Renault-Nissan Alliance overcame crisis, redefined collaboration – Asia Times

Nissan and Honda announced integration late. The Renault-Nissan Alliance, which had existed since 1999, is often described as having come to an end by the adjacent of 2023. Popular structures, such as the simultaneously created purchasing organization, are dissolved. But, the relationship between the two companies continues ( along with the third mate, Mitsubishi ) in the form of creative projects.

How does we comprehend the alliance’s collapse while maintaining a relationship that is sustained through jobs? To explain this phenomenon, it is necessary to examine the entire dynamics of the partnership, from its roots to the problems it has undergone.

The Renault-Nissan proper empire, forged in 1999, has been a subject of extensive research, especially as it faced a big issue in 2018. The partnership’s base was shaken by the arrests of Alliance CEO Carlos Ghosn and Nissan committee member Greg Kelly on charges of tax fraud and misuse of commercial property.

However, the alliance endured, with Mitsubishi joining as a second mate. Understanding its direction – its operations pre-crisis, the tumult of the problems, and its survival – required a new lens. Through conducting extensive interviews with key partners in France and Japan, which led to the publication of our study in the journal M@n@gement.

The bases of the Renault-Nissan empire

First dubbed” The Alliance” by its members, the Renault-Nissan relationship can be assessed through proper alliance concept, which emphasises three core rules:

  • Complementarity: Alliances thrive when colleagues possess comparable features.
  • Interpersonal investment: Trust and cooperation deepen over period, fostering a smooth working relationship.
  • Learning interactions: As companies learn from each other, their mutual dependence diminishes, usually limiting the group’s duration.

Yet, the Renault-Nissan ally defied these standards. There were geographic complementarities when Renault first came out, with Nissan’s reputation in America and Asia competing favorably with Renault’s power in Europe. Operatically, Renault demonstrated exceptional project supervision but lagged in terms of quality control, while Nissan excelled in quality output but struggled with charge and project management.

However, these synergies were overshadowed by the reality that Nissan was on the brink of bankruptcy, burdened with$ 20&nbsp, billion in debt. It was Renault, no Nissan’s preferred companion Daimler-Benz, that took the risk. Complementarity is an exaggerated notion because the two businesses had little in common at the beginning.

The companies had plenty of time to learn from one another as the empire approached its 20-year milestone. However, the 2018 problems revealed a remarkable fragility. Decades of cooperation virtually instantly vanished, posing questions about the quality of their interpersonal funds. One top professional reflected:” It remains a problem for me: why are these companies but delicate”?

The Renault-Nissan strong

To fully realize the Renault-Nissan strong, we turned to other philosophical systems. We covered topics ranging from project management and personal connection theory.

While business alliances differ from individual associations, both are, ostensibly, forms of relations. Interpersonal theories show two important conclusions:

  • Relationships are ongoing, inherently “unfinished business” ( Duck, 1990 ).
  • Yet long-standing relationships can become ineffective when ahead momentum stops, so the prospect takes precedence over the past.

Current companies operate within a framework of “projectification”, in which jobs are defined by distinct priorities and fixed timeframes. Unlike connections, projects are “finished company”. The Renault-Nissan agreement was analyzed by this duality between fixed assignments and open-ended relationships.

The Alliance is seen as a “project of assignments.”

Carlos Ghos n’s framing of” the Alliance” as a new management model offers critical insight. He envisioned it as a tactical empire without a predetermined goal, neither a momentary collaboration nor a merger. Through shared jobs, this vision came to life. As a Renault manager said:” Ghos n had this genius. He focused whatever on tasks. As soon as we got out of there, stuff went wrong”.

Soon after the name, the Alliance launched a joint effort in Mexico. Interconnections were created within the construction of the job itself. ” At the beginning, we focused on determining how to work properly. Jobs were matched, with a head and a co-leader assigned to each area”, said the Renault boss.

” We were informed that Nissan had a strong emphasis on quality and strict obedience to schedule”, the manager continued. ” Their technique was known to be unforgiving. When we began working together, we assigned a Renault co-leader in acknowledgment of this. In terms of price management, Renault was more organized and drove its jobs with revenue goals. Thus, cost control was managed by Renault”.

The Renault-Nissan relationship operates as an overall, endless task sustained by fixed, goal-oriented cooperation. Its construction reflects the broader pattern of projectification but with a special bend: an “unfinished task” supported by finite, finished projects.

The 2018 problems, but, tested this concept. Conflicts arose from different objectives. The French authorities, a Renault investor, pushed for a consolidation – an ultimate finish to the empire. Nissan resisted. Compounding the burden, Renault and Nissan pursued electric car growth differently, undermining combined development.

As a Nissan director said,” Now, markets only occur on jobs. We not longer have the goal, the cause for exchanges has fully changed”.

To return, the empire returned to its basic model, emphasising collaboration on electronic vehicle projects. The emphasis on shared efforts restored speed to the larger, open-ended marriage.

The Renault-Nissan event enriches our understanding of strategic alliances and job control:

  • Complementarities can come over time: More than existing from the outset, they may grow through shared projects.
  • Relational capital is focused on the future: The strength of an alliance lies more in its shared goals than in its historical ties.
  • Projectification’s dual nature, the interplay between infinite and finite projects, can sustain complex relationships.

Interestingly, this framework may extend beyond corporate alliances to interpersonal dynamics. Couples, for example, could be seen as “projects of projects”, with their longevity dependent on shared goals and mutual perceptions of fairness.

Going back to Renault-Nissan, the Alliance has ended in its institutional form, but the relationship between Renault and Nissan continues through time-limited ( finished ) projects. The dynamics of this relationship will be fascinating to keep an eye on. Will it eventually fall apart as the two partners become more and more involved in joint projects with other automakers and their joint initiatives start to decline? Or will the two partners be able to maintain some form of collaboration through joint, concrete projects without an unfinished perspective?

Magali Ayache is the maître de conférences en sciences de gestion at CY Cergy Paris Université and Hervé Dumez is vice-président rechervhed’euram, professeur and directeur of the Centre de recherche en gestion et del’Institut interdisciplinaire del’innovation, École polytechnique, European Academy of Management ( EURAM )

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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Ex-PM Hwang says South Korea’s conservatives must stick together – Asia Times

South Korea is currently in severe social and political upheaval as a result of President Yoon Suk Yeol’s quick declaration of martial law on December 3. His choice to install military forces onto the roads of Seoul shocked spectators both domestically and abroad, a sight not seen in decades.

However, what initially appeared to be a democratic dying end for the leader is now taking an unexpected move. Despite his extraordinary arrest on January 15 on suspicion of rebellion, the situation appears to be reversing.

Long sluggish, Yoon’s approval ratings have lately surged and surpassed their pre-martial rules numbers. After decades of division and faction fighting, the ruling People Power Party is also immediately reorganizing.

While this upsurge may prove momentary, the growing influx of pro-Yoon followers and the government’s increasing momentum are becoming harder to ignore. Multigenerational crowds are unified in their support of the chief executive and their state to uphold the constitutional attempt as a result of the city’s growing rallies.

Interviewed for Asia Times, Hwang Kyo-ahn, who was South Korea’s 44th prime minister and even served as justice secretary, shared his insight. Hwang offers a unique view on the unfolding social crisis having served as acting president during the impeachment and removal of President Park Geun-hye in 2016 and 2017.

Was President Yoon’s military law order justified?

An fundamental right bestowed on the main executive, an extraordinary power that supersedes common law, is for the disaster to be called martial law. However, one may comprehend the circumstances that led to President Yoon’s December 3 declaration of martial law.

Over the two and a half times since Yoon’s management took company, the opposition, wielding a majority in parliament, has effectively paralyzed the legislative branch. Most importantly, the de facto communist coalition, headed by the major opposition Democrat Party, has consistently obstructed the application of the president’s personal agendas.

The partnership, for example, has wielded its fiscal power for years, hiking members ‘ salaries while slashing financing for Yoon’s premier policies. They also eliminated the president’s specific activities finances, a crucial source for managing administrative operations.

Beyond economic measures, the criticism has constantly obstructed the visit of key personnel, putting pressure on them to retire even after taking office, or rejecting nominees during verification hearings. In a striking show of obstructionism, the Democrat Party has filed 29 prosecution motions against express officials, prosecutors and people until today. This is a record-breaking find unmatched by any previous leadership.

With President Yoon’s standard rights and social strategies stymied, he had no choice but to take actions. But, let there be no mistake. Yoon sought to overthrow the Constitution or any state instrument, but the order was never implemented by troops by force under the direction of the president.

Can you elaborate on the poll fraud disputes?

Another major motivation for President Yoon’s emergency martial law was to look into the automated system used by the National Election Commission and find the truth about allegations of election fraud. Conducting a thorough investigation during the peacetime is hardly possible because the percentage is an independent legal body with top judiciary members on staff. The army was then deployed to the Election Commission and related organizations to secure machines and important evidence in the context of martial law.

Election fraud claims first surfaced during the April 2020 and April 2024 public votes. Information includes faulty vote, improper seals, and vote boxes that were supposed to be sealed but were discovered open. In some towns, these irregularities and other political flaws have led to statistically unfeasible outcomes.

Through recounts that I and other candidates who were impacted negatively by the imperfect system, we were able to uncover these details. Over 1, 000 incorrect votes were found despite just 1, 900 citizens having been registered at a voting place in Incheon, for example. Min Kyung-wook, a former member of the US Parliament, tirelessly pursued this matter legally until the Supreme Court invalidated 279 erroneous votes. It did not alter the election results, yet.

A statement from the National Intelligence Service in October 2023 highlighted major flaws in the electoral roll, the vote-counting system, and the early voting system in South Korea. Unabhängig of one’s opinion on election scams, investigating an electoral program with obvious flaws may be merely common sense.

What do you think about the allegations of rebellion against President Yoon?

Subjective and objective criteria are two key concepts in criminal law. The objective condition addresses the act’s intended purpose. Without goal, punishment is not possible. The work itself is subject to the imperative necessity. If I punch a stranger, for example, that would meet the definition of an assault.

For a criminal verdict on rebellion charges, both parts may be present. In the case of President Yoon’s martial law, yet, neither was visible. There is no evidence that the leader authorized or intended for the legislature to be overthrown.

