Trump leads key swing state while Biden a drag on Harris – Asia Times

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The United States presidential election will be held next Tuesday, with results coming in Wednesday AEDT. In analyst Nate Silver’s aggregate of national polls, Democrat Kamala Harris leads Republican Donald Trump by 48.6–47.5, a slight gain for Trump since Monday, when Harris led by 48.6–47.4. Harris’ national lead peaked on October 2, when she led by 49.4–45.9.

The US president isn’t elected by the national popular vote, but by the Electoral College, in which each state receives electoral votes equal to its federal House seats (population based) and senators (always two). Almost all states award their electoral votes as winner-takes-all, and it takes 270 electoral votes to win (out of 538 total).

Relative to the national popular vote, the Electoral College is biased to Trump, with Harris needing at least a two-point popular vote win to be the narrow Electoral College favourite in Silver’s model.

In Silver’s averages, Trump has a 0.6-point lead in Pennsylvania (19 electoral votes), up from 0.3 on Monday. Trump has slightly larger leads of one to two points in North Carolina (16), Georgia (16) and Arizona (11). Harris is narrowly ahead by 0.1 point in Nevada (six) and about one point ahead in Michigan (15) and Wisconsin (ten).

If current polls are exactly right, Trump wins the Electoral College by 281–257. Not making Pennsylvania’s popular governor Josh Shapiro her running mate could be Harris’ biggest mistake.

In Silver’s model, Trump has a 54% chance to win the Electoral College, slightly higher than 53% on Monday. There’s a 29% chance that Harris wins the popular vote but loses the Electoral College. The FiveThirtyEight forecast gives Trump a 51% win probability.

Without a major event, there isn’t likely to be much change in the polls before the election, but a polling error where one candidate overperforms their polls could still occur. Silver’s model gives Trump a 22% probability of sweeping the seven swing states and Harris a 12.5% probability.

I wrote about the US election for The Poll Bludger yesterday, and also covered three Canadian provincial elections and Japan’s conservative LDP, which has governed almost continuously since 1955, losing its majority at an election last Sunday.

Biden a drag on Harris and favorability ratings

Joe Biden remains unpopular with a net -16.5 approval in the FiveThirtyEight national aggregate, with 55.8% disapproving and 39.3% approving. As Harris is the incumbent party’s candidate, an unpopular president is a key reason for Trump’s edge.

Biden’s remarks on Tuesday, in which he seemed to call Trump supporters “garbage”, resembled Hillary Clinton’s “basket of deplorables” in the 2016 presidential campaign. This won’t help Harris.

Biden is almost 82, Trump is 78 and Harris is 60. Trump’s age should be a factor in this election that favors Harris, but Silver said on October 19 that Democrats spent so much time defending Biden before he withdrew on July 21 that it’s now difficult for them to attack Trump’s age without seeming hypocritical.

Harris’ net favourability in the FiveThirtyEight national aggregate is -1.5, with 47.8% unfavorable and 46.3% favorable. Her net favourability peaked at +1 in late September. Trump’s net favourability is -8.5, with 52.1% unfavorable and 43.6% favorable; his ratings have improved a little in the last two weeks.

While Harris is more likeable than Trump, that’s not reflected in head-to-head polls. Silver said on October 23 that Trump’s campaign is promoting him as not-nice but on your side and as someone who will get things done. They argue that Harris’ campaign lacks clear policies.

Harris’ running mate Tim Walz is at +2.6 net favourable, while Trump’s running mate J D Vance is at -6.9 net favourable. In the past few weeks, Vance’s ratings have improved slightly while Walz’s have dropped back.

Congressional elections

I last wrote about the elections for the House of Representatives and Senate that will be held concurrently with the presidential election on October 14. The House has 435 single-member seats that are apportioned to states on a population basis, while there are two senators for each of the 50 states.

The House only has a two-year term, so the last House election was at the 2022 midterm elections, when Republicans won the House by 222–213 over Democrats. The FiveThirtyEight aggregate of polls of the national House race gives Democrats a 46.2–46.1 lead over Republicans, a drop for Democrats from a 47.1–45.9 Democratic lead on October 14.

Senators have six-year terms, with one-third up for election every two years. Democrats and aligned independents currently have a 51–49 Senate majority, but they are defending 23 of the 33 regular seats up, including seats in three states Trump won easily in both 2016 and 2020: West Virginia, Montana and Ohio.

West Virginia is a certain Republican gain after the retirement of former Democratic (now independent) Senator Joe Manchin at this election. Republicans have taken a 5.4-point lead in Montana in the FiveThirtyEight poll aggregate, while Democrats are just 1.6 points ahead in Ohio.

Republicans are being challenged by independent Dan Osborn in Nebraska, and he trails Republican Deb Fischer by 2.3 points. Democrats did not contest to avoid splitting the vote. In Democratic-held Wisconsin, Democrats lead by 2.1 points, while other incumbents are ahead by at least three points.

If Republicans gain West Virginia and Montana, but lose Nebraska to Osborn, and no other seats change hands, Republicans would have a 50–49 lead in the Senate. If Harris wins the presidency, Osborn would be the decisive vote as a Senate tie can be broken by the vice president, who would be Walz. This is the rosiest plausible scenario for Democrats.

The FiveThirtyEight congressional forecasts give Republicans a 53% chance of retaining control of the House, so it’s effectively a toss-up like the presidency. But Republicans have an 89% chance to gain control of the Senate.

Adrian Beaumont is election analyst (psephologist) at The Conversation; and honorary associate, School of Mathematics and Statistics, The University of Melbourne

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

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Why Europe should consider boots on the group in Ukraine – Asia Times

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The mantra “as long as it takes” has become the European Union’s rallying cry in support of Ukraine’s resistance against Russia. Initially, some experts predicted that Ukraine would fall within three days – yet nearly three years have passed, and Ukraine is still standing. This prolonged struggle has come at an immense human cost.

It’s clear that the decision to resist was made by the Ukrainian population, and they are grateful to the EU for its support. However, hopes that Ukraine can repel the invaders are fading, and there is no clear end in sight. “As long as it takes” for the EU translates, for Ukrainian ears, to “as many of your lives as we can afford to sacrifice.”

Ukrainians are weary, even as they hold the front line, but the West has not communicated a commitment to fully engage in stopping Russian aggression and deterring future threats. Instead, it seems focused on a policy of “de-escalation management.” This only emboldens Russia and its allies.

What is even more concerning is the absence of a coherent strategy for managing Russia. What would the EU do if the war were to magically end tomorrow? Is there a plan in place, or will EU leaders simply offer Russia a reset?

The EU has excelled in rhetoric when it comes to Ukraine but has fallen short in delivering military support. It remains reluctant to draw firm red lines for Russia as a response to attacks on European soil or to adopt a more assertive stance.

The supply of shells to Ukraine is a case in point. The EU pledged to supply 1 million rounds of ammunition by March 2024, but by January, Josep Borrell, the EU’s foreign affairs chief, admitted that the bloc would only deliver half of that on time while committing to send 1.1 million shells by the year’s end.

To address this shortfall, Czech President Petr Pavel proposed an initiative at the Munich Security Conference in February, aiming to provide 800,000 shells to Ukraine by the year’s end, sourcing ammunition globally instead of solely from EU manufacturers. By August 2024, the EU had sent Ukraine only 650,000 shells out of the promised 1 million.

