By Azhar Azam
Central Asia, due to its terrestrial location to sit at the confluence of China, Russia, South Asia and the Middle East, and potential to serve as a gateway to Europe, long captured attention of global powers; the US withdrawal from Afghanistan, the Ukraine war and battle for geopolitical influence has considerably elevated the region's strategic importance.
While the European Union (EU) has committed to invest €10 billion in sustainable transport network including the Trans-Caspian International Transport Route (TITR), the US support of Central Asia's about making their "own choices" and helping them develop their transportation infrastructure with an eye to exploit the region's potential in producing rare earth metals threaten to fabricate Central Asia into a geopolitical and geostrategic arena.
Such risks swell sharply given Washington hasn't historically afforded Central Asia the attention it gave to other parts of the world. The US interest in the region waned further once it no longer needed Central Asia as a conduit to wreak havoc in Afghanistan, redefining its foreign policy and shifting focus from South to Southeast Asia to offset the so-called China threat.
Even in the early one and a half year of the Ukraine crisis, America's interest was absent in the region until the US President Joe Biden hosted a C5+1 summit with the five Central Asian leaders in September and pledged to solidify security, clean energy and economic partnership including through investment in and development of the Trans-Caspian International Transport Route.
The so-called Middle Corridor – which begins from Southeast Asia and China, runs through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and further to European countries – holds a great significance for the participating economies in terms of trade and reduced travel times; what effectively drove America to cajole the region was the Chinese President Xi Jinping’s meeting with the regional leaders in May that promised to seal close economic and security relations between China and Central Asia.
An overriding goal behind the European Union (EU) wooing of the region has been to end its reliance on Russian’s oil and gas, seek alternative corridor that don’t depend on Moscow and diversify its sources of critical raw materials; the US too sees Central Asia as critical to seize rare earth minerals to break China's near monopoly. Biden's newfound initiative to ameliorate relations with the region, hence, could at best be declared as reactionary rather than proactive, intending to take advantage of Central Asia's geopolitical and geostrategic importance.
But challenges to these objectives emanate from the Central Asian states' close ties with China. Bilateral trade between Beijing and Central Asia in 2022 hit $70 billion with Kazakhstan accounting for $31 billion and Xi and the Kazakh President Kassym-Jomart Tokayev at the China-Central Asia summit agreeing to build the “enduring friendship” and share “weal and woe.” The China-Kazakh partnership would further bolster as Beijing-Astana trade in 2023 has surpassed $41 billion and 80% of the railroad transportation between China and EU goes through Kazakhstan.
The region has struck a very fine balance in its approach toward both Europe and Russia. It was on display when Central Asia welcomed the EU leaders and Kazakhstan received applauds from the French President Emmanuel Macron for “refusing to be a vassal of any power,” a veiled shot at Russia, while having around at the same time hailing the Kazakh relations with Russia as “multi-faceted,” which would determine the course of “strategic” cooperation.
Kazakhstan is the biggest player in Central Asia for being a large economy and its role to act as a transit route for transportation of goods between Asia and Europe. This unique position has urged Asana to remain stick to its multi-vector foreign policy, which seeks good relations with Russia, China, Europe, US and rest of the world without condoning the Russian war in Ukraine.
This equilibrium has helped the region to prevent it from becoming a theater of a new "great game" or geopolitical competition with Europe stepping into the “backyard” of China and Russia. Europe’s or the US abrupt note of Central Asia’s geostrategic importance, following decades of the region's abstraction from their priorities, cannot change this strategy overnight.
Tweaking this balanced policy perhaps isn’t needed either given it has helped Astana and the region to safeguard its national economic and security interests by simultaneously sustaining strong trade ties with Beijing and Moscow, benefiting from China’s Belt and Road Initiative (BRI), becoming a critical mineral supplier to Brussels and maintaining good relations with Washington.
