Another Missed Opportunity in US-China Relations

by Mel Gurtov Posted onAugust 26, 2022

ANTIWAR.COM

The Washington Post reports that Xi Jinping personally asked President Biden to find a way to put off House Speaker Nancy Pelosi’s trip to Taiwan. According to the Post’s account, Biden explained to XI that the independent role of Congress made it impossible for him to stop her, even though US intelligence officials were (correctly) convinced that China would follow through on its warnings and make a forceful response.

China’s ambassador to the US said: "We had warned that if Pelosi made the visit, there would be very serious consequences. China would firmly and forcefully respond. To our regret, the United States chose not to listen." Pelosi’s trip was not written in stone: She said she would not go if Biden explicitly asked her not to.

So Biden had an out, but:

"In the end, Biden never spoke to Pelosi about her trip despite XI’s request . . . In an offhand comment, Biden told reporters shortly before Pelosi’s expected visit that military officials believed the trip was not a good idea."

Now just imagine a different scenario: Biden, concerned about China’s reaction to the visit, says to XI: "I will do my best to persuade her, out of respect for China’s sensitivity regarding Taiwan. But in return for her postponing her trip, I want your assurance that China’s military will stop air naval maneuvers that threaten Taiwan. And let’s plan on holding high-level military-to-military and diplomatic discussions to promote mutual security in the Taiwan Strait area." It was an engagement moment, prompted by the US national interest in competitive coexistence with China.

Would Biden "look weak" if he succeeded in stopping the trip? That’s the usual retort, but Biden could have responded to such a charge by pointing out that Taiwan’s security would not be undermined by the postponement, whereas Pelosi’s trip would force China to make a show of strength. Biden could readily point to the many ways his administration is supporting Taiwan: three recent military aid packages, Biden’s public comments upholding strong ties with Taiwan, and the array of security arrangements, such as the Quad (US-Japan-Australia-India), that are focused on any Chinese threat in the Asia Pacific.

A positive response to XI was an opportunity to put US-PRC relations onto a more positive track at a time when those relations are rapidly deteriorating. At the least, Biden’s proposal would have tested XI’s frequent assertions in support of improved relations.

One Chinese foreign policy expert recently wrote a lengthy defense of China’s Taiwan policy and a sharp critique of how the US is eroding the One China policy. Yet the expert ended not with a warning but with a suggestion that the two countries find common ground:

"On the Taiwan Strait issue, China and the United States need to further negotiate more practical and in-depth cooperation on confidence-building measures and crisis management at the strategic and technical levels, based on the two countries’ current crisis management mechanisms. The existing crisis management mechanisms of China and the United States mainly have three types of institutional arrangements: high-level interaction, dialogue and communication channels, and military rules of behavior.”

The article suggests that there are voices inside the policymaking apparatus in China that are open to dialogue even on Taiwan, the most important of Beijing’s core interests and ordinarily a subject closed to "external interference."

Tensions in the Taiwan Strait will probably cool down in coming weeks. But the Pelosi trip has created new circumstances that do not bode well for moderating Taiwan’s role in US-China relations. More official US visits to Taiwan are in the offing, and in Congress the mood favors bipartisan efforts to upgrade Taiwan’s status.

Meantime, the Chinese military will continue testing Taiwan’s defenses, breaking with previous patterns that had avoided directly challenging Taiwan’s territorial waters and air space. As a Chinese military adviser said the other day, the strategy is to "close the door and beat the dog."

Spiraling confrontations will end in open conflict unless Washington and Beijing seize diminishing opportunities for engagement.

Mel Gurtov, syndicated by PeaceVoice, is Professor Emeritus of Political Science at Portland State University and blogs at In the Human Interest.

DURING SANCTIONS ON RUSSIA

South Korea signs $2.25 billion deal with Russia nuclear company

THE ASSOCIATED PRESS

August 26, 2022 

Nuclear power plants, Kori 1, right, and Shin Kori 2 are seen in Ulsan, South Korea, Feb. 5, 2013. (AP Photo)

SEOUL--South Korea landed a 3 trillion won ($2.25 billion) contract with a Russian state-run nuclear energy company to provide components and construct a turbine building for Egypt’s first nuclear power plant, officials said Thursday.

The South Koreans hailed the deal as a triumph for their nuclear power industry, although it made for awkward optics as their American allies push an economic pressure campaign to isolate Russia over its war on Ukraine.

South Korean officials said the United States was consulted in advance about the deal and that the technologies being supplied by Seoul for the project would not clash with international sanctions against Russia.

According to South Korea’s presidential office and trade ministry, the contract between state-run Korea Hydro and Nuclear Power and ASE requires the South Koreans to provide certain materials and equipment and construct the turbine building of the plant being built in Dabaa. The Mediterranean coastal town is located about 130 kilometers northwest of Cairo.

