Month: November 2022

Chinese Foreign Minister Wang Yi lashed out over US export curbs in a Sunday phone call with his US counterpart Secretary of State Antony Blinken. The tense call underscored that significant obstacles remain as the two sides continue preparing for a potential Biden and Xi Jinping face-to-face meeting next month.

“The U.S. side should stop its containment and suppression of China and not create new obstacles to bilateral relations,” Wang said, base on a foreign ministry statement. “The US side introduced new export controls against China, restricting investments in China, seriously violating free-trade principles and seriously harming China’s legitimate rights and interests, which must be corrected.”

Additionally, per state media: “China’s diplomatic and domestic policies are open and transparent, and the US should not be blinded by ideology,” Wang said. The US was generally once again accused of suppressing China’s economic growth. 

It was the first direct contact since Wang became China’s top-ranked diplomat, having been promoted to the Communist Party’s 24-member Politburo during its major meeting earlier this month. 

Biden’s first ever sit-down meeting as president with President Xi is likely to happen at the Group of 20 meeting in Bali, Indonesia in mid-November. Washington efforts to restrict Chinese access to chipmaking technology, which it appears was a top pressing issue raised with Blinken by Wang, will likely be brought up by Xi as an area of deep contention later.

As for the US readout of the call, Blinken said the two agreed upon the need to “maintain open lines of communication” – with two main foreign policy issues also raised: Ukraine and Haiti. “The Secretary raised Russia’s war against Ukraine and the threats it poses to global security and economic stability,” an official US readout said. “The Secretary also noted the deteriorating humanitarian and security situation in Haiti and the need for continued coordinated action in support of the Haitian people.”

Currently, the US is attempting to put together a UN coalition that can lead a peace-keeping force into restive Haiti, at a moment the US-backed Acting President Ariel Henry is battling armed groups seeking his removal from power. China and Russia have signaled they would veto such a resolution at the UN Security Council, seeing in it another attempt at US-Western intervention in a foreign country’s internal affairs.

As for the Russia-Ukraine conflict, President Xi while entering a third term as China’s most powerful leader in decades is expected to deepen relations with Russian President Vladimir Putin.

As a further sign of China’s growing willingness to stand behind Moscow even while Putin faces unprecedented global isolation over the war…

Hong Kong’s Cathay Pacific to restart use of polar route flight path over Russia after it was axed in March because of invasion of Ukraine https://t.co/bCL9RXofxF

— South China Morning Post (@SCMPNews) October 30, 2022

Last week, Reuters cited Wang’s words describing Beijing’s future outlook on its relationship with Russia as follows, “China is willing to deepen its relationship with Russia in all levels and any attempt to block the progress of the two nations will never succeed.”

“It is the legitimate right of China and Russia to realise their development and revitalisation, Wang Yi said in a telephone call with his Russian counterpart Sergei Lavrov,” the report noted.

By Ye Xie, Bloomberg Markets Live reporter and analyst

The People’s Bank of China has urged traders to respect its yuan fixing. Instead, they are testing the central bank’s resolution to defend the currency by pushing the yuan toward the limit of its trading band.

The longer the deviation between the market and the PBOC’s reference rates persist, the more likely it will end in a volatile showdown.

Recent data show continued weakness in economic fundamentals for the yuan. Both manufacturing and service sectors contracted. Outflows from the bond market continued. And Covid cases are spreading again.

Against this backdrop, it’s not surprising to see the yuan under pressure. One-month implied volatility has hit a record since the offshore market came into existence in 2011. The volatility curve is inverted, with short-term vol higher than one-year vol, in a sign of market stress.

On Monday, the yuan traded about 1.8% weaker than the fixing, marking the third time over the past five weeks that the spot rate was so close to the 2% daily limit. The currency has never tested the trading band so often since China revamped the fixing mechanism in 2015.

And it’s not only against the dollar. The yuan’s weakness is broadening. The CFETS yuan basket fell below 100 for the first time since November 2021. On a trade-weighted basis, the divergence between the market and the official reference rate reached a record 1.8% on Oct. 25, according to Bank of America’s calculation.

In September, when the spot yuan traded close to the daily limit, the PBOC issued a strongly-worded statement saying that speculators will lose money and called for market participants to “protect the authority of the fixing.”

These warnings have fallen on deaf ears. That shows “the credibility of the CNY regime is being tested,” Bank of America’s strategists, including Claudio Piron, wrote in a note Monday.

In early 2015, the PBOC kept the yuan steady even as the spot rate started to weaken toward the edge of the trading band. The divergence was eventually resolved when the PBOC engineered a one-off devaluation in August of that year.

The central bank is facing a similar dilemma. Either it forces the market to converge to a stronger level to reinforce its authority, or it allows the market to guide the yuan to a lower level. Either way, there’s likely to be more volatility ahead.

Trick-or-treating has been associated with Halloween celebrations in the U.S. and Canada since the early 1900s, but, as Statista’s Katharina Buchholz notes, traditions of children going door to door in a quest for treats exist in many parts of the world, with one European custom being widely recognized as the precursor of the North American tradition.

You will find more infographics at Statista

As far back as the Middle Ages, people in the British Isles dressed up for holidays and went from door to door performing scenes in order to receive a thank-you in the form of food and drink. The tradition is preserved today in Scotland and Ireland under the name guising and features dressed-up children rather than theater displays. The origin of Halloween, celebrated on October 31, also goes back to Celtic traditions, more specifically the Samhain festival, which marked the beginning of winter and a time when fairies and spirits needed to be appeased. Like many Christian holidays, All Saints’ Day (November 1) and its eve, All Hallows’ Day, coincide with the pagan festival and trick-or-treating is done in Portugal on the first day of November. All Saints’ Day also has a big significance in Mexico (celebrated as Day of the Dead there) but U.S. Halloween traditions have also been adopted, most heavily in the Northern and Central parts of the country, where the custom is named calaverita (litte skull) after the sugar skulls which are gifted for the festival.

