Positive Influence

Moody's downgrades US economy to negative, APEC sidelines are Xi-Biden headlines, Albanese upgrades China relations to positive, Will David Cameron support China proposed Peace Summit?

Nov 14, 2023

UPDATE: Moody's has affirmed the long-term issuer and senior unsecured ratings of the US at Aaa, making it the only one of the three major credit rating agencies to maintain a triple-A rating on the world's largest economy.

Beijing and Washington are busy working together for a key bilateral meeting in San Francisco this week, following rosy signs in the past year, such as increased high-level and working-level contacts between the two governments, that the China-United States relationship is being stabilised after hitting a record low.

China is Australia's biggest commercial partner and the two countries have built a trade relationship for decades. China has been purchasing Australia's food and natural resources. However, in recent years, relations between the two countries have soured.

David Cameron has returned to the UK government as foreign secretary. A profile on the government’s website credits him with developing “a foreign policy that responded to the new challenges of the Arab spring and also evolving challenges from various state and non-state actors”.

Moody's: US outlook negative

Source: Xinhua

Moody's has affirmed the long-term issuer and senior unsecured ratings of the US at Aaa, making it the only one of the three major credit rating agencies to maintain a triple-A rating on the world's largest economy.

Following months of political brinkmanship over the US debt ceiling, Fitch cut the US long-term foreign currency issuer default rating to AA+ from AAA in August, joining S&P which has had an AA+ rating since 2011.

Moody's warned of "downside risks" because of a rising budget deficit with no apparent plan to rein in the deficit at a time of significantly higher interest rates from the Federal Reserve.

The agency cited a string of recent red flags, including brinkmanship over the debt limit, the ouster of the House speaker and rising threats of another government shutdown.

The Republican-controlled House of Representatives is now under pressure to take a stopgap spending measure aimed at averting a partial government shutdown.

"In Moody's view, such political polarization is likely to continue," the firm said, making it increasingly difficult for lawmakers to "reverse widening federal deficits".

According to official data published last month, the US federal government recorded a budget deficit of nearly 1.7 trillion US dollars in fiscal year 2023, which ended in September, up 23.2 percent from the previous fiscal year.

This adds to America's already ballooning federal debt, which recently exceeded a staggering 33.6 trillion dollars.

The federal deficit grew significantly more last year than expected due to rising borrowing costs and declining tax revenues, according to an analysis from the Congressional Budget Office.

Immediately after Moody's release, both the US Treasury and White House officials said they disagreed with the shift in the outlook by Moody's.

White House spokesperson Karine Jean-Pierre said the outlook change was "yet another consequence of congressional Republican extremism and dysfunction".

"The American economy remains strong, and Treasury

securities are the world's preeminent safe and liquid asset," Deputy Secretary of the Treasury Wally Adeyemo said in a statement.

Read more here.

Australian PM: “very positive” on China

By Manas Joshi

Australian Prime Minister Anthony Albanese on Monday (November 6) said that he had a "very positive" engagement with China after his meeting with Chinese President Xi Jinping. Xi on his part said on Monday that a stable relationship between the two countries served each other's interests and that Australia and China should further enhance their cooperation. This is seen to be a clear signal from the Chinese side that it was ready to move on from the recent strain in relations between the two countries.

Albanese is the first Australian leader to visit Beijing since the year 2016. He said that the "conflict in the world was raised" during the meeting that took place at the Great Hall of the People. The topics included the Russian invasion and the Middle East. Albanese said that he also raised the case of Australian writer Yang Hengjun, who is languishing in Beijing jail for four years on spying charges.

China is Australia's biggest commercial partner and the two countries have built a trade relationship for decades. China has been purchasing Australia's food and natural resources.

However, in recent years, relations between the two countries have soured. In 2017, Australia accused China of meddling in its politics. Australia is part of the Quad grouping with the United States, India and Japan. China sees the grouping as an attempt to contain it.

China has been proactive in enhancing ties with Pacific Island nations, traditionally viewed as being part of Australia and New Zealand's sphere of influence. Chinese moves have caused concern in Australia as well as in the West, with the United States rushing to counter rising Chinese influence in the region.

The strain in relations between Australia and China had affected the trade as well. Australian PM Anthony Albanese's visit was widely perceived as an attempt at damage control and to ease tensions.

Read more here.

Efforts to stabilise CN-US ties paying off

Principles, people-to-people exchanges urged by Xi keep Sino-US relations afloat

Behind such progress is the fact that China, as led by President Xi Jinping, has further developed and built on a set of methodologies for effectively handling its relations with the US in the new era, analysts said.

