Geopolitical developments are expanding quickly in various regions of the world.
Media reports from various regions said:
Japan and the European Union on Thursday agreed to step up their sanctions against Russia as leaders from the two sides raised concerns about the war’s impact in the Indo-Pacific, where they seek to strengthen their partnership and increase engagement amid China’s growing assertiveness.
Japanese Prime Minister Fumio Kishida, who held talks in Tokyo with European Commission President Ursula von der Leyen and European Council President Charles Michel, told a joint news conference that Japan supports tough sanctions against Russia and ample support for Ukraine because the war “shakes the foundation of the world order not only in Europe but also in Asia.”
“Security in Europe and in the Indo-Pacific are inseparable,” Kishida said.
The EU leaders said they want to take a greater role and responsibility in the region and agreed to bolster cooperation in a range of areas including digital transformation, renewable energy and climate.
“The Indo-Pacific is a thriving region. It is also a theater of tensions. Take the situation in the East and South China seas or the constant threat of (North Korea),” von der Leyen said at the news conference, referring to rising tensions over Beijing’s increasingly assertive maritime actions and Pyongyang’s missile and nuclear threats.
“We want to take more responsibility in a region that is so vital to our prosperity,” she said.
Michel said cooperation on Ukraine is critical in Europe and also important in the Indo-Pacific.
UK Signs Security Agreements With Sweden And Finland
The UK has agreed “mutual security assurances” with Sweden and Finland, British Prime Minister Boris Johnson revealed on Wednesday, a few days before Stockholm and Helsinki are due to announce their decision on pursuing NATO membership.
Johnson ws visiting both countries as he signed “historic” declarations, the prime minister’s office said in a statement.
According to Downing Street, the new pacts involve “intensifying intelligence sharing, accelerating joint military training, exercising and deployments, and bolstering security across all three countries and northern Europe.”
The UK also intends “to support the two nations armed forces should either face crisis or come under attack,” the office said. This reassurance comes as both Finland and Sweden previously expressed concern of possible retaliation from Russia should they apply for NATO membership.
The news of the security pacts comes amid reports that several other countries will soon be joining the UK in providing security assistance to Sweden and Finland. According to the Norwegian newspaper Verdens Gang, Nordic NATO countries Norway, Denmark and Iceland are working with their neighbors on a joint political declaration which could provide Stockholm and Helsinki with additional assurances in the coming months.
On May 6, White House spokeswoman Jen Psaki reassured Sweden and Finland that the U.S. will be able to find ways “to address any concerns either country may have about the period of time between a NATO membership application and the formal accession to the alliance.”
In early April, the head of the military alliance NATO, Jens Stoltenberg, said NATO “will warmly welcome” Finland and Sweden if they apply to join, and is prepared to make a decision on membership “quite quickly.”
Russia considers the further expansion of NATO to be a direct threat to its own national security, and “for the whole architecture of security.” Kremlin spokesperson Dmitry Peskov warned in April that Moscow would “take additional measures” to make its defenses on the Western flank “more sophisticated” if Finland and Sweden join the bloc.
Finnish leaders make statement on NATO
Finnish President Sauli Niinisto and Prime Minister Sanna Marin made a joint statement on Thursday morning, confirming their desire to become part of NATO. The country refrained from asking for accession during the Cold War, but made a U-turn after the Russian attack against Ukraine in February.
The statement expressed the view that “as a member of NATO, Finland would strengthen the entire defense alliance.” The two officials said their country “must apply for NATO membership without delay”.
NATO claims to be a purely defensive organization, but Russia, which shares a 1,340km (833-mile) land border with Finland, perceives the bloc’s expansion as a threat to its national security. Moscow warned that Helsinki will lose its status as a trusted mediator that its non-alignment stance granted it throughout much of the last century. It also said Finland’s security would be compromised rather than served by joining NATO, since Russia would have to respond to the expansion.
Swedish Defense Minister Peter Hultqvist said earlier this week that if his country submits an application to join NATO, he would prefer it to be processed along with Finland’s bid.
Europe Might Be Entering a Recession. Why the U.S. Won’t Be Next.