Various news outlets have reported that the result is a grim picture on the front line, where for every shell fired by Ukraine, Russian forces are firing ten or more. Additionally, the EU has been reluctant to take decisive action, even in response to Russian attacks on its territory.

Recent incidents, such as a narrowly avoided plane crash in Germany attributed to suspected sabotage, reflect a troubling increase in aggressive behavior from Russian saboteurs. The only response so far has been a relatively weak sanctions framework to be used on those involved in such attacks.

A strategy for the future

The EU must adopt a proactive approach to securing peace in Ukraine, recognizing that Russia is currently unwilling to negotiate – but would also never negotiate from a position of weakness.

A clear strategy – including security guarantees for Ukraine, preferably through a pathway to NATO membership – could help put pressure on Russia and facilitate negotiations. It’s clear that bringing Ukraine into NATO might take years, but in the meantime, European countries should consider deploying troops to Ukraine as a security guarantee for this interim period.

As the Lithuanian minister of foreign affairs, Gabrielius Landsbergis, rightly said: “At the beginning of the year, Emmanuel Macron hinted at putting boots on the ground. At the end of the year, North Korea had actually done so. We are still on the back foot, reacting to escalation instead of reversing it. Macron’s ideas should now be revisited – better late than never.”

Of course, security agreements exist between Ukraine and its EU and G7 partners, but not a single country has hinted at the possibility of providing such a security guarantee as “troops on the ground” as a guarantee for peace. EU countries must consider this seriously.

And with a view to what happens after the Russian aggression in Ukraine, the EU needs at least the beginnings of an idea about what its terms would be for re-engaging with Russia. Otherwise, it risks enabling Russia to set its own terms.

The situation on the ground is dire. While the West boasts economic strength, it lacks visionary leadership and political will.

It should not allow Russia to take the lead and must adopt a clear strategy for Ukraine’s victory. Otherwise, we are heading toward the scenario described by Timothy Garton Ash in his Financial Times article advocating for Ukraine’s accession to NATO:

Consider the alternative. A defeated, divided, demoralized, depopulated Ukraine, pulsating with anger against the West and – as Zelensky hinted last week – probably seeking to acquire nuclear weapons. Moscow triumphant. The rest of the world concluding that the West is a paper tiger. Xi Jinping encouraged to have a go at Taiwan. Biden and Harris going down in history as the leaders who ‘lost Ukraine’.

One could add: the EU faces disintegration, regressing to its pre-union state. Ursula von der Leyen is remembered as the leader whose “as long as it takes” policy resulted in an epic failure to secure a safer future for Europe and Ukraine. Does the West want to see itself in this way?

Viktoriia Lapa is lecturer, Institute for European Policymaking, Bocconi University

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

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The nations on the brink of going nuclear – Asia Times

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Following Israel’s October 26, 2024, attack on Iranian energy facilities, Iran vowed to respond with “all available tools,” sparking fears it could soon produce a nuclear weapon to pose a more credible threat.

The country’s breakout time—the period required to develop a nuclear bomb—is now estimated in weeks and Tehran could proceed with weaponization if it believes itself or its proxies are losing ground to Israel.

Iran isn’t the only nation advancing its nuclear capabilities in recent years. In 2019, the US withdrew from the Intermediate-Range Nuclear Forces Treaty (INF), which banned intermediate-range land-based missiles, citing alleged Russian violations and China’s non-involvement. The US is also modernizing its nuclear arsenal, with plans to deploy nuclear weapons in more NATO states and proposals to extend its nuclear umbrella to Taiwan.

Russia, too, has intensified its nuclear posture, expanding nuclear military drills and updating its nuclear policies on first use. In 2023, it suspended participation in the New START missile treaty, which limited US and Russian deployed nuclear weapons and delivery systems, and stationed nuclear weapons in Belarus in 2024.

Russia and China have also deepened their nuclear cooperation, setting China on a path to rapidly expand its arsenal, as nuclear security collaboration with the US has steadily diminished over the past decade.

The breakdown of diplomacy and rising nuclear brinkmanship among major powers are heightening nuclear insecurity among themselves, but also risk spurring a new nuclear arms race. Alongside Iran, numerous countries maintain the technological infrastructure to quickly build nuclear weapons. Preventing nuclear proliferation would require significant collaboration among major powers, a prospect currently out of reach.

The US detonated the first nuclear weapon in 1945, followed by the Soviet Union (1949), the UK (1952), France (1960), and China (1964). It became evident that with access to uranium and enrichment technology, nations were increasingly capable of producing nuclear weapons. Though mass production and delivery capabilities were additional hurdles, it was widely expected in the early Cold War that many states would soon join the nuclear club.

Israel developed nuclear capabilities in the 1960s, India detonated its first bomb in 1974, and South Africa built its first by 1979. Other countries, including Brazil, Argentina, Australia, Sweden, Egypt, and Switzerland, pursued their own programs.

However, the Non-Proliferation Treaty (NPT), enacted in 1968 to curb nuclear spread, led many countries to abandon or dismantle their programs. After the end of the Cold War and under Western pressure, Iraq ended its nuclear program in 1991.

South Africa, in a historic move, voluntarily dismantled its arsenal in 1994. Kazakhstan, Belarus, and Ukraine relinquished the nuclear weapons they inherited after the collapse of the Soviet Union by 1996, securing international security assurances in exchange.

Nuclear proliferation appeared to be a waning concern, but cracks soon appeared in the non-proliferation framework. Pakistan conducted its first nuclear test in 1998, followed by North Korea in 2006, bringing the count of nuclear-armed states to nine. Since then, Iran’s nuclear weapons program, initiated in the 1980s, has been a major target of Western non-proliferation efforts.

Iran has a strong reason to persist. Ukraine’s former nuclear arsenal might have deterred Russian aggression in 2014 and 2022, while Libya’s Muammar Gaddafi, who dismantled the country’s nuclear program in 2003, was overthrown by a NATO-led coalition and local forces in 2011.

If Iran achieves a functional nuclear weapon, it will lose the ability to leverage its nuclear program as a bargaining chip to extract concessions in negotiations. While a nuclear weapon will represent a new form of leverage, it would also intensify pressure from the U.S. and Israel, both of whom have engaged in a cycle of escalating, sometimes deadly, confrontations with Iran and its proxies over the past few years.

An Iranian nuclear arsenal could also ignite a nuclear arms race in the Middle East. Its relations with Saudi Arabia remain delicate, despite the 2023 détente brokered by China, and Saudi officials have previously indicated they would obtain their own nuclear weapon if Iran acquired them. Saudi Arabia gave significant backing to Pakistan’s nuclear weapons program, with the understanding that Pakistan could extend its nuclear umbrella to Saudi Arabia, or even supply the latter with one upon request.

Turkey, which hosts US nuclear weapons through NATO’s sharing program, signaled a policy shift in 2019 when President Erdogan criticized foreign powers for dictating Turkey’s ability to build its own nuclear weapon. Turkey’s growing partnership with Russia in nuclear energy could meanwhile provide it with the enrichment expertise needed to eventually do so.

Middle Eastern tensions are not the only force threatening non-proliferation. Japan’s renewed friction with China, North Korea, and Russia over the past decade has intensified Tokyo’s focus on nuclear readiness.

Although Japan developed a nuclear program in the 1940s, it was dismantled after World War II. Japan’s breakout period, however, remains measured in months, but public support for nuclear weapons remains low, given the legacy of Hiroshima and Nagasaki, where nuclear bombings in 1945 killed more than 200,000 people.