You claim the opponent’s ‘ despotism’ has never stopped. How thus?

On December 14, opposition events rammed through an prosecution movement in congress against President Yoon following a failed endeavor. He is accused of planning an insurrection through an unlawful martial law order, according to the motion, which Democratic Party lawmakers have actively supported recently.

The main opposition party is now moving to remove that claim from the senate articles, apparently in recognition of the difficulty of proving rebellion charges. Rather, they are shifting their focus to the dispute over Yoon’s says that he violated the law by declaring martial law on December 3.

By lowering the high-burden-of-proof rebellion cost, streamlined the content, allowing courts to hear fewer arguments, and reducing the number of witnesses, Yoon’s prosecution process. And specifically on this is the key opposition’s primary focus. In the end, Democratic Party politicians are determined to remove President Yoon from business as soon as possible, paving the way for opposition leader Lee Jae-myung to take the helm. For Lee, who is grappling with mounting legal problems, this situation is very appropriate.

The Democratic Party recently introduced a special counsel act to investigate Yoon for allegations of inciting North Vietnamese anger as well as for inciting insurrection. Their despotic endeavor, thus, shows no signs of abating.

I’ve long warned that assuming the role of a communist like Lee Jae-myung would bring about the demise of South Korea’s liberal democracy. We liberals must remain steadfast and fight until the last breath to accomplish this.

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Israel-Hamas ceasefire won’t end war or bring peace – Asia Times

A ceasefire between Hamas and Israel has been reached after 467 times of conflict, and it will take effect on Sunday, pending Jewish federal approval.

This deal won’t provide harmony or end the war. Ceasefires are not a cure for the conflict, trauma, dislocation, poverty and dying Israelis and Palestinians have borne before and since October 7, and will no doubt continue to bear, long before.

While this is not the end of the story, this peace does mark the start of a new book for Palestinians, especially those in Gaza, and Israelis.

The term of this peace, at least for the first step, are detailed, setting the stage for its successful application.

Israel-Hamas ceasefire plan, partly based on the May 27 2024 agreement.
Israel-Hamas agreement plan, largely based on the May 27 2024 contract. The Conversation, CC BY-SA

This peace is similar in terms of structure and content to a number of other proposals over the past month, including the 7 2 time truce reached in November 2023. Unlike that truce, however, this agreement is envisaged to last longer, having three distinct phases, each lasting 42 days ( 6 weeks ).

This arrangement, according to US President Joe Biden, “is the precise model of the package I proposed in May.”

Israel and Hamas will temporarily suspend their military activities in the first step, along with the Israeli forces moving their troops eastward, toward Israel’s Gaza border, and away from densely populated areas.

Additionally, air activity in the Gaza Strip will temporarily been suspended ( for defense and surveillance purposes ), especially once captives are freed.

This also happened during the November 2023 peace, which provided Palestinians with much-needed relief from bombing as well as assurances to Hamas that Israel is not using drones to monitor hostages, determine where hostages are being held, and determine how and where they are being held, as well as provide assurances that the country is not using drones to monitor hostages and monitor how and where they are being held, as well as how and where they are moving them.

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Additionally, large volumes of humanitarian aid, pleasure supplies, and energy will be permitted to enter Gaza from the moment the contract is in effect.

The energy is required for large machinery to clean and remove dust, as well as for the activity of Gaza’s power plant and sanitation systems. This will begin the long task of rebuilding the strip’s decimated infrastructure, including hospitals, clinics and bakeries ( the main food source for Gazans ).

A particular” strange deal”

Undoubtedly, the power interactions between Israel and Hamas when this contract was negotiated were very irregular. Israel has shown over the past 15 weeks that it has much better war might to Hamas.

Additionally, Israel was arguably generally disposed to dismiss Hamas ‘ only political card, which was the release of the hostages on October 7.

Because of the extreme strength imbalance, one party, ( in this case Israel ), might interpret the terms of the agreement as a kind of hurt contract.

Hamas has vehemently agreed to the terms of a peace over the past 12 months, only to have the words changed by Israel and no compromise has been reached.

Hamas has tried to alter the ceasefire’s term also. However, it has been largely ineffective in gaining Israel’s consent due to the power imbalance.

Hamas has forsaken its two major demands in order to achieve a deal: a lasting peace and the complete removal of Israeli soldiers from the Gaza Strip.

This agreement has three phases. In the first phase, Israel might exchange 33 hostages for the release of thousands of Palestinian prisoners. More than 60 hostages are thought to have been rescued.

However, it is interesting that in the past, Israel has merely detained and re-arrested a large number of Palestinians who had been released under similar agreements. This kind of strangle deals also occurred during the Syrian civil war. There, they were branded as reconciliation agreements.

The Assad regime and Russia effectively imposed ceasefires on rebel-held communities after they besieged, bombarded, and starved them, sometimes for many years, after they had besieged, bombarded, and starved them. Communities had little or no bargaining power regarding the terms and implementation of these agreements because of their asymmetrical power relations with the parties to them.

What we don’t know

Indirect negotiations between the two parties will begin on the 16th day following the agreement’s entrée into force regarding its next stage. Further hostages and prisoners ‘ release as part of this new phase and the continuation of the ceasefire are anticipated.

However, if no agreement is reached for the second phase, there are no written guarantees that the ceasefire will continue after the first phase.

Israeli Prime Minister Benjamin Netanyahu made it clear that he would continue to fight Hamas after the initial phase in exchange for similar deals that had already been made.

Additionally, the ceasefire agreement specifies that Israeli troops will leave Gaza and Israel and travel eastward. Israel’s initial demands for a ceasefire with Hamas included a complete withdrawal of Israeli troops from Gaza.

The ceasefire terms suggest that Israeli forces will remain in a more permanent buffer zone along the border, even though it has since abandoned that requirement. Along the Netzarim Axis and in the Philadelphi Corridor, they might also be able to stay longer.

Any continuing Israeli military presence on this Palestinian land means it cannot be used for civilian purposes, including for homes or farmland, in a territory only 40 kilometers long and between five and thirteen kilometers wide. This further complicates the already densely populated Gaza Strip, as well as feigning Palestinian landslide rights there.

Additionally, we are unsure of how this ceasefire will impact Lebanon’s fragile ceasefire with Hezbollah or Israel’s calculus in the West Bank. Attacks continue to occur daily in Lebanon, with both sides accusing one another of breaking the deal. The first phase of that ceasefire agreement, lasting 60 days, is scheduled to end on January 26, 2025.

What comes next?

Although ceasefires are technically unenforceable, they are perhaps best understood as a form of contract between the two conflicting parties.

This ceasefire, at least for the first phase, has detailed terms, including maps, that the parties have taken time ( some would say too much time ) to agree on.

This makes the agreement more likely to be implemented as both sides can more easily be held to what they have agreed by external parties, including the ceasefire’s guarantors, Qatar, Egypt and the US.

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Vaguer terms give the parties more room to maneuver and the potential to hold the other party accountable for breaking the agreement, like the ceasefire between Israel and Hezbollah in Lebanon and the 2016 Cessation of Hostilities in Syria or with the Taliban in Pakistan.

The war between Hamas and Israel is, of course, not over. This ceasefire is all that marks the beginning of a new era. It’s a welcome relief and the least-worst option that humans have so far developed to put an end to the bloodshed of war.

But with more than 1, 000 Israelis and 46, 000 Palestinians dead, many more homeless, the Gaza Strip decimated and potentially millions with some sort of trauma, even if there is a halt in the violence, this is certainly not peace.

Palestinians and Israelis, if not the world, will be living with the implications of the past 467 days for many years to come.

Marika Sosnowski is postdoctoral research fellow, The University of Melbourne

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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The Pettis paradigm and the Second China Shock – Asia Times

As you can see in the chart below, China has a sizable and growing industry deficit. That table is via Brad Setser, who is really a one-man troops in terms of tracking global trade and financial moves.

Here’s a much more in-depth discussion of China’s glut in a Setser&nbsp string. Incidentally, China’s exports to the developing world are &nbsp, a bit bigger of a factor here &nbsp, than its exports to the US and the EU, though the latter are up by a little bit.

This is the Next China Shock, in other words. Trade deficits like this can’t be explained by the great old principle of comparative advantages — a Chinese business surplus is only countries writing China IOUs in trade for physical goods. When writing Securities, places don’t really have a comparative benefits. ( 1 )

Origin: Brad Setser &nbsp

Why trade deficits and deficits&nbsp, do &nbsp, occur is an important and fascinating and complex topic, and my general idea from reading a bunch of economics documents on the subject is” No one really knows”.

It probably has something to do with the fact that China’s authorities is directing its banks to lend a lot of money to producers and, on top of that, pay companies a ton of subsidies.

But there also has to be some kind of&nbsp, financial&nbsp, component involved that prevents China’s forex from appreciating and allowing Taiwanese people to buy more goods. This might be everything the Chinese authorities does on purpose, or it might just be a result of China’s financial difficulties. More on this afterwards.

What should be done in response to the enormous flood of Taiwanese imports? Overwhelmingly, from all sides of the commentariat, there has been one main policy proposal ( 2 ) &nbsp, for the world outside of China: &nbsp, tariffs&nbsp, on Chinese goods. Taxes are one of their main plan ideas, and MAGA people undoubtedly support this.

In contrast, some commentators suggest that China may change its economic type toward promoting private use instead of yet more production. Many of the people who make the suggestion are private-sector economics who work for businesses, &nbsp, authors, or other private-sector analysts.

But somewhat, Paul Krugman&nbsp, has said related issues. Although many commentators don’t directly support taxes, they will continue to say that the world will eventually impose tariffs on Chinese goods if China doesn’t start to consume more of what it produces.

The “other nations should put tariffs on China” thought and the” China should change its business toward domestic use” plan are unified in the view of&nbsp, Michael Pettis, who has advocated both things.

He has been arguing for well over a century that China needs to increase its share of domestic use, and it seems more than anyone that he is to blame for bringing this notion into the conversation. And in&nbsp, an essay in&nbsp, Foreign Affairs&nbsp, in December, Pettis laid out a case for levies:

Americans now import the majority of their produce from overseas because they consume far too much of it, unlike in the 1930s. In this case, tariffs ( properly implemented ) would have the opposite effect of]the ] Smoot-Hawley]tariffs of the 1930s].

