Oil economics could sway the US election – Asia Times

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Like no other bounded natural source, fuel continues to have an impact on global politics and economics. In the 2024 US national vote, the proper product will be an important regional problem.

The US has a specially close connection with the black thing because it is the biggest oil producer and consumer on earth. The applicants are aware of this.

Donald Trump has promised to “drill, drill, drilling” and apparently courted the financial support of business giants. The tycoons have responded by donating US$ 7.3 million to Trump’s battle, which is three times the amount needed for his 2020 bid.

However, Joe Biden’s clean energy policy and different legislative initiatives have attempted to lessen reliance on fossil fuels. He has also overseen a rise in home oil production and promised to keep gas prices low for drivers at the same time.

In the US, a nation whose love affair with vehicles is well-known, it represents an important claim. Auto dominance has increased as a result of out-of-town shopping centers, protracted routes, and a lack of federal funding for public transport, with many cities built around massive road networks.

Therefore, it may not seem surprising that pumps rates have a major impact on voter behavior. Research has also demonstrated that oil prices have an “outsized impact” on consumer sentiment and prices expectations. As gas prices rise, confidence in the economy declines.

And while many European and Asian nations have switched to alternative energy sources, the US still relies heavily on fossil fuels for transportation. Electric models make up only 8 % of vehicles sold in the US, compared to 21 % in Europe and 29 % in China.

The Democratic party may be seriously concerned about any increase in fuel costs ahead of the US summer “driving time,” when holidays and better temperature encourage more road journey and fuel usage is estimated to be 400, 000 barrels per day higher than other times.

However, it’s also true that anyone in the White House has a limited ability to affect gasoline prices. The cost of crude oil, whose price is determined by international markets, accounts for about 50 % of the pump price.

The US continues to trade its oil around the world despite producing enough domestic oil to cover its consumption. Congress passed legislation in 2015 to ease the country’s four-decade restrictions on US crude oil exports, allowing US companies to sell their products to the highest international bidder.

Some US refineries can only handle a certain type of crude oil, which must be imported, to complicate matters further. A US president is not in charge of any international events or decisions regarding foreign production.

In fact, political crises in other oil-producing regions have contributed to oil price spikes, which show how continued dependence on oil, whether domestically produced or imported, leaves the US vulnerable to global market shocks, which could in turn affect electoral outcomes.

The Republican party used a rise in gasoline prices to criticize Biden’s environmental policies, which had reduced domestic oil drilling and ended drilling leases in the Arctic, following Russia’s full-scale invasion of Ukraine in 2022 and production cuts from countries like Saudi Arabia in 2023.

Big oil, little oil

Domestic oil and gas regulations have a role to play, as oil producers make up a significant body of influence in the US, even though the US president has little control over the fuel prices that voters pay.

The US oil industry is unique among oil-producing states in that it is dominated by a sizable number of small independent producers who make money from the extraction and sale of oil from their land, aside from the large corporations that support Trump.

Petrol pump screen with sticker of Joe Biden and the words 'I did that'.
Some campaigners attribute Biden’s blame for pump price increases to Biden. Photo: ZikG / Shutterstock via The Conversation

In most oil-producing countries, subsurface oil is owned by the state.

However, in the US, the private landowner owns the mineral rights, which allow oil companies to drill on their property. In 2019, there were 12.5 million royalty owners in the US. Around 9, 000 independent fossil fuel companies operate alongside them, which account for 3 % of the country’s oil and provide 4 million jobs and contribute 3 % of GDP.

Those companies drilling on state-owned land pay a royalty rate to the government, which up until recently was as low as 12.5 % of the subsequent sales revenue. Biden’s decision to raise the rate to 16.67 % did not go down well with oil producers.

Despite that rise and Biden’s commitment to advance the US energy transition, the expansion of the domestic oil and gas industry has continued under his leadership. US oil production increased to an unprecedented level in 2023, reaching 12.9 million barrels per day, and forecasters project a 2 % increase in production in 2024.

Rising US oil prices may support the Democrats ‘ campaign for re-election, but rising gasoline prices will not, despite the fact that their levels depend on much more than Biden’s energy policies. Instead, it might be that oil markets ‘ global economics influence the outcome of voters ‘ ballots and determine who wins and who loses in November 2024.

Emilie Rutledge is senior lecturer in Economics, The Open University

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

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Iran’s Pezeshkian a ray of hope for the West – Asia Times

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Words that are often used in the same word in recent years, especially in Western news reports, are encouraging democracy in Iran. However, Masoud Pezeshkian’s vote as Iran’s president must be seen as a good development.

Pezeshkian is a well-known senator who served as health minister in Mohammad Khatami’s liberal government between 2001 and 2005. He has just made a strong criticism of the brutal assault on large-scale rallies in 2018 and 2022.

Pezeshkian defeated his conservative opposition, Saeed Jalili, the original cause nuclear negotiator, by a ratio of 2.7 million votes in the run-off voting held on July 7. Turnout was 49.7 % of the 61 million eligible voters, ten items more than the first vote where fewer than 40 % voted.

Pezeshkian, 69, was born in the city of Mahabad in Iran’s West Azerbaijan Province and speaks competent Kurdish and Azeri. He completed his training as a cardiac surgeon and enlisted in the Iran-Iraq battle from 1980 to 1988.

Pezeshkian, a vocal supporter of civil rights for Iranian women, unsuccessfully ran for president in 2013 and 2021 ( he was disqualified by the Guardian Council in that election ).

Pezeshkian is known to get in favor of closer ties with Europe, yet the US. Ayatollah Ruhollah Khomeini, the chief of Iran’s Islamic Revolution in 1979, addressed the audience at his tomb, where he prayed after the poll results were announced, saying,” I have come… to the area,… to get long enduring peace and tranquillity, and cooperation in the region, as well as dialogue and productive interaction with the world.

But you Pezeshkian provide the social equality, political accountability, and individual rights that millions of Iranians desire and have been risking their lives for? Do n’t forget that these lofty ideals were at the forefront of the revolution of 1979. And they have been severely betrayed, in distinct in recent years.

The comparative lack of enthusiasm for the votes, at least in the first round, suggests a high level of frustration in the public. But the ten-point increase in the number of citizens, when it appeared that they just may end up with a activist in the president, is revealing. Iranis have gathered once more.

No false claims

Pezeshkian is aware of the stress and devastation that regular Iranians experience so frequently. He made this clear in his discourse from Khomeini’s tomb.

” In this election, I did n’t give you false promises. I did not lie”, he said. It has been many years since the revolution that we appear on the podium, make promises, and do n’t deliver them. This is the biggest issue we currently face.

However, the new leader and his administration will have to explore the numerous subordinates that make up Iran’s complicated state apparatus. These establishments are currently dominated by the conventional right.