In contrast, around 70 percent of South Koreans support developing nuclear weapons. South Korea’s nuclear program began in the 1970s but was discontinued under US pressure. However, North Korea’s successful test in 2006 and its severance of economic, political, and physical links to the South in the past decade, coupled with the abandonment of peaceful reunification in early 2024, has again raised the issue in South Korea.

Taiwan pursued a nuclear weapons program in the 1970s, which similarly ended under US pressure. Any sign of wavering US commitment to Taiwan, together with China’s growing nuclear capabilities, could prompt Taiwan to revive its efforts. Though less likely, territorial disputes in the South China Sea could also motivate countries like Vietnam and the Philippines to consider developing nuclear capabilities.

Russia’s war in Ukraine has also had significant nuclear implications. Ukrainian President Volodymyr Zelensky recently suggested to the European Council that a nuclear arsenal might be Ukraine’s only deterrent if NATO membership is not offered. Zelensky later walked back his comments after they ignited a firestorm of controversy. Yet if Ukraine feels betrayed by its Western partners—particularly if it is forced to concede territory to Russia—it could spur some factions within Ukraine to attempt to secure nuclear capabilities.

The war has also spurred nuclear considerations across Europe. In December 2023, former German Foreign Minister Joschka Fischer endorsed a European nuclear deterrent. A Trump re-election could amplify European concerns over US commitments to NATO, with France having increasingly proposed an independent European nuclear force in recent years.

Established nuclear powers are unlikely to welcome more countries into their ranks. But while China and Russia don’t necessarily desire this outcome, they recognize the West’s concerns are greater, with Russia doing little in the 1990s to prevent its unemployed nuclear scientists from aiding North Korea’s program.

The US has also previously been blindsided by its allies’ nuclear aspirations. US policymakers underestimated Australia’s determination to pursue a nuclear weapons program in the 1950s and 1960s, including covert attempts to obtain a weapon from the UK. Similarly, the US was initially unaware of France’s extensive support for Israel’s nuclear development in the 1950s and 1960s.

Smaller countries are also capable of aiding one another’s nuclear ambitions. Argentina offered considerable support to Israel’s program, while Israel assisted South Africa’s. Saudi Arabia financed Pakistan’s nuclear development, and Pakistan’s top nuclear scientist is suspected of having aided Iran, Libya, and North Korea with their programs in the 1980s.

Conflicts involving nuclear weapons states are not without precedent. Egypt and Syria attacked nuclear-armed Israel in 1973, and Argentina faced a nuclear-armed UK in 1982. India and China have clashed over their border on several occasions, and Ukraine continues to resist Russian aggression.

But conflicts featuring nuclear countries invite dangerous escalation, and the risk grows if a nation with limited conventional military power gains nuclear capabilities; lacking other means of defense or retaliation, it may be more tempted to resort to nuclear weapons as its only viable option.

The costs of maintaining nuclear arsenals are already steep. In 2023, the world’s nine nuclear-armed states spent an estimated US$91.4 billion managing their programs. But what incentive do smaller countries have to abandon nuclear ambitions entirely, especially when they observe the protection nuclear weapons offer and witness the major powers intensifying their nuclear strategies?

Obtaining the world’s most powerful weapons may be a natural ambition of military and intelligence sectors, but it hinges on the political forces in power as well. In Iran, moderates could counterbalance hardliners, while continued support for Ukraine might prevent more nationalist forces from coming to power there.

Yet an additional country obtaining a nuclear weapon could set off a cascade of others. While larger powers are currently leading the nuclear posturing, smaller countries may see an opportunity amid the disorder. The limited support for the Treaty on the Prohibition of Nuclear Weapons, in effect since 2021, as well as the breaking down of other international treaties, reinforces the lingering allure of nuclear arms even among non-nuclear states.

With major powers in open contention, the barriers to nuclear ambitions are already weakening, making it ever harder to dissuade smaller nations from pursuing the ultimate deterrent.

John P Ruehl is an Australian-American journalist living in Washington, DC, and a world affairs correspondent for the Independent Media Institute. He is a contributor to several foreign affairs publications, and his book,“Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’”, was published in December 2022.

This article was produced by Economy for All, a project of the Independent Media Institute. It is republished here with permission

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How China can revive its bruised and dwindling billionaire class – Asia Times

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Is the “smart” money still fleeing China? Whether it’s wise to leave Asia’s biggest economy is debatable. What’s not is that the mainland billionaire emigration trend continues and that their ranks have thinned by more than a third in just the last three years.

The latter dynamic, tracked by research group Hurun, spotlights how the fallout from the last few years of government crackdowns, slowing economic growth, volatile equities and property collapse is catching up with Xi Jinping’s policymakers and complicating their efforts to counter Wall Street worries that China has become “uninvestable.”

To be sure, the “avoid-China” vibe isn’t what it was, say, six months ago. As Nicholas Colas, co-founder of research firm DataTrek, notes, the recent “surprise announcement of aggressive fiscal and monetary policy action is spurring a reappraisal of the view” that Chinese equities are uninvestable.

“China’s leadership has finally acknowledged that the country’s economy needs much more monetary and fiscal stimulus if it is to achieve its growth potential over time,” Colas says.

Billionaire David Tepper has been making his own headlines by declaring it time to buy “everything” in China. And after “running around the world” in recent weeks, Kinger Lau, chief China equity strategist at Goldman Sachs, says that “for some investors who haven’t really looked at China over the past one to two years, certainly, the interest level has picked up a lot”

As Lau tells the South China Morning Post, “I’m not saying everyone is buying. But the level of interest has picked up a lot, very much consistent with the flows and positioning.” He’s among many who now see “upside” for Chinese equities.

Where this leaves China’s remaining billionaires in US dollar terms – Hurun says there are now 753 versus a peak of 1,185 in 2021 – is debatable. What’s clear, though, is that the stakes surrounding next week’s gathering of the standing committee of National People’s Congress are rising.

Rarely has there been a better opportunity for Xi’s inner circle to reassure the billionaire set at home and global funds abroad.

“The announcement of the NPC Standing Committee meeting for November 4-8 reflects Beijing’s strategic approach to the major economic policy U-turn underway,” says economist Diana Choyleva at Enodo Economics.

Choyleva noted that “by scheduling the meeting immediately after the US presidential election on November 5, the Chinese leadership has positioned itself to announce fiscal measures with full knowledge of the electoral outcome, enhancing its ability to manage market expectations and responses effectively.”

Next week’s confab will “allow Chinese policymakers to fine-tune their announcements and potentially adjust the scale or presentation of stimulus measures based on the new geopolitical context,” she says.

Choyleva notes that “a better-coordinated approach to policy announcements could actually enhance market stability. Investors should view the timing as a sign of careful planning rather than delay, particularly given the potential for more comprehensive and strategically calibrated announcements.”

Billionaires and global funds alike are craving a “well-thought-out approach” that “sets the stage for more impactful and sustainable market responses,” Choyleva says. “For investors, this timing and a more coordinated policymaking reduces uncertainty by ensuring that China’s fiscal response will be announced with full knowledge of the US political landscape, potentially leading to more stable and sustained market reactions rather than volatile short-term responses.”