At the center of this approach is Xi's proposal of the three principles for approaching China-US relations — peaceful coexistence, mutual respect and win-win cooperation, the analysts said.

When meeting with a bipartisan US Senate delegation led by Majority Leader Chuck Schumer last month in Beijing, Xi reiterated the three principles, saying that "planet Earth is vast enough to accommodate the respective development and common prosperity of China and the US".

Diao Daming, a professor at Renmin University of China's School of International Relations, said, "Beijing has been faithful and consistent in acting on the three principles as proposed by President Xi, which is an overarching philosophy.

"Cooperation is the only right path forward, and there is a widespread sincere wish in US communities to see the two nations move toward the same goal and yield greater benefits by fulfilling these three principles," Diao said.

The increase in visits to China in recent months by high-level US officials also illustrates Washington's efforts to nurture more highlights of collaboration and to better stabilize the ties, he added.

The Chinese president has always been an earnest advocate of exchanges between the two countries at various levels, including official contacts and public diplomacy.

In the past several months, Xi has met with US federal and state officials, including Secretary of State Antony Blinken and California Governor Gavin Newsom, as well as prominent figures who have made remarkable contributions to Sino-US relations, such as former US secretary of state Henry Kissinger.

Blinken said the US is committed to responsibly managing its relationship with China, as "it's in the interests of the United States, in the interests of China and in the interests of the world".

Xi also sent several reply letters or messages to organizations, individuals or events focused on the bilateral friendship, such as the Fifth China-US Sister Cities Conference in Suzhou, Jiangsu province, this month.

Among remarks he made on two-way exchanges, four key points that aim to improve China-US relations and create an enabling atmosphere stand out. "The foundation of China-US relations lies among the people, the hope is in the people, the future lies in the youth, and the vitality lies in subnational areas," he said.

His efforts and words have triggered positive responses from all walks of life in both countries.

David Chong, founder and president of the US-China Youth and Student Exchange Association, co-signed a letter in July from his association and friendly people in Washington state, which the Chinese president replied to in August.

Chong told China Daily that they sent Xi the co-signed letter because they were inspired by Xi's meeting in June with Bill Gates as well as by Xi's remark that "the foundation of China-US relations lies among the people, the hope is in the people".

"We wanted to let President Xi know that there are many people back in the US expecting the friendship to be passed on," he added.

In addition to Xi's personal push, another key impetus for recent signs of stabilization of ties is that China has been steadfastly offsetting Washington's strategy and impulses in recent years to contain and suppress China, prompting it to take steps recently to help cool down tensions, observers said.

"Through recent interactions with Beijing, Washington has witnessed China's resolute approach for securing its own sovereignty, security and development interests, and China has made powerful pushbacks to US provocations," said Su Xiaohui, deputy director of the China Institute of International Studies' Department of American Studies.

"Therefore, the US has had to reconsider how to deal with the China-US relationship. The great focus it has placed on the upcoming presidential meeting is also a response to rising voices back in the US and from US allies for repairing ties with China," she added.

Observers said both sides should fully carry out the important consensus reached by the two presidents in Bali, Indonesia, a year ago, and Washington should effectively rein in negative domestic factors that target China.

'Long way to go"

Chinese Ambassador to the US Xie Feng said in a video speech on Thursday at this year's Hong Kong Forum on US-China Relations that "there remains a long way to go to stabilize and improve the bilateral relationship".

He emphasized that to return to the Bali consensus and move toward San Francisco, more efforts are needed to foster a sound atmosphere, achieve positive outcomes and take solid follow-up actions.

An unnamed senior official of the US National Security Council said on Friday that the goal of the upcoming bilateral meeting is to manage competition, prevent the risk of conflict and ensure open lines of communication.

"China is not afraid of competition, but it opposes the move of using competition to define the (whole of) China-US relations," Foreign Ministry spokeswoman Mao Ning said in response on Monday. The US should not "highlight

its own concerns while damaging China's interests", Mao said at a regular news conference in Beijing.

She voiced the hope that the US will carry out its commitments to not seeking a "new Cold War" and having no intention of a conflict with China, and jointly return the relations to the track of sound, stable development.

Read more here.

Brexit to pints with Xi: David Cameron returns as UK foreign secretary

By Ben Quinn

David Cameron has made a shock return to the UK government as foreign secretary. A profile on the government’s website credits him with developing “a foreign policy that responded to the new challenges of the Arab spring and also evolving challenges from various state and non-state actors”.

But his legacy – most obviously his triggering of the biggest shift in Britain’s foreign relations since the second world war with Brexit – is riddled with controversy.