With markets pulling back on concerns that the global economy is weakening, it would be tempting to think that all regions are in the same boat. But there are reasons to think that Europe is in worse shape than the U.S.
The euro area posted an economic expansion in the first quarter while the U.S. contracted. But their fortunes are set to diverge in opposite directions.
Russia’s invasion of Ukraine will be particularly painful for Europe, lifting fuel, power and food prices that will act as a tax on consumers, wrote Seth Carpenter, Chief Global Economist at Morgan Stanley , in a note May 8. That can only get worse if the European Union bans Russian oil imports, which appears likely.
Spiraling inflation will also prompt the European Central Bank (ECB) to start hiking rates sooner than previously anticipated. Finland’s central bank chief Olli Rehn came out in favor of a July increase on Monday. “The second half of the year looks decidedly worse for euro area growth than first half,” Carpenter said.
The prospect of earlier moves by the ECB – with inflation driven by food and fuel rather than stronger economic growth — is bearing down on sentiment.
“It’s becoming more evident that the eurozone has entered a recession” in the second quarter, said Bleakley Advisory Group’s Peter Boockvar, in a note.
Carpenter thinks a European contraction could trigger a U.S. recession, after frontloaded policy tightening has been set in train. But while the alignment of those “unlucky stars is possible”, he said: “hence the rising risk . . . it is not something I would count on.”
Morgan Stanley warns 2022 global economic growth to be less than half of 2021
Morgan Stanley forecasts this year’s global economic growth to be less than half of 2021 due to risks from the Russia-Ukraine conflict and COVID-19 surge in China even as central banks tighten monetary policy to control record high inflation.
The brokerage expects global growth to be at 2.9%, about 40 basis points below consensus, compared with the 6.2% growth in 2021, on a year-on-year basis.
“The deceleration is global, driven by the combination of waning fiscal impetus, tightening monetary policy, a continuing drag from Covid, persistent supply chain frictions, and, most recently, repercussions from the Russian invasion of Ukraine,” wrote Morgan Stanley economists in a note dated Tuesday.
Commodity and oil prices have skyrocketed after Russia was slapped with Western sanctions for its invasion of Ukraine, worsening inflationary pressures globally and prompting governments and central banks to reassess their monetary policies.
China’s tighter COVID-19 curbs have halted factory production and crimped domestic demand, taking a toll on its economy with export growth slowing to its weakest in almost two years.
With a resolution to the Ukraine crisis looking unlikely and global central banks already trying to slow growth to tame inflation, Morgan Stanley economists expect the upside for economic growth to be limited.
Morgan Stanley said the slower global growth is broadly-based, and the only two major economies where brokerage does not see substantial slowing are Japan and India.
Recessionary Forces Are Gathering In UK Economy
“The UK economy has now recovered to its pre-pandemic level, but momentum seems to be ebbing away, and recessionary forces are gathering,” said Laith Khalaf, head of investment analysis at AJ Bell. “GDP came in at 0.8% for the first quarter of the year, a little below forecasts.”
“What is more concerning is that almost all of the growth was registered in January, and March actually saw a 0.1% fall in GDP.”
Concerns over the pace of recovery heightened following stagnation in February, and analysts expect UK inflation to accelerate from its 30-year high.
March’s unexpected economic decline comes ahead of April’s 54% rise in energy bills. British households are now under mounting pressure from soaring living costs on the back of rising energy, food and fuel prices, exacerbated by Russia’s invasion of Ukraine.
Last week, the Bank of England warned consumer prices could reach as high as 10%, well above the Bank’s 2% target, later this year after Threadneedle Street hiked UK interest rates to a 13-year high of 1% to stem inflation.
Khalaf added: “On top of higher energy prices and taxes, the UK economy now also has to deal with rising interest rates, which will serve to further dampen activity.
“Recession risk is therefore elevated, and while growth is still expected this year, 2023 looks like it will be more challenging economically.
“The markets are already looking forward to next year with some trepidation, which explains why we have seen significant falls in the pound and the FTSE 250 since the start of the year.”
Oil Prices: Barring Recession, Expect High Energy Prices For Several Years, Says Analyst
Gasoline and diesel prices are hitting all-time highs again — at a national average of $4.40 and $5.55 per gallon, respectively.