Modern-day taxes would divert a percentage of US demand toward increasing the total amount of goods and services produced at home by hard usage to support production. That may lead US GDP to fall, resulting in higher jobs, higher pay, and less loan. Yet as use as a percentage of GDP decreased, American households would be able to eat more.

Thanks to its somewhat open industry profile and even more open investment account, the American economy more or less quickly absorbed excessive production from trade partners who have implemented beggar-my-neighbor policies. It is the last resort’s global consumer.

The purpose of tariffs for the United States should be to cancel this role, so that American producers would no longer have to adjust their production according to the needs of foreign producers. For this reason, such tariffs should be straightforward, straightforward, and widely used ( perhaps excluding trade partners who pledge to maintain a domestic trade balance ).

The aim would not be to protect specific manufacturing sectors or national champions but to counter the United States ‘ pro-consumption and antiproduction orientation.

Some economists have criticized Pettis ‘ views on trade policy and his entire way of thinking about global economics.

For example, in September 2023, Tyler Cowen&nbsp, questioned the focus on Chinese domestic consumption&nbsp, as a target for Chinese growth policy. He suggested that China should concentrate on enhancing some dysfunctional service industries like health care, which will increase both production and consumption.

In November, Pettis&nbsp, vented his frustration&nbsp, with the academic economics establishment in an X thread:

It’s okay to ask economic historians, but never ask economists if you want to understand the effects of trade intervention. That’s because their answer will almost certainly reflect little more than their ideological position…It was direct and indirect tariffs that in 10 years transformed China’s EV production from being well behind that of the US and the EU to becoming the largest and most efficient in the world… Tariffs may not be an especially efficient way for industrial policy to force this rebalancing from consumption to production, but it has a long history of doing so, and it is either very ignorant or very dishonest of economists not to recognize the ways in which they work…To oppose all tariffs on principle shows just how ideologically hysterical the discussion of trade is among mainstream economists.

Tyler&nbsp, blasted harshly:

I am usually loathe to turn]Marginal Revolution ] space over to negative attacks on others, but every now and then I feel there is a real contribution to be made. Michael Pettis is consistently portrayed as an authority in the serious financial press despite my constant complaints that he completely does not understand international economics. Here is&nbsp, his recent tweet storm. It is incorrect.

As you know, any time there’s an economist food fight, especially over macroeconomics, I am here for it! I wish Tyler had given more details about how he felt about Pettis ‘ paradigm, and I believe Pettis is being unfair with his blanket accusations of ideological bias.

But in any case, I think I have four points to make on this topic.

International economics is really, really challenging.

The first point is that as far as I can tell, &nbsp, nobody&nbsp, really understands international economics. It’s basically macroeconomics on steroids. There are a huge number of factors that make issues of tariffs, trade surpluses, and the effect of trade on consumption vs investment very complex. Some of these elements are:

    There are &nbsp, many countries&nbsp, in the world, not just two. Although we typically think about bilateral trade deficits, there are many of them, and in fact, third parties are important. For example, if China’s trade surplus with America goes down, it&nbsp, might&nbsp, be because China is exporting more components to Vietnam for cheap final assembly, to be shipped onward to American consumers.

  • Business cycles  are important. If countries are in a depression-style situation where interest rates are at the zero lower bound ( a “liquidity trap” ), a number of standard results about the effects of trade policies— and results about how monetary and fiscal policy affect trade — go out the window. There are currently indications that China is in that predicament, but the rest of the world is not.
  • Tariffs interact with&nbsp, monetary and fiscal policy. For instance, China might try to impose tariffs on China by printing a lot of money to reduce the yuan’s value. These sorts of interaction depend on understanding&nbsp, how monetary and fiscal policy work&nbsp, ( which we don’t really ), and also on understanding&nbsp, how policymakers in countries around the world make decisions&nbsp, about monetary and fiscal policy ( which we definitely don’t understand ).
  • Why international trade occurs in the first place isn’t well understood. Exactly  There’s the classic theory of comparative advantage. There are theories based on investments in labor-intensive nations, as well as theories. There’s Krugman’s” New Trade Theory“, which focuses more on differentiation and variety as the motivation for trade. And so forth. The most empirically successful models of trade are just very simple equations called&nbsp, gravity models, which are agnostic on why trade happens, and could arise from&nbsp, a variety&nbsp, of different processes. This implies that we are not really aware of the fundamental principles of what trade between the United States, China, and other nations would look like, without regard to Chinese industrial policies or currency market intervention.
  • There are all kinds of wrinkles and complications that affect trade, called “frictions“. These include things like home bias in both financial and consumer investing, sovereign default, currency market frictions, and other issues. Economists argue back and forth about which of these frictions cause the various&nbsp, “puzzles” in international trade&nbsp, — disconnects between theory and evidence — or whether that’s just how trade works in the first place.
  • Competition&nbsp ( also known as “market structure” ) can stifle everything in this. Trade is carried out by companies, and whether Chinese companies and American companies end up making profits on their exports and their domestic sales will affect how they behave. Both domesticated competitive environments and international competitive environments are important, and neither one is particularly well understood.

In graduate school, I took a class in international finance. The professor who taught that class was renowned for creating models using advanced mathematical techniques borrowed from engineering that involved two distinct frictions that interacted with international trade. That was a big improvement over the standard theories that could only handle one friction. But what if you have seven? It’s hopeless.

Any more complex than that quickly turns into an absolute nightmare is one reason no one has developed an alternative to Michael Pettis ‘ ultra-simple way of analyzing international economics.

Making big sweeping assumptions about how tariffs will affect production and consumption isn’t exactly the most rigorous or empirically testable way to think about trade and industrial policy, but if the alternative is a blizzard of unworkable math that probably&nbsp, still&nbsp, makes way too many simplifying assumptions, maybe you just go with the simple thing.

Additionally, Pettis ‘ paradigm isn’t all that dissimilar from some of the heuristic theories that orthodox economists have used to evaluate trade policy. For example, Ben Bernanke ‘s&nbsp, early-2000s warnings about a global” savings glut” &nbsp, bear more than a little similarity to Pettis ‘ ideas, and the IMF’s&nbsp, calls for China to “rebalance” its economy&nbsp, toward domestic consumption in the mid-2000s are very similar to Pettis ‘ prescription.

Which brings me to my second point: Regardless of what you think of Pettis ‘ theories, I believe he is the most significant and influential international economics theorist in the world today.

His framework for understanding China’s economy and China’s trade policy might not please academics, but from what I can tell, it has been implicitly accepted by most private-sector economists and commentators, and many policymakers as well. It’s a more modernized, simplified version of the fabled” savings glut” and “rebalancing” concepts.

When I see China’s top economic policymakers&nbsp, use language like this, I’m almost certain they’re reading Pettis:

Senior leaders at a meeting of the 24-member decision-making body led by President Xi Jinping, the official Xinhua News Agency, agreed that the focus of economic policies should shift toward promoting spending and benefiting people’s livelihood, according to China’s ruling Communist Party, as weak domestic demand threatens the nation’s annual growth target.

Pettis isn’t the only person to talk about China’s low level of consumption as a share of GDP as an important problem, or to advocate “rebalancing”. Not at all necessary that he was the first. But he has been the most consistent and relentless, and these days I see him&nbsp, cited&nbsp, very&nbsp, frequently. Simply put, Pettis is winning this discussion.

A pretty simple way that Pettis could be ( sort of ) right

Thirdly, I can see a pretty straightforward way in which an approximation of Pettis ‘ view might be useful, if not to understand global economics in general or at least to understand the Second China Shock in particular. Basically, it’s all about&nbsp, the profits of Chinese companies.

China’s main strategy to combat its real-estate-induced recession has so far been to pump up manufacturing output, especially in the highly capital-intensive high-tech sectors like machinery, ships, planes, cars, batteries, drones, semiconductors, and so on. The Wire China had&nbsp, a great interview with Barry Naughton&nbsp, ( probably the top American expert on China’s industrial policies ) in which he explains what Xi Jinping is trying to do:

Of course, we have no idea what exactly goes through Xi Jinping’s mind. But I think we can characterize his approach as this: ‘ Billions for tech, but not one cent for bailouts. Because that would be just regular GDP, Xi Jinping doesn’t really care what Chinese people want to buy or make. He’s asserting that there’s something more fundamental than that: high quality GDP, which is determined, at the end of the day, by Xi Jinping himself…

This causes a significant misallocation of resources, which in turn causes a decline in the economy’s productivity. When we look at total factor productivity growth…China’s not really experiencing significant productivity growth. That is astonishing because, when we examine this economy that is implementing all these new technologies, we think, wow, that must result in some sort of explosive growth in productivity. But we don’t see it…

And it’s in part because, for instance, China is investing in a lot of semiconductor equipment factories, which are losing a lot of money, and it’s investing in thousands of miles of high-speed rail, which go where nobody wants to go.

In other words, Xi is making the Chinese economy look a little bit more like the old Soviet one, where production was determined by plans instead of by the market. He is telling Chinese companies to build a number of specific high-tech manufactured products using industrial policies and banks, and they are actually doing what he’s telling them to.

Why did this approach fail in the USSR? In the end, it was because Soviet manufacturers were ineffective; they produced a lot of stuff but were at a loss. That was unsustainable.

Chinese factories are much better than Soviet ones were. But if you tell enough different manufacturers to all produce the same stuff at the same time, they’re going to compete with each other, and their profits will mostly fall, and they’ll start taking big losses.

In fact, this is already starting to occur in China:

Source: FT

And here ‘s&nbsp, the ever-excellent Kyle Chan:

China’s solar-manufacturing sector is struggling to stop price wars and excessive capacity expansion. One set of tools Beijing uses to control over-expansion is tighter regulatory requirements on financing, resource use, and tech. However, of course the devil is in the enforcement.

You see similar policy efforts across a range of industries facing similar challenges in China: steel, coal, shipbuilding, batteries, wind. Other policy options include the elimination of subsidies and outright moratoriums on new projects or new businesses, such as China’s temporary moratorium on new shipbuilding companies following the global financial crisis.

Even in&nbsp, China’s vaunted auto industry, profits are collapsing and a shakeout is occurring. SAIC, the once-legendary auto giant, is flailing.