The potential wildcard of a Donald Trump 2.0 presidency would be a game-changer for Asia, starting with a 60% tax on all Chinese goods that would upend Asian growth and supply chains.

Derek Holt, Bank of Nova Scotia’s head of capital markets economics, speaks for many when he warns that “Trump’s plans risk being highly destabilizing to world markets in a much more fractured world.”

Investors everywhere are bracing for a supersized US trade war in the event of a second Trump White House, including Europe. Germany’s recession is already casting a pall over European markets.

“In a worst-case scenario of a full-blown tariff war with retaliation, we estimate potential for a mid to high single-digit drag on European earnings-per-share growth,” says Barclays Plc strategist Emmanuel Cau. A “big chunk” of analysts’ worry more than 10% growth in earnings next year could disappear as trade tensions spike, he notes.

One worry is Trump’s desire to add fiscal stimulus via giant tax cuts into an economy that doesn’t need it. “The US economy doesn’t need pump-priming, it’s in excess demand and will remain there next year,” Holt notes. And while “the US needs to assert control over its borders, Trump’s extreme immigration policies would severely damage the US economy.”

Trump’s desire to weaken the US dollar also would increase inflation risks, complicating hopes the Federal Reserve might cut interest rates. Not that Vice President Kamala Harris has a great track record in global market circles, Holt notes. As a US senator in 2020, Harris was one of only a few lawmakers who voted against a revised US-Mexico-Canada trade agreement.

In Holt’s view, “it’s a matter of picking the one you think will be less damaging. As a professional economist, I have no doubt that this means voting against Donald Trump and the weak self-serving men behind him.”

Yet risks abound as the US national debt tops the US$35 trillion mark. “America’s fiscal position is living on borrowed time and the more damage that’s done now, the higher taxes will go in the future in a potentially more divided and more dangerous world,” Holt explains.

Reassuring China’s billionaires and overseas funds requires bold and transparent action by Xi’s inner circle. 

Earlier this month, Beijing cut borrowing costs, slashed banks’ reserve requirement ratios, reduced mortgage rates and unveiled market-support tools to put a floor under share prices. Beijing is telegraphing bolder fiscal stimulus steps.

Team Xi also raised the loan quota for unfinished housing projects to 4 trillion yuan (US$562 billion), nearly double the previous amount. The bump was less than markets wanted, but pledges of more come has limited big negative market reactions.

The bigger issue, though, is repairing the balance sheets of giant property developers. Success in devising a mechanism to dispose of toxic assets could go a long way toward reassuring investors.

Xi’s inner circle has surely demonstrated it knows what’s needed to turn things around and reassure its capitalist class: a clear strategy to strengthen the finances of good-quality developers; incentivizing mergers and acquisitions; improving capital markets so that consumers stop seeing property as their only investment option; creating social safety nets so that households spend more and save less.

Beijing also must allay concerns that the tech crackdowns that began in late 2020 are over and done with.

Xi has left it to Premier Li Qiang to make the case for a more dynamic, competitive and predictable China. In January, Li said that “choosing investment in the Chinese market is not a risk, but an opportunity.”

He stressed that “investing in China will bring huge returns and a better future” and described CEOs on hand as “participants, witnesses, and beneficiaries of China’s reform and opening up.”

China, Li added, “stands ready to seriously look into and solve the difficulties and problems encountered by foreign enterprises” operating in the country. “We will take active steps to address reasonable concerns of the global business community,” Li said.

The bottom line, says Fred Hu, CEO of Primavera Capital Group, is that if China “really commits to rule of law and market reforms, I do think the confidence will slowly but surely come back, then the animal spirit will be rekindled.”

One reason the clock is ticking in Xi’s reform plans is that the 10-year mark of his “Made in China 2025” scheme is fast approaching.

When he took the reins of power in 2012, Xi promised to let market forces play a “decisive” role in Beijing’s decision-making. In May 2015, Xi unveiled his ambitious plan to morph China into a high-tech Mecca for semiconductors, renewable energy, electric vehicles, biotechnology, aerospace, artificial intelligence, robotics and green infrastructure.

A decade on, progress has been more sporadic than hoped. Team Xi has often proved better at treating the symptoms of China’s economic funk, not the underlying ailment. 

It’s a lesson Japan taught the world: throwing money at an economy traumatized by plunging property values and deflationary pressures won’t work without supply-side moves to repair cracks in the economy.

Late last year, Xi introduced the buzz-phrase “new quality productive forces.” Though somewhat cryptic, Xi’s inner circle has been selling it as the answer to China’s economic future.

China wants to get its consumers to spend more and save less to keep growth near 5% year after year. That means continuing to raise incomes and building more robust social safety nets to encourage spending. It means creating deeper, trusted capital markets so the average Chinese can invest in stocks and bonds — not just real estate.

Beijing’s extreme focus on boosting consumption over the years has proved counterproductive, economists say. It leaves China susceptible to boom-and-bust cycles that require urgent attention at the expense of moving the economy upmarket. China’s heavy reliance on exports leaves the economy vulnerable to Trump-like antics.

There’s no better alternative to accelerating and broadening China’s evolution into a high-tech powerhouse, development experts say. And indications are, this is precisely the pivot Xi and Li are making as 2025 approaches.

At the NPC in March, Xi’s Communist Party said “it’s imperative to boost the endeavors to modernize the industrial system, and accelerate the development of new productive forces.” Billionaires skittish about China’s prospects couldn’t agree more. The days and weeks ahead offer Xi a ready opportunity to do just that.

Follow William Pesek on X at @WilliamPesek

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On foreign policy, it’s Trump disruption vs Harris engagement – Asia Times

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According to conventional wisdom, US voters are largely motivated by domestic concerns and especially the economy.

But the upcoming presidential election may be somewhat of an outlier. In a September 2024 poll, foreign policy actually ranks quite high in voters’ concerns – with more Democrats and Republicans combined saying it was “very important” to their vote than, say, immigration and abortion.

As such, understanding where Republican presidential nominee Donald Trump and Democratic rival Kamala Harris stand on the significant international issues of the day is important. And we can do so by looking at the records of their respective administrations in the three regions they prioritized: the Indo-Pacific, Europe and the Middle East.

Donald Trump: disrupter-in-chief

In his 2017 inaugural address, Trump painted a dark picture of the US In his telling, his country was being taken advantage of by other nations, especially in trade and security, while neglecting domestic challenges.

To disrupt this, Trump promised an “America First” approach to guide his administration.

And in practice, his foreign policy certainly proved disruptive. He showed a clear willingness to buck traditions and undid some of former President Barack Obama’s signature policies, such as the Iran nuclear deal, which exchanged sanctions relief for restrictions on Tehran’s domestic nuclear program, and the Trans-Pacific Partnership trade agreement.

In so doing, he ruffled the feathers of allies and foes alike.

Trans-Atlantic relations were tense under Trump, especially because of his hostility toward NATO. After deriding the Atlantic alliance on the campaign trail, Trump stuck to the same tune while in office. He routinely insulted allies at high-level summits and allegedly came close to withdrawing from the alliance altogether in 2018.

Donald Trump meets Russian President Vladimir Putin in June 2019. Image: Kremlin Press Office / Handout / Anadolu Agency / Getty Images via The Conversation

While NATO did make inroads in bolstering its Eastern flank in that period, the alliance was primarily defined by internal turmoil and limited cohesion during Trump’s time in office. US relations with the European Union hardly fared better. In 2018, the US imposed steel and aluminum tariffs on the European Union, citing national security concerns.

