RADAR SWEEP

Geopolitics Newsletter October 23-30 2022

Financial markets drop as Xi commences third term — Oct. 24

As Chinese President Xi Jinping commenced his third term in office, Chinese financial markets everywhere plunged. On October 24, Chinese companies listed on New York’s Nasdaq dropped by a fifth in combined value at one point. The announcement of a Standing Committee packed with Xi loyalists—none of whom represent a suitable successor to Xi—confirmed to investors that China’s economic troubles would likely persist.

China’s economy continues to face rolling lockdowns, and an easing of Beijing’s zero-COVID approach is unlikely in the near term. Factory activity has not grown in October and large multinational corporations have begun already diversifying their supply chains away from China. Apple has started to shift production to Vietnam and India. Both Beijing’s increasingly unstable business environment and Washington’s efforts at technological decoupling will likely cause this trend to further accelerate in the coming years.

Xi will likely attempt to capitalize on the upcoming UN Conference on Climate Change (COP27) to divert attention from continuing economic woes. Not only are China’s efforts in energy transition crucial to combating climate change, but the world continues to rely on China for green technology products, including 70% of the world’s batteries and 80% of solar photovoltaic panels. China will likely maintain its edge in green technology over this decade. However, this alone may not suffice in bringing China’s economy back on track.

Indo-Pacific Geopolitics

South Korea’s Hoguk military exercises concluded – Oct. 28

South Korea’s armed forces conducted their annual 12-day Hoguk field exercise, following bilateral naval drills with the U.S. Tensions have flared up in recent weeks between the two Koreas as North Korea has conducted missile drills. Still, South Korea has rejected the possibility of a NATO-style nuclear weapons sharing agreement with the U.S. Read more

North Korea fired missiles into the sea – Oct. 28

North Korea continued firing missiles as South Korea’s Hoguk military exercises came to an end. Pyongyang is also widely expected to have finished preparations for its first nuclear weapons test since 2017, which may be conducted anytime soon. Read more [EXTERNAL]

Russia hosts 16th Russia-Iran Economic Energy Commission – Oct. 29 – Nov. 1

Moscow and Tehran have increased cooperation since the beginning of the war in Ukraine, as both countries are affected by wide-ranging Western sanctions. Iran has become a weapons supplier to Russia and may also become a critical ally in Moscow’s attempts at selling its energy further east. Read more

Vietnam’s Communist Party Chief to commence a four-day visit to China – Oct. 30

Vietnam’s Communist Party Chief Nguyen Phu Trong will be the first leader to visit China after Xi Jinping secured his third term as president. Trong is expected to congratulate Xi on his third term and to address Vietnam’s increasingly close relationship with the U.S. Read more [EXTERNAL]

Diplomacy

German Chancellor and French President met – Oct. 27

German Chancellor Olaf Scholz and French President Emmanuel Macron met in person on October 27. Officials on both sides claimed that the meeting was a success and that conversations focused on energy. However, the cancellation of an expected post-meeting press conference hints at tension growing between the EU’s two biggest powers. In recent weeks, Scholz and Macron have been at odds over how to address the energy crisis, how to overcome the EU’s lacking defense capabilities and the best strategy to deal with China. Read more

Kishida and Albanese met in Australia – Oct. 27

Japanese Prime Minister Fumio Kishida met with his Australian counterpart Anthony Albanese in Perth during his three-day visit to Australia. They discussed measures to strengthen the two countries’ defense cooperation in light of an increasingly aggressive China. Cooperation on energy and infrastructure was also on the agenda. Read more

Turkish FM Cavusoglu concluded West Africa visit – Oct. 27

Turkish Foreign Minister Melvut Cavusoglu ended his West Africa tour in Benin. Cavusoglu pledged to boost relations with Benin, particularly in the domains of defense, and made promises with his Beninese counterpart Aurelien Agbenonci to enhance economic cooperation. The two diplomats raised discussions about future visits by the presidents of Turkey and Benin. Read more