( Fun historical side note: From the 1950s through the 1980s, a major aspect of Japan ‘s&nbsp, industrial policy&nbsp, was about trying to prevent the profits of Japanese companies from collapsing via overproduction and over-competition, usually by forming cartels to restrain production in manufacturing industries. Xi’s China, in contrast, is simply moving forward with ease in order to increase production.

Chinese companies are responding to this in a very natural manner — trying to export their products when they can’t sell them at home. This is what people are talking about when people talk about “overcapacity,” &nbsp. Export profits are keeping many Chinese manufacturing companies— and, increasingly, the Chinese economy itself — afloat.

World Bank, &nbsp

Exporting your way out of a recession is fine and good — it’s basically how Germany and South Korea shrugged off the Great Recession in the early 2010s. However, China’s export boom is heavily subsidized, both with explicit government subsidies and, more importantly, with incredibly cheap bank loans.

Subsidies are distortionary — they mean that China is making the cars that Germany and Thailand and Indonesia and other countries would be making for themselves if markets were allowed to operate freely. China is distorting the entire global economy by subsidizing exports on such a massive scale.

But, you may ask, as long as China’s taxpayers ( who pay the cost of explicit subsidies ) and savers ( who pay the cost of underpriced bank loans ) are footing the bill, why should people outside China worry about those distortions? In essence, China pays for Indonesians, Thai people, and Germans to purchase inexpensive automobiles rather than having to produce them themselves. Why should anyone be angry?

There are three reasons, I suppose. First of all, if a wave of underpriced Chinese exports forcibly deindustrializes the rest of the world — a possibility I’m sure Xi Jinping has considered — then it could weaken the world’s ability to resist the military power of China and of Chinese proxies like Russia and North Korea. That is frightful.

Second of all, even if a bunch of cheap Chinese stuff looks like a gift in the short term, it can create financial imbalances that cause bubbles and crashes in other countries. The” savings glut” theory accounts for the collapse of the world economy following the First China Shock in 2000.

And third, a flood of cheap Chinese stuff can cause disruptions and chaos in other economies, &nbsp, hurting lots of workers&nbsp, a lot even as it helps most consumers a little.

Additionally, according to Michael Pettis, cheap Chinese goods actually cause Americans to become poorer because they actually use less of it because they lower domestic production. I ‘m&nbsp, highly&nbsp, skeptical of this argument, since a basic principle of economics is that people don’t voluntarily do things that make them poorer. ( 4 )  But perhaps the labor market disruptions, financial instability, and military weakness are enough to frighten.

So what should countries do to prevent this? One obvious response is tariffs. If the world raises tariffs on China high enough, exchange rates will have difficulty adjusting, and Chinese products will have difficulty penetrating foreign markets. Chinese businesses will then have to revert to their domestic markets. This will intensify the effect of competition, and reduce their profits much more quickly.

The sooner Chinese businesses’ profits fall, they will reduce their production. They’ll also probably pressure the government to stop subsidizing overproduction, in order to lessen the competitive effect and keep themselves in the black. This political pressure may be what ultimately causes Xi Jinping and the CCP to alter the country’s economic model, lowering the incentives for overproduction.

This would be good for Chinese consumers. When Chinese companies flood the domestic market, they are given a temporary flood of cheap goods. If and when China’s government reduced the fiscal and financial incentives for overproduction, China’s taxpayers and savers would get a much-needed reprieve. And a less distorted Chinese economy would be beneficial for productivity in the long run because resources would be shifted to areas with more room for improvement, such as healthcare and other services.

This scenario isn’t &nbsp, exactly&nbsp, what Pettis envisions, but it’s reasonably close. It is impacted by tariffs, which will ultimately benefit regular Chinese citizens by rebalancing its production-to-consumption model. And it’s pretty easy to understand this scenario in terms of pretty standard orthodox economic concepts — subsidies, distortions, productivity, and competition — plus a little bit of political economy thrown in.

This wouldn’t necessarily mean that Pettis ‘ paradigm would be correct&nbsp in general. This scenario would only work because of unique features of Chinese industrial policy and Chinese domestic politics. However, I believe there is a chance that Pettis ‘ paradigm is becoming useful given that the Second China Shock is one of the most significant events currently taking place in the global economy.

Pettis needs to think harder about the downsides of tariffs

Having said that, I believe it’s also possible that Pettis is downplaying or ( more likely ) downplaying some of his biggest mistakes. This is my fourth point.

Pettis posits that tariffs would cause US manufacturing to surge so much that US GDP and US consumption would rise due to America’s enormous trade deficit. He&nbsp, writes:

Modern-day tariffs would redirect a portion of US demand toward increasing the total amount of goods and services produced at home by taxing consumption to subsidize production. That would lead US GDP to rise, resulting in higher employment, higher wages, and less debt. Even as consumption as a percentage of GDP decreased, American households would be able to consume more.

But Trump’s tariffs in his first term didn’t do anything of the kind. After Trump introduced his tariffs, industrial production actually decreased:

There was no surge in factory construction, either, that only happened once Biden came into office and&nbsp, enacted industrial policies&nbsp, ( the CHIPS Act and the IRA ).

The trade deficit also saw little activity. If you squint really hard you can see a small improvement right before the pandemic began, but then a total collapse afterward:

What transpired? Two things. First, the tariffs caused at least a portion of the effect, which the US dollar did as a result of. Second, US manufacturers suffered when they had to pay a lot more for parts and components. I went into both of these issues in more detail in this post, but they are very general issues with tariffs as a policy.

Instead of quoting my earlier post, I’ll quote Matthew C Klein, who co-authored the book&nbsp,” Trade Wars are Class Wars” &nbsp, with Pettis, and who recently wrote an op-ed&nbsp, explaining how tariffs could easily backfire:

The business cycle and new orders for American-made goods are frequently tracked when money is spent on imports&nbsp. Imposing “universal” tariffs high enough to force those imports to fall by more than 40 % to close the trade deficit would likely involve a severe economic downturn that hurts Americans more than anyone else.

Domestic production of those same goods would need to increase quickly enough to bridge the gap to prevent shortages and inflation in order to avoid that pain. The experience of the pandemic suggests that this is not a realistic option …

Another counterintuitive effect is that the dollar tends to increase in price in response to the imposition of new tariffs, or threat of new tariffs.[ This ] results in higher prices for customers in the US. The net effect is that tariffs often hit&nbsp, exports&nbsp, more than imports, even when foreign trade partners fail to retaliate.

Pettis doesn’t really seem to grapple with either issue. It’s possible that he believes that Trump’s first-term tariffs were a failure because China simply&nbsp, rerouted its exports through Vietnam, in this case, putting tariffs on all other countries, as Pettis recommends, would close off that loophole.

However, that wouldn’t address the issue of exchange rate appreciation. Unless tariffs on the rest of the world are so huge that they overwhelm the dollar’s ability to adjust to compensate, some sort of&nbsp, financial intervention&nbsp, to keep the dollar weak would be necessary in order to make tariffs effective. Pettis has suggested taxing capital inflows, which might be effective, ( 5 ) &nbsp, but the Trump administration doesn’t seem to be interested in doing this.

And Pettis also fails to grapple with the intermediate goods problem. The US would not benefit from returning to the quasi-autarkic economy of World War 2 because, unlike other nations, technology has evolved far too much to prosper while shutting itself off from the rest of the world.

The US can onshore and harden its supply chains to some extent, but no matter what, US manufacturers are still going to have to order some materials, parts, and components overseas. I haven’t yet seen Pettis suggest a solution to this issue or consider how unsuccessfully Trump’s tariffs were six years ago in terms of boosting US industrial production.

So while I think Pettis ‘ paradigm probably does a good job grappling with the unique characteristics of the Second China Shock and China’s political economy, I don’t think we should rush to make it our general default paradigm for thinking about trade, tariffs and international economics in general. It still needs to be developed a lot.

Notes:

1 Actually, this is not entirely true. There is a claim that America actually has a comparative advantage in writing IOUs because it has the reserve currency and does so for risk hedging and other things like that, and that this is because those IOUs are used for international payments and risk hedging and other forms of disguised financial services. But it’s hard to apply this argument to the developing countries that are accounting for more and more of China’s trade surplus. Few people believe that Vietnam, Brazil, or Saudi Arabia have a competitive advantage in terms of financial services.

2 I tried to suggest intentional devaluation of the dollar via&nbsp, exchange rate intervention&nbsp, as an alternative, but nobody has been particularly interested in this idea.

3 Germany may have caused some harm to its European neighbors by exporting too much to them, since at the time they were all at the bottom of the scale.

4 In order for cheap Chinese imports to actually impoverish Americans, there would have to be some kind of externality or coordination problem involved. That might be the case, but Pettis or MAGA people need to explain what they believe externality to be. It’s not readily apparent to me what it might be.

5 Though the Fed’s intervention in the currency market would be much more efficient and much simpler to carry out!

This&nbsp, article&nbsp, was first published on Noah Smith’s Noahpinion&nbsp, Substack and is republished with kind permission. Subscriber or subscriber can sign up for Noahopinion.com.

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Trump threatens to trigger a globe-shaking crypto ‘arms race’ – Asia Times

In his next word as US senator, cryptocurrencies are expected to be at the heart of Donald Trump’s financial plans.

The creation of a strategic bitcoin reserve ( SBR ) is undoubtedly his most contentious proposal, in his opinion. Similar to the US’s strategic petroleum reserve, which includes acquiring massive amounts of the bitcoin over the upcoming years to maintain as a reserve.

However, there has been heated between proponents and opponents, including Jerome Powell, the head of the Federal Reserve. What an Br may look like, and whether Trump will even be able to deliver on this proposal, have been the major social concerns.

However, a major shift in the world’s monetary order could be in play as a result of a new player and fresh currency forms beginning to assume an ever-larger role.

The major advocate of an SBR, Republican lawmaker Cynthia Lummis, has proposed that the US acquires 200, 000 cryptocurrency a month for five decades.

However, it is more likely than ever to identify the roughly 207, 000 bitcoins currently held by the US as a supply to get held by the US Treasury. Any further significant acquisitions of bitcoin may require a rules change and the approval of the US Treasury, which is already opposed.

Regarding whether Trump can fulfill his vow, it is questionable whether an Bb at the national level would have the necessary votes to pass through the House of Representatives, the lower chamber of the US. But, there are already 13 US states that are taking steps to create a SBR or have made proposals for policy.