ASE is a subsidiary of Rosatom, a state-owned Russian nuclear conglomerate.

A senior aide of South Korean President Yoon Suk Yeol said the negotiations were slowed by “unexpected variables,” mainly Russia’s war on Ukraine and the U.S.-led sanctions campaign against Moscow over its aggression.

Choi Sang-mok, Yoon’s senior secretary for economic affairs, said South Korea provided an explanation to the United States in advance about its plans to participate in the Dabaa project and that the allies will maintain close consultation as the work proceeds. As part of U.S.-led sanctions against Moscow, South Korea has ended transactions with Russia’s central bank and sovereign wealth funds and banned exports of strategic materials to Russia.

Neither Choi nor officials from South Korea’s trade ministry elaborated on how the crisis in Ukraine and the sanctions on Moscow affected the negotiations between Korea Hydro and Nuclear Power and ASE, which has a contract with Egypt to build four 1,200 megawatt reactors.

Choi stressed that South Korea’s involvement in the project would not clash with international sanctions against Russia.

“Any kind of issue can be met by various uncertainties, but those have all been resolved as of now, and that’s why we were able to finalize the agreement,” he said.

Yoon’s office expressed hope that South Korea’s participation in the Dabaa project would help the country gain a foothold in future nuclear projects across Africa and also improve its chances to export to countries such as the Czech Republic, Poland and Saudi Arabia.

Korea Hydro and Nuclear Power had been engaging in negotiations with ASE as the preferred bidder for the turbine-related project since December, before Russia’s invasion of Ukraine in late February.

Go Myong-hyun, a senior analyst at Seoul’s Asan Institute for Policy Studies, said the deal wouldn’t have been possible without an export approval by the United States as the components provided by Korea Hydro and Nuclear Power likely include U.S.-originated technology.

Current sanctions against Moscow also do not include specific restrictions related to nuclear energy and the Biden administration would have no interest in disrupting a crucial project for Egypt, which it sees as a key partner in the region, Go said.

While South Korea’s involvement in the Dabaa project wouldn’t immediately be a problem between the allies if the Americans signed off on it, things could change depending on how Russia’s war on Ukraine goes and whether Washington expands export controls against Moscow, Go said.

Yoon’s office said the participation in the Dabaa project is the country’s biggest export of nuclear power technology since 2009, when a South Korean-led consortium won a $20 billion contract to build nuclear power reactors in the United Arab Emirates.

Yoon, a conservative who took office in May, has pledged to boost South Korean exports of nuclear power technology, which he insists were dented under the policies of his liberal predecessor, Moon Jae-in, who sought to reduce the country’s domestic dependence on nuclear energy.

Yoon in a statement on Facebook said the deal reaffirms South Korea’s “advanced technology and safeness and strong supply chains” in the nuclear power industry. His government has set a goal of exporting 10 nuclear power reactors by 2030.

Vietnam court upholds 9-year prison sentence for journalist

A Vietnamese court has rejected an appeal by prominent journalist and democracy activist Pham Doan Trang, who had been sentenced to nine years in prison on charges of “propaganda against the state,” state media said

ByThe Associated Press

August 25, 2022, 

HANOI, Vietnam -- A Vietnamese court has rejected an appeal by prominent journalist and democracy activist Pham Doan Trang, who had been sentenced to nine years in prison on charges of “propaganda against the state,” state media said.

The Hanoi Supreme Court upheld the sentence that was handed down to the 44-year-old in December, Tuoi Tre newspaper reported. During the court hearing on Thursday, the judge said Trang’s activities “brought danger to the society,” “violated the stability" of the government and that her sentence was justified, the newspaper said.

Trang, who denied the charges, is known for her outspokenness on topics including gender equality, human rights and democracy.

For her activism, Trang was granted the 2022 Secretary of State’s International Women of Courage Award.

“Trang’s continued detention is the latest instance in an alarming pattern of arrests and sentencing of individuals in Vietnam for peacefully expressing their opinions,” said Ned Price, spokesperson for the U.S State Department.

“We call for the Vietnamese government to release Trang and to allow all individuals in Vietnam to exercise their right to freedom of expression, without fear of retaliation, consistent with the human rights provisions in Vietnam’s constitution and Vietnam’s international obligations and commitments,” Price said in a statement.

What a waste! Japan’s food sustainability challenge

YUSAKU YOSHIKAWA

Imported food has an environmental cost. And a nationwide

effort is needed to drastically cut the amount discarded.

Beyond the environmental cost, disposing of food waste amounts to a massive economic burden on the Japanese public sector (The Asahi Shimbun via Getty Images)

Published 26 Jul 2022 Japan
Sustainability

Japan is famous for its “mottainai” culture, often translated as “what a waste!”, which encourages people to reduce what is discarded from their everyday lives. At the same time, Japan’s government, as well as the country’s private sector and citizens, are struggling to reduce the most ubiquitous wastage – food loss and waste.