The traditional group supported by the supreme leader, Ali Khamenei, who serves as the supreme head of state, succeeded in reviving prior efforts to reform the political system, most importantly under Khatami in the early 2000s. Pezeshkian is aware of how difficult it will be to implement true reform because he has served in this state.

He is even aware that he only has a limited time to effect adjustments. The new leader will not be the only one who has become extremely impatient with his or her officials. The drive towards reform did continue, if needed with more demonstrations.

In from the cool?

But there is cause for optimism, also in the realm of international politics. There is the potential for a constructive dialogue with Washington, as long as Donald Trump is n’t the next US president. The UK and the European Union are both at the same level.

One of Pezeshkian’s important supporters is Javad Zarif, then an intellectual, but originally foreign minister under the liberal former leader Hassan Rouhani. Zarif spoke at rallies all over the country in support of his colleague in the vein of Pezeshkian on the campaign road.

The US-educated Zarif was especially near to John Kerry, Obama’s secretary of state from 2013 to 2016. Their relationship was incredibly crucial in the negotiation of the Joint Comprehensive Plan of Action (JCPOA ), the first direct negotiations between Iran and the US since the Iranian Revolution of 1979. These close ties are important.

Therefore, Pezeshkian has a chance to resume a new book in Iran’s domestic and international politics. And incidentally, this is why he was allowed to run in the vote and the message that it sends to the divided and angry Egyptian electorate that they do include a degree of political choice.

In this way, he is intended to work for the structure, both domestically and internationally, particularly with the US and Europe.

After all, the conservative Guardian Council, the same physique that barred him from the 2020 presidential election, was the only revolutionary candidate allowed to run in this vote.

But this new Iranian leader sends a message to the world that Iran can be discussed with and that Egyptian society can choose a certain course of action.

Mass demonstrations following the death of Mahsa Amini, a 22-year-old Kurdish-Iranian woman who was killed by the conscience authorities in September 2022, had lingering unease and resentment, which is a major cause of concern for the state’s traditional core.

This was followed by a dangerously low attendance at the 2024 congressional elections, where only 40 % voted. The key state institutions saw both as an indicator of a major political crisis in Iran.

Pezeshkian’s election is a sign that the establishment is aware of the fact that the country’s validity had begun to be threatened by the lack of widespread support.

In many ways, Pezeshkian is able to eventually establish a method that is responsible to the Iranian people. However, it wo n’t be simple, and he will also be aware of the pressure coming from the conservative right.

Pezeshkian might be a genuine democratic leader and a creative activist, or he might be just another example of the overwhelming majority of Iranians ‘ political will.

Arshin Adib-Moghaddam is Professor in Global Thought and Comparative Philosophies, SOAS, University of London

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

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US needs smarter policies to avoid a China war – Asia Times

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A group of guys board ships that are in opposition and immobilize them with swords and axes at their disposal. Consider this to be from the Age of Sail? Consider afterwards.

Another illustration of Beijing’s willingness to defend its claimed place is China’s recent increase of its disagreement with the Philippines. This function follows a similar increase in 2020 along the Sino-Indian frontier where both sides&nbsp, used sticks and stones to support their promises, not to mention China ‘s&nbsp, defense drills&nbsp, around Taiwan.

Washington had better comprehend Beijing’s willingness to fight for its perceived territory in light of the US’s pledge to help the Philippines and Japan with its rock and reef claims and potential aid for Taiwan, as well as develop a more effective strategy, as a weakening conflict is a possibility.

The risk of conflict over China’s disputed lands is true. Since at least 2012, Beijing has earnestly pressed its promises, including building&nbsp, military outposts in the South China Sea&nbsp, and maintaining a&nbsp, typical beach watch presence&nbsp, around the Senkaku/Diaoyu Islands.

However, China has been willing to use force to&nbsp, defend its claims since at least 2003&nbsp, when they became part of its” core interests”, as they are viewed as vital to national survival.

Chinese President Xi Jinping ‘s&nbsp,” China Dream” of the” Great Rejuvenation of the Chinese Nation” &nbsp, by 2049 further ties these territories to the political legitimacy of the Chinese Communist Party, effectively making them uncompromisable.

China will likely continue to assert disputed territory regardless of the ruling party until a solution is found, leaving a conflict with Beijing perpetually on the table. Since the late 1800s, regaining China’s lost territory has been a priority.

This was true when the&nbsp, Republic of China ( ROC ) controlled the country, remains consistent under the People’s Republic of China and is even nominally true for the&nbsp, rump ROC on Taiwan. Moreover, territorial integrity has been a&nbsp, requirement for government legitimacy since the 300s&nbsp, – far older than most states.

Given Beijing’s vital interest in its territorial disputes, Washington’s reliance on accident avoidance or threats of force is irresponsible at best and reckless at worst. China’s recent attack on Filipino vessels was viewed as cowardly, but how long will it be before both sides escalate further and Manila invokes its mutual defense pact with Washington?

The US’s pledges to militarily defend the Philippines and Japan from their disputes with China&nbsp already lack credibility. US&nbsp, military exercises&nbsp, and&nbsp, freedom of navigation operations&nbsp, have not led to a more peaceful Indo-Pacific. A conflict that could weaken or even destroy America requires smarter policy choices.

Regarding the most serious territorial flashpoint between China and Taiwan, the US can fully fulfill its legal obligations under the Taiwan Relations Act while remaining within the peace zone by revising the Six Assurances Agreement to provide additional pledges to both Beijing and Taipei.

The volume of arms sales should be proportionate to both Taiwan’s willingness to defend itself and the level of cross-Strait threat. Americans should n’t be expected to give up their lives and assets to a force that wo n’t help itself. Additionally, military sales could be linked to independence activities in Taiwan.

As the US has &nbsp, no interest in Taiwan’s independence&nbsp, and this event is the&nbsp, most likely trigger for Chinese use of force, creatively modifying Taiwan’s arms sales could become a stabilizing force. Finally, Washington should look into ways to diplomatically resolve the conflict rather than allowing it to continue to threaten US interests.

Washington should prioritize its national interests over the East and South China Sea disputes, which means reducing the risk of American deaths due to rocks and reefs.

By clarifying their mutual defense treaties could only be invoked in an attack on the home islands, the US could stop implicitly backing the Philippines and Japan’s claims – despite assurances of neutrality.

Washington should follow up and encourage Manila and Tokyo to creatively manage their disputes with Beijing, which could include a&nbsp, return to the” Duterte model” &nbsp, in the South China Sea or&nbsp, denationalized&nbsp, and regulated ownership of the Senkaku/Diaoyu Islands.

Additionally, the US can support the negotiation, establishment and implementation of the mutually-agreed&nbsp, South China Sea Code of Conduct&nbsp, to lower regional tensions.

Looking to China and India’s border dispute, the answer is easy: the US has no interest in getting involved. Washington has &nbsp, nothing to gain&nbsp, and would lose much by doing so. &nbsp, Avoiding land wars in Asia&nbsp, remains the best option.