Financially, however, one of the main arguments is that an Br may act as a fence to protect a country’s prosperity against inflation and currency depreciation. There is a fixed source of bitcoin ( the quantity in circulation cannot exceed 21 million ), which could limit its devaluation, compared to the usual currencies that can be printed at will by central banks, which causes their worth to decline.

Thus, according to advocates, an SBR was act similarly to gold reserves as a fairly safe place to store wealth. Due to this, bitcoin has been given the moniker “digital silver” for.

Another common claim is that the SBR’s pecuniary value could quickly increase, helping to lower US national debt. However, this is essentially a philosophical and unproven argument, and the precise mechanisms are still undetermined.

On the other hand, some economists worry that a Br might cause financial instability and undermine confidence in the money. If cryptocurrency were widely adopted as a global reserve currency, for instance, this might destroy the economy’s status as the world’s major supply money.

Of course, any such volatility may become heightened by currency’s historical price volatility. This saw, for instance, its value jump from around US$ 3, 800 at the start of 2019 to roughly US$ 68, 000 in November 2021. By the end of January 2022, it had lost nearly half of its value, dropping to about$ 35, 000. But now it is above$ 95, 000.

Beyond these problems, however, the SBR shows a more fundamental, era-defining move – one that is currently underway.

It is good to place the fall of cryptocurrencies in perspective in order to understand this change. Initial structure of the post-second world war purchase was based on a dollar-dominated structure, with the US dollar being correlated with gold and a number of other currencies being correlated with the dollar. This provided security and trust in the economy’s value.

In the 1970s, the fixed-rate structure was abandoned, but US dominance was maintained through the petrodollar system, which set the price of oil in dollars. The US’s effect in global organizations like the IMF and World Bank and the economy’s position as the world’s supply money furthered this supremacy.

However, three recurrent styles have threatened to overthrow the dollar’s hold on power for the past two years.

First, the rise of emerging economies such as Brazil, Russia, India, China, South Africa and others ( the BRICS ) is creating a more multipolar global system. This is challenging the US’s status as the single power, and reshaping the political landscape. These nations are also playing greater management roles in the world while experiencing rapid economic growth.

The decentralization of the monetary method and the rise of “private money,” especially in response to the world economic crisis of 2007-08, have been the next trend. Any sign used as cash that is not controlled or backed by a republic or central bank is referred to as private money. In this regard, cryptocurrencies are the quintessential form of private money that operate independently of standard central banks and Treasury money supply systems.

A second pattern is emerging in addition to the shift to private money. In order to achieve public policy objectives, governments use the financial tools and services that these actors provide to achieve this goal by granting private actors, such as crypto providers and exchanges, significant control ( “infrastructural power” ).

This significantly alters the previous system, which gave governments more immediate authority.

A crypto hands culture?

The next step in this move is being made clear by rumors that Trump has made crypto a goal. The balance of power is moving away from state and towards firms that block-hold bitcoin, markets upon which cryptocurrencies are traded, and the masters of exchange-traded bitcoin money.

This could be a watershed time. If the US, another leading economic power ( like China ), or a series of larger emerging economies ( like the rest of the BRICS) become block-holders of bitcoin or other major cryptocurrencies, it could trigger the emergence of a cryptocurrency “arms race” on a global scale. In response to this, nations had frantically increase their deposits.

Other countries, including Japan, Russia, and China, are now accumulating cryptocurrency, according to reports in the media, in advance of a potential US SBR news. Trump has also suggested that he might overturn a contentious crypto accounting concept that would permit banks to store more bitcoin.

By incorporating personal income and the institutional power of personal actors into a typically domineering region dominated by leading states and their regional currencies, these trends have the potential to transform the international economic order.

Trump’s plans for an Br will highlight the expanding role of personal money in the global market. Regardless of whether the fresh government’s strategies for bitcoin are realized, these changes in the global order are currently taking place.

Huw Macartney is associate professor in social economy, University of Birmingham, Erin McCracken is a PhD candidate in bitcoin, University of Birmingham, and Robert Elliott is professor of economics, University of Birmingham

The Conversation has republished this essay under a Creative Commons license. Read the original content.

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S Korea must respond to N Korea’s hypersonic threat – Asia Times

The new hypersonic missile test by North Korea is a harmful expansion of its military capabilities, scuttling East Asia’s stability and raising serious issues with global security.

This martial development is largely attributed to Pyongyang’s extremely strategic relationship with Russia, which was established through a high-stakes quid pro quo.

Moscow is reportedly providing Pyongyang with superior weapons technology in exchange for North Korea’s crucial military aid for Russia’s war efforts in Ukraine, giving North Korea the tools it needs to accelerate its weapon modernization program.

The effects of this relationship go far beyond the Korean Peninsula. By acquiring developed missile systems, including hypersonic weapons, North Korea is significantly enhancing its reach features, posing a direct and immediate risk to South Korea, Japan, and US troops in the region.

This military alignment poses the risk of severing decades of efforts to maintain regional stability and forcing neighbors to make drastic adjustments to the shifting power balance.

South Korea’s defense policymakers must address North Korea’s expanding military might right away. Failure to act decisively risks dragging South Korea into a new era of heightened geopolitical instability, where rogue regimes, emboldened by shared interests, pose an escalating threat to regional security and sovereignty.

Conventional posture

South Korea’s defense strategy has prioritized maintaining air dominance on the Korean Peninsula ever since the 1953 Korean War armistice. The constant acquisition of cutting-edge aircraft, the construction of strategic airbases, and unwavering allies have been key components of this strategy.

This approach has enabled South Korea to operate cutting-edge fighter jets, such as the F-35 stealth fighters, giving it a decisive technological advantage over North Korea’s outdated air force. Key airbases like Osan, Kunsan, and Daegu serve as pivotal hubs for projecting airpower.

The United States has played a critical role in enhancing South Korea’s air capabilities through joint operations, intelligence sharing, and the provision of advanced weaponry.

This air-dominance tactic has been successful in preventing North Korean aggression and enabling quick response capabilities. However, the rise of hypersonic missile threats has exposed critical vulnerabilities, necessitating urgent adjustments to South Korea’s defense framework.

Hypersonic missiles, with their unmatched speed, maneuverability and precision, pose a game-changing challenge that can quickly destabilize the balance of power.

These missiles can travel at speeds over Mach 5, significantly reducing the time it takes to detect and intercept. Their inability to follow radar and missile defenses and their unpredictable flight patterns render existing air defense networks insufficient.

Given the proximity of North Korea, hypersonic missiles can strike any location in South Korea within a few minutes, leaving minimal time for countermeasures.

This capability directly threatens South Korea’s airbases, which, due to their limited number, are highly vulnerable to saturation attacks. South Korea’s air force would be crippled if a successful strike on these crucial facilities, undermining its main defense strategy.

The successful testing of hypersonic missiles by North Korea signals a significant change in its military strategy, focusing on asymmetric capabilities to offset South Korea’s technological prowess.

Hypersonic missiles pose a more immediate and practical threat than South Korea’s defense strategy, which has largely focused on thwarting North Korea’s nuclear arsenal.

Hypersonic missiles are much more likely to be used in a conflict than nuclear weapons, which are primarily used as deterrents because of their disastrous effects.

This growing threat necessitates a thorough review of South Korea’s defense priorities and a shift to tactics designed to mitigate the unique risks posed by hypersonic weapons.

New defense strategy

South Korea must urgently update its defense strategy to ensure greater resilience and adaptability in light of the unprecedented threat posed by hypersonic missiles.

Strengthening its security posture requires upgrading missile defense systems, diversifying force structures, reinforcing ground forces, leveraging cyber and space capabilities, and deepening alliances and partnerships to address this fast-evolving danger.

South Korea must prioritize the creation and deployment of advanced missile defense systems specifically designed to counter hypersonic threats as the power balance shifts on the Korean Peninsula. To improve its defensive capabilities, it should include more potent early warning systems, directed energy weapons, and integrated defense networks.

Upgraded radar and satellite systems must be a key component of this new strategy in order to enhance missile launch and booster detection. Currently, South Korea relies on traditional systems such as THAAD ( Terminal High Altitude Area Defense ) and KAMD ( Korea Air and Missile Defense ).

While effective against conventional ballistic missiles, these systems may fall short against hypersonic missiles, which travel at lower altitudes, exceed Mach 5 speedsand maneuver unpredictably, making them difficult to track with conventional radar.

At present, South Korea’s early warning network includes the Green Pine radar, AN/TPY-2 radar ( part of THAAD), and Sejong the Great-class Aegis destroyers. The Green Pine Block-C radar can detect ballistic missiles at ranges up to 800 kilometers, while the AN/TPY-2 radar offers detection beyond 1, 000 kilometers.

The SPY-1D radar aboard Aegis destroyers provides high-resolution tracking and interception for mid-course missile trajectories. These systems are also designed for ballistic missiles with predetermined flight paths, which may be challenging to follow due to hypersonic missiles, which change direction in flight and travel at fast speeds.

Additionally, South Korea’s boost-phase detection capabilities are insufficient for hypersonic threats, which accelerate rapidly after launch, reducing response time for interception. Additionally, these missiles ‘ unique thermal and electromagnetic signatures cannot be identified by the current radar infrastructure.

South Korea must invest in cutting-edge technologies like advanced laser and electromagnetic systems to neutralize hypersonic missiles in flight in order to close these gaps.

Strengthening coordination between ground-based and naval defense systems to create layered, real-time protection is equally critical. Without these novel adaptations, South Korea’s current defense strategy will continue to be increasingly vulnerable to hypersonic missile attacks.

South Korea’s defense strategy’s heavy reliance on a few large airbases is inherently vulnerable, necessitating a shift towards decentralized air assets, mobile launch platforms, and hardened underground facilities.

The major airbases currently supporting South Korea’s air defense include Osan Air Base in Pyeongtaek, housing the US 51st Fighter Wing and South Korean 19th Fighter Wing, Kunsan Air Base on the western coast with the US 8th Fighter Wing, Cheongju Air Base, a key logistics hub with F-15K fighters, Gimhae Air Base in Busan, Daegu Air Base, home to South Korea’s 11th Fighter Wing, and Seosan Air Base, operating F-35A stealth fighters.