In the 2019 financial year, the Ministry of Agriculture, Forestry and Fisheries (MAFF) and the Ministry of the Environment (MOE) reported that Japan produced 5.7 million tons of “food loss and waste”. It was produced either by households (3.1 million tons) or businesses (2.6 million tons) and amounts to 45 kilograms per citizen per year. The estimate showed that the total amount decreased 5.2 per cent from the previous fiscal year and was down about 12 per cent compared to seven years ago.
To discard food is to waste energy – both used at the production and waste stage.

However, such statistics need to be put in proper context. Japan’s food waste from households is estimated by applying valid results answered by municipalities to the whole country. The MOE reported that municipalities with smaller populations often skip this time-consuming process, meaning that the current statistics may focus too heavily on the results from big cities.

The Sustainable Development Goals adopted at the 2015 United Nations Summit propose to halve global food waste per capita by 2030 (SDG 12.3). In support of this ambition, Japan aims to halve its food loss and waste by 2030 from the 5.5 million tonnes recorded in 2000. This target was stipulated in the country’s 2019 food recycling law. While food loss and waste seems to be decreasing in the country, there is still a long way to go to achieve this goal.

In addition to the global consensus, the country has its own motivation to tackle the challenge. Incinerating food waste amounts to a massive economic burden on the Japanese public sector, with municipalities spending millions every year to process non-industrial waste, including food scraps.

Indeed, to discard food is to waste energy – both used at the production and waste stage. Dumped food that contains water emits carbon dioxide during the incineration process. Considering the waste as biomass, MAFF promotes recycling it through methane fermentation.

Imported food tends to waste more energy than domestically produced food 

(Stuart Rankin/Flickr)

Japan’s low calorie-based food self-sufficiency rate is another incentive. With transportation, imported food tends to waste more energy than domestically produced food. MAFF’s food mileage indicator – which measures the amount of imported food multiplied by the distance from where the food is produced – underlines this tendency. Japan’s food mileage is considerably higher than other countries due to Japan’s geographic remoteness.

To meet the Sustainable Development Goals, the Japanese government established two acts regarding food loss and waste: the Food Recycling Law in 2000 targeting business operators and the Act on Promotion of Food Loss and Waste Reduction in 2019. Regarding “food loss reduction as a national movement”, the latter encourages Japanese citizens to take sustainable actions.

Based on these legal frameworks, the Japanese government started reviewing the country’s commercial practices to reduce food loss and waste. One of the initiatives was to extend the country’s notoriously strict best-before date so that retailers can sell food for a longer period.
There are signs that Japanese consumers are becoming more conscious of food loss and waste.

Another initiative was to review the country’s so-called “one-third rule”. It required wholesalers to discard products that failed to be delivered to retailers within the first third of the period between the production and best-before dates. The government’s proposal was to extend this deadline until the first half of the period.

In the country’s private sector, advanced technologies have allowed online platforms to innovate. A website named Kuradashi sells food items that have almost reached their best-before date at low prices. Convenience chain store Lawson has introduced an AI-based food stock management system that reduces food waste by minimising products going unsold.

Consumer-oriented grassroots efforts to reduce food waste in the country have followed more conventional approaches. Food banks and community fridges offering donated vegetables for free to those in need are gaining popularity. The economic consequences of the Covid-19 pandemic have increased demand for the food distribution.

There are signs that Japanese consumers are becoming more conscious of food loss and waste. According to the Japan Finance Corporation survey, nearly 60 per cent of consumers take actions to reduce food waste, such as making plans for grocery shopping rather than impulse buying. Generational differences also appear to explain this shift in consumer consciousness. The Consumer Affairs Agency found that more than 90 per cent of consumers over 70 years of age are familiar with a concept of food loss and waste, but it remains around 65 per cent for young consumers in their 20s.

Efforts to reduce food waste and loss in Japan are gaining momentum. Nonetheless, the country requires a further commitment – from government, the private sector, and individual citizens – to meet a global goal of halving food waste by 2030.

Once convicted of bribery, Brazil's Lula vows to punish corruption



Trailing Lula in the polls, incumbent Bolsonaro, known for his brash rhetoric, is now counting on a more moderate image and a possible economic upturn to win, his communications minister says.

Brazil's general elections are scheduled for October 2. (AP)

Former leftist president Luiz Inacio Lula da Silva, who spent 19 months in prison on bribery convictions, has promised to crack down on corruption if elected in Brazil's October election.

Lula said on Thursday he would create new mechanisms to investigate anyone in his government accused of corruption and punish them if proven guilty.