Trump also broke with previous US presidents in his administration’s Asia policy. One of his first moves in 2017 was to abandon the Trans-Pacific Partnership, a trade deal negotiated by Obama. Trump’s late 2017 national security strategy also announced a major shift toward China, labeling it as a “strategic competitor” – implying a greater emphasis on containing China as opposed to cooperating with it.

This hawkish turn played out especially in the field of trade. Trump’s administration imposed four rounds of tariffs in 2018-19, affecting US$360 billion of Chinese goods. Beijing, of course, responded with tariffs of its own.

The two countries did sign a so-called phase-one deal in January 2020 that sought to lower the stakes of this trade war. But the Covid-19 pandemic nullified any chance of success, and relations soured further with each Trump utterance of the pandemic being a “Chinese virus.”

Trump showcased somewhat contradictory impulses toward the Middle East and other issues. He pushed for disengagement and to undo Obama’s major policies.

Besides withdrawing from the Paris Climate Accords in 2017, Trump abandoned the Iran nuclear deal in 2018. His administration also signed a deal to end the US presence in Afghanistan, and it withdrew forces from northern Syria.

But at the same time, Trump continued the bombing campaign against the Islamic State group in Syria and Iraq and authorized the killing of Iranian General Qasem Soleimani in 2020. The latter was consistent with a policy that aimed to pressure and isolate Iran economically and diplomatically.

The key example of diplomatic pressure came especially through the Abraham Accords, through which Trump helped facilitate the establishment of normal diplomatic ties between Israel, the UAE, Bahrain and Morocco.

Kamala Harris: alliance and engagement

Although not taking a driving role in foreign policy, Harris has been part of an administration that has committed the US to repairing alliances and engaging with the world.

This came across by undoing some major actions from the Trump administration. For example, the US quickly rejoined the Paris Climate Accords and overturned a decision to leave the World Health Organization.

But in other areas, the Biden administration has shown more continuity with Trump than many expected.

For instance, the US under Biden has not fundamentally deviated from strategic competition with China, even though the tactics have differed a little. The administration maintained Trump’s tariff approach, even adding its own targeted rounds against Beijing on electric vehicles.

Moreover, it cultivated different diplomatic platforms in the Indo-Pacific to act as a counterweight to China. This included the cultivation of the Quad dialogue with Australia, India and Japan, and the AUKUS deal with Australia and the UK, both of which attempted to further the Biden administration’s strategy of containing China’s influence by enlisting regional allies.

Finally, the Biden administration did maintain some channels of communication with China at the highest level as well, with Biden meeting Xi Jinping twice during his presidency.

A man and a woman walk along a balcony.
Ukraine President Volodymyr Zelenskyy walks alongside Vice President Kamala Harris at the White House compound on September 26, 2024. Photo: Tom Brenner / Getty Images / The Conversation

The Biden administration’s Middle Eastern policy displayed significant continuity with Trump’s approach – at first.

While it turned out to be chaotic, the US completed the withdrawal of its troops from Afghanistan in summer 2021, as had been agreed under Trump. The Biden administration also embraced the format and goals of the Abraham Accords. It even tried to build on them, with the goal of fostering Israeli-Saudi diplomatic ties.

Of course, the attacks of October 7, 2023, in Israel completely changed the equation in the Middle East. Preventing the spiral of violence in the region has become an all-consuming task. Since then, Biden and Harris have tried, largely unsuccessfully, to balance support for Israel with mediation efforts to liberate the hostages and to ensure a cease-fire.

Trans-Atlantic relations, however, are an area where there were marked differences in the past four years. The tone of the Biden-Harris administration has been in sharp contrast with that of Trump, reaffirming frequently its clear commitment to NATO. And once Russia launched its illegal invasion in February 2022, the US placed itself at the forefront of supporting Ukraine.

Harris has suggested that she would continue Biden’s policy of providing Kyiv with extensive and continuous military support. In conjunction with allies, the White House of Biden and Harris also implemented a broad range of sanctions against Russia. But the US under Biden has not yet been willing to support Ukraine’s immediate entry into NATO.

What next?

Based on their records, what could we expect of a Trump or Harris presidency?

It’s unlikely either candidate will abandon strategic competition with China. But Trump is more likely to seriously escalate the trade war, promising extensive tariffs against Beijing. Trump’s commitment to defending Taiwan is also more ambiguous in comparison with Harris’ pledges.

US policy toward Europe will largely depend on the results of the election. Harris has frequently underlined her steadfast support for NATO, as well as for Ukraine. Trump, on the other hand, is showing signs that he is unwilling to further aid the regime in Kyiv.

And for the Middle East, it remains to be seen whether either Trump or Harris would be able to better shape events in the region.

Garret Martin is senior professorial lecturer, co-director Transatlantic Policy Center, American University School of International Service

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

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Japan’s shock election shows how much inflation matters – Asia Times

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Japan is remarkably safe, stable and comfortable, but it is in a dangerous part of the world, right next to China, North Korea and Russia. That makes it important to European allies and, above all, to its closest ally, the United States, as a liberal leader countering China and Russia in Asia.

Its stability cannot be taken for granted. Even Japanese voters can get angry and disillusioned, as they showed in a destabilizing shock result in Sunday’s general election. In the election, the country’s long-ruling conservative coalition lost its parliamentary majority, while the opposition parties showed new energy and coherence.

This wasn’t supposed to happen: A new prime minister, Shigeru Ishiba, who had made a career out of being a maverick outsider, called a snap election to exploit his apparent personal popularity.

Now, after he’s been in office for less than a month, Japanese commentators are comparing him insultingly to Britain’s Liz Truss, the Conservative who in 2022 famously survived for just 45 days as prime minister.

In truth, this is the sign of a healthy democracy, but it is an election result that holds lessons for other rich countries. It also leaves a key American security ally lacking a government just ahead of America’s own, rather momentous, election.

Japanese governments are normally formed within hours or, at most, days, but forming this one could take weeks or months.

The parliamentary arithmetic is difficult. In the 465-seat House of Representatives, a party or coalition needs 233 for a simple majority, but Ishiba’s Liberal Democratic Party fell in the election to just 191 seats while its coalition partner since 2012, Komeito, fell to 24, giving them a combined total of just 215, way down on the 279 the coalition held before the vote.

There are 12 independents, many of whom were kicked out of the LDP over financial scandals, but even if all those were readmitted the coalition would fall short. 

Under Japanese law, a special session of parliament must be held within 30 days after an election to choose a new prime minister, and hence government, although the vote is expected to be scheduled sooner, on November 11. So Ishiba now has less than two weeks to persuade one of the other small parties to support him in that vote.

If he fails to win the vote, an opposition leader may be able to cobble together an interim government, though that too looks a tall order. Whatever happens on November 11, the likely outcome is a fresh set of elections in the first half of 2025. At the latest, this might coincide with elections scheduled for the House of Councillors, Japan’s less powerful upper house of parliament, by July at the latest.

For other rich countries, the big lesson of Japan’s political earthquake is that inflation matters more to voters than it does to many economists.

For more than three decades, Japanese have become used to stable or even falling prices, a deflationary trend that reflected economic stagnation but at least made things predictable for ordinary citizens. Their incomes were depressed, but prices were dependably low. Two years ago, following Vladimir Putin’s invasion of Ukraine, this changed.