America ought to comprehend the significance of China’s willingness to use force to defend its territorial integrity, including disputed territory. Washington must take smart decisions seriously in order to safeguard its national interests in these regions.

The stakes could n’t be higher for some of these policies, even though some of them may not be popular or even upend convention. America’s strength and survival are at risk. The answer lies in placing them first, introspectively.

Contributing to Defense Priorities is Quinn Marschik.

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China tightening its grip on leaky rare earth supplies – Asia Times

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China has implemented a number of new regulations to make it easier for sanctioned American companies to get the country’s precious metal.

The State Council lately unveiled a set of new rules, set to take effect on October 1, to control the country’s unique world economy. No business or individual is permitted to use or steal unusual world deposits because they belong to the state under the new regulations. &nbsp,

According to the rules, the Ministry of Industry and Information Technology ( MIIT ) and the relevant State Council departments will plan and coordinate the implementation of the local law-enforced plan for the rare earth industry development.

The regulations also say that a company may be fined 5-10 times of any profit it made from illegal activities in rare earth mine, smelting and separation, product distribution, as well as immoral imports and exports. If it has not yet made any revenue, it will face a fine between 500, 000 to 2 million yuan ( US$ 68, 751 to$ 275, 005 ).

If a business does n’t send the administrative details of its uncommon world businesses to the country’s solution tracking system, it will be fined 50, 000 to 200, 000 yuan. If it still refuses to publish its data, it will be shut down and fined 200, 000 to 1 million renminbi.

The State Council met on April 26 this year to approve a review of the new laws, and Premier Li Qiang signed them into effect on June 22. On June 29, the authorities made the new regulations publically.

In a remark posted on a social media site called” Shumiyuan No. 1,” a journalist wrote that” the importance of rare earths to China is comparable to that of crude oil to the Middle East. 10″ operated by the state-owned Global Times. ” China may have a say in its unique earth tools, which are essential to the development of the world’s proper emerging business”.

The writer cited US sanctions and export controls against Chinese technology firms as evidence that the implementation of the new regulations will deepen supply-side reform and ensure the safety and stability of the strategic resource industry chain supply chain, giving China the opportunity to bargain in the unfair international high-tech competition. &nbsp,

He wrote the new regulations to help China combat the smuggling and illegal mining of rare earths, strengthen its rare earth industry, and prevent foreign intelligence agencies from obtaining its technology.

In February 2022, the Chinese Ministry of Commerce accused Lockheed Martin, the maker of America’s F-35 fighter jets, and Raytheon Technologies Corp, the world’s largest producer of guided missiles, of selling arms to Taiwan and banned them from buying China’s rare earths. &nbsp,

A man allegedly bribing the manager of a Chinese rare earth company for information relating to the country’s rare earth reserves was sentenced to 11 years in prison on April 14th according to China Central TV’s report from the same day. &nbsp,

Chinese media reported last month that some sanctioned foreign defense contractors had bribed Chinese business executives into paying them to export a sizable amount of rare earths. Additionally, they claimed that some Western spies had attempted to elude China’s advanced technology for rare earth processing. &nbsp,

They claimed the Ministry of State Security had provided them with information about the situation without naming any businesses, but that they were merely referring to US companies like Lockheed Martin.

The US has made more efforts in recent years to diversify its imports of rare earth from China to countries like Australia and Brazil.

Recent developments in the industry include the discovery of an estimated 2.34 billion metric ton deposit in Wyoming, the state of Wyoming, and an estimated 8.8 million metric tons of rare earths in Norway last month. &nbsp,

The Biden administration has stated that it wants to establish a new domestic rare earth supply chain. The Internal Revenue Service granted the California-based MP Materials a$ 58 million tax credit on April 1 to help fund the construction of America’s first fully integrated rare earth magnet factory. &nbsp,

A postgraduate student using the pseudonym” Nick Wilde” claimed in an article published by Taiwan’s Liberal Times on Monday that” the proportion of China’s rare earth production to the world’s total output has decreased to about 70 % now from 90 % a decade ago. &nbsp,

The writer claims that if China’s Communist Party reduces its exports of rare earth, it will only have a limited impact on the West. ” But at the same time, China will face more Western sanctions”.

In light of the industry’s slowdown, China may refrain from starting a rare earth battle, according to other analysts.

China Rare Earth Resources and Technology, the state conglomerate China Rare Earth Group’s Shenzhen-listed subsidiary, reported on Monday that it made a net loss of about 231 million to 251 million yuan in the six months ended June 30 as compared to a net profit of 172 million yuan a year earlier.

The business claimed that over the past year, rare earth prices have significantly decreased.

Read: China wants role in US-Vietnam rare earths plan

Follow Jeff Pao on X at&nbsp, @jeffpao3

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Is Bank of Japan finally ready to really raise rates? – Asia Times

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TOKYO – After decades of brain scams, prevarications and disappointments, is the Bank of Japan suddenly on the cusp of a reputable financial tightening?

Buyers are betting that the BOJ’s policy meeting on July 30 will be the turning point for the world’s markets for a long time. One important factor is that May saw the highest base pay increase since 1993, which may seal the deal for a rate increase.

Are industry right? Only time will tell, given that gamblers ‘ terrible track record of predicting BOJ spins. The BOJ has pledged unwaveringly for 15 years that it would “normalize” interest rates and end the first quantitative easing ( QE ) experiment that was started in 2001.

Now, though, the standard rate is only 0.1 % and QE continues to offer the most aggressive corporate welfare&nbsp, system history has ever known.

Haruhiko Kuroda, BOJ government from 2013 to 2023, passed up many opportunities to move up QE. Even in the homestretch of his generation at the helm, Kuroda lacked the persistence to commence “tapering” the BOJ’s US$ 5 trillion harmony plate.

BOJ Governor Kazuo Ueda has jumped at every chance to put a considerable tightening shift on the scoreboard since taking office in April 2023. Or even just to reduce the impact of buying of bonds and stocks.

Does that change later this month, there’s a bigger query worth asking: are international markets available for the BOJ to reach the brakes, especially as the yen tests the 162 level against the US dollar?

Given that the BOJ has been holding prices at or close to zero since 1999, it’s impossible to say. Since next, Japan has become the best bank country. The japanese carry industry, a method of borrowing money in yen and investing those funds in higher-yielding assets around the world, quickly gained popularity as a result.

Therefore the risk that the renminbi might surge immediately, pulling the rug out from under businesses everywhere. Any tinge of a japanese boom in recent years shocked bond and stock markets from New York to Johannesburg to Seoul.

This threat complicates Ueda’s decision-making math. If the BOJ acts very confidently, it may collapse international markets. Act to cautiously, and the BOJ will struggle even more to find a way out of QE.