Uzbekistan, another Central Asian state, is also actively pursuing an omnidirectional policy. The Uzbek President Shavkat Mirziyoyev's recent visit to Beijing where he upgraded the Uzbekistan-China relationship to "all-weather comprehensive strategic partnership.", following meetings with Macron and Italian President Sergio Mattarella, showed Tashkent was open to every country that could invest and contribute to the Uzbek economic, infrastructure, green and tech development.
By implementing the trans-Afghan corridor, the Uzbekistan-Afghanistan-Pakistan railway project that will connect the three countries as well as the EU, Russia, India and Southeast countries but stalled once Taliban took power in Afghanistan, Tashkent seeks to leverage this and other projects to enhance its attractiveness as a trans-regional transit bridge and by benefitting from tariffs. The corridor, estimated between about $5 billion and $6 billion, has a great potential in terms of trade and regional connectivity as progress is being made with officials of the three countries holding discussions in Islamabad last month.
Initiatives such as the Central Asia-South Asia Electricity (CASA-1000) electricity transmission project, designed to transport 1,300 megawatt of hydropower from Kyrgyzstan and Tajikistan, could contribute to the Afghan and Pakistan's clean transition, battle against climate change and reduce power outages. Even as Taliban lack the means to fund the projects as well as international legitimacy, the World Bank is extending financial support to Dushanbe to implement the project. Ashgabat, on the other hand, has also been making efforts to revive the dormant Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline although the project is encountering boredom from India.
Like South Asia – one the world’s least integrated regions over conflicts, inter-state rivalries and great power competition despite facing common challenges – Central Asia is poorly connected to one another and the rest of the world, hindering intra- and inter-regional connectivity for decades. But unlike South Asian countries, the Central Asian states have managed to overwhelm geopolitical competition and instead are aggressively attempting to capitalize on their strategic location, keeping eyes to improving their connectivity with all and uplifting the region's and individual country's economic profile.
While Mirziyoyev approached Qatar in December to back the trans-Afghan corridor, the Tajik President Emomali Rahmon in the same month met with the World Bank’s President Ajay Banga to jump-start the CASA-1000. Dushanbe has also extended its electricity supply agreement with Taliban, which will help it to influence Kabul to expedite work on the CASA-1000.
These attempts are backed by China whose foreign minister in May produced a joint statement with his counterparts from Afghanistan and Pakistan, supporting the extension of the China-Pakistan Economic Corridor to Afghanistan as well as the trans-Afghan railway, CASA-1000 and TAPI projects as initiatives to enhance regional connectivity and prosperity.
In a bid to attract transit container trains and the EU involvement in the Middle Corridor, Kazakhstan is considering fixing the tariff rates for five years. As Kazakhstan has removed Taliban from its terrorist list, this will help Astana to retain its access to large Afghan, Pakistani and Indian markets and create new transportation and logistics routes in the region to enter the Gulf and the Middle East through the Pakistani ports of Karachi and Gwadar, bringing a boon for the Kazakh exporters and economy.
Astana unveiled its domestic infrastructure initiative, Nurly Zhol (Bright Path), in 2014. Just a couple of years later, it aspired to integrate the project with China’s Silk Road Economic Belt citing similarities between the two projects such as trade facilitation, transit transportation and development of reliable transport and logistics infrastructure. In 2019, the Chinese and Kazakh leaders agreed to implement the cooperation plan to connect the two initiatives. Underpinned by its appeal to serve as an overland freight transport corridor between China and Europe, Kazakhstan is expected to drive economic growth over the next five years owing to increased BRI investments.
The world’s largest landlocked country, which referred to itself as a buckle in the BRI, launched the China-backed Astana International Financial Center (AIFC) in 2018. This ambition to transform Uzbekistan into a regional financial center by becoming Luxemburg-style intermediary between the large nations and a gateway for foreign investment in Central Asia is paying off as the AIFC as of 2022 had resulted in registration of 1,738 companies from 70 countries, mostly from leading economies such as China, the EU, the UK, the US, Singapore and India.
