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FILE PHOTO: Chinese President Xi Jinping waves as he walks with U.S. President Joe Biden at Filoli estate on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, in Woodside, California, U.S., November 15, 2023.
Biden and Xi catch up
US President Joe Biden and Chinese President Xi Jinping spoke for nearly two hours on Tuesday, in a wide-ranging conversation meant, as one senior official put it, to serve as a “check-in.” Both men agreed to periodic phone calls when they met last year in San Francisco in a bid to boost dialogue and stabilize relations.
So far, Washington and Beijing have avoided any major flare-up, but Biden and Xi had no shortage of risks and gripes to discuss. Biden emphasized his commitment to the status quo over Taiwan and urged Xi to respect freedom of navigation in the South China Sea, where Chinese and Filipino vessels have had tense confrontations recently. He also expressed concern about China’s support for Russia’s military-industrial base. Xi, meanwhile, criticized “endless” US sanctions on the tech sector in an attempt to restrict Chinese access to militarily sensitive gear.
It wasn’t all complaints. The two leaders discussed recent progress on military-to-military communications, fentanyl trafficking, climate policy, and artificial intelligence, among other items. Cooperation on those less sensitive issues helps ease pressure on more intractable ones.
What’s next? The call comes just ahead of US Treasury Secretary Janet Yellen’s expected visit to China. Given Xi’s complaints today, she might be in for a less-than-relaxing trip, as she’s expected to press Beijing harder on “unfair” trade practices.
Secretary of State Antony Blinken and Defense Secretary Lloyd Austin will also travel to China in the coming weeks. And we have our eye on the inauguration of Taiwanese President William Lai next month, when a vigorous Chinese display of strength could test relations with Washington, which would face pressure to back up Taipei.FILE PHOTO: Donald Trump dancing during the campaign rally for the Republican primary for the 2024 American presidential election. Manchester (NH), USA, January 20, 2024.
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?
U.S. National Security Advisor Jake Sullivan attends a session during the 54th annual meeting of the World Economic Forum in Davos, Switzerland, January 16, 2024.
US and China set up back-channel meetings as pressure over Yemen grows
US National Security Advisor Jake Sullivan will reportedly meet with Chinese Foreign Minister Wang Yi behind closed doors in the coming days to discuss the Middle East and Taiwan.
Several top-level meetings had already been on the public schedule, but this private format – previously used to set the stage for the 2023 Biden-Xi summit as well as to smooth things over after House Speaker Nancy Pelosi’s 2022 visit to Taiwan – allows a more candid exchange on sensitive issues.
Taiwan on the agenda. The meeting comes just one month after pro-independence candidate William Lai won the Taiwanese presidential elections. As such, it’s a chance for Washington and Beijing – which considers Taiwan to be part of China – to speak frankly about boundaries over the self-governing island, minimizing risks to the stability of the US-China relationship.
But the Houthi issue may be more pressing, as the Iran-backed rebel group’s attacks on Red Sea are posing a broader risk to the global economy. Some 15% of global trade normally passes through the Red Sea, including crucial cargoes of oil, natural gas, and grains. Ships forced to take the 4,000-mile longer alternate route around the Cape of Good Hope add about 10 days time and triple the cost of shipping, raising prices for the producers and consumers who rely on those goods.
The US, which has pounded Houthi positions with airstrikes, has also been asking Beijing to use its good offices with Iran to ask Tehran to restrain the Houthis. Beijing’s reaction has essentially amounted to “sinking ships is bad, but you’re on your own, pal.” In part that may be because the Houthis have promised not to attack Chinese ships, a pledge that some Chinese shipping companies are capitalizing on. Still, if the Red Sea choke-out starts to have wider effects on the global economy, China – still nursing a slow post-pandemic recovery – may start to see things differently.Hou Yu-ih, left, candidate for Taiwan's presidency from the main opposition Kuomintang Party, and Jaw Shaw-Kong, vice presidential candidate, wave at the Central Election Commission in Taipei on Nov. 24, 2023.
Taiwan’s unity ticket falls apart at the altar
The opposition’s shotgun wedding is off in Taiwan. Just two weeks ago, with the blessing of Beijing, the Kuomintang Party and the Taiwan People’s Party announced their intention to field a single candidate in the country’s Jan. 13 election in the hopes of defeating the ruling Democratic Progressive Party. It was a move cheered by China, which is no fan of the current frontrunner, DPP’s pro-independence candidate, William Lai Ching-te.
But on Thursday, negotiations collapsed on the political equivalent of a reality TV show as business magnate and independent candidate Terry Gou moderated a live broadcast of efforts to break the deadlock over which opposition party’s candidate should be on the ballot. After mutual accusations of bad faith, KMT leader Hou Yu-ih read a private text message from TPP rival Ko Wen-Je that said Gou needed to “find a reason” to drop out of the presidential race. In a dramatic finale, KMT negotiators walked off the set as the cameras were rolling.
Both opposition parties have now registered separate candidates in the race. The entire spectacle played into the DPP’s hands, prompting Lai to ask, “Should we dare to hand over the business of running the country to these people?”
The opposition now has little chance of defeating Lai, who further boosted his candidacy last week by naming Hsiao Bi-Kim, Taiwan’s representative to the United States, as his vice-presidential running mate. Since Beijing considers the pair a “union of pro-independence separatists,” analysts agree that a Lai-Hsaio victory would likely further degrade already hostile relations between Taiwan and China, leading to greater military escalation and economic coercion.