"Whoever makes a mistake will pay, you can be sure of that," he said in an interview with TV Globo's Jornal Nacional, a newscast with the largest audience in Brazil.

Lula, who led Brazil from 2003 to 2010, was jailed in the country's biggest corruption investigation that put dozens of politicians and businessmen in prison for graft and bribes. His convictions were later annulled allowing him to run again for office.

"I want to return to do things better this time," he said, admitting mistakes by his handpicked Workers Party (PT) successor Dilma Rousseff, who was impeached in the midst of a recession.

Lula has a double-digit lead in opinion polls over his far-right rival, President Jair Bolsonaro, in Brazil's most polarised race in decades.

Lula said Brazil's powerhouse farm sector had done well during his two terms as president when Brazil enjoyed a commodity boom. Bolsonaro, who is backed by the farm lobby, has eased environmental rules and frozen indigenous land claims.

If some farmers were against him, Lula said, it is because he opposes the destruction of the forest, but "serious" agricultural exporters were against illegal deforestation.

"What we need is to correctly tap our biodiversity and generate employment in the Amazon," he said.

READ MORE: Brazil to investigate lenders in credit card 'fraud' case

A 'moderate' Bolsonaro

Bolsonaro, who is not exactly known for mild rhetoric, is now counting on a more moderate image and economic upturn to win, his communications minister said on Thursday.

Bolsonaro's polling is bruised by a weak economy, his controversial handling of Covid-19 and what critics call his extremism. Lula leads Bolsonaro by 47 percent to 32 percent, according to the latest poll from the Datafolha institute.

Ten other contenders are polling in single digits.

But his charismatic, cool-tempered communications chief, Fabio Faria, said he is confident a critical mass of Brazilians will ultimately pick Bolsonaro over four more years of the PT.

Surging onto the national scene in the wake of that triple crisis, Bolsonaro won the presidency in 2018 with broad support, taking 55 percent of the vote.

And though some of those voters are disillusioned today, Bolsonaro's camp is confident the incumbent will win them back with a softer tone and an improving economy, Faria told the AFP news agency in an interview at the presidential palace in Brasilia.

Known for downplaying Covid-19 as a "little flu," urging Brazilians to stop being "sissies" about the pandemic, and attacking institutions such as the Superior Electoral Tribunal, whose new chief he once called a "scumbag," Bolsonaro has been dialling his rhetoric down a notch, Faria said.

"The president's more moderate tone speaks to voters who had turned against him because they felt the president's style could have been more moderate," said the telegenic 44-year-old brought in to give the administration a communications makeover in June 2020.

As evidence of Bolsonaro's softer touch, he offered the incumbent's prime-time interview on Monday on TV Globo, the biggest broadcaster in the country of 213 million people.

Despite being a fierce critic of Globo, Bolsonaro was less aggressive than usual during the interview.

But he drew criticism for casting doubt on whether he would accept the election result if he loses.

Bolsonaro said he would respect the outcome "as long as the elections are clean and transparent."

Like many countries, Brazil is suffering from surging prices, fuelled by the effects of the pandemic and Russia's offensive in Ukraine.

But prices posted a record drop of 0.68 percent in July, thanks partly to government fuel tax cuts.

Bolsonaro has also passed a massive social spending programme that recently began making welfare payments of around $110 a month to some 20 million families.

READ MORE: Brazil police raid Bolsonaro allies reportedly over 'coup' texts

Heat or eat? Winter protests loom as energy poverty sweeps Europe

A view shows the village of Tardinghen with the snow-covered "Cap Blanc Nez" cliff in the background as winter weather with snow and cold temperatures hits northern France, February 9, 2021. REUTERS/Pascal Rossignol

Some economists say the immediate need to keep Europe's electricity and heating running should trump medium-to-long term goals to adopt more clean energy and curb climate change, especially heading into the colder winter months

Joanna Gill, Reuters News

August 26, 2022

ECONOMYINFLATIONEUROPEENERGY

BRUSSELS - Europe is facing a major social test ahead of winter, as it juggles rising discontent, fuelled by soaring energy prices, and pressure to meet climate goals as the Ukraine conflict drags on.

British grassroots group "Don't Pay UK" is calling for people to boycott energy bills from Oct. 1, while the trade union-backed "Enough is Enough" campaign kicked off a series of rallies and actions in mid-August calling for pay rises, rent caps, cheaper energy and food, and taxes on the rich.

A worsening cost-of-living crisis across Europe has already seen workers in France, Spain and Belgium go out on strike in the public transport, health and aviation sectors, pushing for higher wages to help them cope with rocketing inflation.

Meanwhile, the European Union has committed to reducing its Russian fossil-fuel imports by two-thirds and cutting gas demand by 15% by year's end. Before the Ukraine war, it had already set a target to become the first carbon-neutral continent by 2050.