Amid its efforts to turn itself into a major Eurasian transport and logistics hub between North and South as well as emerge as epicenter of green, economic, industrial and technological development, China’s steadfast support of Central Asia’s growth agenda is one of the major factors the Central Asian people are bullish on economic relations with Beijing.
Latest stats from Urumqi Customs, revealing Xinjiang’s exports to five Central Asian states in 2023 had topped $34 billion at a staggering increase of 23.2%, underscore the regional countries and the wider Asia have rejected the US-led smear campaign to put a drag on autonomous region’s economy through sanctions and legislative proposals. The deepening Beijing-Central Asia ties on economy, trade and security are demonstrative of the region's firm resolve not to allow anyone to concoct the region into a geopolitical playhouse for their vested interests.
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February 21, 2024
February 4, 2024
Uzbekistan policies show the way to developing world
By: Azhar Azam
Ahead of his trip to Beijing, Uzbekistan’s President Shavkat Mirziyoyev in his article for the People's Daily didn't desist from pouring lavish praise on China. Not only the Uzbek leader admired Chinese President Xi Jinping's global development, security and civilization initiatives as an effort to significantly address the global challenges and accelerate the transition to a more sustainable and inclusive future, he also aligned Tashkent's vision of regional and international security with Beijing.
Mirziyoyev has paid several visits to China, underscoring Beijing's growing importance in his economic and development agenda. His objective to strengthen "multifaceted" relations with Beijing further expounds that China will be a centerpiece of his foreign and regional policy and ambition of green transition.
During his October's trip to Beijing to attend the third Belt and Road Forum, Mirziyoyev struck a mollifying tone as he expressed gratitude to Xi for the invitation and stressed China's investments and number of Chinese companies had increased fivefold and tripled respectively, expecting bilateral trade to exceed $10 billion by the end of 2023.
The Uzbek leader's campaign has worked given the Chinese enterprises with investment participation are the second-largest in the country, China accounts for more than one-fifth of Uzbekistan’s foreign trade (21.3%) and bilateral trade in 2023 has far exceeded his expectations, reaching $14 billion. Once he put China as one of his top foreign policy priorities, it helped Tashkent sign several agreements with Beijing.
In his last visit, Mirziyoyev called for international unity on the "Green Silk Road," which was first proposed by Xi in Uzbekistan in 2016, and fully supported the green initiative over its potential to shape the agenda for a “common green future. Construction of 400 megawatt solar photovoltaic power plant by PowerChina and Mirziyoyev's meetings with Chinese energy companies in October described he was moved by their ability to deploy modern engineering solutions in electricity transmission networks and implement solar, wind and hybrid power projects.
Just last month, the Uzbek leader revealed his warmth for China when he gave plaudits to his strategic partner for completing projects at an “astonishingly” pace of as little as nine months. Mirziyoyev continues to hail China's progress on the large scale joint investments projects, which had helped Tashkent making important strides in developing green energy and creating 27 gigawatts of renewable energy generation capacity by 2030.
While cooperation with the "undisputed global leader" in renewable energy would solidify Tashkent's energy security and environmental sustainability, the first hydrogen plant in the country and region will save some 33 million cubic meters of gas every year, decarbonize heavy industries as well as add a new engine of growth and raise Tashkent’s international profile.
China and Uzbekistan are promoting active cooperation on infrastructure too. The Chinese-built Angren-Pap railway line, the China-Kyrgyzstan-Uzbekistan transport corridor and four routes of the China-Central Asia natural gas pipeline that pass through Uzbekistan, denote a region-wide consensus on developing intra- and inter-regional infrastructure to push trade, enhance connectivity and bring prosperity.
Once finalized, the China-Kyrgyzstan-Uzbekistan railway project will give Central Asia the shortest and most accessible passage to global markets, bringing billions of dollars of investments to the region. Reconstruction projects such as the 87 kilometer A380 highway by China have buttressed Uzbek's transportation infrastructure, ensuring fast delivery of goods; cooperation on logistics is also making progress.