Additionally, Camp Humphreys is the largest US military base outside of the United States, supporting air defense operations. Currently, over 70 % of South Korea’s air defense assets and manpower are concentrated in these bases. &nbsp,

Due to North Korea’s new missile capabilities, a significant risk exists from this reliance on centralized infrastructure. South Korea needs to start considering setting up smaller, dispersed airfields to reduce vulnerability, develop mobile missile and aircraft platforms for operational flexibility, and build underground facilities that can withstand advanced missile attacks in order to reduce risk.

These measures would improve survival and give a more resilient defense posture that can deal with threats effectively.

Beyond decentralizing air forces, South Korea must prioritize bolstering its ground forces in order to have a more balanced and potent defense strategy. Modernizing tanks, artillery and infantry systems, along with asymmetric warfare training, is essential to counter the new threats.

Ground forces must be equipped for urban combat, counter-insurgency, and irregular warfare to neutralize both conventional and unconventional adversaries. Establishing rapid deployment units with high mobility and flexible response capabilities across the peninsula will increase deterrence and ensure operational readiness against evolving threats.

South Korea must strengthen its advanced cyber and space capabilities in order to compete with its conventional military might in order to combat emerging threats. The Cyber Operations Command, responsible for cyber defense, must enhance both offensive and defensive measures to disrupt North Korea’s command-and-control systems.

Exploring space-based reconnaissance and secure communications using the Korea Multipurpose Satellite ( KOMPSAT ) series and the recently launched military communication satellite ANASIS-II is equally important. In the face of ever-evolving threats, strengthening these capabilities will significantly improve South Korea’s situational awareness and give it a more robust, multi-domain defense posture.

South Korea’s relationship with the US is important, but it may not be sufficient to fend off new threats. To create effective collective security mechanisms, South Korea must actively engage regional partners like Japan, Australia, and India.

To improve intelligence-sharing, technology exchange, and defense cooperation, it is necessary to engage more deeply in multilateral frameworks and strengthen ties with international organizations. Expanding these partnerships will enhance South Korea’s strategic autonomy and promote regional stability in the face of changing security challenges.

Implementation challenges

Revising South Korea’s defense strategy is urgent but faces significant obstacles, including resource constraints, shifting political priorities and widening technological gaps.

Significant investment is required to develop new technologies and modernize existing ones, which could further strain the economy. In a divided political climate, it’s equally challenging to win bipartisan support for defense reforms.

Additionally, reliance on foreign suppliers to bridge domestic technological limitations risks compromising South Korea’s strategic autonomy. Addressing these challenges demands bold leadership, a long-term vision and innovative solutions to secure a resilient and future-ready defense posture.

Failure to adapt, however, will leave South Korea dangerously exposed to evolving threats. East Asia’s security dynamics have been reshaped by the rapid development of hypersonic missile technology, with North Korea’s expanding ability to attack critical infrastructure undermining South Korea’s air superiority doctrine.

South Korea must immediately adopt a multi-dimensional defense plan that includes advanced missile defense systems, diversified force structures, enhanced ground forces, and integrated cyber and space assets.

South Korea requires a steadfast, stable, and visionary leadership to protect its interests from growing threats in light of the Korean Peninsula’s rapidly shifting power balance.

South Korea’s military and political leadership must remain focused on the changing regional dynamics and refrain from getting sucked into internal political snucks. National security must never be compromised by internal conflict or domestic political objectives.

Unwavering vigilance and proactive strategies are required to deal with the growing threats coming from across the border. South Korea should anticipate and prepare for potential difficulties rather than reacting in secret. This calls for a unified national security framework that transcends political divisions, continuous improvement of defense capabilities, and strategic foresight.

In this volatile environment, complacency is not an option. South Korea’s leaders must adopt a forward-looking security doctrine, ensuring that the nation remains prepared to counter any threat to its stability.

In order to safeguard South Korea’s future, it will be crucial to maintain a strong military posture, strengthen intelligence capabilities, and form stronger alliances with like-minded partners.

The resilience of South Korea’s national security architecture is a key factor in its future prosperity and survival. Therefore, preserving the nation’s sovereignty in the face of evolving threats must remain a non-negotiable priority.

Lakhvinder Singh is the Asia Institute in Seoul’s director of peace and security studies.

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Biden’s parting China blow based on flimsy math – Asia Times

Joe Biden’s declare that China” does not surpass” the US in economic terms has sparked clean debate among analysts everyday. Consider well-known continental analyst Justin Lin Yifu to be one of those who don’t agree with the retiring American president’s math.

Lin, a former World Bank chief economist, predicted 31 years ago that China’s gross domestic product ( GDP ) would top the US ‘ as early as 2030 and by 2035 at the latest. Speaking at the Asian Financial Forum in Hong Kong on January 13, Lin said that” under regular circumstances” his projection” should be unchanged”.

Limitations appear, of program. One is that Lin’s opinion on the removal of the GDP guard is primarily driven by changes in exchange rates as China allows the yuan to increase. Any shift by Xi Jinping’s Communist Party to degrade or change the renminbi for years to come was, in theory, limit China’s GDP trajectory.

There is nothing particularly “normal” about the massive industry war Donald Trump is threatening or the state of the US funds that Biden’s federal leaves behind. Between Washington’s US$ 36 trillion federal loan and the Trumpian trade conflicts to travel, there are plenty of reasons to worry about self-inflicted US winds, old and new, clouding the view.

Then there’s the inflation wave to occur if Trump makes good on his tax risks, including a 60 % cover taxes on all Foreign goods. In December, US client prices were rising at a 2.9 % price year on year. &nbsp,

Wall Street benefited from the media, mainly because volatile food and energy products are removed from the baskets and prices are rising less quickly. Eugenio Aleman, chief analyst at Raymond James, says,” The Federal Reserve is OK with watching the title CPI go off periodically if that boost does not spill over into the main CPI, and this is what happened in December.”

However, Navy Federal Credit Union’s analyst Robert Frick adds that” core prices rising less than expected may foretell great news for prices in the months to come,” but” this was a particularly unpleasant report for consumers.” Frick notes that the” cost of necessities that hurt household budgets, especially for lower-income Americans, were among the top reasons inflation rose in December”.

If and when Trump layers on ever more taxes on imports, upward price pressures may intensify. Many economists worry that the Fed may start considering rate increases rather than rate increases as a result of Trump’s 60 % tariff on China and 25 % levies on Canada and Mexico.

According to Goldman Sachs strategist Dom Wilson,” US equities may now need clear relief from hawkish policy to make a sustained move higher.” ” We believe that equities may remain more fragile until we change the perception that the” Fed put” is now struck lower,” we think.

According to reports, Trump may be considering imposing tariffs more gradually to prevent unexpectedly raising inflation.

” If the focus is more on deregulation, tax cuts and potential sweeteners than changes to tariffs and immigration, then growth could be much stronger in 2025″, says Diane Swonk, chief economist of KPMG. ” Otherwise, risks are for higher inflation and weaker expansion”.

What’s more, many doubt Trump, considering the array of China hawks he’s gathered in his next cabinet, will have the discipline to forge a giant trade deal.

Trump’s” transactional approach won’t work everywhere, and in some cases, it will backfire”, warns Ian Bremmer, CEO of the Eurasia Group. China isn’t willing to make enough concessions to reach a grand bargain, especially with the absence of communication and management channels.

Bremmer notes that “early tariff hikes and mounting US provocations, at least as perceived by Beijing, in the coming months are likely to cause a&nbsp, breakdown in US-China relations&nbsp, this year”, not an economic partnership.

Here, Biden’s hubris about his economic legacy also seems unhelpful.

Arguably, Biden’s presidency did more to hobble key Chinese industries than Trump 1.0 did. Biden prioritized more nuanced and targeted curbs on mainland technology and limited China Inc’s access to crucial materials, while Trump relied on blunt-force tariffs.

Biden also made a slight switch in order to increase his domestic economic muscle. The Trump 1.0 era was about tripping&nbsp, China&nbsp, on the race course. Biden concentrated more on limbering up to compete with China both naturally and over the long term.

The CHIPS and Science Act&nbsp, that Biden&nbsp, signed into law&nbsp, in 2022 deployed$ 300 billion to strengthen domestic research and development. Biden took other steps to incentivize innovation, raise America’s semiconductor capabilities and boost productivity.

A$ 1.7 trillion tax cut, whose main feature, did little to boost domestic capacity or competitiveness, was a significant change from the Trump era. Had Trump’s tax scheme innovation – or Biden’s policies been more ambitious – boosted innovation and productivity, US inflation might not be rising nearly 3 %.

The danger is that Trump will abandon all Biden-era policies intended to boost US domestic competitiveness and bows to partisan politics. He’s apt to resort to blanket tariffs that inflict the same degree of harm at home as they do in China in their place. And additional stimulus that fans inflation.

Trump’s economic toolbox doesn’t seem to have been updated since the mid-1980s. Along with taxes on Chinese goods, Trump’s signature “reform” was a return to Ronald Reagan’s” trickle-down economics”. Trump 1.0, as a result, did little to encourage chieftains to compete with China by improving the domestic US economy.

The most recent Trump tariffs didn’t boost US productivity, create new wave of business, or create new domestic economic muscle. Nor will the onslaught of Trump 2.0 taxes coming Asia’s way. The 60 % tax on Made in China goods could easily rise to 100 % or more. So might the 20 % blanket across-the-board tax Trump is mulling for all goods entering the US economy.

These policies may hurt middle-class US households, depressing GDP in the medium-to-long terms. Trump’s plans to start mass deportations of allegedly undocumented immigrants will further tighten the labor market and cause wage inflation to rise.

Another issue with Trump’s overconfidence and Biden’s hubris is that both men overlook how different China is now from it was when Trump was first elected in 2017. For one thing, its reliance on the American consumer has been greatly decreased. China’s steady efforts to recalibrate trade routes to Global South nations make China less vulnerable to Washington’s exploits.

For one, US officials may be ignoring China’s efforts to upend its economic game. Over the last decade, Xi’s inner circle has been implementing his” Made in China 2025″ strategy.

Though China faces daunting challenges, not least of which is a giant property crisis, Beijing has been investing big in semiconductors, electric vehicles, &nbsp, biotechnology, aviation, robotics, renewable energy, artificial intelligence and high-speed rail.

