We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
Hard Numbers: Children starving in Sudan, Israel’s credit downgraded, Two tales of Chinese balloons, Chiefs win Super Bowl, Senate advances aid bill
2: Moody’s bond rating agency on Friday announced a first-ever downgrade of Israel's credit rating from A1 to A2, due to the negative economic impacts of the Gaza war and the potential conflict with Hezbollah. Israeli Finance Minister Bezalel Smotrich dismissed it as “a political manifesto,” but if other major agencies follow suit, it would make it harder for Israel to sell bonds, impacting its war effort and post-war recovery.
700,000: UNICEF reports that 700,000 children in Sudan face malnutrition due to the 10-month conflict that has ravaged the country, with tens of thousands at risk of death from lack of food, mass displacement, and disease. The agency is calling for $840 million in assistance and lamented the fact previous requests for aid have not been met.
8: Taiwan's defense ministry reported that eight Chinese balloons crossed the Taiwan Strait Friday and five sailed over the island on Saturday. China has previously claimed such balloons were for “meteorological purposes,”, not surveillance, but Taipei accuses them of being a threat to aviation safety and a form of “psychological warfare.” China’s balloon activity has increased since the election of pro-independence President Lai Ching-Te.
38,000: In more high-flying news, a Hong Kong mall's dragon sculpture, crafted from a hoard of 38,000 balloons, roared into the Guinness Book of World Records just in time for this year’s Chinese New Year celebrations. The 137.04-feet-long masterpiece was assembled by balloon artists Sze Tai "Wilson" Pang and Kun Lung Ho and over 60 volunteers.
3: The Kansas City Chiefs won their third Super Bowl in five years on Sunday night, defeating the San Francisco 49ers 25-22. It was a nail-biter of a game – and just the second Super Bowl in history to go into overtime. Quarterback Patrick Mahomes threw the game-winning touchdown pass to receiver Mecole Hardman after the 49ers gained a short-lived lead off of a field goal.
18: The Democratic-controlled Senate on Sunday moved closer to passing a $95.3 billion foreign aid bill that includes assistance for Ukraine, Israel, and Taiwan – voting 67-27 to clear a procedural hurdle and advance the legislation. Eighteen Senate Republicans voted to advance the bill despite vocal opposition from Donald Trump, who recently helped tank a bipartisan bill that lumped foreign aid and border security together. Though the foreign aid bill could pass in the Senate within days, it faces an uphill battle in the Republican-controlled House.For China, Russia, and Israel, patience is a virtue in 2024
In January, Taiwan elected pro-independence candidate William Lai and, despite warnings, China’s response has been restrained, possibly influenced by Beijing’s belief that the leading US presidential candidate may treat Taiwan like a “discarded chess piece.”
That’s what Chinese Taiwan Affairs Office spokesperson Chen Binhua said would happen if Donald Trump won the US election in November after the former president refused to say whether he would defend Taiwan. His comments shook US ally Japan strongly enough that senior Kishida administration officials are reportedly contacting Trump’s camp to warn against cutting any kind of deal with China.
The view from China: The prospect of a friendlier – or at least more transactional – US administration might be good news for cross-strait relations in the short term. There's no point in rocking the boat in a way that might hurt either Trump’s prospects or what trust Beijing has built with the Biden administration over the last year (Joe Biden, after all, could win too).
Beijing isn’t alone in recognizing that a little patience could pay big dividends after November. In an interview with the Wall Street Journal on Sunday, Israeli far-right leader Itamar Ben-Gvir said Israel would have carte blanche under Trump 2.0.
“Instead of giving us his full backing, Biden is busy with humanitarian aid and fuel, which goes to Hamas,” he said. “If Trump [were] in power, the US conduct would be completely different.”
The view from the Kremlin is just as rosy. Former US Ambassador to Russia Michael McFaul has been arguing for months that Vladimir Putin is waiting for Trump to be re-elected to sue for peace in Ukraine because of how destabilizing another dose of Trump will be to NATO. Former US Ambassador to NATO Ivo Daaldermade a similar argument last week. And Trump did tell European Commission President Ursula von der Leyen, “By the way, NATO is dead, and we will leave, we will quit NATO” in 2020.
GZERO also has its eye on North Korean leader Kim Jong Un. He and Trump left it in a bad place after their whirlwind romance in 2018 … but who knows what another love letter might spark?