Electric transport network in Uzbekistan would also get a boost as per the Uzbek energy ministry, an agreement was reached between China and Uzbekistan in December to jointly produce 70 centralized and 50,000 non-centralized electricity vehicle (EV) charging stations in the country by 2033, providing energy to 700,000 EVs. Some 2,500 of these units are expected to be installed by the end of 2024. Even as leading Chinese tech firms such as Huawei, BYD and ZTE are operating in Uzbekistan, Mirziyoyev intends to foster industrial cooperation with these giants to transform the country into a leading technology hub through establishment of high-tech industries and technology parks.
Education cooperation is another area of Uzbekistan's interest. Through construction of education infrastructure (Finding #5), technical training and scholarships (Table 5), China has expanded its influence in the Central Asian state as well as instilled interest in the Uzbeks, especially among Generation Z, to learn the Chinese language. A couple of Confucius Institutes in Samarkand and Tashkent; Mirziyoyev wants to deepen cooperation in the field of Chinese language teaching that in turn would help him to train a workforce capable of learning and applying China's development practices.
Over the last three decades, the China-Uzbekistan comprehensive strategic partnership has grown substantially. The high-level political exchanges in the last couple of years, this robust engagement, per Uzbek estimates, has translated into agreements and trade contracts worth $40 billion as Chinese investors continue to invest heavily in green energy, oil and gas, telecommunications and automotive industry among others.
First strategic dialogue in November, Tashkent's support of Beijing's efforts "to implement the reunification of Taiwan," Mirziyoyev's backing of Xi’s global initiatives and upgradation of ties to "all-weather comprehensive strategic partnership" signal the Uzbek president is dismissive of geopolitics and global great power rivalry and that he will put out all the stops to curry favor from China in the areas of economy, trade and investment, infrastructure development, industrial cooperation, technology transfer, green transition and to kick- the start construction of the China-Kyrgyzstan-Uzbekistan railway project, a lesson the developing countries should learn to transform their economies.
Ahead of his trip to Beijing, Uzbekistan’s President Shavkat Mirziyoyev in his article for the People's Daily didn't desist from pouring lavish praise on China. Not only the Uzbek leader admired Chinese President Xi Jinping's global development, security and civilization initiatives as an effort to significantly address the global challenges and accelerate the transition to a more sustainable and inclusive future, he also aligned Tashkent's vision of regional and international security with Beijing.
Mirziyoyev has paid several visits to China, underscoring Beijing's growing importance in his economic and development agenda. His objective to strengthen "multifaceted" relations with Beijing further expounds that China will be a centerpiece of his foreign and regional policy and ambition of green transition.
During his October's trip to Beijing to attend the third Belt and Road Forum, Mirziyoyev struck a mollifying tone as he expressed gratitude to Xi for the invitation and stressed China's investments and number of Chinese companies had increased fivefold and tripled respectively, expecting bilateral trade to exceed $10 billion by the end of 2023.
The Uzbek leader's campaign has worked given the Chinese enterprises with investment participation are the second-largest in the country, China accounts for more than one-fifth of Uzbekistan’s foreign trade (21.3%) and bilateral trade in 2023 has far exceeded his expectations, reaching $14 billion. Once he put China as one of his top foreign policy priorities, it helped Tashkent sign several agreements with Beijing.
In his last visit, Mirziyoyev called for international unity on the "Green Silk Road," which was first proposed by Xi in Uzbekistan in 2016, and fully supported the green initiative over its potential to shape the agenda for a “common green future. Construction of 400 megawatt solar photovoltaic power plant by PowerChina and Mirziyoyev's meetings with Chinese energy companies in October described he was moved by their ability to deploy modern engineering solutions in electricity transmission networks and implement solar, wind and hybrid power projects.
Just last month, the Uzbek leader revealed his warmth for China when he gave plaudits to his strategic partner for completing projects at an “astonishingly” pace of as little as nine months. Mirziyoyev continues to hail China's progress on the large scale joint investments projects, which had helped Tashkent making important strides in developing green energy and creating 27 gigawatts of renewable energy generation capacity by 2030.