The squeeze on oil and gas imports from Russia, after its February invasion of Ukraine, has left countries scrambling to plug the energy gap through a mix of energy efficiency measures, firing up old coal plants and boosting renewable energy projects.

Some economists say the immediate need to keep Europe's electricity and heating running should trump medium-to-long term goals to adopt more clean energy and curb climate change, especially heading into the colder winter months.

"Nobody wants to see blackouts," said Simone Tagliapietra, senior fellow at Bruegel, a Brussels-based economic think-tank, adding that all options must be considered to avoid that scenario, "including polluting ones".

But climate campaigners want to see governments turn their back on fossil fuels entirely, invest more heavily in efficiency measures and add more renewables to their energy mix.

Whichever route they choose, the coming winter is set to be plagued by social unrest, warned Naomi Hossain, a professor of development politics at the American University in Washington D.C. who is studying energy, fuel and food riots.

At a conservative estimate, 10,000 such protests have taken place worldwide since last November, she told the Thomson Reuters Foundation - with more expected in an uncertain future.

"If I were a politician, I'd be really worried," she added.

ENERGY SAVINGS

Faced with the threat of power outages, EU countries have introduced a raft of energy efficiency measures to help slash power bills, as annual inflation hits a record 8.9%, with about 4 percentage points of that due to more expensive energy.

Spanish citizens have been feeling the heat during a sizzling summer, after the government ordered air-conditioning to be set no cooler than 27 degrees Celsius (80.6F) in public buildings, hotels, restaurants and shopping centres.

France, meanwhile, is focusing on "energy sobriety" with measures to be launched by the end of summer including dimming illuminated public billboards overnight, and fining shops that leave doors open while using heating or cooling.

Germany, the EU state most dependent on Russian fuels, has announced heating limits of 19C (66.2F) in the winter for public buildings and colder public pools, while cities like Augsburg are contemplating which traffic lights to turn off.

Such efforts form part of a wider EU drive to slash gas demand as the bloc races to shore up supplies ahead of winter, amid fears Russia will further restrict gas deliveries in response to EU financial sanctions.

TOUGH CHOICES

But energy savings have yet to ease the pressure of surging utility bills - and protests have been planned from Madrid to London for the autumn in response to the cost of living crisis.

When people start complaining en masse about their inability to pay for their basic needs - and must choose between heating or eating - it can overturn governments, said Hossain.

"Often an energy protest turns into a political protest, like in Sri Lanka," where an uprising against an economic crisis led to the unseating of the president in July, she noted.

Such unrest can also see far right or left-wing parties "capturing the political energy from discontent", as centrists baulk at price controls or expanding public services, she added.

Cassie Sutherland of C40 Cities, a network of major cities pushing for swift action on climate change, said measures were required to cushion the impact of energy inflation while also cutting emissions fast enough to limit global warming to 1.5C, the lower goal set by governments in the 2015 Paris Agreement.

She called for a policy focus on the "three Rs" of "relief, retrofit and renewables": financial support for the poor, upgrading buildings to save energy starting with social housing, and scaling up investment in wind, solar and other renewables.

C40 Cities is pushing the European Commission to commit to retrofitting 6 million homes in the next year, which would boost the current housing renovation rate from 1% to 3%.

European consumer organisation BEUC agrees that countries should roll out ambitious retrofit plans to protect households from energy price volatility.

"The cheapest energy is the energy we don’t consume," said BEUC Director General Monique Goyens. "Given recent developments, we can no longer afford to wait."

FOSSIL-FREE FUTURE?

As fears rise over energy insecurity, Germany, Italy, Austria and the Netherlands have signalled they will allow shuttered coal-fired plants to re-open or prolong operations beyond planned closure dates.

Pragmatism is driving decisions to revive polluting power plants, said Tagliapietra, adding that without stop-gap measures the economic and social consequences could be "devastating".

But green advocates argue that relying on fossil fuels to keep the power on, even in the short term, will worsen the energy price crunch and jeopardise emissions reductions.

"It leads to continued problems with fluctuation in prices," said Sutherland, noting that high energy costs are hitting vulnerable households the hardest.

And sticking with fossil fuels is also likely to increase carbon emissions, putting climate targets at risk, she added.

A new report from the Climate Crisis Advisory Group (CCAG), a panel of 16 international climate experts, called on governments to use the energy crisis to slash greenhouse gas emissions "deeply and rapidly" and accelerate the switch to renewables.

"If we push in that direction, we are creating a safer future," said CCAG Chair David King.

He admitted that new solar and wind projects would take several years to come online - and would not come in time to help address the energy shortfall this winter.

Meanwhile, the financial pain being felt by voters spells trouble for Europe's political establishment, said Hossain, urging governments to listen to what is happening on the streets and respond with measures to ease the pain.

