China, France: Paris match
Also: the Philippines, Yemen, India, and Panama.
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CHINA. FRANCE. Paris match
Xi wants to play Europe on its own terms.
Xi Jinping described China's ties with France as a "model for the international community" as he arrived in Paris for a state visit Sunday. "We want to obtain reciprocity of exchanges", Emmanuel Macron told newspaper La Tribune.
INTELLIGENCE. Macron has taken care to show that hosting Xi is not a pivot from Washington. He even went so far as to hold a rare meeting with the head of Tibet's government-in-exile last week. But Beijing will seek to highlight divisions in the West. It has enjoyed previous success with Macron, such as in April last year, when he told reporters returning from Beijing that Europe must not get “caught up in crises that are not ours” in reference to Taiwan.
FOR BUSINESS. Xi arrives at an opportune time, with Macron in a periodic bout of “strategic autonomy” – the theme of a recent speech. By dealing with Europe as a single power, rather than one half of a united West, China can better negotiate the outcomes it desires and fend off accusations it is funding the war in Ukraine. Macron’s Renaissance party is also vulnerable and needs good news. It is currently polling at half the share of the far-right National Rally.
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CHINA. THE PHILIPPINES. Fishy business
Beijing deepens a fissure in Filipino politics.
President Ferdinand Marcos Jr said Monday Manila would not use water cannons or weapons in the South China Sea. China's embassy last week said there was an unwritten agreement with Marcos's predecessor not to escalate tensions.
INTELLIGENCE. The agreement, from 2016, has been denied by Manila, but has fuelled an increasingly public feud between Marcos and Rodrigo Duterte, his predecessor, as well as Sara Duterte, the ex-leader's daughter and current vice president. Allegedly a deal to allow small-scale fishing at disputed atolls, while restricting access by official vessels within 12 nautical miles, it can either be seen as a pragmatic fudge or an abdication of Philippine sovereignty.
FOR BUSINESS. The revelation may have upset the Duterte clan by wading into domestic politics, but Beijing has obtained a concession that Manila won’t use force (in contrast to the Chinese coast guard). While the Philippines has looked tough – exercising and signing defence pacts with a range of Western countries – it is further than ever from being able to defend its claimed territories. China, by contrast, has achieved further autonomy in the disputed waters.
YEMEN. Beyond the sea
Signals of a new phase in the Houthi conflict.
The Houthis have joined Al Qaeda to fight separatists in Yemen's south, The Telegraph said Saturday. The militant group said they would target ships in the Mediterranean. Local media reported plans for a US-led air and ground attack.
INTELLIGENCE. The Houthis’ campaign on Red Sea shipping has been relatively quiet in recent weeks, due in part to lower munitions and the presence of allied warships. But it has begun to ramp up again. Rumours of an impending US assault seem far-fetched. A new war is the last thing Washington needs. But after a US Reaper drone was shot down, limited reprisals may be in order. Getting Saudi Arabia to the table on Israel may also require a bit of incentive.
FOR BUSINESS.The costs of a US attack on Yemen might seem small against the costs of re-routed global trade, but the 2015 Saudi intervention in Yemen cost an estimated $200 million per day in its first year (and is still technically going). Deterring Houthi strikes on shipping may also soon get cheaper. Right now, a $2,000 drone needs a $2 million missile to shoot it down, but Britain has begun testing a laser that can knock them out of the sky at around $13 each.
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INDIA. The honeymodi’s over
Hindutva is winning at home but failing abroad.
Narendra Modi visited a controversial Hindu temple in Ayodhya Sunday, his first visit since inaugurating it on the site of a razed mosque in January. Canadian police arrested three men Friday charged with killing a Sikh leader in June.
INTELLIGENCE. Modi’s re-election campaign is said to have flagged in recent weeks due to a regional heatwave and voter apathy. By appealing to Hindu nationalism (last week he said the opposition wanted Muslims to "vote jihad") he hopes to boost attendance at the polls. Yet while India’s press and business community have been slow to criticise Modi’s shrill rhetoric, his Western allies have noticed, particularly amid rising claims of diaspora persecution abroad.
FOR BUSINESS. Besides the Canadian arrests, which India called "political compulsion", the Washington Post last week quoted unnamed US officials accusing a senior Indian spy of plotting to assassinate a Sikh activist. Claims have also leaked of an Indian intelligence ring in Australia and Joe Biden called India “xenophobic” (alongside Japan). Western investors are still largely bullish on India, but their governments may increasingly lack their enthusiasm.
PANAMA. Own goals
A vote for economic growth could come at a cost.
Jose Raul Mulino claimed victory Sunday in a single-round plurality vote. An ally of ex-leader Ricardo Martinelli, facing arrest and holed up at Nicaragua's embassy, Mulino and his Realizing Goals party had won 34% of votes in late counting.
INTELLIGENCE. Mulino, a former Martinelli minister, campaigned to end graft, boost investment, and stop migrants heading to the US. Borrowing the argot of right-wing populists in Argentina and El Salvador (upon winning, he declared "mission accomplished, damn it") he will however face a credibility cap, with Martinelli hiding from his own corruption charges in the compound of a leftist dictatorship, and many of his backers wanting to expel a Canadian mining firm.
FOR BUSINESS. A return to the free-wheeling days of Martinelli’s term in power won’t be easy. Panama’s institutions are divided over the former president’s corruption allegations, and a parallel trial into the so-called "Panama Papers" of international tax evasion schemes has put a spotlight on the country's rickety legal and financial sector. Legitimate investors may well stay away, even as the Panama Canal returns to higher water levels and normal transit times.