New Boundaries
EEZ Indonesia-Vietnam, TSMC losses, LatAM not for war, Russia in Africa, Cambodia adopts CIPS, Biden's two-front Cold War, China-Iran up, NATO replace Stoltenberg, Ukraine defences collapsing
UPDATE: Today, the Long Mekong Daily looks at how new boundaries are being drawn as multi-polarity takes hold of world order. ASEAN chair Indonesia has scored an early goal with Vietnam settling a 12 year negotiated EEZ treaty.
Warren Buffet bails from troubled Taiwan semiconductor behemoth TSMC. The US tech-trade War with China is no place for the legendary investor, but he is sticking with EV maker BYD, the worlds most integrated and largest EV maker.
Latin American leaders have rejected US-NATO requests for weapons and ammunition for the rapidly unravelling Ukraine proxy war.
African leaders have embraced Russia and also rejected US-NATO requests to support their proxy-war in Ukraine.
Cambodia has joined the CIPS international bank transfer system, which allows local currency cross-border trade with China and a host of Belt and Road partners.
Joseph Biden and his neo-con war cabinet have finally realised that a two-front cold war is now beyond the diplomatically, politically, economically and socially bankrupt USA.
China and Iran are building on their partnership to stabilise West-Asia and ensure that the economic power of Iran - so-long disrupted by the US - can finally be realised. The boon for all of Central Asia and West Asia is clear. Joint action on Ukraine is a necessity.
The rapidly deteriorating position of the Ukraine has resulted in news of NATO Secretary General Stoltenberg being replaced. Russia has made strong advances and may have broken the back of Ukraine defences.
Look to Munich tomorrow!
How a new Vietnam-Indonesia deal will affect South China Sea disputes
A recent agreement between Indonesia and Vietnam over maritime boundaries in the South China Sea will likely smooth over the occasionally tense relationship between the two South East Asian nations. The agreement, inked Dec. 22, follows 12 years of negotiations, and comes 19 years after both countries adopted a delineation of the continental shelf boundary between them.
Details of the agreement and the delineation remain classified. The Vietnamese and Indonesian defense ministries did not respond to requests for comment by press time.
“Practically, the successful Indonesia-Vietnam EEZ [exclusive economic zone] demarcation will help both countries to resolve illegal, unreported, and unregulated (IUU) fishing, which has been a serious bilateral irritant and a broader issue involving third-party countries, including China and Thailand” (Bich Tran, Yusof Ishak Institute in Singapore)
The agreement also “provides hope for the strengthening of the region’s commitment to international maritime norms and principles, as encapsulated in the 1982 U.N. Convention on the Law of the Sea,” he wrote, allowing the two countries “to assert their respective sovereign international maritime rights and enforce their maritime interests.”
According to international law, an exclusive economic zone includes waters extending up to 200 nautical miles from a country’s coast, where that nation has exclusive rights to explore and exploit the natural resources within.
Read full article here.
Buffett’s quick $4.9 billion sale of TSMC stock spooks investors
Billionaire investor Warren Buffett slashed his holding of Taiwan Semiconductor Manufacturing Co (TSMC) just months after disclosing a major stake, an unusually quick reversal by the legendary stock picker that is chilling investor sentiment towards the chip giant.Buffett’s Berkshire Hathaway cut its holding of TSMC’s American depositary receipts by 86 per cent in the last quarter, according to the latest filing.
Assuming it sold them at the average price over the period, the stake sale would have fetched US$3.7 billion (S$4.9 billion). Shares of the world’s largest chipmaker closed at NT$525, or down 3.27 per cent, in Taipei following the news, amid broad market losses. TSMC had jumped in November amid news that Mr Buffett had acquired a stake worth about US$5 billion, and it is still up more than 40 per cent from an October low.
“It’s surprising that Berkshire cut its holding so much in just a quarter, which differs from its past practice of long-term investment and continuing to add shares,” (Tony Huang, Taishin Securities)
The chip industry has had to contend with Covid-19-induced supply disruptions in China and a slump in demand for electronics amid surging inflation. TSMC cut its spending target by about 10 per cent in 2022 to about US$36 billion after the Biden administration slapped new restrictions on China’s access to critical technologies.
Amid US-China political tensions, governments in Washington, Tokyo and Brussels are all pushing TSMC to help build local production capabilities. This threatens to drive up its costs.
Read more here.
‘We are for peace’: Latin America rejects pleas to send weapons to Ukraine
Tradition of non-interventionism prompts region’s leftwing leaders to snub pleas from US and Europe. The offer from the US sounded appealing: if Latin American nations donated their ageing Russian-made military kit to Ukraine, Washington would replace it with superior American weaponry.
But far from taking up the US proposal, which was revealed last month by General Laura Richardson, head of the US Southern Command, Latin America’s leaders lined up to denounce it.