China’s success in EVs has &nbsp, Honda Motor and Nissan Motor&nbsp, rushing to join forces. Few observers in Japan noticed that jarring realignment.

Additionally, there are the potential ways China might respond to Trump’s trade war. As former World Bank economist Lin said in Hong Kong this week:” We hope Trump will be reasonable, because to charge 60 % of tariff rates on China, or 25 % of tariffs on other countries, I don’t think that is good for the US, certainly, that’s not good for the world ]either ]”.

Lin comes to the conclusion that” we have no control over the trade policies from the US. But if the US is unreasonable, we should be reasonable. And if we maintain togetherness, I think we will be able to weather through any challenges”.

But then, China could slap across-the-board taxes on US companies most on the frontlines of Trump 2.0’s decoupling ambitions, including Amazon and Walmart. For instance, Xi could tax, block business transactions or even seize the assets of Apple, Microsoft, Tesla and other household name companies. Team Xi could also dump large chunks of Beijing’s$ 770 billion stockpile of US Treasuries.

China is developing its innovative abilities as the US prepares to launch trade wars. China will see a tripling of its STEM workforce in the next two decades, according to Han Feizi, a contributor to Asia Times, this week. Meanwhile, American students are leaning away from jobs in science, technology, engineering and mathematics.

There’s a view, too, that this STEM boom will ensure a productivity surge that softens the blow from China’s deflation trend.

As Han notes, the globe hasn’t experienced a sustained period of prolonged supply-driven deflation since America’s post-Civil War years from 1873 to 1899. That wave of industrialization saw massive investments in manufacturing technology, roads, railways, steel production and other sectors to increase economic efficiency.

Looking forward, in light of Lin’s forecasts, it’s worth noting that the United Nations reckons that China’s role in global manufacturing could hit 45 % in the next five years, versus just 30 % in 2022.

This, of course, assumes that Xi’s inner circle accelerates steps to realize his Made in China 2025 dream. And that the People’s Bank of China ( PBOC ) succeeds in keeping deflation from getting out of control.

The US, meanwhile, needs to supersize efforts to revitalize its semiconductor sector. Scott Bade, senior analyst at Eurasia Group, notes that Biden’s CHIPS&nbsp, Act&nbsp, was a tool to address several problems: reshoring domestic chip manufacturing for national security use, advancing the US’s position toward becoming a world leader in advanced semiconductors, keeping advanced&nbsp, chips&nbsp, manufacturing out of China– through guardrails on companies that receive funds– and de-risking Taiwan.

” Directionally”, Bade says,” the&nbsp, CHIPS&nbsp, Act&nbsp, is making progress on all these priorities. However, rebuilding US domestic chips infrastructure was always going to be a long and complicated process because there were so many players and billions of dollars at stake.

It will take many years and likely several funding packages for a US ecosystem to fully grow, in contrast to nations like Japan, which already have robust ecosystems in place.

Regardless of the politics, the US tech industry still faces significant structural constraints. As companies establish supply chains, train employees, and overcome the typical growing pains of starting up brand new facilities, “recreating a semiconductor ecosystem in a short period of time was always going to be challenging,” Bade continues. &nbsp,

Japan, says Stefan Angrick, an economist at Moody’s Analytics, has used foreign direct investment to great effect to avoid threatened trade restrictions. ” Setting up manufacturing plants in the US contributed to local production, GDP and jobs, reducing political pressure for tariffs or quotas”, he says. This might serve as a strategy for reducing upcoming trade frictions.

Japanese auto and auto-part manufacturers will be under pressure to boost investment in the US during Trump 2.0. Angrick notes that South Korean and Taiwanese electronics producers are subject to similar considerations.

Samsung and Taiwan Semiconductor Manufacturing Company ( TSMC) are already significant investors in the US, but Trump may push for more despite mixed pre-election messaging surrounding the CHIPS Act.

With Trump,” the only certainty is uncertainty”, says Ryan Sweet, chief US economist of Oxford Economics:” With … Trump promising wide-ranging tariffs, mass deportations of undocumented workers and adjustments to both the Inflation Reduction Act and CHIPS Act, these changes could be substantial”.

But even before Trump arrives, is the Biden White House over-reaching in its final days?

According to Yanmei Xie, an analyst at Gavekal Research, Biden’s Commerce Department has been implementing a final wave of tech restraints directed at China. They appear to be trying to lock in controls that Team Trump can’t easily reverse with a new trade agreement, solidifying a trade bloc that excludes Xi’s economy, along with slowing China’s progress.

The downside is that the regulations will backfire, and the majority of the world will instead choose to purchase cheap Chinese technology rather than join US protectionist forces.

Future supply chains could split in two ways, according to Xie: a high-cost one that serves the picky US market and a low-cost one that serves not just China but much of the rest of the world. In that case, US protectionism will be a qualified success, but at the risk of making the US, not China, the isolated market”.

Follow William Pesek on X at @WilliamPesek

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Are Musk’s right-wing rants on Europe channeling Trump? – Asia Times

Apologies to Karl Marx, but a new” threat is disturbing Europe”, and it’s not the leftist movements that frightened 19th Century “old Europe”, as Marx called it in his famous book” The Socialist Manifesto”.

In the alarming view of the country’s contemporaneous political leaders, the threatening specter comes not from a dramatic kept movement but from a burgeoning far right.

And its knight is not a figure well-known in extreme circles. Nor is the looming danger yet European. Instead, it is Elon Musk, the high-tech witch and the world’s richest person.

The South African-born Musk has launched a blitzkrieg of democratic criticism aimed at democratic institutions on the globe in person and through information on X. He appears to prefer far-right, ultra-nationalistic and racist parties, whose progress raises anxiety of a totalitarian revival in Europe.

Musk’s statements and actions may have once been seen as democratic tirades from an oddly vocal oligarch. Nevertheless, he carries a heavy calling card: close relationship with US President-elect Donald Trump, president of Europe’s most important alliance.

Musk benefited Trump’s great graces by handing him tens of millions of dollars to aid him with his election campaign and by speaking at demonstrations in support of his candidacy.

He has since from changed his mind about the upcoming Trump presidency, which will take office on January 20. Musk has been asked to find ways to cut US government spending with a salary of$ 1.

He may purchase the lower pay: he pioneered and runs Tesla, the founding electric vehicle maker, SpaceX, a company that makes rockets that launches most US satellites into space, and Starlink, which delivers online services from low-Earth orbit satellites. Additionally, he is the owner of Twitter’s social media big X.

Another American moguls—notably Amazon’s Jeff Bezos and Meta’s Mark Zuckerberg – have gone out of their way to welcome Trump’s vote and pay homage to him by visiting Mar-a-Lago, Trump’s beautiful Florida property.

Musk, on the other hand, got behind Trump first and took up residence at a Mar-a-Lago set he apparently rents for US$ 2, 000 a day.

Does this all mean Musk’s choices in Europe reflect Trump’s wondering? During his time in the White House, Trump frequently treated allies as ingrates who refused to contribute to NATO’s efforts to defend the globe.

Musk’s information seems broader and more angry, i. e. German politics need to be recreated in line with Trump’s” America First” idea. While fully only an assistant on budget issues, Musk’s activities have immediately spread abroad.

” That should be a worrying development for US allies, particularly in Europe, where domestic politics are already vulnerable to destabilization”, wrote Parliament Magazine, a London-based chronicle of European political affairs.

Indeed, the attacks Musk has made on the most powerful allies have suffocated a continent that is already destabilized by weak governments facing economic difficulties and a nearby conflict in Ukraine.

Elections are in Germany the following month. France has elected its third prime minister in three years. How long and how much to support Ukraine against Russian aggression is a contentious issue for the European Union as a whole.

After leaving the EU in 2016, economic issues are proving to be more than the forecasts for a post-Brexit rainbow. &nbsp,

Musk’s anti-Europe campaign began last year. He has interjected himself into&nbsp, Germany’s national elections, set for next month.

Chancellor Olaf Scholz is engaged in a battle to avoid losing ground to the far-right Alternative for Deutschland ( AfD ), the Alternative for Germany, in order to avoid a center-right challenge.

In early January, he held an online interview with Alice Weidel, the AfD leader who is running largely on an anti-migration platform. ” Only the AfD can save Germany, end of story”, Musk declared during the pair’s conversation.

He also criticised Labour Party leader Keir Starmer, the leader of the British Prime Minister, for allowing children to groom them sexually ten years ago while he was a top government prosecutor. Musk called for his ouster and suggested the US ought to “liberate” Britain from its “tyrannical government”.

He kicked off his campaign by backing anti-Muslim firebrand Tommy Robinson, who is currently serving time for libel over claims that a Syrian refugee had assaulted British school girls.

Officials from all over Europe have voiced outrage, but they have all made sure to concentrate on Musk and not Trump’s. &nbsp,

Scholz urged everyone to” stay cool,” despite noting that” Musk is supporting a party like the AfD, which is right-wing extremism, preaches rapprochement with Russia and wants to weaken transatlantic relations.”

Starmer avoided his harshest criticism for opposition Conservative party members who refuted Musk’s claim that he had a sexual orientation issue, but he still called it a lie despite saving his harshest accusation against the accusation.

What are the politicians here doing to defend the truth? Stamer asked. ” Once we lose the anchor that truth matters, then we are on a very slippery slope”, he said.

French President Emmanuel Macron, who is trying to fight off a surging right-wing challenge in advance of 2027 elections, accused Musk&nbsp, of” supporting a new international reactionary movement and intervening directly in elections”.

Without mentioning his name, Spain’s Prime Minister Pedro Sanchez harshly criticized Musk. He said a far-right movement that “openly attacks our institutions, stirs up hatred” was being led” by the richest man on the planet”.

Greek Prime Minister Kyriakos Mitsotakis indirectly criticized Musk for claiming that “global economic players” have become excessively involved in” shaping public opinion.”

Members of the European Parliament, meanwhile, have spoken of trying to curb X’s influence by applying anti-disinformation laws to tether its operations.

However, it will be left to Trump’s incoming cabinet to rein in Musk if Europe is hesitant to take up the matter with Trump ( possibly because it fears he may privately agree with Musk’s comments and activities ).