To economists, the inflation Japan has experienced since 2022 has looked moderate – or even welcome given that, besides high energy prices and a falling currency, it also appeared to reflect a new corporate dynamism. Wages started to rise faster, too. But they were outpaced by prices. People felt poorer.

Most importantly, incomes did not move at all for a crucial block of long-time supporters of the conservative Liberal Democratic Party: Nearly 30% of the Japanese population is now over the age of 65, of whom most depend on pensions that have not kept pace with inflation.

This is a lesson from the 1970s that many had forgotten: Inflation is especially cruel to those on fixed incomes. Older voters are likelier to turn out to vote than younger ones, and they can get angry too.

This concern about inflation coincided with financial scandals in the Liberal Democratic Party. Not surprisingly, many voters concluded that the ruling party was doing little to help them while pocketing money for itself.

This conservative party has ruled Japan since 1955, except for two short periods in the early 1990s and 2009-12. In the past, it had shrugged off countless financial scandals. But this time, the blend of scandal and inflation has proved its undoing.

The question, as always after political earthquakes, is whether the old conservative government can now rebuild itself and repair its image or whether this will be the start of a more sustainable change.

The Liberal Democratic Party remains the largest party in parliament, but it now faces a difficult choice. It can try to soldier on under its current leader, for want of anything better. Or — probably once he has failed to form a stable government — it can get rid of him and consider switching to one of the more obvious “change” candidates who lost out to him in the LDP’s September leadership election:

  • Sanae Takaichi, a right-winger who would offer herself as Japan’s first female prime minister, or
  • Shinjiro Koizumi, son of the popular Junichiro Koizumi, who was prime minister from 2001-06, and who at just 43 years old, would stand to be Japan’s youngest postwar prime minister (the previous youngest was Shinzo Abe at 52 in 2006) and thus to represent a new generation.

This matters to Europe and America for two main reasons. The first is that Western efforts to deter China from invading Taiwan depend critically on Japan’s plans to double its defense spending by 2027.

The financing of that buildup will be harder without a stable government majority. There is a broad cross-party consensus that Japan’s national security requires such a defense build-up but there is no consensus about how to pay for it.

The second reason is that if Donald Trump is elected as US president on November 5 and carries out his promise to launch a trade war against Europe and Japan, Europe will need a dependable and resolute Japanese partner in resisting that American economic aggression, but it might not get one.

This commentator continues to bet that Kamala Harris will, in fact, win the US election, boosted by a strong turnout among her party’s voters and enough revulsion among traditional Republicans against Trump.

But the Japanese lesson must be borne in mind for it touches one of her main weaknesses by virtue of her having been vice-president for the past four years: Inflation matters a lot to voters.

Formerly editor-in-chief of The Economist, Bill Emmott is currently chairman of the Japan Society of the UK, the International Institute for Strategic Studies and the International Trade Institute. This article was originally published on his Substack, Bill Emmott’s Global View. It is republished here with kind permission.

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SAIC to file lawsuit against EU over EV tariffs – Asia Times

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The Shanghai-based SAIC Motor Corp, which owns the British automotive marque MG, is planning to file a lawsuit against the European Commission now that the latter has started imposing tariffs on Chinese electric vehicles.

SAIC’s legal action plan comes as the EC announced on Tuesday that it will slap 7.8-35.3% tariffs on EVs made in China from Wednesday. The measure is definitive and will last for five years. 

Tesla, owned by American technology mogul Elon Musk, now faces a tariff of 7.8% when exporting its EVs from China to the European Union. It was the least hit by the EU’s tariff actions as it had cooperated with the bloc’s anti-subsidy investigation over the past 13 months.

Geely, one of the largest EV sellers in China, faces an 18.8% tariff while SAIC Motor faces the highest triff, 35.3%. Shenzhen-based BYD has to pay a 17% tariff. 

All these additional tariffs will come on top of a 10% tariff for all automobiles imported by the European Union. That means SAIC will have to pay a tariff of 45.3%.  

“China does not agree with or accept the ruling and has filed a lawsuit under the World Trade Organization’s dispute settlement system,” a spokesperson of the Chinese Commerce Department said Wednesday. ”China will continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”

The spokesperson also said that China has repeatedly pointed out that the EU’s anti-subsidy investigation of Chinese EVs contains a lot of unreasonable and non-compliant elements, and that it is a protectionist approach that aims to push forward unfair competition in the name of fair competition. 

“In the anti-subsidy investigation, there were some wrong definitions of subsidies while the EC ignored some key information and opinions submitted by us,” SAIC told the Beijing Youth Daily. “The EC also inflated the subsidy rates of some of our projects.”

SAIC said it deeply regrets the EC’s final ruling as it had provided thousands of documents, including questionnaires, written defenses and hearing statements, to the EC for legal defense but still failed to change the situation. 

It said it will bring the case to the Court of Justice of the EU to safeguard its legitimate rights and interests.

In 2023, China exported 1.55 million units of pure EVs, up 64% from 944,566 units in 2022, according to Chinese Customs. In terms of sales value, China’s exports of pure EVs increased 70% to US$34.1 billion in 2023 from US$14 billion in 2022.

The average price of China’s exported EVs was US$22,000 last year, compared with about US$23,300 in 2022. 

China shipped 438,034 battery-electric cars to the EU in 2023. In the first half of this year, China exported 222,000 EVs to the EU, down 14.6% from 260,000 units in the same period of 2022. China Chamber of Commerce to the EU said the decline was a result of the negative impact of the EU’s anti-subsidy probe against Chinese EVs. 

Some Chinese media said the implementation of the EU’s tariffs is a setback to Chinese automakers’ overseas expansion plan. 

Caixin.com said in an article on Wednesday that as the EU is an important market to Chinese automakers, their growth will be slowed by the newly-imposed tariffs. 

SAIC’s falling profits

The EU said on September 13 last year that it would initiate a 13-month investigation into whether government subsidies have helped Chinese EV makers win market share in Europe in recent years. 

On July 4, the EU started imposing provisional tariffs on Chinese EVs. Since then, Beijing has initiated an anti-dumping investigation into the EU’s pork products and accelerated its ongoing probe of European brandy. 

Now the tariffs imposed on Chinese EVs are here to stay for at least five years. 

Some analysts have said that most Chinese EV makers can absorb the EU tariffs as their products are still cheaper than European ones even after they doubled their selling prices in Europe from the levels in China.

However, SAIC is having a falling margin problem due to rising competition from rivals such as BYD in China.  

In the first half of this year, SAIC sold 1.82 million units of automobiles, including the traditional and new energy cars, down 13.9% from a year earlier. Its total revenue fell 12.8% to 284.7 billion yuan (US$40 billion) for the same period while net profit, excluding one-off items, plunged 82% to 1.02 billion yuan.  

The state-owned SAIC, the second largest EV maker in China after BYD, saw its new energy car sales rose 29.9% to 524,000 units in the first half of 2024. BYD’s sales rose 28.4% to 1.61 million units for the same period.

Read: French brandy makers sacrificial lambs in China-EU trade war

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Palestine’s economy teeters on the brink after year of war – Asia Times

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The Palestinian economy has been devastated beyond recognition. Israel’s intense military operations in Gaza have led to unprecedented destruction, wiping out much of the enclave’s essential infrastructure, private property and agricultural resources.