Higher fuel costs are prompting some consumers to change their driving patterns, with drivers consolidating grocery shopping trips to save on gas.
Analysts predict if a recession were to occur, demand destruction would kick in, causing oil prices to fall.
“Back in July 2008, crude oil prices reached $145 per barrel. By December, the price had plummeted to $35 per barrel,” Andy Lipow of Lipow Oil Associates told Yahoo Finance.
“A recession with a decline in demand of 10% can result in a $35 to $50 per barrel decline in oil prices which translates into 75 cents to $1.25 per gallon for gasoline,” he added.
“Barring a recession, high energy prices are going to be with us for several years,” analyst Andy Lipow recently wrote in an oil brief.
Lipow points out prices could remain higher, in part due to the Department of Energy’s (DOE) recent announcement of a long-term buyback plan of crude oil to replenish the nation’s Strategic Petroleum Reserve.
Russia’s Economy Is Stronger Than Expected And Will Only Suffer A Shallow Recession Despite Sanctions, Says JPMorgan
The Russian economy has so far fared better than expected under tough sanctions and is likely to suffer only a shallow — although drawn-out — recession, according to JPMorgan.
The Wall Street bank said business sentiment surveys from the country “are signaling a not very deep recession in Russia, and therefore imply upside risks to our growth forecasts,” in a note sent to clients last week and released publicly Monday.
The US and its allies slapped tough economic sanctions on Russia in late February after Vladimir Putin’s troops invaded Ukraine. The stringency of the measures prompted forecasters to predict a dramatic slowdown in Russia’s economy.
In March, JPMorgan forecasted that Russian gross domestic product would contract 35% quarter-over-quarter in the second quarter, and 7% for the year. The IMF expects Russia’s economy to shrink 8.5% in 2022.
Yet the bank told clients last week that the country’s economy is in better shape than expected, judging from business surveys and high-frequency indicators such as electricity consumption and financial flows.
“The data at hand therefore do not point to an abrupt plunge in activity, at least for now,” JPMorgan’s analysts wrote. They said GDP in the second quarter would likely be better than predicted in March.
To be sure, JPMorgan said Russia’s economy is far from where it would be if the invasion hadn’t happened. It said export orders are doing particularly badly, and companies expect more pain down the line.
“The impact of sanctions will continue building in coming quarters, we expect,” JPMorgan said. “The GDP profile, therefore, looks increasingly likely to be consistent with a drawn-out, but not very sharp recession.”
Ukraine War To Accelerate Geopolitical Trends, Including US-China Confrontations
Analysts said on Monday that growing US-China confrontations over trade, technology and communications already amounts to a worrisome global conflict.
“The domains of warfare are changing,” said Stewart Paterson, founder of the investment research firm Capital Dialectics and a fellow at the Hinrich Foundation, which co-sponsored the panel discussion with the Association of Foreign Press Correspondents in the United States.
“So, I will be controversial and I will say that World War III started about 20 years ago when China joined the WTO”, referring to the World Trade Organization.
Trade and economics are traditionally framed as win-win exercises. But major economic powers are increasingly poised to use decoupling and supply-chain disruptions as weapons, denying their adversaries access to semiconductors, rare earth elements and other strategic goods.
“What we have seen in the last few years is an expressed willingness on the part of several great powers to use trade and economics in such a way that it is a lose-lose,” said Paterson. “That is the definition of war, is not it? You always suffer costs, but you are hoping that the cost is going to be higher for your opponent.”
Analysts at the event said that the Ukraine war has accelerated economic, military and geopolitical trends expected to play out over the next decade.
Among the seismic shifts may be a serious erosion in China’s influence and footprint in central and eastern Europe as thicker lines are drawn between democracies and authoritarian states.
China had prioritized these parts of Europe as an area of strategic importance, investing heavily in Ukraine, routing Belt and Road Initiative rail lines through the region and forming the 17+1 grouping of China and eastern European partners.
That grouping shrank to 16+1 after Lithuania left last year partly over a dispute involving its diplomatic ties to Taiwan, which Beijing considers a renegade province.