Lai won in Taiwan, but Xi isn’t losing his cool
Taiwan may have elected pro-independence candidate William Lai as its next president, but the result wasn’t the worst news Beijing expected.While Lai secured a decisive win with a seven percentage point lead over his next nearest rival, his party did not fare as well. Dissatisfaction with rising house prices, stagnant wages, and shrinking job opportunities lost the party favor with young voters. Lai’s Democratic Progressive Party, or DPP, failed to get a majority of seats in the legislature. Final results gave the Kuomintang 52 seats, the DPP 51, the Taiwan People’s Party 8, and independents 2.
Lai will thus have to compromise to pass legislation and cooperate with parties that are more favorably disposed to Beijing, potentially toning down his anti-China rhetoric. That could preclude the need for a show of military might by Beijing, a relief for investors who feared the economic impact of such a move, as well as for Western nations that have zero interest in another front opening up in Asia while they’re busy with Ukraine, Israel, and the Red Sea.
But don’t expect a kumbaya moment. In an article to be published Tuesday in Qiushi, a magazine of the Communist Party’s Central Committee, Chinese President Xi Jinping sets out Beijing’s strategy: “Develop and strengthen Taiwan’s patriotic, reunification forces. Oppose ‘Taiwan independence’ separatist activities, and promote its complete reunification with the motherland.”
In other words, do more of what China has been doing for the past few decades – and during the recent vote: co-opting politicians, disinformation campaigns, political persuasion, and other “soft power” weapons will be deployed apace. Already, Beijing can chalk up one win: The Pacific island nation of Nauru announced this week that, “in the best interests” of the country and its people, it would cut ties with Taiwan and seek full resumption of diplomatic relations with China. The United States, the ally that really matters to Taipei, maintains that its support for Taiwan’s status remains “rock solid.”Taiwan elects pro-independence candidate, calls Beijing’s bluff
Taiwan, one of the freest democracies in Asia, went to the polls on Saturday for a highly anticipated election with implications for both cross-strait and US-China relations.
As we told you last week, Taiwan’s presidential campaign ended up being a close race between independence-leaning candidate William Lai Ching-te of the ruling Democratic Progressive Party, or DPP, and Hou You-ih of the Kuomintang, aka KMT, who favors closer relations with China.
On the day, Lai came out on top with 40% of the vote, beating Hou by almost 7 percentage points. But Lai’s DPP didn’t have the same success: The party lost control in the legislature, winning 51 of 113 seats, while the KMT netted 52, and the third party, the TPP, won eight.
The defeat of China’s preferred candidate is likely to ruffle some feathers back in Beijing. China sees Taiwan as a breakaway territory and is determined to reunify, by force if necessary, but so far Lai’s remarks have not been escalatory. Also, the DPP’s loss of the legislative majority means Beijing isn’t in the worst-case scenario and might preclude the most aggressive responses.
“Chinese initial reactions are unlikely to be escalatory,” says Eurasia Group expert Ava Shen, “given that Lai's remarks on cross-strait relations after the elections were fairly measured.”
While the DPP losing seats in the legislature, Shen says, “will make it more difficult for Lai to push his domestic agenda through the legislature,” he still has room to maneuver when it comes to foreign policy, cross-strait relations, and defense.
So all eyes now turn to Lai to see how much independence rhetoric he uses in the days and weeks ahead – talk that could help determine China’s response. Any real moves against Taiwan, which is backed by Washington, could lead to a wider conflict.
Taiwan holds first big election of 2024
The world will be watching when Taiwanese voters head to the polls on Jan. 13 to choose their next president. The first in a series of elections with global ramifications in 2024, Taiwan’s vote will be a flashpoint in the tense US-China relationship. China regards Taiwan as a breakaway territory and has vowed to unify with it, by force if necessary. Taiwan has the backing of the US, which would feel pressured to come to the island’s defense in the event of a conflict with China.
The election is shaping up into a close contest between the independence-leaning candidate William Lai Ching-te of the ruling Democratic Progressive Party, or DPP, and Hou You-ih of the Kuomintang, aka KMT, who favors closer relations with China.
We asked Eurasia Group expert Ava Shen what to watch for.
What is the state of play of the race?
The DPP’s Lai remains the front-runner and has held a consistent lead in this election cycle, but his lead has been narrowing. According to the latest polling data available from Jan. 1-2, he is about five points ahead of the KMT’s Hou, who started gaining ground in late November. Winning the party’s official nomination, with Jaw Shaw-kong chosen as his running mate, has helped Hou consolidate the support of the KMT base. The end to efforts to broker a presidential joint ticket with Ko Wen-je of the Taiwan People’s Party, or TPP, has also helped.