Meanwhile, the occupied West Bank is also under severe strain. Similar patterns of destruction, alongside rising settler violence, land confiscations and expanding settlements, have left its economy buckling under the pressure of mounting public debt, unemployment and poverty.

Gaza’s economy was being suffocated even before the war. A blockade imposed by Israel in 2007 has severely restricted the import and export of goods, while fishermen were limited to a six-mile zone, crippling their ability to earn a livelihood.

The blockade caused Gaza’s GDP per capita (a measure of the wealth of a country) to shrink by 27% between 2006 and 2022, with unemployment rising to 45.3%. This gave rise to a situation where 80% of the population depended on international aid.

In addition to the economic blockade, Gaza suffered massive physical destruction due to Israeli military operations in 2008–2009, 2012, 2014, 2021 and 2022. Yet the cumulative effects of 16 years of blockade and military attacks are minor compared to the sheer destruction caused by the current war.

A report by the UN’s trade and development wing (Unctad) has revealed that in the space of just eight months, between October 2023 and May 2024, Gaza’s GDP per capita fell by more than half. The economic situation now is almost certainly worse.

According to the report, which was released in September 2024, Gaza’s GDP dropped by 81% in the final quarter of 2023 alone. The report concluded that the war had left Gaza’s economy in “utter ruin,” warning that even if there was an immediate ceasefire and the 2007–2022 growth trend of 0.4% returns, it would take 350 years just to restore the GDP levels of 2022.

A graph showing the sharp drop in Gaza's GDP after October 2023.

The only sectors still functioning are health and humanitarian services. All other industries, including agriculture, are at a near standstill. The destruction of between 80% and 96% of agricultural assets has led to rampant food insecurity.

The scale of destruction in Gaza is unprecedented in modern times and is happening under the world’s gaze. From October 2023 to January 2024 alone, the total cost of damage reached approximately US$18.5 billion – equivalent to seven times Gaza’s GDP in 2022.

A separate report by the UN Development Program, which was published in May, predicts that it will take more than 80 years to rebuild just Gaza’s housing stock if it repeats the rate of restructuring seen after Israeli military operations in 2014 and 2021. Merely clearing the debris could take up to 14 years.

The war has displaced almost all of Gaza’s population and has thrown people into dire poverty. Unemployment surged to 80%, leaving most households without any source of income. And prices of basic commodities have increased by 250%, which is contributing to famine across the Strip.

Palestinians walking down a street in Gaza that has been destroyed during the war.
The Gaza Strip is in ruins after more than a year of relentless bombardment. Photo: Anas-Mohammed / Shutterstock via The Conversation

The economic crisis has also extended to the West Bank, where GDP has fallen sharply. Military checkpoints, cement blocks and iron gates at the entrances to Palestinian towns and cities, as well as the denial of work permits for Palestinians in Israeli settlements, have resulted in more than 300,000 job losses since the start of the war.

The Unctad report reveals that the rate of unemployment in the West Bank has tripled to 32% since the start of the conflict, with labor income losses amounting to $25.5 million. Poverty is rising rapidly.

Israeli forces have also continued to confiscate Palestinian homes and land. Over the past year alone, 24,000 acres of land in the West Bank have been seized, and over 2,000 Palestinians have been displaced.

This devastation has been exacerbated by Israel’s decision to withhold the tax revenue it collects for the Palestinian Authority, which typically accounts for between 60% and 65% of the Palestinian public budget, as well as a significant decline in international aid. Aid to Palestine has dropped drastically over the past decade or so, falling from the equivalent of US$2 billion in 2008 to just $358 million by 2023.

The Palestinian Authority is facing a massive budget deficit, which is projected to increase by 172% in 2024 compared to the previous year. This financial strain has crippled the Palestinian government’s ability to provide essential services, pay salaries and meet the needs of a population battered by war, displacement and severe poverty.

The road to recovery

For the Palestinian economy to have any chance at recovery, several immediate steps are necessary.

First, international aid should flow into Gaza uninterrupted, and pressure must be applied to ensure that humanitarian aid – particularly food aid – reaches those in need. Data analysis by organizations working in Gaza suggests that Israel is currently blocking 83% of food aid from reaching Gaza.

Second, the destruction of homes, schools and infrastructure must cease. However, this seems improbable as Israel continues to pursue its military goal of destroying Hamas – an objective most analysts believe to be unachievable.

And third, the economic restrictions imposed on Gaza and the West Bank must be lifted. Sustainable development – and any prospect for recovery – cannot be achieved without granting the Palestinian people the right to self-determination and sovereignty over their resources.

This would require new peace agreements, an outcome that appears unlikely at present. But without these crucial interventions, the Palestinian economy will be completely devastated and the humanitarian crisis will worsen, making any future recovery within the lifetime of anyone currently living in Gaza virtually impossible to imagine.

Dalia Alazzeh is lecturer in accounting and finance, University of the West of Scotland and Shahzad Uddin is professor of accounting, University of Essex

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

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BRICS+ wants new world order sans shared values or identity – Asia Times

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The last two summits of BRICS countries have raised questions about the coalition’s identity and purpose. This began to come into focus at the summit hosted by South Africa in 2023, and more acutely at the recent 2024 summit in Kazan, Russia.

At both events the alliance undertook to expand its membership. In 2023, the first five Brics members – Brazil, Russia, India, China and South Africa – invited Iran, Egypt, Ethiopia, Saudi Arabia and the United Arab Emirates to join.

All bar Saudi Arabia have now done so. The 2024 summit pledged to admit 13 more, perhaps as associates or “partner countries.”

On paper, the nine-member BRICS+ strikes a powerful pose. It has a combined population of about 3.5 billion, or 45% of the world’s people. Combined, its economies are worth more than US$28.5 trillion – about 28% of the global economy. With Iran, Saudi Arabia and the UAE as members, BRICS+ produces about 44% of the world’s crude oil.

Based on my research and policy advice to African foreign policy decision-makers, I would argue that there are three possible interpretations of the purpose of BRICS+.

  • A club of self-interested members – a kind of Global South cooperative. What I’d label as a self-help organization.
  • A reforming bloc with a more ambitious goal of improving the workings of the current global order.
  • A disrupter, preparing to replace the Western-dominated liberal world order.

Analyzing the commitments that were made at the meeting in Russia, I would argue that BRICS+ sees itself more as a self-interested reformer. It represents the thinking among Global South leaders about the nature of the global order and the possibilities of shaping a new order.

This, as the world moves away from the financially dominant, yet declining Western order (in terms of moral influence) led by the US. The move is to a multipolar order in which the East plays a leading role.

However, the ability of BRICS+ to exploit such possibilities is constrained by its make-up and internal inconsistencies. These include a contested identity, incongruous values and lack of resources to convert political commitments into actionable plans.

Summit outcomes

The trend towards closer trade and financial cooperation and coordination stands out as a major achievement of the Kazan summit. Other achievements pertain to global governance and counterterrorism.

When it comes to trade and finance, the final communiqué said the following had been agreed:

  • adoption of local currencies in trade and financial transactions. The Kazan Declaration notes the benefits of faster, low-cost, more efficient, transparent, safe and inclusive cross-border payment instruments. The guiding principle would be minimal trade barriers and non-discriminatory access.
  • establishment of a cross-border payment system. The declaration encourages correspondent banking networks within BRICS and enables settlements in local currencies in line with the BRICS Cross-Border Payments Initiative. This is voluntary and nonbinding and is to be discussed further.
  • creation of enhanced roles for the New Development Bank, such as promoting infrastructure and sustainable development.
  • a proposed BRICS Grain Exchange, to improve food security through enhanced trade in agricultural commodities.