The evolving geopolitical situation “may very well end the 16+1, which was already in some kind of slumber format,” said Ivana Karaskova, founder of MapInfluenCE, a group that maps China’s influence in central Europe.
“There have been two delegations from China recently touring central and eastern European countries on damage-control missions. They didn’t grasp the changes which happened in EU over the past two years.”
Beijing’s decision to join Russia in blaming NATO’s expansion for the invasion of Ukraine is alienating many countries that fear they could be attacked next. This follows regional disillusionment that Beijing was using divide-and-conquer tactics, rather than win-win economic benefits, in its 17+1 leadership, Karaskova added.
China’s willingness to condemn the NATO may estrange Europeans, but Beijing’s message may be aimed further afield, among African, Latin American and Asian nations that have their own reasons for distrusting US-led Nato.
Beijing’s enhanced ties and “no-limit” partnership with Moscow were laid out during a February 4 meeting between Chinese President Xi Jinping and Russian President Vladimir Putin, but their strategic interests have become increasingly aligned in recent years.
Both are wary of Western liberalism and US “hegemony”, as well as regime change, and have complementary economic interests, said Thomas Graham, a fellow at the Council on Foreign Relations. Xi and Putin have met nearly 40 times since 2013, while trade between the two nations has doubled since 2015 to US$115 billion and is seen as growing to US$200 billion by 2024.
Russia exports energy and high-end weapons, while China is an eager importer. And both imports can be easily transferred overland, reducing Beijing’s vulnerability to US naval blockade in the event of a conflict.
But Western analysts are divided over whether the partnership amounts to a relatively benign marriage of convenience or “something more sinister” involving the creation of an axis power further worsening the democracy-autocracy split, Karaskova said.
Growing geopolitical polarity will put more strain on counties and multilateral organizations that have tried to remain relatively neutral to pick a side, analysts added.
The Association of Southeast Asian Nations (ASEAN) is a case in point, Paterson said. Singapore has sided with the US over Ukraine, other members like Laos and Cambodia lean toward China while the remaining democracies are trying to balance between Beijing and Washington.
“The war in Ukraine makes it far harder for countries to maintain that kind of neutrality,” Paterson said.
China’s GDP growth may be marginal this year. And even without the impact of Covid-19, the nation’s protracted real estate crisis, huge local debt, changing demographics and the growing wariness of multinational companies in China doesn’t bode well.
Despite its calls for technological independence, China remains heavily reliant on foreign multinationals, which generate some 40 per cent of its exports, analysts said. Europe has realised how dependent it is on Russian energy – and on Chinese trade fuelled by coal and Russian oil as the planet warms – which could increase the democracy-authoritarian divide.
“The war in Ukraine was really the big accelerant of this bifurcation, which I think was fairly inevitable anyway,” Paterson said. “The reality of economics is that market-oriented economies don’t trade well with command economies.
“And so there was always going to be an asymmetry and injustice in the economic relationship that ultimately was going to catch up with elites on both sides.”
U.S. angers China With Taiwan Mission
The Chinese military made critical remarks on Wednesday after the U.S. sailed one of its warships through the Taiwan Strait on Tuesday in a show of flag mission. Beijing said that Washington had a habit of “staging dramas” over the self-governed island that China considers to be under its sovereignty. The US supports Taiwan against China, while maintaining strategic ambiguity over its status.
The U.S. Navy sent the USS Port Royal, a Ticonderoga-class guided missile cruiser of the 7th Fleet, to pass through the body of water separating Taiwan from mainland China. The ship remained in international waters while navigating the corridor on Tuesday in a mission meant to demonstrate American “commitment to a free and open Indo-Pacific,” according to a statement.
The US Navy launches such missions about once a month amid its standoff with China over Taiwan and the region in general. The previous sail-through, conducted by the Arleigh Burke-class destroyer USS Sampson, was reported in late April.
Beijing considers the island to be part of its territory and criticizes Washington for actions that may be perceived as supporting “separatism” among its population.