“Even if they end up as scrap in Colombia, we will not hand over Russian weapons to be taken to Ukraine to prolong a war […] We are not with either side. We are for peace.” (Gustavo Petro, President of Colombia).
“Brazil has no interest in passing on munitions to be used in the war between Ukraine and Russia […] Brazil is a country of peace. At this moment, we need to find those who want peace, a word that has so far been used very little.” (Luiz Inácio Lula da Silva, President of Brazil)
“Argentina is not going to co-operate with the war […] It is not appropriate to co-operate by sending arms to the conflict in Europe.” (Argentinian Defence Ministry)
Opinion polling suggests Latin American leaders are in tune with their people on this issue. About 73 per cent of Latin Americans polled by Ipsos last year “claim that their country cannot afford to lend financial support to Ukraine, given the current economic crisis”, said Jean-Christophe Salles, Latin America chief executive of the pollster. Two major countries, Argentina and Mexico, are particularly against any support to Ukraine, a majority claiming the problems of Ukraine are none of their business.
Read more here.
Russia’s Newfound Appeal To African Countries Is Actually Quite Easy To Explain
Africa will always support the side that’s fighting to liberate its countries from the chains of neo-colonialism and structural racism, which means that the West never had a chance from the get-go when it came to competing with Russia for hearts and minds.
Observers across the world are bewildered by Russia’s newfound appeal to African countries, especially over the past year since the start of its special operation in Ukraine. The US-led West’s Golden Billion (one billion population) invested heavily in propagating the weaponised information warfare narrative alleging that Russia was behaving as a so-called “coloniser” in that neighbouring former Soviet Republic, not to mention supposedly holding over a billion Africans hostage by allegedly preventing Ukrainian grain shipments.
What happened over the past twelve months caught that de facto New Cold War bloc completely off guard since almost half the continent declined to condemn Russia at the UN General Assembly while not a single African country complied with the Golden Billion’s sanctions against it. Foreign Minister Lavrov has since visited a slew of African states on his three visits to the continent since last summer, including two in recent weeks that practically occurred back-to-back.
Read more here.
Cambodia looks to join China’s CIPS payment system
The National Bank of Cambodia (NBC) is looking into joining the RMB Cross-border Interbank Payment System (CIPS) to provide additional international payment options; facilitate and boost trade, investment, tourism between the two countries through yuan-denominated transactions; and to make management of the Chinese currency in the Kingdom’s international reserves easier.
The plan was revealed by NBC assistant governor Chea Serey at a February 13 press conference that comes just two days after Prime Minister Hun Sen’s three-day official visit to Beijing came to a close.
“The NBC has been studying in detail the requirements for CIPS membership since the system was first established in 2015, so the NBC knows what they need, which won’t be new for us. Second, the leaders of the two countries have discussed and agreed this in principle. This will hopefully speed up the process for Cambodia to join CIPS soon” (Chea Serey, bank of Cambodia assistant governor )
Serey remarked that neither SWIFT (Society for Worldwide Interbank Financial Telecommunication) nor CIPS transfers are universally more expensive ways to move funds than the other. “Hence, when there are two options, we profit.”
Anthony Galliano, group CEO of financial services firm Cambodian Investment Management Co Ltd told The Post on February 14 that Beijing “is promoting the use of the RMB [renminbi, or yuan] as a trade currency, asset currency and reserve currency and as part of this initiative has developed the [CIPS]”.
He explained that the RMB “is the fifth most active currency for global payments by value, according to [SWIFT], CIPS was launched in May of 2018, as a financial infrastructure developed in line with international standards, to provide fund clearing and settlement services to domestic and foreign participants in cross-border RMB businesses.
“The main functions of CIPS are remittances and inter-bank settlements related to cross-border RMB settlement in trade in goods and services, direct investment, financing, and fund transfers.
“For Chinese investors in Cambodia, the utilisation of [CIPS] should make it easier to transact and transfer funds in and out of China, and also mitigate currency risk. With the expectation [that] Chinese FDI [foreign direct investment] will regain traction in 2022, the further implementation of CIPS is timely to facilitate cross border RMB settlements,” Galliano said.
Read more here.
A Cold War on Two Fronts? No Thanks, Says Biden
Despite intense pressure from his Republican opposition, President Joe Biden appears intent on maintaining a measured response to the Chinese spy balloon that crossed the continental United States early this month. The approach appears calibrated to avoid escalation with a second major adversary as his administration deals with Russia’s almost 1-year-old war on Ukraine.
John Kirby, the National Security Council coordinator for strategic communications, told reporters Tuesday the balloon drama does not change the fact that the administration intends to avoid a conflict and continues to seek open lines of communication with China.
Nothing has changed about the president's desire “to move this relationship forward in a better place than it is right now,” Kirby said.
This despite Republican demands for a tougher stance on Beijing.
