Lloyd Austin

The U.S. sought to bolster its support in Asia by reassuring nations they do not need to join a coalition against China, drawing a stark contrast with Beijing’s threats to defend its interests with military force, said Bloomberg.

The Bloomberg report — US Makes Asia Inroads by Playing Down Need to Oppose China — said on June 13:

U.S. Defense Secretary Lloyd Austin told Asia’s biggest security forum Saturday that the U.S. was taking “wise counsel” from smaller countries, saying they should be “free to choose, free to prosper and free to chart their own course.”

It represented a break from the Trump administration pressing nations to take sides on the use of 5G equipment from Huawei, one of China’s most strategically important companies, a position that rankled many at the last gathering of defense officials in 2019. And it was a marked difference from China, whose defense minister, Wei Fenghe, vowed this time around to “fight to the very end” against any powers that wanted confrontation.

The two defense chiefs laid out their competing visions for Asian security with dueling speeches at the IISS Shangri-La Dialogue in Singapore, where hundreds of officials gathered this weekend for the first time since the pandemic. While the U.S. attempted to seize on the shock of Russia’s invasion of Ukraine to push back against a more assertive China, Beijing tried to cast Washington as the main destabilizing force behind conflicts from Eastern Europe to the Western Pacific.

The report said:

Most Asian nations, with a history of being carved up by colonial powers, would prefer to not take sides and let both camps court their support. Indonesian Defense Minister Prabowo Subianto said all powers “need to have their space, their rights respected,” while Fijian national security chief Inia Batikoto Seruiratu said the people of his small island nation “see benefit from all these relationships that we have, including China.”

The Association of Southeast Asian Nations “will take comfort that both have said, ‘There is no need to choose. We do not want you to choose,’” Singaporean Defense Minister Ng Eng Hen said. “But whether that is the reality, I think only the facts will speak for themselves.”

The Biden administration is trying overcome skepticism about the U.S.’s commitment to the region after former President Donald Trump withdrew from a landmark Pacific trade pact in 2017 and ramped up criticism of allies. Despite vowing to prioritize Asia after taking office last year, President Joe Biden has only recently begun to outline his China policy and the “Indo-Pacific Economic Framework” intended to balance America’s military moves in Asia.

The region was at the “heart of American grand strategy,” Austin said in his speech.

Quad Actions

The Bloomberg report said:

The U.S. has leveraged the newly expanded Quad Group, which includes Japan, Australia and India, to shore up support across the region and troubleshoot burgeoning problems.

India has pushed the International Monetary Fund to expedite bailout funds to Sri Lanka, while China has been more hesitant to give fresh credit to ease its financial crisis.

Japanese PM Kishida used the Shangri-La meeting to lay out an expanded security role in Asia that includes providing equipment, including patrol vessels, and training for maritime security personnel in at least 20 countries.

Aside from Austin who is also visiting Thailand, Deputy Secretary of State Wendy Sherman, U.S. Special Envoy to North Korea Sung Kim and State Department Counselor Derek Chollet are in Asia this month. The flurry of trips comes after Biden’s visit to South Korea and Japan last month, when he unveiled the Indo-Pacific Economic Framework, or IPEF, and left China out.

Japanese PM To Attend NATO Summit For The First Time

Japanese Prime Minister Fumio Kishida announced Wednesday he plans to attend the upcoming NATO summit in Madrid later this month.

While Kishida is set to become the first Japanese PM to ever attend a NATO summit, he would not be the only leader from the Asia-Pacific region to join the event, the secretary general of the alliance, Jens Stoltenberg, revealed as he spoke ahead of a ministerial NATO meeting in Brussels on Wednesday.

 “For the first time in our history we will invite our Asia-Pacific partners, the prime ministers of New Zealand, Australia, Japan and also the president of South Korea will participate in the NATO Summit, which is a strong demonstration of our close partnership with these like-minded countries in the Asia-Pacific,” Stoltenberg said.

Ukrainian President Volodymyr Zelensky will be invited as well, the official revealed, but it remains unclear whether he will be able to attend the event in person.

At Asia Security Summit, Japan Vows To Boost Regional Security Role

An earlier Reuters report said:

Kishida pledged on Friday to boost its regional security presence.

Kishida said at the meeting’s keynote address: Japan would enter a new era of “realism diplomacy”, another step by Tokyo to distance itself from its post-World War Two pacifism and step out of the shadow of the U.S, its main ally, to take a bigger role in regional security where it faces China, North Korea and Russia.