While cooperation with the "undisputed global leader" in renewable energy would solidify Tashkent's energy security and environmental sustainability, the first hydrogen plant in the country and region will save some 33 million cubic meters of gas every year, decarbonize heavy industries as well as add a new engine of growth and raise Tashkent’s international profile.
China and Uzbekistan are promoting active cooperation on infrastructure too. The Chinese-built Angren-Pap railway line, the China-Kyrgyzstan-Uzbekistan transport corridor and four routes of the China-Central Asia natural gas pipeline that pass through Uzbekistan, denote a region-wide consensus on developing intra- and inter-regional infrastructure to push trade, enhance connectivity and bring prosperity.
Once finalized, the China-Kyrgyzstan-Uzbekistan railway project will give Central Asia the shortest and most accessible passage to global markets, bringing billions of dollars of investments to the region. Reconstruction projects such as the 87 kilometer A380 highway by China have buttressed Uzbek's transportation infrastructure, ensuring fast delivery of goods; cooperation on logistics is also making progress.
Electric transport network in Uzbekistan would also get a boost as per the Uzbek energy ministry, an agreement was reached between China and Uzbekistan in December to jointly produce 70 centralized and 50,000 non-centralized electricity vehicle (EV) charging stations in the country by 2033, providing energy to 700,000 EVs. Some 2,500 of these units are expected to be installed by the end of 2024. Even as leading Chinese tech firms such as Huawei, BYD and ZTE are operating in Uzbekistan, Mirziyoyev intends to foster industrial cooperation with these giants to transform the country into a leading technology hub through establishment of high-tech industries and technology parks.
Education cooperation is another area of Uzbekistan's interest. Through construction of education infrastructure (Finding #5), technical training and scholarships (Table 5), China has expanded its influence in the Central Asian state as well as instilled interest in the Uzbeks, especially among Generation Z, to learn the Chinese language. A couple of Confucius Institutes in Samarkand and Tashkent; Mirziyoyev wants to deepen cooperation in the field of Chinese language teaching that in turn would help him to train a workforce capable of learning and applying China's development practices.
Over the last three decades, the China-Uzbekistan comprehensive strategic partnership has grown substantially. The high-level political exchanges in the last couple of years, this robust engagement, per Uzbek estimates, has translated into agreements and trade contracts worth $40 billion as Chinese investors continue to invest heavily in green energy, oil and gas, telecommunications and automotive industry among others.
First strategic dialogue in November, Tashkent's support of Beijing's efforts "to implement the reunification of Taiwan," Mirziyoyev's backing of Xi’s global initiatives and upgradation of ties to "all-weather comprehensive strategic partnership" signal the Uzbek president is dismissive of geopolitics and global great power rivalry and that he will put out all the stops to curry favor from China in the areas of economy, trade and investment, infrastructure development, industrial cooperation, technology transfer, green transition and to kick- the start construction of the China-Kyrgyzstan-Uzbekistan railway project, a lesson the developing countries should learn to transform their economies.
February 3, 2024
Wang Yi's trip to strengthen China-Brazil ties, boost convergence on global issues
By: Azhar Azam
Following his Africa trip, China's Foreign Minister Wang Yi is visiting Brazil and Jamaica at their invitation from January 18 to 22.
This year marks the 50th anniversary of the establishment of China-Brazil diplomatic relations. After Beijing became Brasilia's top trading partner in 2009, the bilateral ties were elevated to a comprehensive strategic partnership in 2012.
Under Brazilian President Luiz Inacio Lula da Silva – who bankrolled transformational social programs like "Bolsa Familia," which means "Family Allowance," during his first term partly thanks to China's massive demand for Brazil's commodities and helped him lift roughly 20 million people out of poverty per the World Bank – the China-Brazil relationship experienced stable development. Once Lula returned to the presidency last year, he pledged to "consolidate" Brasilia's relations with Beijing.
