Ukraine, Russia, disinformation: Gray(voron) zone.
Also: Europe, US, technology, China, cybersecurity, investment, India, Iran, Australia, Indonesia, Antarctica and shipping.
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UKRAINE. RUSSIA. DISINFORMATION. Gray(voron) zone.
Attacks on Russia’s side of the border will help Kremlin propaganda.
The governor of Russia's Belgorod region on Monday said Ukrainian saboteurs had attacked the Grayvoronsky district. Ukraine said two anti-Kremlin Russian paramilitary groups were behind the incursion. Eight people were wounded.
INTELLIGENCE. An alleged drone strike on the Kremlin earlier this month failed to elicit much sympathy for Putin, but attacks on Russian civilians by Ukraine-based actors could bolster Moscow’s narrative of moral equivalence, which is gaining traction in parts of the world. Worse, it could equip Putin with additional casus belli through which to escalate, should the future provision of F-16s or other arms be insufficient. Meanwhile, Russia’s ambassador to Washington said on Sunday that attacks on Crimea would be attacks on Russia and lead to a NATO-Russia war.
FOR BUSINESS. Whataboutism is a reliable trick and appears to be working. An Ipsos survey last month showed waning US support for Ukraine. Prominent Republican Ron Paul said Monday that backing Kyiv was “one of the greatest foreign policy disasters in US history.” The war won’t end soon, but there is pressure rising at the margins.
EUROPE. UNITED STATES. TECHNOLOGY. Unfriended.
The EU slaps Meta with a €1.2 billion fine.
Ireland's Data Protection Commissioner issued a record fine to tech giant Meta on Monday, saying Facebook’s owner continued to transfer European data to the US beyond a 2020 ruling. The EU issued Amazon a €746 million fine in 2021.
INTELLIGENCE. European strictures will continue to frustrate the US and impede the Continent’s ability to develop a robust technology ecosystem. The Italian data protection authority's temporary ban on ChatGPT this year was derided in Washington. The European Commission's proposal in April to harmonise EU patent rules was similarly criticised as boosting China's technology sector. But Silicon Valley and Brussels will need to cooperate. The EU market is too big to ignore, and its technology regulations are politically popular, if economically dubious.
FOR BUSINESS. The US makes the tech, but the EU makes the rules. Europe’s regulators are inspiring similar moves in the UK, which blocked the Microsoft-Activision merger, and Australia, which took on Meta over paid content. Even bits of Washington are following suit. Biden’s Federal Trade Commission is an open admirer of the EU’s approach.
CHINA. UNITED STATES. CYBERSECURITY. Tik for tat.
A Chinese social media platform sues Montana
ByteDance's subsidiary TikTok filed a suit in the Montana District Court on Monday over the state's ban on the social media app. TikTok said the ban violated First Amendment rights and the US Constitution's commerce clause.
INTELLIGENCE. The Republican state’s ban rested more on political than legal or security foundations. Still, even if the prohibition is overturned as expected, it only highlights the West’s growing concerns over Beijing’s use of data and the potential for social media to be manipulated by foreign adversaries. For hawks in the Republican Party, the timing is awkward, one week after the release of the Justice Department's excoriating report on the FBI's probe into alleged Russian interference in the 2016 election. While disinformation does work (see above), proving it is hard.
FOR BUSINESS. The battle over data privacy and manipulation is a growing front in US-China competition. Establishing defensible grounds to ban apps like TikTok will take time but will happen, as strategic logic almost always trumps free expression or commerce. Such moves will bolster fears of a ‘splinternet’ between East and West.
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CHINA. UNITED STATES. INVESTMENT. Later, alligator.
Another red state risks a Chinese ban being overturned.
Chinese citizens living in Florida on Monday sued the state over legislation to restrict their ownership of real estate. Governor Ron DeSantis, who is expected to soon announce his candidacy for president, signed the law on 8 May.
INTELLIGENCE. Since the land boom of the 1920s, Florida's economy has relied on real estate investment, much of it from overseas. Amid a culture war with Disney and the education sector, DeSantis is hoping that by outflanking Donald Trump on national security fears, he can secure the Republican nomination. The danger, however, is that a court decision in the plaintiffs’ favour will only prove his legislation’s invalidity (and his incompetence). Foreign ownership bans are not impossible – many use them, including China – but the path is as muddy as a Florida swamp.
FOR BUSINESS. Bans on Chinese residential property ownership in Australia did not have the price effect the market feared (or hoped). The impact of US bans will similarly be more political than financial. Still, the growing prevalence globally of security-derived laws is hampering cross-border investment and will have unintended consequences.
INDIA. IRAN. AUSTRALIA. INDONESIA. Go east.
Two summits aim to affirm power in the Indian Ocean.
India's prime minister arrived in Sydney late Monday for a bilateral program shorn of the Quad summit, which Joe Biden cancelled last week. The same evening, Iran's president departed Tehran for talks on trade and security with Indonesia.
INTELLIGENCE. Few dyads are more hyped but less substantive than those between Australia and India or Iran and Indonesia. The visits aim to put flesh on the bones of rhetoric and, if successful, could lead to lasting changes in the Indian Ocean. Lacking a single hegemon and bereft of strategic architecture besides motley talkfests in Mauritius and Reunion, the Indian Ocean has been geopolitically vacant since Britain left east of Suez. The US, with a legally challenged base in Diego Garcia, and China, with military ambitions from Pakistan to Kenya, will be watching.
FOR BUSINESS. Some 80% of the world's seaborne oil trade crosses the Indian Ocean. Home to the world's fastest-growing economies and narrowest maritime chokepoints, it is an underappreciated fulcrum of strategic competition. A dearth of connectivity presents challenges as well as opportunities for business. For governments, it is mostly risk.
IRAN. ANTARCTICA. SHIPPING. Go south.
The Islamic Republic proposes a flotilla in search of thin ice.
State-linked media reported on Monday the Iranian Navy was considering a deployment of warships to Antarctica. A naval taskforce returned to Bandar Abbas on Saturday after a circumnavigation via the Strait of Magellan.
INTELLIGENCE. Iran wants to weather-test its ships should equatorial chokepoints, from Singapore to Panama, ever get shut by the US Navy. Further, nationalists in Tehran will want to remind observers of the Antarctic ‘frontage’ theory, whereby a slice of the continent, between the meridians of the Gulf of Oman and the Pakistan border, could be claimed. This is more about contesting the Antarctic Treaty, which expires in 2048, than territory. It forms part of Iran’s multilateral playbook, where it likes to side with Russia and China to challenge all points of the US-led order.
FOR BUSINESS. On Friday, the naval chiefs of the US, Britain and France made a rare joint trip aboard a US destroyer through the Strait of Hormuz. The West wants to counter Iran’s growing aggression near its (non-polar) waters. Iranian expeditionary capacity threatens to take its maritime belligerence further, with risks to commercial shipping.
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