But scary dress and trick-or-treating antics are not tied to a single date: Scandinavian children engage in them around Easter, while those in Northern Germany and Southern Denmark pick New Year’s Eve. In Southern Germany, Austria Switzerland, the Netherlands and Flanders in Belgium, treats are given out not for threats, but for songs, which children perform on November 11 (St. Martin’s Day). Caroling for sweets is also performed during Ramadan in Central Asia. This is where trick-or-treating blends into Christmas caroling, which is sometimes also rewarded with food offerings, for example in Eastern Europe.

The practice is associated most closely with England and the United States, but involves adults as well as children and more commonly the collection of money, for example for charity.

While Europe continues the unvarnished hypocrisy of pretending it is imposing draconian sanctions against Russian oil and gas, when instead it is merely buying the country’s natural resources via such middlemen as India and China (an exercise in virtue signaling that costs it a 20% mark-up to Russian prices), less than a year since the start of the Ukraine war, some countries have had enough of pretending.

Today, the Japanese government decided to officially screw the sanctions, and remain involved in the (formerly Exxon-led) Sakhalin-1 oil and gas project in Russia, as it seeks a stable supply of energy (who doesn’t) despite international sanctions on Moscow over its invasion of Ukraine, the Nikkei reported.

ExxonMobil, which held a 30% stake in Sakhalin-1, announced in March that it would withdraw from the project. But after vacillating for more than half a year, Japan decided not to follow in Exxon’s footsteps.

Meanwhile, Russia set up a new company to take over the project under a presidential decree that has in effect forced investors to choose sides. Japan’s Ministry of Economy, Trade and Industry is a stakeholder in Tokyo-based Sakhalin Oil and Gas Development — which owns 30% of Sakhalin-1’s current operator – along with other investors including Itochu, Japan Petroleum Exploration and Marubeni.

The Japanese consortium will make a final decision on whether to stay invested in the project after discussions with other stakeholders.

Why does this matter? Well, back in may, the G-7 nations decided to ban imports of Russian crude oil. Although the G-7 did not decide on a time frame, saying only that the ban will be enforced in a “timely and orderly fashion,” Japan’s continued participation in Sakhalin-1 would go against the consensus among fellow G-7 members.

In short, Japan would be the first “western” nation to officially breach the anti-Russia alliance.

Of course, there are reason: Japan relies on the Middle East for 95% of its crude imports, and sees ownership in Russian projects as essential to ensuring a stable supply of energy. But then again, one can say the same of most of the developed world, and certainly all of Europe, where Russian energy commodities serve as the basis for comfortable, modern life.

On October 7, Vladimir Putin signed a decree transferring Sakhalin-1 to a newly established company, which was registered on Oct. 14. Stakeholders in the project were given one month to decide whether to invest in the new company, and relevant Japanese agencies, including the Ministry of Economy, Trade and Industry, have been considering their options. They have now decided.

A unit of Russian state oil company Rosneft is expected to operate Sakhalin-1 after ExxonMobil. Rosneft and India’s state-owned Oil and Natural Gas Corp. each previously held 20% of the project.

As a result of the chaos, operations at Sakhalin-1 have been virtually shut down, and Japan has imported no oil originating from the project recently, so losing its stake will not have an immediate impact on the country’s fuel supply.

Russia has transferred operations of the Sakhalin-2 natural gas project to a new company as well. Japanese investors Mitsui & Co. and Mitsubishi Corp. decided to retain their stakes in the project, and their continued investment has been approved by the Russian government.

Translation: the upcoming G-20 will be rather awkward as Japan’s PM Fumio Kushida, an anchor pillar of the G7 in Asia, may decide to sit at the table next the Xi and Putin.

Iran’s military has seized a foreign-flagged tanker on suspicion of illegal smuggling operations, state media announced Monday.

While the tanker or flag it is flying under hasn’t been identified by Tehran authorities, it was said to be carrying 2.9 million gallons of “smuggled fuel” – worth an estimated $6.6 million, according to a statement of an Iranian official. 

The country’s elite Islamic Revolutionary Guards Corps (IRGC) boarded and took control of the vessel in the Persian Gulf. Tehran has long complained about and tried to crackdown on what it has described as persistent smuggling of its oil and fuel to Gulf states.

“The captain and crew of this foreign tanker are also detained as investigations and legal procedures are being completed,” Iran’s judiciary chief of the southern province of Hormozgan, Mojtaba Ghahremani, said in a video address.

“All vessels which have delivered fuel to the violating tanker will also be subject to prosecution,” Ghahremani added.

State media showed a clip of the seized vessel with IRGC operatives approaching it. This practice of intercepting foreign vessels in the vital Strait of Hormuz waterway has put Iran’s navy on a crash course with the US military presence in the region. Of late, the IRGC has sought to seize US sea drones in the region.

WATCH: #BNNIran Reports.

Mojtaba Ghahremani, the judiciary chief for Hormozgan province in Iran said, “The navy of the Islamic Revolutionary Guard Corps has seized a foreign tanker carrying 11 million liters of smuggled fuel.” #Iran #Crime pic.twitter.com/jR4dXuGrto

— Gurbaksh Singh Chahal (@gchahal) October 31, 2022

Interestingly, Iran is further alleging that smugglers seek to steal national assets with the help of foreigners. 

“The criminal acts by fuel smugglers who plunder national assets in coordination with foreigners will not be hidden from the sight of Judiciary officials and officers, and the perpetrators of such crimes will be punished severely and without leniency,” Ghahremani said additionally in his statement, according to PressTV.