China and Brazil are entwined in a close economic relationship. Beijing buys almost one-third of all Brazilian exports. Bilateral trade between China and Brazil, according to the Brazilian government's statistics, had expanded from $3.2 billion in 2001 to a record high of $150.5 billion in 2022. Beijing is one of the major sources of foreign direct investment in Brasilia particularly in power generation, oil extraction, telecommunications, financial services, and industry. Between 2007 and 2020, China invested $66 billion in the country as Brazil received almost half of all Chinese investments in Latin America.
The China-Brazil relationship is characterized as primarily economic but Lula wants to see this partnership go beyond trade. His April 2023 visit to Beijing – where he met Chinese President Xi Jinping, which resulted in 15 agreements and Brazilian Real 50 billion (over $10 billion) investments from China – indicated the cooperation was expanding from trade to space collaboration, research and innovation, digital economy, information technology, automotive industry, and renewable energy. Lula's trip, hence, not only broadened the relationship, but it contested claims that Chinese investments in Brazil had plunged significantly.
Dismissing the U.S.-led Western concerns and defending his country's pursuit of Chinese communication and semiconductor technology, Lula hailed Brasilia's relations with Beijing as "extraordinary" and warned, "Nobody can stop Brazil from continuing to develop its relationship with China." His comments, soon after holding a meeting with U.S. President Joe Biden in the White House, signaled an outright snub to America's efforts to suppress China's technological advancement.
In what was Lula's third state visit and first after assuming office, both sides issued a comprehensive joint declaration on cooperation from bilateral to international issues including Ukraine. Described as "the most comprehensive" by the Brazilian government, the joint declaration reflected the two countries' shared interests and common views in key areas.
Amid America's efforts to fuel the Ukraine conflict, Lula sought the U.S. to "stop encouraging war and start talking about peace." On war in the Middle East, Brazil has also condemned forced displacement of Palestinians, while supporting peace and advocating for the two-state solution.
2024 marks the beginning of a new stage of a strong China-Brazil strategic partnership as in the first year of Lula's headship, Brazil's exports to China for the first time ever have transcended the $100 billion barrier surging 16.5 percent to about $106 billion. This increased trade could well be linked with Lula's visit and a reconciliatory approach toward China; it would further help him fund the country's social welfare program and push the poverty rates that have remained stagnant over the recent years.
China, the world's top consumer of soybeans and one of the biggest corn buyers internationally, was once a key market for the U.S. But America's China policy has stoked fears in the Chinese importers, urging them to reduce their dependence on the U.S. for corn and soybeans purchases. As Washington risks the interests of its own farmers and loses agricultural influence globally, Brasilia and other nations are solidifying their ties with Beijing to take advantage of the vast Chinese market.
Renewable energy cooperation is being augmented with the State Grid Corporation of China last month winning the largest-ever electricity transmission line auction in Brazil. The company will invest Brazilian Real 18.1 billion ($3.6 billion) to build 1,513 kilometers of lines to transport energy generated from renewable sources in the northeast to other parts of the country.
The Brazilian oil and gas giant Petrobras plans to create a Chinese subsidiary to accelerate oil refining, fertilizer projects, and green transition. The Chinese automaker BYD has also announced to invest more than $600 million in Brazil to build its first electric vehicle plant outside Asia with a capacity to produce 150,000 cars per year, inaugurating the construction of a new factory.
China is Brazil's promising partner. There is a great convergence between the two states to strengthen strategic communication and cooperation on crucial regional and global issues such as fighting climate change, and inequality, accelerating growth and energy transition, reforming international institutions, and promoting world peace. Wang Yi's trip will reaffirm this commitment and boost the China-Brazil strategic partnership.
Following his Africa trip, China's Foreign Minister Wang Yi is visiting Brazil and Jamaica at their invitation from January 18 to 22.
This year marks the 50th anniversary of the establishment of China-Brazil diplomatic relations. After Beijing became Brasilia's top trading partner in 2009, the bilateral ties were elevated to a comprehensive strategic partnership in 2012.