Kazuo Ueda, the government of the Bank of Japan, is in a QE hot seat. Image: Twitter / Screengrab

” For all the chat of how the world economy is holding up better than expected, one big business is not performing in line with that narrative”, says Helen Besier, scholar at Moody’s Analytics.

A unique next update to GDP data revealed that the year started with a larger recession than previously thought in what was yet another difficult week for the Chinese economy. Moreover, the besieged money hit its lowest level since mid-1986″, she said.

Besier adds that “business assurance, as measured by the Bank of Japan‘s Tankan review, did hang constant, but the level top-line display masked failure in nonmanufacturers, mainly service companies. To cover the month, travel-adjusted consumption exercise in May was smooth than April”.

There is no denying that 25 times of zero costs and 23 years of quantitative easing have caused more harm than good.

QE was a last-ditch effort to revive a listless person, and it was never intended to be a permanent component of Japan’s financial environment. Over time, nevertheless, Japan Inc required bigger and bigger quantities to be aware.

Now, years of strong economic aid have deadened Japan’s dog spirits. It has reduced the necessity for the 12 governments that led Japan since the late 1990s to reduce bureaucracy, release labour markets, stage playing fields, support a startup boom and empower women in the workforce.

Companies were compelled to innovate, restructure, and take significant risks as a result of excessive stimulus. The BOJ continued to produce bigger and bigger punchbowls rather than reverse course or simply throttle back on liquidity.

All of this makes the BOJ reluctant to allow the yen’s declines to deepen. Sho Nakazawa, a strategist at Morgan Stanley MUFG, predicts that a BOJ adjustment toward tighter policy could result from a further yen depreciation.

Yet since December,” the yen has steadily weakened even though the rate gap is no higher than it was back then”, notes economist Richard&nbsp, Katz, author of&nbsp,” The Contest for Japan’s Economic Future”.

As such, notes Udith Sikand, analyst at Gavekal Dragonomics,” a political head&nbsp, of&nbsp, steam is building in&nbsp, Japan&nbsp, for a change in the way policymakers handle the yen”.

With the currency now down 31 % against the US dollar since Prime Minister Fumio Kishida took office in October 2021, the yen’s weakness has been instrumental in keeping&nbsp, Japan’s inflation rate above the central&nbsp, bank’s 2 % target for the last two years.

” After a decades-long battle against deflation, this might have been considered a policy success”, Sikand says. ” But&nbsp, Japan’s politicians are fast rediscovering that if there is one thing voters detest, it is price rises.

A change in exchange rate policy is all but certain as a result of survey respondents now citing inflation as the main reason for the Kishida government’s terrible approval ratings.

Some of that pressure may be coming from Japan’s national security establishment. The disappearing yen is making it harder for Tokyo to ramp up military spending, as per Kishida’s 2022 plan to more than double defense expenditures.

That 43 trillion yen budget ( more than the equivalent of US$ 300 billion at the time ), spaced out over five years, was aimed at countering China’s military rise.

Fumio Kishida, the prime minister of Japan, appears shaky. Image: Twitter Screengrab

As Japan’s purchasing power evaporates, Tokyo is already canceling orders for military aircraft. This dynamic wo n’t help Kishida’s odds of hanging onto his job when the Liberal Democratic Party ( LDP ) holds its September election.

All this, of course, is the cost of Japan’s over-riding policies this past decade. This has become especially important since the government gave the BOJ the green light to completely reform its balance sheet in 2013. The economy might not be recovering from the recovery room if Tokyo had carried out the bold reforms promised by the ruling LDP.

That’s not to say Japan has been devoid of structural change. The Nikkei 225 Stock Average reached its all-time high this year thanks to efforts to improve corporate governance. Additionally, unions and large corporations may be negotiating lucrative wage increases.

Japanese workers ‘&nbsp, base salaries increased 2.5 % in May year on year. The BOJ’s own data show many regions reported that” wage growth is broadening to surpass or is in line with last year’s elevated levels” for small and medium-sized businesses, too.

The longer-term consequences of these increases are an open question. Officials had hoped to start a virtuous cycle of increased wage gains that boost retail spending and corporate profits that result in ever-larger pay increases in the 13-plus years since the LDP’s return to power.

But that could prove inflationary. Consumer prices are already above the BOJ’s 2 % inflation target. The “bad” kind imported via a weak currency are the upward price pressures Japan is experiencing.

In recent years, the yen’s declines accelerated while oil and food prices rose all over the world. The sudden return of inflation, after 20 years of deflation, has undermined consumer confidence.

A sudden rise in Japanese yields could also slam shoddy on the stock market, thereby stifling both consumer and business confidence. Herein lies one of Ueda’s biggest fears: triggering the next Lehman Brothers-like shock.

Like his immediate predecessors, Ueda wants to avoid becoming one of the pantheon of BOJ leaders hailed for making policy mistakes that ruin markets.

The worst such blunder was in&nbsp, 1989 and 1990. As Japan’s” bubble economy “went haywire, the BOJ yanked away the proverbial punchbowl more aggressively than markets expected. As such, then-governor&nbsp, Yasushi Mieno’s 1989-1994 tenure is remembered as a cautionary tale for central bankers everywhere.

Lessons also abound from Toshihiko Fukui’s 2003-2008 governorship. Fukui even managed to put an end to QE for a while and twice raise official rates. However, the resulting recession caused a severe political backlash. By 2008, Fukui’s successor had been reinvigorated and cutting rates back to zero.

In the final year of his presidency, Kuroda opted against preparing for a QE exit. Ueda is now obligated to halt stimulus without causing a recession or panic in the world financial system.

The first quarter’s annual growth rate in Japan decreased by 2.9 %, complicating the situation. Another concern is the potential impact of destroying the yen-carry trade on the world.

Since the late 1990s and early 2000s, financiers of all stripes – hedge funds, especially – routinely borrowing cheaply in&nbsp, yen &nbsp, to bet on riskier assets boosted markets worldwide.

As such, sudden&nbsp, yen &nbsp, moves have a knack for shaking global markets, reverberating through stock, bond, commodity and real estate markets from New York to Sao Paulo to London to Mumbai to Seoul. Given that bourses in Shanghai and Shenzhen&nbsp, lost around$ 7 trillion of market value from a 2021 peak to January of this year, yen-driven chaos is the last thing Asia needs.

China might be able to impose itself on Japan by allowing for a weaker yuan. Image: Getty / Screengrab / Al Jazeera

However, many people worry that the yen’s upward trend may also be enabling Communist Party leaders to create a more advantageous exchange rate. It’s become” more of an option” for the People’s Bank of China ( PBOC ) &nbsp” ,as the economy struggles to find its footing, “notes economist Brendan McKenna at Wells Fargo Securities.

Twenty-five-plus years later, it’s now a chronically weak yen that might give Xi the ammunition he needs to pull the exchange-rate trigger. Within reason, of course.