“[Biden] only shot down the Chinese spy balloon after public pressure demanded it,” said John Barrasso, a Republican senator from Wyoming, in a briefing Tuesday. “This is a complete violation of our integrity as a nation, and the president's indifference and inaction showed weakness not just to China but to the world.”
Read more here.
Why Iran's President Is Making a Rare Trip to China
Iran’s President Ebrahim Raisi met China’s leader Xi Jinping Tuesday as part of a three-day visit to help implement a 25-year cooperation alliance between the two nations, at a time when both countries are facing pressure from Western countries over a range of issues.
The high profile visit—made at the invitation of Xi—is Raisi’s first state visit to the East Asian nation, and the first of any Iranian President in 20 years. The two leaders have only met once before in September at the Shanghai Cooperation Organisation (SCO) summit in Uzbekistan. In 2021, the year Raisi took office, the two countries signed a 25-year “strategic cooperation pact,” and they signed a number of bilateral cooperation documents Tuesday, according to Chinese state media.
Raisi arrived alongside the new central bank governor, as well as six members of his cabinet including ministers who focus on the economy, petroleum, foreign affairs, trade, transport and urban development, and agriculture.
“We are in the middle of a momentous reordering of world politics. As such, new alliance patterns are emerging and strengthening […] The Iran-China link must be seen as a part of this new constellation” (Prof. Arshin Adib-Moghaddam, London’s School of Oriental and African Studies)
Implementing the 25-year “strategic cooperation pact” is expected to feature prominently. The pact is aimed at seeing China invest billions of dollars in Iran’s oil and gas sectors, in exchange for supplies. China is already Iran’s largest trading partner but invested just US$162 million in the first year of Raisi’s presidency. Still, China remains Iran’s largest trading partner. According to data recorded by Iranian customs for the first 10 months of the current Iranian calendar year—which ends in March—Tehran’s exports to Beijing are worth US$12.6 billion, while it imported US$12.7 billion worth of goods from China.
Additionally, regional issues such as Russia’s war in Ukraine and the 2015 Iran nuclear deal with world powers, of which China is a signatory, are expected to be discussed. The nuclear talks remain deadlocked but Iran’s chief nuclear negotiator, Ali Bagheri Kani, is among the Iranian delegation visiting China. The sanctions are a major impediment to developing new contracts and projects as part of the 25-year cooperation pact.
Also on the agenda is Iran’s relations with Arab governments. At the end of last year, Tehran summoned China’s ambassador in Iran after Beijing joined the Gulf Cooperation Council in issuing a statement that questioned Iran’s territorial claims in the Strait of Hormuz. Tehran expressed “strong dissatisfaction” during the visit. While some may expect the issue to be discussed in Beijing, Arshin Adib-Moghaddam thinks it will be strategically avoided.
He said that the nations will likely “keep the GCC factor out of their bilateral relationship, as they are aware that their interests do not have to align on every geopolitical theatre.”
Read more here.
NATO’s Stoltenberg to be replaced
Following a visit to Washington last week, long-serving NATO leader Jens Stoltenberg’s mandate will not be extended for a fourth time and he will be replaced in October, the military alliance said Sunday.
“He has no intention of seeking a further extension of his mandate”
Welt am Sonntag reported earlier Sunday that Stoltenberg’s term may be extended again as NATO seeks to maintain stability during the war in Ukraine, the latest in series of speculation that the NATO chief might stay on. Stoltenberg’s term has been extended three times already, most recently in March last year just after Russia invaded Ukraine.
The 63-year-old former Norwegian prime minister took office at NATO's Brussels headquarters on October 1, 2014 and has overseen the Western alliance build-up in Ukraine. Also under his term in office the last NATO personnel and US forces left Afghanistan in August 2021, shortly before the capital Kabul fell to victorious Taliban forces.
Read more here.
Russia breaks Ukraine defenses
Russia has claimed its forces have broken through parts of Ukrainian defenses in the eastern Luhansk region, while Ukraine's military says its troops are repelling some attacks, but the situation is difficult. The intensifying fighting on February 15 came as Ukraine pleaded with Western allies to speed up the supply of weapons and NATO defense ministers met for second day to discuss the issue.
It also comes as Russia's newest offensive ramps up in the Donbas region, and its forces -- both regular troops and mercenary soldiers -- press a months-long effort to capture the Donetsk region city of Bakhmut. Russia's Defense Ministry said on February 15 that its troops had broken through two fortified lines of Ukrainian defences, but did not specify exactly where. Not long after, President Volodymyr Zelenskiy's office issued a statement saying Ukrainian forces had turned back some attacks in Luhansk, but the situation was difficult.Ukraine's General Staff said on February 15 that the focus of fighting was around not only Bakhmut, but also Lyman, Avdiyivka, and Kupyansk.