“We will be more proactive than ever in tackling the challenges and crises that face Japan, Asia, and the world,” Kishida said.

“Taking that perspective, in order to maintain and strengthen the peaceful order in this region, I will advance the ‘Kishida Vision for Peace’ and boost Japan’s diplomatic and security role in the region.”

China’s Nuclear Arsenal For Self-defence, Says Chinese Defence Minister

Another Reuters report said:

China has made “impressive progress” in developing new nuclear weapons, but will only use them for self-defence, and never use them first, Chinese Defence Minister Wei Fenghe told delegates at the Shangri-La Dialogue on Sunday.

In response to a question about reports last year on construction of more than 100 new nuclear missile silos in China’s east, he said China “has always pursued an appropriate path to developing nuclear capabilities for protection of our country”.

He added nuclear weapons displayed in a 2019 military parade in Beijing – which included upgraded launchers for China’s DF-41 intercontinental ballistic missiles – were operational and deployed.

“China has developed its capabilities for over five decades. It is fair to say there has been impressive progress,” he said. “China’s policy is consistent. We use it for self defence. We will not be the first to use nuclear (weapons).”

He said the ultimate goal of China’s nuclear arsenal was to prevent nuclear war.

“We developed nuclear capabilities to protect the hard work of the Chinese people and protect our people from the scourge of the nuclear warfare,” he said.

U.S. Wants Companies To Buy Russian Fertilizer

The US wants companies to ramp up purchases of Russian fertilizer as global food costs rise and shortages loom, according to a Monday Bloomberg report.

Sources told Bloomberg that the U.S. government is quietly pushing companies to buy and carry more Russian fertilizer. Sanctions fears have created a supply shortage and have fueled a global food crisis, and the U.S. is moving to alleviate pressure with the United Nations by boosting deliveries of fertilizer, grain, and other supplies from Russia.

This year, Russian fertilizer exports have dropped 24%, per Bloomberg data.

The U.S. and EU have included fertilizer exemptions in their sanctions on Russia, per the report, which allow trade to continue flowing for the key commodity.

According to Russia’s Grain Union, wheat exports doubled in May. At the same time, Bloomberg reports that over 25 million tons of grain, sunflower oil, and other goods are stuck in Ukraine due to security concerns.

Russia’s Oil Revenue Soars Despite Sanctions, Finds Study

A New York Times report said:

Russia’s revenues from fossil fuels, by far its biggest export, driven by a windfall from oil sales amid surging prices, a new analysis shows.

Russia earned what is very likely a record 93 billion euros in revenue from exports of oil, gas and coal in the first 100 days of the country’s invasion of Ukraine, according to data analyzed by the Center for Research on Energy and Clean Air, a research organization based in Helsinki. About two-thirds of those earnings, the equivalent of about $97 billion, came from oil, and most of the remainder from natural gas.

“The current rate of revenue is unprecedented, because prices are unprecedented, and export volumes are close to their highest levels on record,” said Lauri Myllyvirta, an analyst who led the center’s research.

The revenue from Russia’s fossil fuel exports exceeds what the country is spending on its war in Ukraine, the research center estimated, a sobering finding as momentum shifts in Russia’s favor.

The research found Russia’s export prices for fossil fuels have been on average around 60% higher than last year, even accounting for the fact that Russian oil is fetching about 30% below international market prices.

Income at Gazprom, Russia’s state-owned gas giant, remained about twice as high as the year before, thanks to higher gas prices, the Center for Research on Energy and Clean Air found.

The United States has made a dent in Russia’s earnings, banning all Russian fossil fuel imports. Still, the United States is importing refined oil products from countries like the Netherlands and India that most likely contain Russian crude, a loophole for oil from Russia to make its way to the U.S.

Overall, China was the largest importer of Russian fossil fuels over the 100-day period, edging out Germany, Italy and the Netherlands. China imported the most oil; Japan was the top purchaser of Russian coal.

U.S. Treasury Secretary Janet Yellen said last week that Washington was in talks with its European allies about forming a cartel that would set a cap on the price of Russian oil roughly equal to the price of production. That would trim Russia’s fossil fuel revenues while also keeping Russian oil flowing to global markets, stabilizing prices and fending off a global recession, she told the Senate Finance Committee.


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