Beijing should never be held accountable for stoking the next global crisis. So the PBOC made the recent moves to show its support for the status quo with a more stable daily reference rate.

However, the more likely it is that Beijing will follow suit by softening the yuan the longer Tokyo keeps a weak yen policy at a time when China’s economy is in danger. Expect Beijing’s daily currency fixing exercise to become a global investor’s obsession in the coming weeks.

All of this makes the BOJ’s policy meeting on July 30 and 31 the most anticipated in a long time. And one that, if Ueda dares, could upend global markets at a particularly delicate moment.

Follow William Pesek on X at @WilliamPesek

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New Japan-Philippine defense pact pushes back at China – Asia Times

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Manila: To counteract China’s growing danger in the South China Sea, the Philippines is looking beyond the United States and toward Japan.

A high-stakes security agreement that will significantly improve diplomatic protection cooperation through joint military drills and gear transfers was eventually signed by Manila and Tokyo after years of negotiations.

President Ferdinand Marcos Jr. is promoting an “independent” foreign policy and is developing a large and well-diversified network of protection partnerships to counteract his nation’s dependence on US ally in the form of joint defense agreements.

Japan, which has recently established itself as a major regional and global surveillance person, is at the heart of the Philippines ‘ foreign policy growth strategy. Both parties have expressed concern about China’s assertive seafaring behavior, particularly along the so-called” First Island Chain” that runs from the East China Sea to the Taiwan Strait and South China Sea.

The Philippines is now only the third country, after Australia and the United Kingdom, to mark an RAA cope with Japan. The new defence pact falls far short of a comprehensive common defense agreement.

Similar to the Enhanced Defense Cooperation Agreement ( EDCA ), which Manila shares and has recently expanded to give US forces greater rotational access to its military installations, is there no such thing as a visiting forces agreement.

Rather, the new RAA specifies “procedures for joint activities that are carried out by troops of Japan and the Philippines while the power of one country is visiting the another country and establishes the legal standing of the visiting power”.

Additionally, the RAA will “improve interoperability between the causes of the two countries by facilitating the application of joint activities like joint exercises and hazard reduction between Japan and the Philippines.”

The two countries have stated that the new agreement is the result of a “increasingly extreme” security environment in the area and is a part of a wider combined effort to “promote security and defense cooperation between the two countries and strongly support peace and stability in the Indo-Pacific region.”

It’s widely expected that the Philippine Senate and the Japanese Diet, both under the sway of current administrations, will ratify the RAA soon, paving the way for large-scale joint exercises and defense equipment transfers. Shared concern about a potential Chinese invasion of Taiwan is a major driving force.

Near Taiwan’s shores, both the Philippines and Japan have military installations. Therefore, it is likely that the two parties ‘ future joint exercises will center on improving interoperability in the Taiwan Strait and Bashi Channel in order to respond to unexpected events.

Japan is also anticipated to increase its assistance to the Philippines in terms of maritime security in an effort to stop China’s actions on the water. In exchange, the Philippines will host more Japanese Self-Defense Forces for bilateral as well as multilateral drills involving like-minded nations like Australia, South Korea, Canada, and the US.

In the event that there is a significant Asian conflict to come up, the RAA could also serve as a springboard for a full-fledged alliance.

Perhaps Japan is the only country with such “bipartisan support” in the Philippines. Japan had the most favorable rating&nbsp, ( 81 % ) among the Philippines ‘ Asian partners in one recent poll, well ahead of other key partners such as South Korea ( 68 % ) and India ( 48 % ).

Japan has served as a leading&nbsp, export destination, development aid source and foreign investor, especially in public infrastructure, in the Philippines in recent decades.

All current Filipino presidents have pressed for greater strategic cooperation with Tokyo, from reformists like Fidel Ramos and Benigno Aquino to authoritarian populists like Rodrigo Duterte.

However, bilateral defense cooperation only began to gain momentum in the 2010s amid growing uncertainties over America’s commitment to the region and fears about China’s expanding military capabilities.

Tokyo and Manila have quickly increased their maritime security cooperation as Beijing has asserted its claims in both the South China Sea and the East China Sea. In particular, Shinzo Abe, the late prime minister, played a significant role in this regard by overseeing the transfer of coast guard ships and radar systems to the Philippines from the Aquino and Duterte administrations.

In exchange, the Philippines, especially under the Aquino administration, became the leading regional champion of a more proactive Japanese defense policy in the Indo-Pacific region.

Abe’s successors have doubled down on his legacy, with current prime minister Fumio Kishida calling for a new “golden age” of strategic cooperation just short of a full-fledged defense alliance in a historic speech before the joint congress of the Philippines last year.

Under Kishida, Japan has adopted a doctrine of “realism diplomacy”, vowing in the process to double Japan’s defense spending over five years. In addition to supporting like-minded countries like the Philippines in the area, Japan has recently launched a new Official Security Assistance ( OSA ) program.

Accordingly, the Philippine Coast Guard (PCG), which has already been a recipient of multiple Japanese-made patrol vessels in the past decade, is expected to acquire a new and modern multi-role ship.

The newly signed RAA is central to the fruition of Kishida ‘s&nbsp, “new vision of cooperation” &nbsp,. In their first” 2 2″ meeting in 2022, the Philippines and Japan flew to Tokyo to” strengthen defense cooperation in light of the increasingly harsh security environment” with then-Philippine Foreign Secretary Teodoro Locsin and then-Defense Secretary Delfin Lorenzana.

Despite Duterte’s generally warm ties with Beijing, his top diplomat and defense chief expressed&nbsp,” serious concern” over &nbsp, China’s increasingly assertive position in adjacent waters while broadly echoing the concern of Japan and major Western nations over Russia’s invasion of Ukraine. The two parties also discussed the transfer of new radar systems to the Philippine military in terms of a new defense pact.

Ferdinand Marcos Jr., who quickly strengthened defense ties with traditional partners following his unsuccessful visit to Beijing in January of last year, has strengthened Japan’s position as an “all-weather ally” to the Philippines.

More than nine out of ten Filipinos favor a tough and non-compromising stance in the disputed waters, which is anchored by Marcos ‘ defiance of China’s actions.

Crucially, the Filipino president has also pushed for closer trilateral security cooperation under the Japan-Philippine-US ( JAPHUS) framework. Foreign and defense ministers from both sides “understood the significance of each country’s respective treaty alliance with the United States and that of strengthening cooperation with regional partner countries” during their 2 2 meeting last year.

The RAA’s announcement comes as tensions in the South China Sea are rising, most recently as a result of Beijing’s deployment of one of its two “monster” coast guard ships in the disputed waters.

According to the most recent reports, China Coast Guard (CCG) ship 5901, which is a humongous ship three times bigger than the US Coast Guard’s National Security Cutters and five times bigger than the Philippines ‘ flagship vessel BRP Teresa Magbanua, is currently anchored at the Sabina Shoal in the disputed &nbsp, Spratly Islands, parts of which are located within the Philippines ‘ 200 nautical miles exclusive economic zone ( EEZ ).