“The United States frequently stages such dramas and provokes trouble, sending wrong signals to ‘Taiwan independence’ forces, and deliberately intensifying tensions across the Taiwan Strait,” a Chinese military official said, commenting on the mission.
The Chinese military was monitoring the progress of the American warship and ready to counteract any threats and provocations, Colonel Shi Yi, the spokesman for the Eastern Theater Command of the People’s Liberation Army, said.
Washington has no formal diplomatic ties with Taiwan but has supported its government since it was captured by nationalist forces during the Chinese civil war. The U.S. has ramped up informal and semi-formal backing of Taipei over the past several years with arms supplies, trade deals and other actions. U.S. officials say they want to deter Beijing from attempting to seize the island by force, an intent that Beijing denies having.
The US warship passed through the strait less than a week after the Chinese military conducted exercises near Taiwan. The drills staged between Friday and Sunday were meant to “further test and improve the joint combat capability of multiple services and arms”, the Eastern Theater Command reported earlier this week.
Marcos Presidency Complicates U.S. Efforts To Counter China
Ferdinand Marcos Jr.’s apparent landslide victory in the Philippine presidential election is raising immediate concerns about a further erosion of democracy in Asia and could complicate American efforts to blunt growing Chinese influence and power in the Pacific.
Marcos, the namesake son of longtime dictator Ferdinand Marcos, captured more than double the votes of his closest challenger in Monday’s election, according to the unofficial results.
If the results stand, he will take office at the end of June for a six-year term with Sara Duterte, the daughter of outgoing President Rodrigo Duterte, as his vice president.
Duterte — who leaves office with a 67% approval rating — nurtured closer ties with China and Russia, while at times railing against the United States.
He walked back on many of his threats against Washington, however, including a move to abrogate a defense pact, and the luster of China’s promise of infrastructure investment has dulled, with much failing to materialize.
Whether the recent trend in relations with the U.S. will continue has a lot to do with how President Joe Biden’s administration responds to the return of a Marcos to power in the Philippines, said Manila-based political scientist Andrea Chloe Wong, a former researcher in the Philippine Department of Foreign Affairs.
“On the one hand you have Biden regarding the geostrategic interests in the Philippines, and on the other hand he has to balance promoting American democratic ideals and human rights,” she said.
“If he chooses to do that, he might have to isolate the Marcos administration, so this will definitely be a delicate balancing act for the Philippines, and Marcos’ approach to the U.S. will highly depend on how Biden will engage with him.”
His election comes at a time when the U.S. has been increasingly focused on the region, embarking on a strategy unveiled in February to considerably broaden U.S. engagement by strengthening a web of security alliances and partnerships, with an emphasis on addressing China’s growing influence and ambitions.
Thousands of American and Filipino forces recently wrapped up one of their largest combat exercises in years, which showcased U.S. firepower in the northern Philippines near its sea border with Taiwan.
Marcos has been short on specifics about foreign policy, but in interviews he said he wanted to pursue closer ties with China, including possibly setting aside a 2016 ruling by a tribunal in The Hague that invalidated almost all of China’s historical claims to the South China Sea.
A previous Philippines administration brought the case to the tribunal, but China has refused to recognize the ruling and Marcos said it won’t help settle disputes with Beijing, “so that option is not available to us.”
Allowing the U.S. to play a role in trying to settle territorial spats with China will be a “recipe for disaster,” Marcos said in an interview with DZRH radio in January. He said Duterte’s policy of diplomatic engagement with China is “really our only option.”
Marcos has also said he would maintain his nation’s alliance with the U.S., but the relationship is complicated by American backing of the administrations that took power after his father was deposed, and a 2011 U.S. District Court ruling in Hawaii finding him and his mother in contempt of an order to furnish information on assets in connection with a 1995 human rights class action suit against Marcos Sr.
The court fined them $353.6 million, which has never been paid and could complicate any potential travel to the U.S.
The U.S. has a long history with the Philippines, which was an American colony for most of the early 20th century before gaining independence in 1946.
Its location between the South China Sea and western Pacific is strategically important. And while the U.S. closed its last military bases on the Philippines in 1992, a 1951 collective defense treaty guarantees U.S. support if the Philippines is attacked.
