The US, Russia: Space for improvement
Also: China, trade, France, Brazil, and Ethiopia.
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UNITED STATES. RUSSIA. Space for improvement
A remaining bright spot in US-Russia cooperation.
A Russian spacecraft docked with the International Space Station Monday. The vessel transported three astronauts from Russia, Belarus, and the US in a joint mission to provide additional crew to the ISS, run by a 15-member body.
INTELLIGENCE. The three will join an existing crew on the ISS. The launch took place from a Russian-leased facility in Kazakhstan and was jointly conducted by Roscosmos and NASA. Amid extremely sour relations between Russia and the US, the ISS is one of the last remaining areas of ongoing cooperation. But this too will have a shelf life. The ISS is set to be retired in 2030. Speculation on space-based nuclear weapons and satellite warfare is gathering pace.
FOR BUSINESS. While US-Russia relations remain at an historical low, the ISS shows there is still room for practical cooperation under the right circumstances. Both nations remain interdependent in space and human health research, which is the ISS’s primary function. After 2030, NASA is pinning its hopes on a smooth transition to a private low-orbit space station, with the frontrunner firms including Axiom, Voyager, and Blue Origin. Russia won’t be invited.
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UNITED STATES. CHINA. Quantum leap
Chinese tech ambitions are laid bare.
Data released by the Chinese National Intellectual Property Office suggests patents in quantum computing accounted for 56.5% of China’s total domestic patents granted in the decade to 2022. The US is seen as leading the sector.
INTELLIGENCE. While the US remains the dominant player in quantum computing and artificial intelligence, China is pouring resources into the fields in an attempt to steal a march. The same Chinese NIPO paper suggested that, between 2003 and 2022, 37% of quantum patent applications in the world were Chinese, while just 28% were American. Even if the figures are overstated, the trend is clear. China is already a key player in these sectors.
FOR BUSINESS. Research spending is a clear predictor of tech dominance. Private and public investment has been flowing into quantum computing and AI, and the potential uses are evident. For the time being, while quantum computing does exist, it is not that useful, as it cannot yet make the large-scale data calculations that are theoretically possible. The same goes for AI – everyone sees the potential, but the technology is yet to upend existing processes.
TRADE. Does the WTO dream of electric sheep?
The WTO is moribund, but members continue to file disputes.
China filed a case at the World Trade Organization Tuesday, accusing the US of being discriminatory in its use of electric vehicle subsidies. China’s mission in Geneva said Washington was using environmental regulation as a smokescreen.
INTELLIGENCE. While China has yet to specify the exact measures being disputed, it is likely related to the Biden administration’s Inflation Reduction Act. This includes new rules that came into force on 1 January stipulating that consumers will not have access to tax credits (ranging from $3,750 - $7,500) where parts of the battery in the car come from China, Russia, North Korea, or Iran. China has previously criticised the IRA’s measures as discriminatory.
FOR BUSINESS. China claims the subsidies were formulated under the ruse of climate change, when in fact the measures are protectionist and distort supply chains. However, the case is de facto prevented from reaching any resolution. The US continues to block the appointment of judges to the WTO Appellate Body. This means if the US loses at the panel stage and decides to appeal, the appeal goes into the void. At this stage, the case is thus symbolic.
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FRANCE. BRAZIL. Thaw of the jungle
A new fund for the health of the Amazon rainforest.
Paris and Brasilia announced plans for a $1.1 billion fund for the Amazon Tuesday, during Emmanuel Macron’s three-day visit to Brazil. Ties between the two countries were essentially frozen under Brazil’s previous administration.
INTELLIGENCE. The fund will be run as a collaboration between Brazil’s state-owned banks and France’s investment agency. The plan is to protect the Amazon, including across the Brazilian border in French Guiana, through the creation of a carbon market, halting deforestation, and supporting indigenous communities and local biodiversity. The fund has a strong public relations angle ahead of Brazil hosting next year’s COP30 summit. Paris hosted COP21.
FOR BUSINESS. The fund will raise money from both public and private sources and presents an opportunity for businesses, given the likely co-contributions from Brazil and France to ensure the fund’s success. This deal is a bright spot in economic relations given ongoing tensions. France continues to oppose the proposed EU-Mercosur trade deal, which Lula da Silva has championed, saying there is an imbalance in standards applicable to agricultural goods.
ETHIOPIA. Error in your favour
A banking glitch is just the start.
The Commercial Bank of Ethiopia, the largest bank in the country, said Tuesday it had recovered around 80% of the funds overdrawn following a system glitch that allowed people to take out more money than was in their accounts.
INTELLIGENCE. The bank said the initial loss was only around $14 million, but this figure could blow out and has caused embarrassment in a country that sees itself as a potential financial (and crypto) powerhouse. Still, it’s the least of Ethiopia’s problems. An insurgency in Amhara threatens to explode just as an uneasy peace begins in Tigray. A dispute with Somalia remains tense. Addis Ababa has been forced to deny allegations of a civilian massacre.
FOR BUSINESS. According to the bank, the glitch was caused by an error during an upgrade, rather than a cyberattack. The Commercial Bank of Ethiopia has around 40 million customers, making small errors quite significant. Such errors could also slow Addis’s economic diversification efforts. Foreign property ownership was approved this month. China is being courted for investment. The government is trying to have creditors overlook a sovereign debt default.