Philippine Coast Guard spokesperson Jay Tarriela&nbsp, characterized the deployment as an “intimidation” tactic and insisted that” ]w ] e’re not going to pull out and we’re not going to be intimidated]by China ]”.

General Romeo Brawner, head of the Armed Forces of the Philippines ( AFP), asserts that the Philippines has rejected US requests for direct assistance for resupply and patrol missions in the disputed waters despite ongoing harassment and intimidation from China’s maritime forces. Knowing that it now has more tacit Japanese support, it is able to afford to do so.

Follow Richard Javad Heydarian on X at @Richeydarian

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US Sentinel missile woes raise nuclear readiness concerns – Asia Times

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The US Sentinel intercontinental ballistic missile ( ICBM ) program’s skyrocketing costs are a threat to the crucial weapon’s future in the same way that the US is facing growing nuclear competition from China and Russia.

This month, the US Air Force’s ( USAF ) Sentinel ICBM program, managed by Northrop Grumman, has seen its cost estimate soar to approximately US$ 160 billion, up from$ 95.8 billion, Reuters reported. The document asserts that soaring prices since 2020 may involve reducing the site’s range or timetable.

The Sentinel programme aims to change aging Minuteman III weapons, ensuring the progression of land-based US nuclear deterrent features. The Nunn-McCurdy Act has been triggered by the most recent price increase, which necessitates a proper explanation for the project’s increased expenditure, according to the Reuters statement.

However, according to Reuters, Secretary of Defense Lloyd Austin is likely to address the US Congress the following week, and the US Department of Defense ( DOD ) is expected to release a new cost estimate soon. The document adds that rising prices are also putting pressure on different USAF programs.

According to the Reuters report, the DOD is considering changing the structure plan and Sentinel’s construction to control costs. It mentions that the USAF has recently acknowledged a price increase to “at least”$ 131 billion in January, which now exceeded the Nunn-McCurdy level.

The US is currently engaged in a three-way nuclear arms race between China and Russia, with the US struggling to increase its army in response to its allies ‘ threats and nuclear modernisation.

A senior Biden administration standard, Pranay Vaddi, said in June 2024 that in response to China’s and Russia’s growing nuclear arsenal that the US may need to increase, ending decades of decline work.

According to the same report, this attitude, which was revealed at the Arms Control Association’s quarterly meeting, comes as China aims to have the same number of nuclear weapons as Russia and the US by 2035, and Russia threatens to employ nuclear weapons in Ukraine and storage.

The US attempts to modernize its arsenal, as demonstrated by the development of the B61-13 gravity bomb, according to the New York Times report, but expansion is on the table if adversaries ‘ trajectory does n’t change.

Additionally, it asserts that the US is still available to arms control agreements, but that it has doubtful prospects for new pacts, and that it is also getting ready for a world of radioactive contest without numeric restraints.

According to The New York Times, the US hopes to encourage Russia and China to resume arms control negotiations by promoting politics rather than unrestricted competitors.

The US faces difficulties in moving the nuclear coming toward security with no speaks on replacing the New START contract and China’s indifference in arms manage until its army is considerably increased.

China’s growing nuclear arsenal, Russia’s nuclear risks in the Ukraine conflict, and the burgeoning China-Russia nuclear assistance are all clear sources of concern for US defence planners.

In the Stockholm International Peace Research Institute ( SIPRI ) 2024 Yearbook, Hans Kristensen and Matt Korda mention that, as of January 2024, China’s nuclear arsenal has seen a significant expansion, with an estimated total stockpile of about 500 nuclear warheads.

This is an increase over the past year and 90 more than SIPRI’s projection for 2023, according to Kristensen and Korda. They assert the stockpile progress is part of China’s broader nuclear development and growth, which includes the development of property- and sea-based nuclear weapons and nuclear-configured plane.

Additionally, Kristensen and Korda point out that China’s efforts to modernize indicate a change in its nuclear strategy, which might indicate that some missiles are then combined with their supply systems, a significant change from China’s previous policy of keeping weapons separate during wartime.

They also point out that the US DOD predicts that China’s nuclear arsenal could possibly increase by 2030, but this prediction is based on speculation about the country’s future military posture and plutonium output.

There is no public information that the Chinese government has altered its important nuclear laws, including its “no-first-use” legislation, despite China’s nuclear arsenal growing and becoming more sophisticated and larger.

Kristensen and Korda also mention that, as of January 2024, Russia maintained a fierce nuclear army with an estimated 4, 380 missiles. They say that Russia’s strategic nuclear forces, comprising aircraft, land-based missiles and submarine-launched ballistic missiles ( SLBM ), account for approximately 2, 822 warheads.

They point out, however, that Russia has experienced a net decrease of 109 warheads in comparison to the previous year, despite the deployment of new ICBMs and a new nuclear ballistic missile submarine ( SSBN).

They even mention that Russia’s non-strategic nuclear causes, designed to offset perceived regular weakness vis-a-vis NATO forces, are estimated to have practically 1, 560 warheads.

Kristensen and Korda say that in contrast to China’s “no-first-use” nuclear policy, Russia’s nuclear strategy, highlighted by its deterrence policy, outlines explicit conditions for launching nuclear weapons, including in response to attacks on Russian territory or allies.

Moreover, Asia Times reported in March 2023 that Russia had announced plans to provide China with advanced nuclear reactor technology, potentially enabling a substantial increase in China’s nuclear warhead production.

In December 2022, China received 25 tons of highly enriched uranium ( HEU) from Russia’s state nuclear agency, Rosatom, for its CFR-600 fast breeder reactor. According to US defense officials, the uranium transfer could help China increase its nuclear arsenal to 1,500 by 2035.

The US sees the CFR-600 as a stepping stone for military nuclear capabilities, despite China’s claim that it is solely tied to its desire to have a civilian nuclear power.

In contrast, Asia Times reported in January 2024 that the US faces challenges in modernizing its nuclear arsenal because of issues with its warheads. Due to microscopic changes that can affect storage safety and explosive yield, the US cannot use plutonium from decommissioned warheads in new ones.

Existing US plutonium nuclear pits, designed for older weapons, may not perform as expected in newer weapons. The US wants to build 80 plutonium pits by 2026 to modernize its nuclear arsenal, but its current production capacity prevents it from achieving this goal until 2030 or perhaps even 2040.

This shortfall is attributed to post-Cold War complacency, a lack of skilled nuclear workers, declining industrial infrastructure and restrictive environmental regulations.

Despite these difficulties, the US National Nuclear Security Administration ( US NNSA ) intends to construct 30 new pits each year at Los Alamos National Laboratory in New Mexico and 50 new pits annually at the Savannah River Site in South Carolina.