Even though the Biden administration may have preferred to work with Marcos’ leading opponent, Leni Robredo, the “U.S.-Philippines alliance is vital to both nations’ security and prosperity, especially in the new era of competition with China,” said Gregory B. Poling, director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington.
“Unlike Leni, with her coherent platform for good governance and development at home and standing up to China abroad, Marcos is a policy cipher,” Poling said in a research note. “He has avoided presidential debates, shunned interviews, and has been silent on most issues.”
Marcos has been clear, however, that he would like to try again to improve ties with Beijing, Poling said.
“But when it comes to foreign policy, Marcos will not have the same space for maneuver that Duterte did,” he said. “The Philippines tried an outstretched hand and China bit it. That is why the Duterte government has reembraced the U.S. alliance and gotten tougher on Beijing over the last two years.”
China Urges Cooperation As South Korea’s New President Takes Office
China’s vice-president has told South Korea‘s new leader that Beijing hopes for more strategic communication and high-level exchanges, a message delivered after he attended Yoon Suk-yeol’s inauguration in Seoul on Tuesday.
Wang Qishan said South Korea and China “are important cooperation partners as well as close neighbours” with common interests, and should strengthen communication and coordination on international and regional affairs, according to Chinese state news agency Xinhua.
“The two sides should … work together to safeguard multilateralism and the free-trade system, and promote regional and global development and prosperity,” Wang told Yoon after delivering a congratulatory message as special envoy of Chinese President Xi Jinping.
He called for more cooperation between the trading partners in key areas and third-party markets.
Wang also said the two neighbors should take advantage of their close geographical proximity, shared cultural heritage and traditional ties to improve the friendship between the two nations.
And he pledged more cooperation with the South on “sensitive issues” such as North Korea.
“China sincerely supports the improvement of relations between the North and the South … and the promotion of reconciliation and cooperation, and is willing to strengthen communication with South Korea to promote denuclearisation and lasting peace on the peninsula,” Wang said.
Yoon agreed to continue close communication at a high strategic level and to further strengthen exchanges and cooperation in various fields, boost people-to-people exchanges and promote a new era in relations, according to the Xinhua report.
“South Korea is willing to strengthen communication and coordination with China to jointly promote peace, stability and prosperity on the peninsula,” Yoon was quoted as saying.
Vice-President Wang is the highest-level Chinese leader to attend a South Korean presidential inauguration – previously Beijing has sent lower ranking officials such as its vice-premier or state councillor.
The US delegation, meanwhile, was led by Douglas Emhoff, husband of Vice-President Kamala Harris, while Japan sent Foreign Minister Yoshimasa Hayashi.
Chinese leaders have made few overseas trips since the start of the Covid-19 pandemic, and analysts said Wang’s attendance at the inauguration reflected the importance Beijing attaches to relations with Seoul at a time of heightened tensions with Western countries – particularly the US – and an economic slowdown at home.
The relationship between Beijing and Seoul has been strained since South Korea in 2017 deployed the US. THAAD missile defence system, which China saw as a security threat. Yoon is a conservative who is expected to take a more hardline position on China.
US President Joe Biden will visit South Korea to meet Yoon on May 21 before travelling to Japan to meet Prime Minister Fumio Kishida.
Europe’s Security Should Be Kept In The Hands Of Europeans, Xi Tells Scholz
Europe’s security should stay in the hands of Europeans, Chinese President Xi Jinping has told German Chancellor Olaf Scholz.
The two leaders discussed the war in Ukraine and other issues during a video call on Monday, with Xi urging European nations “to make every effort” to prevent the conflict from escalating and reaching “a point of no return”.
He also emphasised the need for an independent European security framework, against the backdrop of the Ukraine crisis, saying China supports Europe in playing a positive role to promote peace talks and in the eventual establishment of “a balanced, effective and sustainable European security architecture”.
“The security of Europe should be kept in the hands of Europeans themselves,” Xi told Scholz, according to the Chinese foreign ministry readout. “The European side needs to show historical responsibility and political wisdom, bear in mind the long-term stability of Europe, and promote a solution in a responsible manner.”