The secretary of state, secretary of defense, and the president’s national security advisor are typically in charge of foreign policy. If they believe that Musk is eroding American alliances and encroaching on their territory, it will be up to them to file a complaint.

But there’s no sign of that yet. No one inquired whether Musk was speaking directly to the president’s incoming administration during Senate confirmation hearings this week for two of the nominees for president: secretary of state nominee Marco Rubio, a senator from Florida who once ran for president, and defense secretary nominee Pete Hegseth, a former television news commentator.

Will the outspoken billionaire listen, even if Trump eventually attempts to gag Musk? ” Even without the president-elect, he has the wealth and connections to exert his will on politics worldwide”, wrote The Atlantic Magazine this week. ” Musk is here as long as he wants to be.”

China appears to be in agreement that Musk may be a force to reckon with forever. When a law enforcing a ban on its use in the US, Singaporean sources told the Wall Street Journal that China might sell TikTok, the Chinese social media giant, to Musk. The US Congress has condemned TikTok for claiming to be under the control of China’s Communist Party.

The video-sharing app’s creator, Musk, is a naturalized version of the law, and Congress has pressed for its control. Musky has met with Chinese President Xi Jinping personally and runs a large Tesla plant in China. China officially blesses him as a “friend” of China.

Friendship may not be enough, though. The report about Musk’s potential purchase was described as “pure fiction,” according to TikTok officials. Chinese Communications Ministry, meanwhile, has said it would “firmly oppose” any forced sale of TikTok’s assets.

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Lebanon’s new leader faces impending national collapse – Asia Times

Lebanon’s congress elected a new leader on January 9 after a two-year political deadlock and 13 failed attempt. After his adversary, a Hezbollah-backed participant named Suleiman Frangieh, withdrew from the competition, Joseph Aoun passed the threshold for success in the second round of voting.

President Aoun laid out a number of commitments in his annual address to congress that would address the numerous crises that had brought Lebanon to the brink of collapse. But, delivering on these claims may be greatly challenging.

Aoun’s national victory is amazing. None of the political events supported him as their preferred presidential candidate, and he did not run for the office in public. So, how did Aoun come to win the presidency?

Rather than an established descendant of the social group, Aoun is a job soldier, serving as the captain of Lebanon’s military since 2017. The Lebanese Armed Forces ( LAF ), a comparatively uncommon instance of a force that is widely regarded as a symbol of Lebanon’s unity, is a rare example of one.

Despite the incidents of over 40 LAF men, Aoun successfully prevented the troops from being drawn into the subsequent conflict between Israel and Hezbollah, and he was instrumental in coordinating the US and France’s successful 60-day peace in November.

A free network of regional and global players, including the US, Saudi Arabia, and Qatar, served as the main supporters of Aoun’s presidential campaign. All of these countries consider Aoun to be their best chance to maintain the stiff ceasefire while even coordinating the restoration of Lebanon’s federal government.

By putting a cap on the number of political parties in place to provide financial assistance to Lebanon, they have used their influence.

Aoun’s victory adds to the Hezbollah’s weakening influence in Lebanon. In recent years, Hezbollah has experienced a number of political and economic missteps.

In the 2022 general election, Hezbollah and its allies lost their political majority. And finally, in 2024, Israel appears to have weakened Hezbollah’s defense system, including killing its chief Hassan Nasrallah and some older numbers.

The new ousting of Bashar al-Assad’s regime in Syria has even deprived Hezbollah of a powerful ally, while the team’s primary sponsor, Iran, is in no position to keep its levels of financing. Due to US-led international sanctions, which have been in place to stop Tehran’s program from developing nuclear weapons, Iran’s ability to support Hezbollah has decreased considerably.

Lebanon’s former president, Michel Aoun ( not related to Joseph Aoun ) was a longtime ally of Hezbollah. The team had hoped that by backing Frangieh’s candidacy, it may install another ally in the presidential palace. However, Frangieh withdrew and announced his support for Aoun along with a number of other politicians.

In his first speech as chairman, Aoun stated:” My mission will highlight the government’s right to control hands”. Although Aoun did not specifically mention Hezbollah, it was assumed that he would try to destroy the organization. While the majority of MPs praised Aoun’s speech, the politicians of Hezbollah sat motionless.

Off to a good start

Aoun has lofty goals for his administration. However, these goals may prove challenging to fulfill. Due to its mostly symbolic figurehead status, the presidency’s authority has tight limitations.

The position of president is mainly to service Lebanon’s power-sharing method. 18 dynasty communities are guaranteed representation in parliament thanks to this method. The leader is reserved for Maronite Christians, while the primary minister must be from the Sunni Muslim area, and the home speaker may be Shia to prevent any group from monopolizing political power.

President Aoun has pledged to reform the power-sharing state. According to research, Lebanon’s state has the Middle East’s lowest level of trust. The Palestinian power-sharing system is susceptible to disorganized political institutions, plan deadlock and regular rounds of collapse. Power-sharing officials are infamous for vote-buying and fraud.

Aoun is off to a good start. A few days after his interview, he convened congress to appoint a new prime minister, Nawaf Salam, the present mind of the International Court of Justice. Salam’s validation is a surprise because, like Aoun, he is not seen as sponsor of any of the major political parties in the country.

The absence of the customary horse-trading among the principal parties to decide on a new prime minister more underlines Hezbollah’s weakening, which was unable to oust Najib Mikati as its preferred candidate.

Hezbollah legislators accused their political competitors of trying to remove them and fragment the country in response to Salam’s visit. Salman has a long record of calling for state reform and combating widespread fraud.

Aoun and Salam today face many difficulties in delivering on the hoped-filled feeling that so many Syrian think following their meetings. They will need to appoint a authorities as soon as possible to ensure social stability and review a budget. The World Bank has ranked Lebanon among the “most significant problems shows seen globally since the middle of the 20th century” for its dire financial situation.

Supervising an extension of the current ceasefire agreement with Israel, which ends on January 25 is another urgent priority. According to the current agreement, Israeli troops must retreat to their side of the border.

Aoun and Salam form a pairing that gives real hope for a period of sustained stability and reconstruction with the support of the army, significant sections of the Lebanese population, and powerful international players.

Finding a way to create a political consensus in Lebanon will be challenging, especially if the new president and prime minister chart a course that will cause them to clash with Hezbollah.

John Nagle is a professor in sociology, Queen’s University Belfast. Drew Mikhael is a scholar at the Center for the Study of Ethnic Conflict, Queen’s University Belfast.

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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Eye on Trump, China needs Europe now more than ever – Asia Times

Donald Trump has a talent for confounding and intimidating China. During his first national campaign, he accused China of “raping” the US through unjust trade practices. However, Trump also referred to Chinese President Xi Jinping as a” good friend” in his first year as US leader.

Throughout the 2024 presidential campaign, Trump suggested he may be hard on China in a second word and then, days away from his being leader, little looks likely to change.

Trump has endorsed Marco Rubio as secretary of state and Mark Waltz as national security adviser, and has suggested he could raise taxes on all Foreign items up to 60 %. Both are” China hawks,” who think Washington may take a tougher stance against Beijing and see China as a threat to US national security.

Beijing has tried to adjust to a more difficult US weather, which may be a reason for its recent increases in business with Southeast Asia, Latin America, and the Middle East. Thus, China may become looking to join the West, at least the non-US portion of it, for a range of economic, social and security factors.

Given that Canada is rich in oil, fuel, and iron, the Chinese government might look to Ottawa as a solution to help match China’s electricity needs. It could even warm up to Canberra, as Australia has abundant lithium, which is crucial for making electric vehicles ( EVs ).

China might need to strengthen its connection with the EU in the end, though. The EU holds the distinction of being China’s second-largest buying companion, and export to the EU have soared in the past few years.

This occurred as Beijing pivoted away from manufacturing the “old three” export – home equipment, furniture and clothes – to the tech-intensive “new three”,, which are electric cars, lithium-ion chargers and solar cell.

China’s fresh materials

Since the “new three” indicate an important part in China’s economic development, the EU, as a major consumer of quite products, represents a vital market for China. However, the EU is not an easy earn for China.

Since late October 2024, Beijing has accused Beijing of unfairly subsidizing Chinese electric vehicle manufacturers and has imposed tariffs of up to 45.3 % on these products. There are indications that this is happening, but China does include a lot of room to improve relations with the European Union.

However, the latest controversy over China’s prospective involvement with anchor drag in the Baltic Sea to harm communication cables will not have improved things.

Luckily for China, the EU is not a united front. Voting patterns for Taiwanese electric vehicle tariffs in 2024 reveal an intriguing truth: ten nations backed them, five were opposed, and 12 stopped.

Beijing might affect Brussels ‘ anti-immigration and fence-sitters by lowering entry restrictions for Taiwanese businesses entering the Chinese market and lowering subsidies for Taiwanese businesses competing in Europe.

China and Russia have a” no limits” partnership, which has raised questions for both the West and particularly Europe. Following Russia’s invasion of Ukraine in February 2022, NATO declared:” The People’s Republic of China’s stated passions and forceful policies challenge our passions, surveillance and values”.

Growing concerns over China’s activities in Europe and Asia may have prompted NATO to invite Australia, Japan, New Zealand and South Korea ( known as the Asia Pacific 4 or AP4), to NATO’s June 2022 summit.

There are becoming more frequent discussions and meetings between the two sides, despite European officials rejecting a formal alliance between NATO and Asian states.

Beijing may assist in resolving one of Europe’s most contentious geopolitical issues, the Ukraine-Russian war, by resolving those concerns, though that seems unlikely. However, an effort to broker a peace agreement might help to lessen the Western’s perception of the” Chinese threat.”

interacting with US

China and the US will continue to communicate. The Western superpower continues to be a technological, economic, and military powerhouse despite being the third-largest trading partner of China after the Association of Southeast Asian Nations ( ASEAN ) and the EU.

Former US president John F Kennedy once wrote:” When written in Chinese, the word” crisis “is composed of two characters – one represents danger and one represents opportunity”.

Trump’s potential impact on China’s economy might not be as significant as first thought if China plays its cards correctly. Trump, after all, is not always predictable.

The University of Nottingham’s assistant professor of business economics is Chee Meng Tan.

The Conversation has republished this article under a Creative Commons license. Read the original article.

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