"Until people feel like they're being heard on energy needs, I don't see any reason for them to stop protesting," she added.

(Reporting by Joanna Gill; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Exclusive-Chinese defense firm has taken over lifting Venezuelan oil for debt offset -sources

By Chen Aizhu and Marianna Parraga - Yesterday 


An oil tanker is docked while oil is pumped into it at the ships terminal of PDVSA's Jose Antonio Anzoategui industrial complex in the state of Anzoategui

© Reuters/Carlos Garcia Rawlins

By Chen Aizhu and Marianna Parraga

SINGAPORE/HOUSTON (Reuters) - China has entrusted a defense-focused state firm to ship millions of barrels of Venezuelan oil despite U.S. sanctions, part of a deal to offset Caracas' billions of dollars of debt to Beijing, according to three sources and tanker tracking data.



China National Petroleum Corp (CNPC) stopped carrying Venezuelan oil in August 2019 after Washington tightened sanctions on the South American exporter. But it continued to find its way to China via traders who rebranded the fuel as Malaysian, Reuters has reported.

Since November 2020 China Aerospace Science and Industry Corp (CASIC) has been carrying Venezuelan crude on three tankers it acquired that year from PetroChina, CNPC's listed vehicle, the sources said. The oil is stored on a tank farm it also took over from PetroChina, the sources said.

The three CASIC tankers load in Venezuela with their transponders active, allowing third-party tracking, Eikon data showed.

The firm has far taken 13 cargoes carrying a total of about 25 million barrels of oil, including two vessels due to arrive in China in September, according to the loading schedules of Venezuelan state oil firm PDVSA, and tanker tracking data from Refinitiv and Vortexa Analytics.

The 13 shipments, worth about $1.5 billion at formula prices for Venezuela’s flagship-grade Merey crude, were declared "crude oil" at Chinese customs, without specifying origin, said one of the sources.

"These shipments are strictly under a government mandate, where CASIC was designated to move the oil as payment to offset Venezuelan debt (to China)," the person said.

All three sources spoke on condition of anonymity due to the sensitivity of the matter.

Media departments at CASIC, China's Ministry of Foreign Affairs and the General Administration of Chinese Customs did not respond to requests for comment.

A CNPC representative declined to comment.

A second source said that although part of each cargo pays down debt, other goods, such as COVID-19 vaccines, are also being subtracted from the crude sales.

"All money from proceeds stays in China. Venezuela’s foreign affairs ministry is in charge of conciliation and accountability," said this person.

At roughly 42,000 barrels a day, these shipments have increased total Venezuelan oil to China to about 420,000 bpd between January and July this year, equivalent to about 3% of China's consumption, according to Emma Li, analyst with Vortexa, which tracks such flows.

Related video: Gravitas: Can the US cut off China's oil supply during war?

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Officially, China has not reported any crude oil imports from Venezuela since October 2019.

Venezuela's debt dates to 2007, the era of former President Hugo Chavez, when the country borrowed more than $50 billion from Beijing under loan-for-oil deals.

Reuters could not determine how much of Venezuela's debt remains outstanding. In August 2020, Beijing agreed to extend a grace period for $19 billion of the loans, Reuters reported, but China and Venezuela have not said whether that period has ended.

GREEN CHANNEL

China, the world's top oil buyer, has over the past few years benefited from cheaper oil supplies from Iran and Venezuela, and has in recent months ramped up imports from Russia amid soured relations with Washington.

The country manages its crude imports under a rigid quota system for qualified refiners. The CASIC shipments are an exception, with no quota, said the first source.

"They enter China under a special green channel," the person said.

PDVSA and Venezuela’s oil and foreign affairs ministries did not reply to requests for comment.

The U.S. Treasury Department, which enforces sanctions, declined to comment.

CASIC, which started in 1956 as a defense research arm that developed China's first missile, has over the decades expanded into a defense conglomerate specialising in space technology.

It was picked for the oil job because it is politically powerful and has limited global financial exposure, making it less vulnerable to sanctions, said the first source.

The company has since 2015 worked with state oil giants, including CNPC and Sinopec, in petroleum equipment manufacturing, digital technology and overseas projects, according to company websites.

TRANSFER OF TANKERS, STORAGE

The CASIC Venezuelan oil shipments are transported by three Very Large Crude Carriers - Xingye, Yongle and Thousand Sunny-, according PDVSA's loading schedules and ship tracking by Vortexa and Refinitiv.

CASIC took over the vessels from PetroChina in 2020, shortly after PetroChina took control of them after a legal dispute with PDVSA over assets involved in a joint venture bankruptcy, two sources told Reuters. PetroChina told Reuters in 2020 that it had transferred the vessels, but declined to say to whom.

PetroChina also transferred to CASIC a tank farm based in the eastern coastal city of Ningbo, where the shipments are delivered, the sources added.