This momentum gives the KMT a lot of confidence in its ability to mobilize a last-minute surge in support, possibly thanks to strategic voting by TPP supporters who don’t want another DPP administration. Lai remains favored to win, but it’s going to be close. It’s also noteworthy that Lai, if he wins, would probably do so with less than 50% of the vote. That marks a shift from the elections of 2016 and 2020 when current President Tsai Ing-wen comfortably cleared that threshold.
What would a Lai victory mean for relations with China?
Beijing would probably have an immediate negative reaction. It has signaled multiple times that it is deeply wary of Lai, who has a history of comments in favor of full independence for Taiwan, a red line for China. It would respond in two ways. First, it would probably reduce the number of Taiwanese products that are subject to preferential tariff rates under the Economic Cooperation Framework Agreement, the cross-strait trade agreement signed in 2010. In a warning shot to Taiwan’s voters, it excluded 12 Taiwanese products from the agreement in mid-December.
Second, China would likely intensify what it has already been doing in the military sphere. If Beijing judges any of Lai’s post-election remarks to be provocative, it will consider flying larger numbers of fighter jets over the Taiwan Strait, deploying more coast guard or naval vessels, and possibly moving those military assets closer to Taiwan’s main island. It could enter for the first time Taiwan’s 24-nautical-mile contiguous zone.
But Lai has moderated his rhetoric recently, hasn’t he?
Yes. He has indicated on the campaign trail that he would maintain the status quo and continue the approach that Tsai has taken to cross-strait relations. Still, from Beijing’s perspective, this is not enough. It does not like Tsai’s cross-strait policies but believes she has exercised restraint in managing tensions. It views Lai as more reckless.
Nonetheless, as I said, Lai is not likely to win by a large margin, and his party will probably lose its majority in the legislature. This is important to Beijing because it sends a signal that the DPP doesn’t have complete control over the island’s politics and that not everyone supports independence. That gives Beijing some hope that the idea of unification is not dead.
So, we think tensions are likely to rise in the event of a Lai victory, but it won’t be a catastrophic situation.
And what would a Hou victory mean for cross-strait relations?
If Hou wins, there is less of a risk of Beijing increasing the pressure against Taipei in the short term. However, there is a risk it will resume aggressive tactics over the long term if Hou doesn’t agree to upgrade cross-strait ties economically and politically. China wants to move toward more regular contact between government officials on both sides and take steps toward unification.
Hou has said he wants to start with more cultural and economic engagement, and if things go well, gradually progress to more political exchange, something that Taiwanese society broadly opposes. So, he's saying he wants to put off the political engagement that Beijing is seeking, and the question is, how long is Beijing going to patiently wait?
What’s at stake for the US in this election?
The US’s official stance is that it has no preferred candidate, and I think it has been consistent in maintaining this approach even in private interactions with Taiwan counterparts. The bilateral relationship is robust, and all three of the main Taiwanese parties are committed to close US ties.
That said, President Joe Biden’s administration likely recognizes that a Lai victory has the potential to jeopardize the recent stabilization of the fraught US-China relationship if it provokes an aggressive Chinese response, putting the US under pressure to offer a gesture of support. As Eurasia Group noted in its Top Risks 2024 report, Lai is one of a handful of “dangerous friends,” a group of friendly world leaders who may draw the US into expanded conflicts this year.
Edited by Jonathan House, Senior Editor at Eurasia Group
Trump's immunity claim: US democracy in crisis
Ian Bremmer shares his insights on global politics this week on World In :60.
First , how will the appeals court decision on Trump's presidential immunity claim play into your Top Risk of 2024?
Well, the top risk is the US election, the US versus itself. What we see is that Trump is having more time to campaign before decisions are made, potential convictions are made while the primaries are playing out. In other words, he's likely to get the nomination before he's going to be convicted of anything. And what that means is, he'll have all the Republicans behind him. And at that point, if he gets convicted, it's kind of too late because the people that are going to vote for him are on the other side. So, yeah, this is increasingly a democracy in crisis. That's what we're looking at in the United States in 2024.
How will the upcoming Taiwan presidential election affect its relationship with both the United States and China?
Well, the election is close to a coin flip between the sitting vice president, William Lai, and the DPP. And the opposition in the KMT has more stable relationship, cross-strait relations with mainland China. If Lai wins, which is slightly, slightly more likely than not, the Chinese government is going to respond negatively. And that doesn't mean war, but it does mean sharp economic relations. It means that trade relations will be hindered and it may, at the worst, mean that some ships are going to be inspected. That will certainly hurt US-China relations. But that's in the context of a US-China relationship that both sides want to manage this year. They don't want additional crisis. So I'm less worried about this election next week than a lot of other people are.