National Security

Czech Republic banned Russian tourists with Schengen-zone visas – Oct. 25

The Czech Republic has banned Russian tourists with Schengen zone visas from entering. The move closes a loophole permitting travel from Russian holders of visas issued by other Schengen countries, though Czech officials stopped issuing visas to Russian nationals soon after Russia’s invasion of Ukraine. This makes the Czech Republic one of the latest countries to completely ban travel by Russian citizens into its territory. Read more

NATO Secretary General met with Romanian PM Ciuca – Oct. 27

NATO Secretary General Jens Stoltenberg met with Romanian Prime Minister Nicolae Ciuca at NATO headquarters in Brussels amid growing tensions between NATO member states over whether to negotiate directly with Russia or to continue indefinite support for Ukraine. At a press conference following the meeting, Stoltenberg pledged continued support for Ukraine and emphasized NATO’s focus on strengthening their negotiation tactics by providing further military support. Read more

Russian bank Renaissance Credit seized SWIFT transfers – Oct. 27

The Russian commercial bank moved to seize SWIFT transfers made in dollars and euros after Russia was banned from the international SWIFT money transfer system following Russia’s invasion of Ukraine. Renaissance is a recent target of Western sanctions and is following directions from the Kremlin to adopt increasingly protectionist policies. Read more

See Also

Strategic dialogue EU Conversations 2025 to begin

Finance, Economics and Technology

EU trade ministers discussed trade relations with the US – Oct. 30

EU trade ministers met at the Informal Meeting of Trade Ministers in Prague to discuss Europe’s future relations with the U.S. ahead of the looming fallout from Washington’s recently announced export controls, which will affect Chinese high-tech products. Read more [EXTERNAL]

South Korean economic growth slows down – Oct. 27

According to the Bank of Korea, South Korea’s export-dependent economy has barely grown in the last quarter, because of rapidly dropping demand for exports, rising inflation and interest rates, as well as ongoing global supply chain disruptions. In response, the government has pledged to loosen regulations on the housing sector and increase support for the ship-building and battery sectors. Read more [EXTERNAL]

Australian government delivered its first national budget – Oct. 25

Anthony Albanese’s Labor government delivered its first national budget amid rising inflation and slowing growth. Highlights include increased subsidies for childcare, medical bills and higher education. Read more

Society and Environment

East Asia’s largest Pride March was held in Taiwan – Oct. 29

Around 120,000 people participated in Taipei’s 20th Pride March. Taiwan became the first Asian country to legalize same-sex marriage in 2019 and remains a beacon for LGBTQ+ rights in the region. Read more [EXTERNAL]

Global tuberculosis deaths rose – Oct. 28

According to the World Health Organization, global deaths from tuberculosis have risen in the period of 2019-2021, reversing a long-term trend of decline. Similar to malaria and AIDS, efforts to tackle tuberculosis have suffered greatly during the COVID-19 pandemic. Read more [EXTERNAL]

EU-ACPS Meeting ahead of COP27 – Oct. 29

Representatives of the EU and 78 African, Caribbean and Pacific States (ACPS) have met in Mozambique to discuss closer cooperation in climate change mitigation efforts ahead of COP27 in November. Read more

THE WEEK AHEAD

South Korea and U.S. to conduct Vigilant Storm Air Drills – Oct. 31-Nov. 4

The five-day military exercise is expected to involve over 200 military aircraft and comes amid growing tensions with North Korea. Read more [EXTERNAL]

Putin, Pashinyan and Aliyev to meet – Oct. 31

Russian President Vladimir Putin, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev will meet in a trilateral setting in Sochi. Read more [EXTERNAL]

Shehbaz Sharif to meet Xi Jinping – Nov. 1-2

Pakistan’s Prime Minister Shehbaz Sharif will meet with Chinese President Xi Jinping in Beijing. Read more [EXTERNAL]

Olaf Scholz to visit China – Nov. 3-4

The German Chancellor will be the first G7 leader to visit China and meet with President Xi Jinping since the outbreak of the pandemic. Read more [EXTERNAL]

COP27 to commence – Nov. 6

More than 200 governments are expected to attend the 27th UN Conference on Climate Change in Sharm El Sheikh, Egypt. Read more [EXTERNAL]

Contributions by: David Song-Pehamberger, Madeline McQuillan, and Shravan Krishnan Sharma