Libya

Cameron was one of the main architects of Nato’s use of force in Libya in 2011 and the years afterwards have been marked by anarchy.

He has said that he was “proud” of the UK’s role in the overthrow of Muammar Gaddafi after a western intervention to enforce a UN-approved no-fly zone amid attacks on civilians by the dictator’s forces.

However, damning verdicts on Cameron’s intervention have been delivered by critics. These include MPs on the foreign affairs select committee, who found in 2016 that it was carried out with no proper intelligence analysis, drifted into an unannounced goal of regime change and shirked a moral responsibility to help reconstruct the country.

China

That visit was hailed on both sides as the start of a “golden era” of relations the Treasury hoped would make China Britain’s second-biggest trading partner within a decade.

But eight years later that strategy looks very different against Xi’s attempts to suppress democracy in Hong Kong and preparations for an invasion of Taiwan. China’s interference abroad has also been described by Rishi Sunak as “a particular threat to our open and democratic way of life”.

Europe

Cameron claims that he has no regrets about calling the 2016 referendum on whether the UK should stay in the EU – a promise he made before the 2015 general election – but Britain’s influence on the world stage has arguably never been the same since Brexit.

Before the referendum, EU leaders and officials in Brussels were irritated by Cameron’s attempts to renegotiate the UK’s relationship with the bloc, which ultimately did not persuade the electorate to vote to stay in.

Even before then, Cameron had caused immense anger in 2011 when he used Britain’s veto to block a new EU-wide treaty and left other countries to forge a pact to salvage the single currency.

“People remember him as the man who caused Brexit to save his own government. I think in European eyes he is so much discredited and no one will be keen to deal with him, which of course they will have to,” one senior EU source said.

The US

While the body language during joint appearances was read as Cameron playing a deferential role to Barack Obama, the then US president would later reveal his frustration with British foreign policy.

Cameron was distracted by domestic priorities as Libya descended into a “mess”, Obama suggested in 2016. He also revealed that he warned his British counterpart that the “special relationship” would be at risk if the UK did not commit to spending 2% of national income on defence, in line with Nato targets.

Cameron is withering of Obama in his autobiography, accusing him of “dithering” on Libya and of being “clearly frustrated he had been sucked in”.

He would go on to describe Donald Trump, then vying for the Republican presidential nomination, as “divisive, stupid and wrong” to call for a ban on Muslims entering the US.

Middle East

Cameron authorised UK airstrikes against Islamic State in Syria in a move he said would “make us safer”, but was forced to rule out further British involvement in action against Syria in 2013 after losing a key Commons vote.

Bashar al-Assad, who clung to power by slaughtering hundreds of thousands of Syrians, would openly mock Cameron afterwards and the UK was accused by Oxfam of failing to take its “fair share” of refugees.

On the Middle East’s most intractable conflict, Cameron caused waves in 2010 when he likened the experience of Palestinians in the blockaded Gaza Strip to that of a “prison camp”. But five years later Israel’s Haaretz newspaper ventured that he was “the most pro-Israel British prime minister ever”.

Elsewhere, he sought to deepen the UK-Saudi relationship, even after the exposure of a secret deal to ensure both states were elected to the UN human rights council.

It emerged after the exposure of Cameron’s lobbying for Greensill Capital that he had maintained a relationship with Mohammed bin Salman, meeting the Saudi crown prince during a business trip with Lex Greensill in 2020, a year after the murder of the Saudi journalist Jamal Khashoggi.

Russia

Cameron wrote in his autobiography that there was “a series of moments” that gave “hope for the future” when Vladimir Putin resumed the Russian presidency, although he insisted he “never forgot the man I was dealing with”.

While he supported sanctions against Russia after its 2014 invasion of Crimea, leading to Putin’s G8 suspension and UK training for the Ukrainian military, critics point to Cameron’s pursuit of supposed shared interests with Russia, UK defence cuts and the way in which the City of London became a haven for corrupt Russian money.

Michael Fallon would go on to claim that, as Cameron’s defence secretary, he was told to turn down requests for assistance in upgrading Ukraine’s defences and that there was a desire not to “further provoke Russia”.

Aid

Cameron’s support for committing 0.7% of GDP to international development has been regarded as being on the “plus side” on the balance sheet of his foreign policy record, even as those on the right have derided it as a reckless target at a time of falling defence spending.

For his own part, Cameron regards committing to the target as a central part of his legacy as Conservative leader. After his time in Downing Street, he criticised Boris Johnson’s aid cuts and the abolition of the Department for International Development.

His criticism of aid cuts in November 2020, which he described as a “very sad moment” for the UK, came after the axe was wielded by the then chancellor, Sunak.

Read more here.

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