Xi also said the China-Europe relationship “is not targeted at, subjugated to, or controlled by any third party”, which is “a strategic consensus that both sides must follow in the long run”.
He reiterated China’s support for the “strategic autonomy” of the EU, meaning nations take positions that are independent and not influenced by the United States.
His remarks come as US President Joe Biden is seeking to shore up America’s alliances and partnerships in foreign policy.
As Beijing faces criticism for refusing to condemn Russia’s invasion of Ukraine and opposing Western sanctions, Xi told Scholz that China always stands on the side of peace and has been working to promote peace and defuse tensions.
The two leaders also discussed the bilateral relationship and China-EU ties, which have deteriorated over human rights issues.
Xi said China and the EU had “far more common interests than differences” and needed to push for dialogue and cooperation amid changes in the international landscape.
The Chinese president also expressed hope that Germany would support and take part in two new initiatives he has proposed – the Global Development Initiative and the Global Security Initiative.
“The two sides should stand for true multilateralism, uphold international fairness and justice, defend the UN’s central role in international affairs, safeguard basic norms governing international relations, promote an open world economy, and make global development more balanced, coordinated and inclusive,” he said.
According to the Chinese readout, Scholz told Xi that Germany was prepared to enhance communication and coordination with China on the multilateral front and promote the sound development of Europe-China relations.
“Germany welcomes China’s commitment to expanding high-standard opening-up, which will bring more opportunities to Germany,” he was quoted as saying.
The leaders also agreed to cooperate in areas ranging from supply chain stability to trade and investment, climate change, Covid-19, healthcare, education and culture, according to the Chinese readout.
Macroeconomic policy, financial stability, energy security, food security, new technologies including environmental protection were also among areas for potential cooperation.
China Has To Be Part Of The Solution To The Russia-Ukraine War, Says Mnuchin
Former U.S. Secretary of Treasury Steven Mnuchin called Russia’s invasion of Ukraine “the most dangerous situation we have been in since World War II” and said China has to assist in de-escalating tensions.
“We need to have an exit strategy,” said former Mnuchin at a Milken Institute Global Conference panel in Beverly Hills, Calf., earlier this week. “We need to find an exit from this for both sides. The risk of escalation is quite significant.”
China Accuses West Of Encouraging Arms Race
In response to Australia’s criticism of its security pact with the Solomon Islands, China has accused Canberra and its partners of encouraging an “arms race” in the South Pacific region.
“Australia, together with the United States and Britain, form a military bloc in the region and encourage an arms race without discussing relevant issues with the countries of Oceania,” Chinese foreign ministry spokesperson Zhao Lijian said at a media briefing on Wednesday.
The recently signed security agreement between Beijing and the Pacific nation has been a matter of concern for the Australian authorities. Prime Minister Scott Morrison claimed that a Chinese military base on the Solomons would constitute a “red line” for Canberra.
A tiny archipelago state, the Solomon Islands is located roughly 2,000km (1,242 miles) northeast of Australia.
Zhao refuted the reports of his country’s alleged plans to establish a new military foothold, calling them “fake news.”
He underlined that signing agreements about security cooperation is a “sacred right of two sovereign countries” and is fully in line with international practice. He also stressed that China’s pact with the Solomon Islands is open, transparent and does not target “any third parties.”
Therefore, the spokesman added, Australia should change its “opaque” approach which, as he claimed, is viewed as very concerning by the countries in the region.
Zhao’s statement follows last week’s remarks by the Solomon Islands’ Prime Minister Manasseh Sogavare, who said that the West has “no need to worry” about his country’s agreement with China and stressed that his nation feels “insulted” over the “continued lack of trust” demonstrated by Australia.
Sogavare also claimed that the Solomon Islands perceive a threat to their interests and have to deal with the risk of “military intervention” posed by Western countries.
“We are threatened with invasion,” he warned. “Now, that is serious.”
The nation’s prime minister previously criticized Australia for being hypocritical when it came to the Solomons’ pact with China. He argued that Canberra had not consulted with its other partners last year when it unveiled the AUKUS deal – a security pact involving Australia, the UK and US – which paves the way for Canberra to acquire nuclear-powered submarines.