However, these efforts are reportedly behind schedule, highlighting the difficulties in restarting US pit production.

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Shanghai Cooperation Organization takes another giant step – Asia Times

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The Shanghai Cooperation Organization (SCO ) held its 24th&nbsp, summit of heads of state on July 4 in Astana, Kazakhstan. When the event was n’t ignored all together, the majority of American internet criticized it, but it later proved to be one for the history books. &nbsp,

It brought together the heads of nations that make up nearly 30 % of the world’s GDP, 40 % of the landmass, and 80 % of the world’s population in one room. The fruits of more than&nbsp, two years of inter- European politics, the&nbsp, SCO has ten whole people ( Belarus joined on July 4 ) and 14 “dialogue lovers” from Asia and the Middle East, including Saudi Arabia.

The conference participants approved 25 proper documents covering power, protection, trade, environment and finance. &nbsp,

The message is, of course, that Eurasian integration continues to advance with unwavering enthusiasm despite ( or probably because of ) bloody wars, bare-faced meddling by outside powers in Asian nations ‘ internal affairs, and the growing unreliability of the US dollar as a “non-partisan” means of exchange and store of value.

Asian security concept

The true story of the SCO Summit, for anyone paying close attention ( I was that ), is that European countries are moving to establish an undivided, &nbsp, Eurasia- centric&nbsp, social security framework that may work alongside post- Military global security architecture, despite the latter’s shortcomings and contradictions. &nbsp, &nbsp,

Without making this point, some American journalists characterized the summit as either a community for business growth, an training in futile optics, or as an attempt to gain the support of states trapped in the gulag of non-Western, misfit nations. &nbsp, &nbsp,

According to the Astana Declaration,” [the member states ] find it unacceptable that individual countries or groups of state attempt to advance their own protection at the expense of the safety of other says.” Turkish President Recep&nbsp, Erdogan echoed this watch:

” As Turkey, we consistently draw attention to the flaws of the existing international order. Despite all obstacles, we are working to build an efficient international system where appropriate makes does – not the other way around – and which embraces the entire society, promotes peace, security, stability, and prosperity, tackles economic disparities, and eliminates world injustices”.

Any Eurasian nation joining the SCO would be welcomed by member states as long as they adhere to regular accession requirements. China has specifically stated that it welcomes US allies to take part in a “new security arrangement.“

The list of applicants is growing, and explains, in part, the presence at the Summit of Amir H H Sheikh Tamim bin Hamad Al Thani ( Qatar ) and H H Sheikh Saud bin Saqr Al Qasimi, Supreme Council Member and the Ruler of Ras Al Khaimah ( UAE ). &nbsp,

Turkey, a member of NATO, is close to signing up as a full member, following in Iran’s footsteps. We want to strengthen our ties with Russia and China within the Shanghai Cooperation Organization. &nbsp, We believe they should accept us not just as a’ dialogue partner’ but as a member like the others”, said Erdogan.

SCO chair and host of the confab, Kazakhstan’s President Kassym- Zhomart Tokayev, underscored the summit’s underlying focus on security:” Today, the world is facing serious challenges due to unprecedented geopolitical contradictions and growing conflict potential. The security architecture of the world is in danger, which could have dire repercussions for everyone. In such a crucial period, we have a great responsibility to strengthen peace, stability, and security through collective efforts at regional and global levels”.

Chinese President Xi Jinping made the same point: &nbsp,” No matter how the international landscape changes, the]SCO] must uphold a common, comprehensive, cooperative, and sustainable security ]system]. The security of all countries is a premise for real security.

According to Uzbekistan’s President Mirziyoyev, SCO members should “intensify joint efforts to strengthen the atmosphere of trust and friendship within the SCO and to remove barriers to further cooperation.” First of all, a thorough review of the conceptual foundation that supports the SCO’s security-related activities is required.

The heads of state of Azerbaijan, Belarus, Iran, Kyrgyzstan, Mongolia, Pakistan, Russia, Tajikistan and Turkey echoed these sentiments. Prime Minister Narendra Modi was represented at the SCO by Indian External Affairs Minister Jaishankar.

A report from the West’s press suggested that Modi was avoiding the SCO Summit because he felt uneasy about the direction the organization was taking.

Besides having urgent parliamentary duties, Modi, according to Indian sources, was reluctant to speak with President Xi until further progress is made at the ministerial level on the resolution of Sino-Indian border disputes along the Line of Actual Control in Ladakh.

It would have been premature for Modi and Xi to have met. &nbsp, Border issues between the two heads of state will probably be left until the October 2024 BRICS meeting in Kazan, Russia. Yes, Prime Minister Modi did not get to meet with President Putin in Astana, but the two leaders were already scheduled to meet in Moscow on July 8 during the NATO summit in Washington. &nbsp,

It is absurd to claim that Modi has feelings for the SCO. Western think tank leaders are more likely to be uneasy with India’s growing strategic autonomy, but that’s another story.

SCO de- dollarization

In the interim, SCO members reaffirmed their desire to expand the group’s non-SWIFT payment and settlement systems and called for the expansion of national currencies in international trade.

President Tokayev once more summarized the sentiment:” The transition to national currency settlements has gained positive momentum.” According to the Astana Declaration,” Member States emphasized the need for further implementation by the SCO to promote a gradual increase in the share of national currencies.”

As long as the West continues to impose unilateral sanctions and restrictions on the use of US dollars, which the Global South and SCO members believe are incompatible with international law and property rights, the organization’s efforts to break away from Western payment and settlement systems will continue to grow.

In conclusion, the 2024 Astana Declaration was no simple rehash in bureaucratese of the 2022 Samarkand Declaration. In its SCO format, the Astana Declaration represented a thoughtful set of statements and principles about the intentions and policies of the organization’s members. It would be foolish to dismiss it and the SCO members ‘ speeches as mere banter or as a prestige-building exercise.

The Astana 2024 SCO Summit’s real story is that the SCO’s goal is to develop a new, Eurasia-centric collective security framework that acknowledges the sovereignty of independent countries in a multipolar world and the tenet that a foreign policy that pursues the common good is best served by. &nbsp,

The nations of Eurasia and the Global South are definitely worth watching, according to Western think tanks. &nbsp,

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China’s legacy chips in EU’s crosshairs – Asia Times

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The European Union is conducting two research to find out how China’s expanding production of older-generation semiconductors is affecting the country. &nbsp,

The European Commission will do two studies covering major microprocessor- consuming industrial companies and the chip industry, both, in September, Reuters reported on Saturday ( July 6 ). &nbsp,

The document, citing two unnamed sources, said the EC has now started seeking comments on the two study’s review issues. &nbsp,

The EC may inquire with chip-consuming companies about where they get their so-called legacy chips, which refer to older, 28-nanometer chips and older, older chips. Separately, it may ask EU chipmakers about their products and prices, and their projections of the same data from their opponents, including the Chinese people. &nbsp,

The EC had already announced in early April that it would conduct research to assess the” trustworthiness” of legacy cards used in everything from aviation to cars to home appliances and to look for evidence of market errors.

