China, Taiwan: Straitening up.
Also: Israel, the US, Malaysia, France, Bangladesh, Nigeria and the UAE.
CHINA. TAIWAN. Straitening up.
Cross-strait measures to increase links.
China announced on Tuesday a series of measures designed to deepen integration with Taiwan. The measures aim to make it easier Taiwanese to live, study and do business in China and are seen as a carrot after several years of sticks.
INTELLIGENCE. Fujian province, across the strait, will be the site of the ‘demonstration zone’. One of the goals of the policy, explicitly stated, is the ‘peaceful reunification of the motherland’. China has seen that economic integration, convenient transport links, business connections and study ties are seductive tools. It draws on the experience of Hong Kong, where the city is becoming ever closer to the mainland as more people live and work across the border.
FOR BUSINESS. There are 21 measures intended to facilitate Taiwanese people to live in Fujian and access social services. The measures include enrolment of Taiwanese students in Fujian schools and further industrial cooperation. Without a doubt, there will be opportunities for companies to take advantage of greater integration. But the geopolitical goals underlying the economic integration message should not be ignored.
ISRAEL. Judge jury.
A hearing on judicial reform is not without irony.
Israel’s Supreme Court held on Tuesday its first hearing on a challenge to the government’s judicial reforms. Protests against the measures continued over the weekend, with demonstrators arguing that democracy itself was at stake.
INTELLIGENCE. The court case focuses on the most controversial measure in the suite of the coalition’s reforms – cancelling the power of the courts to annul government decisions it deems ‘unreasonable’. Opponents argue this existing power gives the judiciary critical oversight of government decisions. All 15 justices of the court are hearing the appeal, the first time in the court’s history, on the ironic question of whether the court should limit its own power.
FOR BUSINESS. Netanyahu’s hard-line conservative partners are pressing for reform, arguing the judiciary interferes with legislation and is biased in support of liberal, elitist agendas. And it is leading business figures who have threatened to leave the country if the reforms pass. The reforms highlight the divided nature of Israeli society, between cosmopolitan, entrepreneurial Ashkenazi urbanites and the poorer and more religious parts of the country.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
UNITED STATES. Search and destroy.
A landmark case could set a precedent.
Opening arguments were presented on Tuesday by the US Department of Justice in a major antitrust case against Google parent Alphabet. The firm is accused of abusing its power to restrict rival access to search engine markets.
INTELLIGENCE. The US government estimates Google has a 90% share of the US search market. Its position in the global search market (ex-China) is nearly as dominant. At the heart of the case is an allegation that Google paid up to $10 billion annually to Apple and other tech providers to ensure its search would be the default option. Google has countered that its dominance stems from the superiority of its engines rather than such anti-competitive behaviour.
FOR BUSINESS. US law generally does not exclude companies making exclusive arrangements with customers. It is, after all, a common practice among smaller businesses. But big tech is increasingly in the sites of govenrment regulators, where companies are so powerful they can dictate market conditions and block new entrants. The EU has fined Google a cumulative $9 billion since 2019 for what it deems to be anti-competitive behaviour.
MALAYSIA. Raring to go.
More economic nationalism in Southeast Asia.
Malaysia’s prime minister said on Monday his government would ban the export of rare earth minerals, with the aim of boosting domestic processing and increasing local jobs. Shares in local rare earth processor Lynas fell on Tuesday.
INTELLIGENCE. Prime Minister Anwar Ibrahim said the plan would guarantee ‘maximum return to the country’. The move comes on the back of a similar decision by neighbouring Indonesia to restrict exports of certain unprocessed materials such as nickel ore. Anwar told parliament the decision could create nearly 7,000 jobs. Malaysian reserves of rare earths are a fraction of China’s, by far the world’s leading producer, but it does have a refining industry.
FOR BUSINESS. The decision is part of a regional trend toward economic nationalism. The stated aim is to attract foreign investment to process the materials and increase local content. But firms already involved in rare earth processing, such as Australia’s Lynas Corporation, have found Malaysian regulations capricious and local politics unsupportive. Anwar must convince firms the rules will be stable, and the infrastructure and skills will be available.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
FRANCE. BANGLADESH. Into orbit.
New loans further France’s global diplomacy.
French President Emmanuel Macron signed off on loans to Bangladesh on Monday to facilitate infrastructure development. Macron also agreed to a letter of intent to provide Bangladesh with an earth observation satellite system.
INTELLIGENCE. The deals were signed during Macron’s visit to Bangladesh following the G20. The visit comes after trips to Mongolia, Sri Lanka and Papua New Guinea to shore up counterbalance to China’s growing influence. Smaller states are sometimes beneficiaries of geostrategic competition. Last week, Russian FM Lavrov visited Bangladesh (a first since 1971) to give assurances Russia would complete a nuclear power plant on time, despite sanctions.
FOR BUSINESS. France’s global diplomacy is not just in the name of geostrategic competition. It has a distinct business bent as well. During the visit, Macron discussed a possible commitment from Bangladesh's national airline to purchase 10 planes from Airbus, headquartered in France, reportedly worth up to $3.2 billion. Bangladesh’s first broadcasting satellite was also launched in 2018 from France, manufactured by Thales Alenia Space.
NIGERIA. UNITED ARAB EMIRATES. Flying high.
New deals on visas and air travel.
UAE authorities said on Tuesday they would lift a visa ban on Nigerians, while Emirates will again start flying to Lagos, following a meeting between Nigerian President Bola Tinubu and his Emirati counterpart in Abu Dhabi.
INTELLIGENCE. The UAE stopped issuing visas to Nigerians last year due to a shortage of foreign currency and Nigeria’s inability to repay debts. This led Emirates and Etihad to suspend services to Africa’s most populous country, despite growth in demand. As part of the talks, Tinibu has negotiated a new foreign exchange liquidity program between Nigeria and the UAE, which is looking to shore up its influence throughout Muslim-majority parts of Africa.
FOR BUSINESS. Tinibu has undertaken bold reforms in Nigeria, including removing a petrol subsidy which cost the government $10 billion in 2022 and lifting currency restrictions. He hugely devalued the naira to ease the foreign currency shortages and help it align with the black-market rate. The naira has weakened over 40% since the start of the year. It has been painful for many. For example, Airtel Africa reported a $151 million loss due to the devaluation.
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