said the reporting requirement places too heavy a burden on workers at medical institutions and public health offices who are already struggling amid the latest surge in infections. Ibaraki Governor Kazuhiko Oigawa welcomed the policy change, saying the lighter reporting requirement will “significantly alleviate the burden on front-line medical services.” Click here to read…