All Venezuelan oil cargoes received by CASIC were originally picked up at the Jose port by Cirrostrati Technology Co LTD, a firm with no track record in oil trading, acting as intermediary for only these cargoes, according to PDVSA schedules.

Cirrostrati could not be reached for comment. Reuters could not find the company's registration or incorporation information, or independently determine other links between Cirrostrati and CASIC.

The oil shipped by CASIC is mostly consumed by China's independent refiners, which have increasingly relied on cheaper crude from Iran and Venezuela and more recently Russia to maintain operations.

One independent refiner said they were offered the oil at $8 per barrel below benchmark Brent crude ex-storage basis, versus a discount of more than $30 for similar-quality crude marketed as a Malaysian export.

"It is more costly, but it's good that the government is now taking charge of these Venezuelan supplies, which saves us lots of logistics headaches and sanction-related risks," said an executive with the refiner.

(Reporting by Chen Aizhu in Singapore and Marianna Parraga in Houston. Additional reporting by Daphne Psaledakis in Washington Vivian Sequera in Caracas, Eduardo Baptista in Beijing, and the Beijing newsroom. Editing by Gerry Doyle)

 

China’s navy begins to erase imaginary Taiwan Strait median line

An established Chinese naval presence close to Taiwan’s territorial waters would stretch Taiwan’s military and make any Chinese blockade or invasion much easier, Taiwanese officials warn. — AFP pic

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Friday, 26 Aug 2022 12:10 PM MYT

TAIPEI, Aug 26 — 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 modernised navy asserts its strength.

China has never officially recognised the line that a US general devised in 1954 at the height of Cold War hostility between Communist China and US-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 US 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.

Other officials and security analysts warn that it would be difficult for the island to defend the line without raising the risk of dangerous escalation.

Projecting power

Taiwan would have to react militarily if Chinese forces entered its 12 nautical miles of territorial waters, the Taiwan official said, but apart from that, there was no immediate plan to give the military or coastguard more authority to respond.

President Tsai Ing-wen has repeatedly said Taiwan will neither provoke nor escalate conflict.

It is questionable whether international support for Taiwan is sufficient to deter China from patrolling into Taiwan’s side of one of the world’s busiest shipping lanes, or if Taiwan’s friends would help it maintain the line.

Ships of the US and other Western navies sail through the strait to highlight what they maintain is its international status, not to strictly enforce the imaginary line that has no legal standing.

The Taiwan Strait is some 180 km (110 miles) wide and at its narrowest, the median line is about 40 km (25 miles) from Taiwan’s waters.

An established Chinese naval presence close to Taiwan’s territorial waters would stretch Taiwan’s military and make any Chinese blockade or invasion much easier, Taiwanese officials warn.

Ultimately, a redundant median line would also usher in further challenge to the long-standing US dominance of China’s near seas — the so-called first island chain — and help China to project its power into the Pacific.

The median line has no features marking it. For years, China tacitly acknowledged it but in 2020 a foreign ministry spokesman stated it “did not exist”. That was echoed by its defence ministry and Taiwan Affairs Council.

In recent days, the two sides’ frigates and destroyers have played cat-and-mouse, with Chinese ships attempting to manoeuvre around Taiwanese patrols to cross the line.

Chinese fighter jets have also crossed the line this month, albeit only going a short way over, something China’s air force has only done rarely in the past.

China’s defence ministry did not respond to requests for comment.

‘Political artefact’

Chieh Chung, a security analyst from the National Policy Foundation think tank in Taipei, said the “overthrowing” of the median line consensus had increased the risk of accidental conflict.

Chieh said the codes of engagement for Taiwan’s coastguard and military should be reviewed to give them more authority and legal protection in reacting to increasingly complex challenges from Chinese forces.

Within weeks, US warships are expected to sail through the Taiwan Strait, underscoring what they see as its status as an international waterway, to the inevitable annoyance of China, which claims sovereignty and other rights over the strait.

But the US ships are not expected to challenge Chinese vessels on either side of the median line.

Three US officials, speaking on the condition of anonymity, said that Chinese crossings of the median line had little tactical importance.

“It’s an imaginary line that’s symbolic and it’s about poking Taiwan in the eye a bit,” one of the officials told Reuters.

The United States saw little need to uphold the status of the line or push back against China’s moves across it, they said.

Christopher Twomey, a scholar at the US Naval Postgraduate School in California, said he believed the US Navy viewed the line as a “political artefact” rather than a legal one.

Speaking in a private capacity, Twomey said the dangers should not be overstated and the recognition and use of the strait as an international waterway would continue. He described Chinese activities as “political statements”.