With Israel conducting airstrikes in Lebanon, is an expanded war in the Middle East inevitable?
I'm having a very hard time seeing how we will be able to maintain a contained war in Gaza over the course of the year.There are far too many ways for this to extend and expand, both in the West Bank, in Lebanon, with Hezbollah in the Red Sea, with Iranian proxies in Syria, in Iraq, with Iran itself, and of course, given radicalism of Islamic extremist groups, lone wolves, all the rest. I mean, you have to get an awful lot of things right and lucky to keep the war contained, if I can call it that, to where it is right now. On balance, I would bet very strongly this war is set to get significantly worse.
That's it for me and I'll talk to you all real soon.
Strange objects over Taiwan
Look, up in the sky, is it a gender reveal gone wrong? An attention-seeking stunt to bring Balloon Boy into the 2020s? Your favorite geopolitics meme of 2023 is flying high again in the new year: Taiwan’s Ministry of National Defense reported four Chinese spy balloons hovering over strategic targets on the self-governing island in recent days, including an air force base.
Feeling some déjà vu? Last January, a similar balloon made headlines as it traversed the continental United States before a US jet shot it down. The Chinese said it was a weather balloon that had gone off course, but the incident tanked relations between China and the United States for months. Secretary of State Antony Blinken alerted dozens of countries after accusing Beijing of a broader surveillance program that “violated the sovereignty of countries across five continents.”
What makes this different? The balloons appeared on the eve of Taiwan’s presidential election, which is set for Jan. 13. Taiwanese authorities have already accused China of trying to help opposition candidates who would take a friendlier approach to Beijing and be less opposed to China’s ultimate goal of “reunification.”
Against that backdrop, the balloons seem to carry a clear message from Chinese President Xi Jinping: We’re watching you.
COP28 climate talks complicated by UAE oil deals
Ian Bremmer shares his insights on global politics this week on World In :60.
Will the UAE’s pursuit of oil deals during COP28 undermine the summit's climate goals?
Well, it certainly doesn't make it any easier. I mean, this is the time when the world comes together and tries to reduce the level of carbon in the atmosphere, and the fact that it's being hosted by one of the world's largest oil producers and by the chairman, the CEO of one of the world's largest oil companies, who also is driving his country's sustainability goals. Well, I mean, I guess you can say he's hedged. You can definitely say that but you can also say it's challenging and problematic. Look, there was a chance that COP was going to fall apart completely and you were just going to have fragmented bilateral deals. The Chinese, for example, get much more influence giving out money directly in return for things with countries than being a part of a multilateral group. Having said that, US and China recently have come together on climate in advance, specifically of COP28, and there is more movement on methane emissions from the two largest emitters in the world. There's more movement on carbon capture and storage than we've seen before. Look, I'm glad the meetings happened. It is happening. It's going to be more successful than it not showing up. But there are big challenges and you're going to hear those frustrations loudly from the developing world who are taking climate on the chin.
How will Taiwan's upcoming election affect US-China relationship?
It's coming up January 13th and it look like there was a deal being put together between the two opposition candidates. That deal is now falling apart, which means it is more likely that the vice president and his representative in Washington who is going to run on the ticket with him for the DPP, the Nationalist Party, the pro autonomy as the Chinese government in Beijing says the pro-independence party, is likely to win. That means more tensions over Taiwan, with China and Taiwan and with the Americans and China. So definitely next year that's going to be a more significant risk, something for us all to watch.
Will Elon Musk provide Starlink to Gaza?
Sure he will, as long as the Israeli government says it's okay. The interesting point here is that do you want decisions over where technology is and is not provided that will change the security balance on the ground between countries decided by one man. That is what happened with Russia and Ukraine, largely to Ukraine's favor, though not consistently and not always. That is what's happening in Israel and Gaza to Israel's favor. And that is what would happen between mainland China and Taiwan in mainland China’s favor, because that's where Elon has all of his economic bets, not in favor of Taiwan. And by the way, if you're the US government or a NATO member or Japan, what that means is that you really need to be developing your own technologies or having those technologies in companies that are national champions like Lockheed was in the days in the 20th century, first company ever referred to as “too big to fail” because of the dangers to American national security if something happened to it. This is a very important issue what I call a techno-polar moment and one that is becoming much more significant over time.