All nine BRICS+ countries committed themselves to the principles of the UN Charter – peace and security, human rights, the rule of law, and development – primarily as a response to the Western unilateral sanctions.

The summit emphasised that dialogue and diplomacy should prevail over conflict in, among other places, the Middle East, Sudan, Haiti and Afghanistan.

Faultlines and tensions

Despite the positive tone of the Kazan declaration, there are serious structural fault lines and tensions inherent in the architecture and behavior of BRICS+. These might limit its ambitions to be a meaningful change agent.

The members don’t even agree on the definition of BRICS+. President Cyril Ramaphosa of South Africa calls it a platform. Others talk of a group (Russia’s President Vladimir Putin, India’s Prime Minister Narendra Modi) or a family (Chinese foreign ministry spokesperson Lin Jianan).

So what could it be? BRICS+ is state-driven – with civil society on the margins. It reminds one of the African Union, which pays lip service to citizens’ engagement in decision-making.

One possibility is that it will evolve into an intergovernmental organization with a constitution that establishes its agencies, functions and purposes. Examples include the World Health Organization, the African Development Bank and the UN General Assembly.

But it would need to cohere around shared values. What would they be?

Critics point out that BRICS+ consists of democracies (South Africa, Brazil, India), a theocracy (Iran), monarchies (UAE, Saudi Arabia) and authoritarian dictatorships (China, Russia).

For South Africa, this creates a domestic headache. At the Kazan summit, its president declared Russia a friend and ally. At home, its coalition partner in the government of national unity, the Democratic Alliance, declared Ukraine as a friend and ally.

There are also marked differences over issues such as the reform of the United Nations. For example, at the recent UN Summit of the Future the consensus was for reform of the UN Security Council. But will China and Russia, as permanent Security Council members, agree to more seats, with veto rights, on the council?

As for violent conflict, humanitarian crises, corruption and crime, there is little from the Kazan summit that suggests agreement around action.

Unity of purpose

What about shared interests? A number of BRICS+ members and partner countries maintain close trade ties with the West, which regards Russia and Iran as enemies and China as a global threat.

Some, such as India and South Africa, use the foreign policy notions of strategic ambiguity or active non-alignment to mask the reality of trading with east, west, north and south.

The harsh truth of international relations is there are no permanent friends or enemies, only permanent interests. The BRICS+ alliance will most likely cohere as a Global South co-operative, with an innovative self-help agenda but be reluctant to overturn the current global order from which it desires to benefit more equitably.

Trade-offs and compromises might be necessary to ensure “unity of purpose.” It’s not clear that this loose alliance is close to being able to achieve that.

Anthoni van Nieuwkerk is professor of international and diplomacy studies, Thabo Mbeki African School of Public and International Affairs, University of South Africa

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

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What the West can learn from China about using AI – Asia Times

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AI is already everywhere, ready to change the way we work and play, how we learn and how we are looked after. From hospitality to healthcare, entertainment to education, AI is transforming the world as we know it.

But it’s developing at a different pace in different parts of the world. In the West, it seems, there is a tendency to aim for perfection, with companies taking their time to refine AI systems before they are implemented.

China, on the other hand, has taken a more pragmatic path, on which speed and adaptability are prioritized over flawless execution. Chinese companies appear more willing to take risks, accept AI’s current limitations and see what happens.

And China’s desire to be the world leader in AI development seems to be working. Here are three important lessons the west can learn from China’s economic strategy towards AI.

1. Embrace imperfection

Many Chinese companies have adopted a “good enough” mentality towards AI, using it even when the technology is not fully developed. This brings risks, but also encourages fast learning.

For example, in 2016, Haidilao, a popular Chinese restaurant chain, introduced “Xiaomei”, an AI system which dealt with customers calling up to make reservations. While Xiaomei is not the most sophisticated AI system (it only understands questions about reservations), it was effective, managing over 50,000 customer interactions a day with a 90% accuracy rate.

It’s not perfect, but it provides a valuable service to the business, proving that AI doesn’t need to be flawless to make a big impact.

2. Make it practical

A key distinction between AI strategies in China and the West is the focus on practical, problem-solving applications. In many Western industries, AI is often associated with cutting-edge technology like robot-assisted surgery, or complex predictive algorithms.

While these advances are exciting, they do not always bring immediate impact. China, by contrast, has made significant strides by applying AI to solve more basic needs.

In China, some hospitals use AI to help with routine – but very important – tasks. For instance, in April 2024, Wuhan Union Hospital introduced an AI patient service which acts as a kind of triage nurse for patients using a messaging app.

Patients are asked about their symptoms and medical history. The AI then evaluates the severity of their needs and prioritizes appointments based on urgency and the medical resources available at that time. The results are then relayed to a human doctor who makes the final decision about what happens next.

By helping to ensure that those with the most critical needs are seen first, the system plays a crucial role in improving efficiency and reducing waiting times for patients seeking medical attention.

It’s not the most complex technology, but in its first month of use in the hospital’s breast clinic, it reportedly provided over 300 patients with extra consultation time – 70% of whom were patients in urgent need of surgery.

3. Learn from mistakes

China’s rapid adoption of AI hasn’t come without challenges. But failures serve as critical learning experiences.

One cautionary tale over AI implementation comes not from China, but from Japan. When Henn na Hotel in Nagasaki became the world’s first hotel staffed by robots, it received a great deal of attention for its futuristic concept.

But the reality soon fell short of expectations. Churi, the hotel’s in-room assistant robot, frequently misunderstood guest requests, leading to confusion. One guest was reportedly woken up repeatedly because a robot in his room mistakenly understood the sound of his snoring to be a question.

In contrast, many Chinese hotels have taken a more measured approach, opting for simpler yet highly effective robotic solutions. Delivery robots are now commonplace in hotel chains across the country, and while not overly complex, they are adept at navigating hallways and lifts autonomously, bringing meals to guests.

By focusing on specific, high-impact problems, Chinese companies have successfully integrated AI in ways that minimize disruption and maximize usefulness.

The Chinese restaurant chain I mentioned earlier provides another good illustration of this approach. After the success of its chatbot, Haidilao introduced “smart restaurants” equipped with robotic arms and automated food delivery systems. While innovative, the technology struggled during peak hours and lacked the personal touch many customers valued.

YouTube video

[embedded content]

Instead of abandoning the project, Haidilao continued to adjust and refine its use of AI. Rather than adopting a fully automated restaurant model, it went for a hybrid approach, combining automation with human staff to enhance the dining experience.

This flexibility in the face of setbacks represents a crucial willingness to pivot and adapt when things don’t go as planned.

Overall, China’s pragmatic approach to AI has enabled it to take the lead in many areas, even as the country lags behind the West in terms of technological sophistication. This is driven by a willingness to embrace AI’s imperfections, and then adapt where necessary.

Where speed and adaptability are critical, companies can’t afford to wait for perfect solutions. By embracing AI’s imperfections, focusing on practical applications, and real-world feedback, Chinese companies have unlocked the economic value of AI in a way that others are too timid to emulate.

Jialu Shan is research fellow at the TONOMUS Global Center for AI and Digital Transformation, International Institute for Management Development (IMD)

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

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