“Mere Chinese presence on either side of arbitrary lines within that area is not likely to lead to any operational response,” Twomey said. — Reuters

Japan's wage growth to lag inflation over next 12 months: Reuters poll


Worker cycles near a factory at the Keihin industrial zone in Kawasaki

By Daniel Leussink

Thu, August 25, 2022 

TOKYO (Reuters) - Japanese wages are unlikely to grow as much as nationwide consumer prices over the coming year, almost 80% of economists said in a Reuters poll, which would be bad news for an economy that has hardly seen any real wage growth for more than two decades.

In a sign of further gloom, the world's third-largest economy will likely expand at a much weaker pace than previously thought this quarter, the poll showed, as it braces for fallout from a slowdown in the United States, China and Europe.

The prospect that nominal wage growth will lag price increases raises the risk that households could tighten their purse strings, further hurting the economy.

"It's certain that price growth will be greater (than that of wages) over the coming 12 months," said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.

"While wages are rising, it's hard to expect them to increase more than CPI."

Japan's average wages have hardly risen since the early 1990s and were the lowest among Group of Seven (G7) economies last year, according to OECD data.

That is despite some signs wages are picking up as a rapidly ageing population aggravates labour shortages, and labour unions could step up demands for increasingly big pay rises next year.

Japan's nominal wages were highly unlikely to outgrow the overall year-on-year inflation rate over the coming 12 months, nine of 26 economists said.

Of the remaining 17 economists, another 11 said it was unlikely that nominal wages would outpace inflation over the same period. While six other economists expected consumer prices to increase faster than wages over the next year, none selected "highly likely".

The nationwide overall inflation rate last stood at a near eight-year high of 2.6% in July, and has stayed above 2% for four consecutive months through July, buoyed by rises in the price of fuel and raw materials globally.

Whether bigger wage rises will catch on as a wider trend will ultimately hinge on what tack the country's numerous small and mid-sized firms take, said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

"The wage-raising momentum suffers from the sharp increases in raw material prices and so on," he said.

LOWER GROWTH

Analysts slashed their estimates for economic growth on expectations of a gloomier global outlook.

Japan's economy was now projected to expand an annualised 2.0% in the three months through September, the median forecast of 38 economists in the Aug. 15-24 poll showed, lower than 3.1% estimated in a July survey.

One economist estimated growth would grind to a halt this quarter.

Heightened fears of a global slowdown, driven in part by ramifications in Europe of Russia's war in Ukraine, are causing analysts to become more downbeat about the outlook for Japan's economy as well.

The economy grew an annualised 2.2% in April-June, the government said this month, coming in below median market forecasts for a 2.5% gain.

Economists in the poll slightly upgraded their forecast for the final quarter of the year, predicting the economy to expand another 2.2% on an annualised basis versus 2.0% growth expected in last month's poll.

The poll also found core consumer prices, which exclude volatile fresh food prices, would rise 2.3% this fiscal year through next March, and 1.1% in fiscal 2023.

The economy will grow 1.7% this fiscal year, followed by an estimated 1.3% growth in fiscal 2023, the poll showed, both down from higher forecasts in July.

(For other stories from the Reuters global economic poll:)

(Reporting by Daniel Leussink; Additional reporting by Kantaro Komiya; Polling by Arsh Mogre and Anant Chandak; Editing by Ana Nicolaci da Costa)

Search for trapped Mexico miners could take almost a year - relatives

Published
1 hour ago

IMAGE SOURCE,REUTERS

Image caption,

Relatives have expressed frustration and anger at the slow pace of the rescue effort

The search for 10 Mexican miners trapped in a flooded colliery could take between six and 11 months, relatives say they have been told.

"We can't accept this," Juani Cabriales, the sister of one of the workers, told AFP after being briefed by the government on its latest plan.

On 3 August, a tunnel wall collapsed at the Pinabete mine, northern Coahuila state, triggering flooding.

High water levels in shafts 60m (200ft) deep are delaying the rescue operation.

Five miners have managed to escape following the incident, but there has been no contact with their 10 trapped colleagues.

"They [the government] tell us that it would take between six and 11 months to get them out," Ms Cabriales told the AFP news agency.

Erika Escobedo, the wife of one of the trapped miners, gave the same details, saying that the relatives had rejected the government's rescue plan to find the miners.

"We are very sad... I'm thinking about how to break the news to my children," she told Reuters.

The government has not publicly revealed any details of its proposed plan.

The rescue operation has already been hampered by a number of setbacks.

About two weeks ago, a special underwater drone carrying a camera was lowered into one of the shafts.

The miners' relatives had hoped the drone would provide them with long-awaited news on their loved ones - but the drone failed to reach the depth at which the miners are believed to have become trapped.

The relatives have also expressed frustration and anger at the slow pace of the rescue effort and at what they said was a lack of communication.

Priests in the area have been saying prayers for the miners' rescue.