Russian reservists recruited during a partial mobilization of troops attend a ceremony before departing to the Russia-Ukraine conflict zone, in the Rostov region, Russia October 31, 2022.
What We're Watching: Russian draft goes online, abortion pill ruling, US inflation slows, Taiwan gets new presidential candidate, Biden bets big on EVs
Russia’s digital draft
If you’re a young male citizen of Russia, it just got harder for you to hide from the war in Ukraine. The State Duma, Russia’s parliament, approved legislation on Tuesday that allows the government to send a military summons online instead of serving the papers in person. The upper house swiftly passed it into law on Wednesday.
“The summons is considered received from the moment it is placed in the personal account of a person liable for military service,” explains the chairman of the Duma’s defense committee, though the Kremlin insists no large-scale draft is imminent. If the person summoned fails to report for service within 20 days of the date listed on the summons, the state can suspend his driver’s license, deny him the right to travel abroad, and make it impossible for him to get a loan.
The database that provides names of potential draftees is assembled from medical, educational, and residential records, as well as insurance and tax data. Thousands of young Russians have already fled their country. Many more may soon try to join them.
Abortion pill stays on the market, but access rolled back
As the battle over abortion medication continues in the US, a federal appeals court has ruled that mifepristone – a drug approved by the Food and Drug Administration in 2000 – can remain on the market until the full case can be heard, likely by the Supreme Court.
Still, the court – made up of three appellate judges all appointed by Republican presidents – ruled that mifepristone cannot be sent by mail and rolled back a 2016 rule allowing it to be used up to 10-weeks gestation, dropping it back to seven weeks. It also rolled back other measures enforced by the Biden administration to enhance access after the gutting of Roe v. Wade.
This decision comes after a Trump-appointed, pro-life judge in Texas recently ordered a temporary stay on approval of mifepristone. Less than an hour later, another federal judge in Spokane, Washington, ruled that the drug must remain available in 17 Democratic-run states plus Washington, DC.
Importantly, the appeals court appeared to back the government's view that taking an approved drug off the market that accounts for more than half of all abortions nationwide would have “significant public consequences.”
As expected, abortion rights are shaping up to be one of the biggest political issues in the country. In Florida, Republicans are trying to fight a recently passed law banning abortion at six weeks, pushing for an outright ban.
US inflation cools — smartphones FTW
Good news for American households as US inflation fell to its lowest level in nearly two years in March. Prices grew at an annual clip of 5%, according to the latest figures released Wednesday. That’s down from 6% in February, marking the ninth consecutive month of falling inflation.
The highlights? Well, if you want to do some shopping in the US, now’s the time to cop a new smartphone, which will cost you 24% less than a year ago. And that summer road trip is on – gas prices are down more than 17%. At the same time, we remain “yolked,” as it were, to the Great Egg Crisis of 2023 — prices are up more than 30% despite easing a bit since February.
More broadly, that headline figure of 5% is still more than twice the pre-pandemic norm, and core inflation — which excludes volatile prices for fuel and food — is running at a toasty 5.6%.
That’ll keep the US Fed in the hot seat as it meets again in early May. Will they raise interest rates once more in a bid to finish off inflation? Or will they stand pat, worried about tipping the economy into a recession?
Will this man become Taiwan's next president?
Taiwan's ruling Democratic Progressive Party on Wednesday nominated VP William Lai as its candidate in the January 2024 presidential election.
Lai is widely viewed as a stand-in for term-limited President Tsai Ing-wen, reelected by a landslide in 2020. That means a tough line on China, which has made Tsai a darling in the West and reviled by Beijing. Lai used to support Taiwanese independence openly but has since moderated his position to align with the DPP's: We don’t need to formally break with the mainland because we’re already de-facto independent.
It's unclear who Lai will face, since the opposition Kuomintang Party — which, officially, is not pro-China but favors closer ties with China than the DPP — has yet to pick its candidate. (Terry Gou, the billionaire founder of Foxconn, the Taiwanese company that makes iPhones in China for Apple, is mulling another run.)
The vote will be Taiwan's most closely watched presidential election since 1996, when the self-ruled island ended decades of authoritarian rule. China responded to the democratic vibes by flexing its then-weak military muscles … until the US made it back off. This time, though, expect major Chinese fireworks if Beijing's candidate doesn't come out on top.
Biden’s ambitious new EV proposal
The Biden administration has proposed a new measure that would sharply accelerate the American auto industry’s transition to electric vehicles, and not everyone is happy about it.
The draft marks a big shift from Washington’s current carrots-based approach to boosting EV production to one that relies more on sticks. It would require carmakers to derive 60% of their sales revenue from electric vehicles by 2030, or face penalties. Currently, under a 2021 plan, the target is closer to 50% and manufacturers are allowed to opt in only if they want to. Under that plan, a range of subsidies and tax breaks aimed to incentivize consumers and manufacturers to ditch dirty fuel guzzlers.
Carmakers are already pushing back, saying that changes to assembly lines and supply chains will be expensive and take years to implement. But the Biden administration says the necessary funds were included in the Inflation Reduction Act, which earmarked $31 billion in subsidies for EV’s and tax credits for EV manufacturers.
Expect this to become a heated political issue in the coming months. Texas, despite being a leading investor in EV networks, has sued the federal government over the current EV standards, arguing that they are an overreach that violates states’ rights.