The US, China: Meetings in the middle.
Also: Bhutan, Pakistan, Turkey, Venezuela and Guyana.
UNITED STATES. CHINA. Meetings in the middle.
Signs of diplomacy amid the discord.
China's foreign minister, Wang Yi, will visit Washington this week, the State Department confirmed on Monday. The Pentagon said Monday it would "kickstart' military dialogue by sending officials to the Xiangshan Forum next week.
INTELLIGENCE. Wang’s trip would not be taking place if a Biden-Xi summit wasn’t in prospect. Despite ongoing trade spats, the US and China appear serious about stabilising relations. And despite hostile manoeuvres in the Taiwan Strait and the South China Sea, neither side can afford open conflict. The US is mired in the Middle East and Europe. China, while potentially in the best “window” to invade Taiwan, is mired in a real estate crisis and halting recovery.
FOR BUSINESS. Quiet diplomacy is being made by others. California’s governor is in China this week. Apple’s CEO was there last week. Close economic ties, despite their tensions, remain essential to both sides. De-risking, let alone de-coupling will take years, if not decades. Recent moves like Arkansas' ban on Chinese-owned farmland, or Beijing's probe into iPhone maker Foxconn get the headlines, but neither the US nor China can afford a protracted trade war.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
BHUTAN. CHINA. Boundary shot.
A border deal is both a threat and inducement to India.
The foreign ministers of China and Bhutan met on Monday for border talks. The Pentagon's annual report on China, released last week, said Beijing continued to build infrastructure along its notionally demarcated boundary with India.
INTELLIGENCE. Bhutan and China said they would work towards formal diplomatic relations, which would lessen Delhi's grip on the landlocked Himalayan kingdom. Yet it could also pave the way to a broader deal on the Sino-Indian "Line of Actual Control", over which several clashes have been fought, the most recent in 2020. Earlier this month, China and India held the 20th Corps Commander Level Meeting along the LAC, following an earlier meeting in August.
FOR BUSINESS. Bhutan relies on India for the bulk of its trade and investment, but with vast hydroelectric potential and the tragic (and embarrassing) collapse of a six-year-old $1 billion+ Indian dam in neighbouring Sikkim this month, many in Bhutan would welcome Chinese expertise and infrastructure. China would also welcome another friend on the Tibetan border. Last month, China signed 12 new agreements with Nepal, despite India’s misgivings.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
PAKISTAN. In like a lion.
The rule of law has nothing on the law of the jungle.
Former prime minister Imran Khan was indicted on Monday on charges that could lead to a death sentence. Another ex-PM, Nawaz Sharif, returned from self-imposed exile on Saturday after being granted temporary immunity from arrest.
INTELLIGENCE. Veteran politician Nawaz – the so-called “Lion of Punjab” – whose brother is currently prime minister (having ousted Khan last year) led a rally in Lahore to kickstart his family’s campaign for re-election in January. Despite a dismal economy and unpopular military control, the Sharifs will likely win. Khan, now with almost 100 pending charges, looks out of the picture, though so did Nawaz when he fled to London for the second time in 2018.
FOR BUSINESS. Pakistan has many challenges, least of which are the corrupt dynasties the military allows to contest elections. Still, with likely more support than the rival Bhutto clan, and a plodding program of privatisations and budget discipline, the Sharifs may be the best bet to get Pakistan out of its fiscal hole. Pakistan’s traditional financiers – the US, China, the IMF and the Gulf – seem to be making that bet as well, but anger continues to simmer on the street.
TURKEY. Power broker.
Ankara spies opportunities in the region’s conflicts.
Turkey has expelled two Hamas officials, Al-Monitor said on Sunday, with a view to carving a mediation role between Israel and Palestine. President Recep Tayyip Erdogan on Monday signed off on Sweden's NATO admission on Monday.
INTELLIGENCE. Erdogan has long played off rival powers to Turkey’s advantage. On Ukraine, he has vacillated between the West and Russia. On Cyprus, he has concurrently wooed Greece and the EU while cosying up to Turkish nationalists. With Israel, Turkey has generally pragmatic relations despite Ankara’s pro-Palestine rhetoric and past flirtations with Hamas. A mediation role in Gaza would increase Turkish prestige and gain leverage on other issues.
FOR BUSINESS. The moves on Hamas and Sweden suggest Turkey is in a “pro-Western” phase. It will pivot soon enough (indeed, it is this week working with Russia and Iran on a deal for the Caucasus), but not before it sees what it can extract. Israel and Gaza both have gas reserves an EU consortium hopes to pipe via Cyprus and Crete. Erdogan has his own ambitions for an energy hub to the north. It'd be a small price to pay for peace in the Middle East.
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VENEZUELA. GUYANA. Oil and water.
A territorial dispute, a political rivalry, and a lot of petroleum.
Maria Corina Machado secured more than 90% of votes in Venezuela's opposition primary on Monday. Venezuela's government on Friday announced a vote would be held on 3 December over "the rights" to 75% of neighbouring Guyana.
INTELLIGENCE. Venezuela has long claimed the portion of Guyana west of the Essequibo River, but such claims are even more tempting now Guyana is the world’s fastest-growing oil exporter and President Nicolas Maduro needs a new cause for re-election. The US last week eased sanctions in exchange for Maduro allowing free elections, yet Machado, his most menacing critic, is disqualified from public office, setting up an obstacle for these arrangements.
FOR BUSINESS. Washington wants Maduro to stem migration. It also wants more Venezuelan crude, particularly as low reserves and Middle East tensions keep prices high in the lead-up to US elections. Machado wants to privatise Venezuela’s oil sector. Her election would be a boon for Chevron, which has remained in Venezuela, and which on Monday announced a $53 billion purchase of Hess Corporation, owner of a 30% stake in a major Guyana project.