The Reuters report was released on July 5th, when the EC began levying provisional tariffs of up to 37.6 % on Chinese electric vehicles ( EVs ). In November, the EU will decide whether the more taxes will be lasting. &nbsp,

Manufacturers and the Chinese government both declared they would engage in negotiations with the EU on the subject. China has so far launched anti-dumping investigations into European imports of meat and brandy. Spain and France are the two main producers of meat and vodka, respectively, in the region. &nbsp,

The Bureau of Industry and Security ( BIS ) of the US Commerce Department announced last December that a survey would be launched in January 2024 to find out how US companies are sourcing both current and legacy chips.

The BIS claimed in a study that the Chinese government had spent about US$ 150 billion in incentives on its chipmakers over the past ten years, which it believed would result in a non-level worldwide playing field for US and other international companies.

Western Commissioner for Competition Margrethe Vestager stated that the EU will integrate with the US to conduct a deliberate survey on China’s tradition device issue after speaking with US Commerce Secretary Gina Raimondo at the fifth ministerial meeting of the EU- US Trade and Technology Council in Belgium on April 4.

A Chinese IT columnist writing under an Uncle Biao pseudonym claimed in an article published on Sunday that” China has built its mature chip industry with its huge downstream industry demand.” ” Even if the US and the EU join forces to suppress China with non-market means, they wo n’t be able to change the fact that China is about to occupy the legacy chip market.”

As long as China maintains its market open, it will not only dominate the market for legacy chips, but it will also pioneer technological developments in the advanced chip market, he wrote.

China’s global market share for mature chips will increase from 31 % at the end of last year to 39 % by 2027, according to a TrendForce analysis. &nbsp,

China’s integrated circuit production increased by 32.7 % to 170.3 billion units in the first five months of this year from the previous year, according to the Ministry of Industry and Information Technology. China’s customs data shows its exports of integrated circuits grew 10.5 % to 113.9 billion units, over the period.

The Semiconductor Industry Association ( SIA ) reported on July 5 that the global semiconductor industry’s sales increased 19.3 % to US$ 49.1 billion in May 2024 from a year earlier. Year- to- year sales were up in the Americas ( 43.6 % ), China ( 24.2 % ), and Asia Pacific/all other ( 13.8 % ), but down in Japan (-5.8 % ) and Europe (-9.6 % ). &nbsp,

Some commentators speculated that the duo may soon impose tariffs on China’s legacy chips despite the US and EU’s ongoing investigation.

” If the EU really imposes new restrictions or tariffs on China’s legacy chips, China will definitely launch countermeasures against European products”, Tan Haojun, a Jiangsu- based writer, opined in an article published on Sunday. ” The Chinese and European sides will suffer a lot,” he says.

Tan predicts that as China’s EU’s desire to repress China becomes more and more clear, the business environment there will become increasingly difficult for Chinese companies. He recommends that China expand its consumption markets to expand its domestic market share.

Chip buyers, including the German automakers, need China- made legacy chips, Christophe Fouquet, chief executive of chip- making equipment maker ASML, told Germany’s Handelsblatt newspaper in an interview published on July 8.

Legacy chip manufacturers are increasing significantly globally, but Western chip makers are not making enough money in the industry, which is not very profitable, according to Fouquet.

He claimed that Europe cannot even meet half of its own needs and that the West should look for alternative solutions if it wants to halt China’s legacy chip production. &nbsp,

Read: China’s legacy chips to survive with price advantage

Follow Jeff Pao on X at&nbsp, @jeffpao3

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Urgent need for much more stimulus from Beijing – Asia Times

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The intensity for farther, strong stimulus steps from Beijing has never been more prominent. &nbsp,

China has a disconcertingly low inflation rate, with the Consumer Price Index ( CPI ) showing a mere 0.3 % increase year over year, in contrast to the high inflation that grips the US and Europe. This sluggish growth reflects a pervasive negative threat that, if not addressed right away, could destroy economic stability.

The continuing crisis in China’s real estate sector is a significant factor contributing to its economic troubles. &nbsp, When a strong growth website, the business is still beset by high debt levels among property developers, leading to a strong contraction in construction activities. &nbsp,

Chinese home prices dropped last month to record lows in the country’s economy, indicating that Beijing’s “historic” true land recovery has not yet had the desired impact.

This decline has had, and continues to own, significantly- reaching implications, curtailing purchase, increasing poverty and eroding customer confidence. &nbsp,

According to China’s National Bureau of Statistics, property investment for the first five months of the year decreased 10.1 % from the previous year. New home sales fell 28 % during the same period.

Due to the instability of the housing market, Beijing must take a specific and more effective support strategy to engage. This could lead to additional spillovers into other areas of the market.

Another pressing problem is the weak home need. Despite numerous efforts to increase spending, Chinese buyers are still mindful, and household consumption has never returned to pre-crisis levels. &nbsp,

This slowing down of demand is a major drag on economic development, and it highlights the need for measures to enhance consumer confidence and spending power. &nbsp,

Further measures such as direct subsidies, tax incentives and support for small and medium- sized enterprises ( SMEs ) would help revitalize domestic consumption.

While current industry information may appear urging, with exports outpacing imports for the past two months, these figures face underlying issues. &nbsp,

The obvious export growth is largely driven by a small basic effect, which makes the current figures appear better in comparison to the decline of the previous year. &nbsp,

Also, the surge in worldwide demand that has benefited China’s export may not be sustainable, particularly if other major markets begin to slow down. So, relying on trade performance as a sign of economic wellbeing may be misleading.

Given these issues, the justification for improved stimulus from Beijing is powerful. Enhancing monetary and fiscal policies would give the economy the needed boost. &nbsp,

Targeted steps to help the real estate sector, such as easing funds conditions for homebuyers and developers, may help regulate this vital industry. Also, domestic desire must be fueled by policies that increase consumer confidence and household income.

In addition to quick stimulus measures, Beijing probably needs to focus on lengthy- term tactical investments in infrastructure, technology and natural energy. &nbsp,

These investments may help to lay the foundation for long-term economic development in addition to providing a quick boost to the economy. China is cut down on its emphasis on exports and real estate, thereby creating a more balanced and tenacious economic model by concentrating on areas with high-growth potential.

To repeat, the Women’s Republic’s economic condition requires immediate and significant activity. &nbsp, Failure to act quickly and sufficiently may have grave consequences for China’s economy. &nbsp,

Inaction could lead to further financial unrest, undermine trust in Chinese financial businesses, and lead to a potential global economic downturn with serious consequences. Prompt, powerful treatment is essential to minimize these outcomes.

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