Under Brazilian President Luiz Inacio Lula da Silva – who bankrolled transformational social programs like "Bolsa Familia," which means "Family Allowance," during his first term partly thanks to China's massive demand for Brazil's commodities and helped him lift roughly 20 million people out of poverty per the World Bank – the China-Brazil relationship experienced stable development. Once Lula returned to the presidency last year, he pledged to "consolidate" Brasilia's relations with Beijing.
China and Brazil are entwined in a close economic relationship. Beijing buys almost one-third of all Brazilian exports. Bilateral trade between China and Brazil, according to the Brazilian government's statistics, had expanded from $3.2 billion in 2001 to a record high of $150.5 billion in 2022. Beijing is one of the major sources of foreign direct investment in Brasilia particularly in power generation, oil extraction, telecommunications, financial services, and industry. Between 2007 and 2020, China invested $66 billion in the country as Brazil received almost half of all Chinese investments in Latin America.
The China-Brazil relationship is characterized as primarily economic but Lula wants to see this partnership go beyond trade. His April 2023 visit to Beijing – where he met Chinese President Xi Jinping, which resulted in 15 agreements and Brazilian Real 50 billion (over $10 billion) investments from China – indicated the cooperation was expanding from trade to space collaboration, research and innovation, digital economy, information technology, automotive industry, and renewable energy. Lula's trip, hence, not only broadened the relationship, but it contested claims that Chinese investments in Brazil had plunged significantly.
Dismissing the U.S.-led Western concerns and defending his country's pursuit of Chinese communication and semiconductor technology, Lula hailed Brasilia's relations with Beijing as "extraordinary" and warned, "Nobody can stop Brazil from continuing to develop its relationship with China." His comments, soon after holding a meeting with U.S. President Joe Biden in the White House, signaled an outright snub to America's efforts to suppress China's technological advancement.
In what was Lula's third state visit and first after assuming office, both sides issued a comprehensive joint declaration on cooperation from bilateral to international issues including Ukraine. Described as "the most comprehensive" by the Brazilian government, the joint declaration reflected the two countries' shared interests and common views in key areas.
Amid America's efforts to fuel the Ukraine conflict, Lula sought the U.S. to "stop encouraging war and start talking about peace." On war in the Middle East, Brazil has also condemned forced displacement of Palestinians, while supporting peace and advocating for the two-state solution.
2024 marks the beginning of a new stage of a strong China-Brazil strategic partnership as in the first year of Lula's headship, Brazil's exports to China for the first time ever have transcended the $100 billion barrier surging 16.5 percent to about $106 billion. This increased trade could well be linked with Lula's visit and a reconciliatory approach toward China; it would further help him fund the country's social welfare program and push the poverty rates that have remained stagnant over the recent years.
China, the world's top consumer of soybeans and one of the biggest corn buyers internationally, was once a key market for the U.S. But America's China policy has stoked fears in the Chinese importers, urging them to reduce their dependence on the U.S. for corn and soybeans purchases. As Washington risks the interests of its own farmers and loses agricultural influence globally, Brasilia and other nations are solidifying their ties with Beijing to take advantage of the vast Chinese market.
Renewable energy cooperation is being augmented with the State Grid Corporation of China last month winning the largest-ever electricity transmission line auction in Brazil. The company will invest Brazilian Real 18.1 billion ($3.6 billion) to build 1,513 kilometers of lines to transport energy generated from renewable sources in the northeast to other parts of the country.
The Brazilian oil and gas giant Petrobras plans to create a Chinese subsidiary to accelerate oil refining, fertilizer projects, and green transition. The Chinese automaker BYD has also announced to invest more than $600 million in Brazil to build its first electric vehicle plant outside Asia with a capacity to produce 150,000 cars per year, inaugurating the construction of a new factory.
China is Brazil's promising partner. There is a great convergence between the two states to strengthen strategic communication and cooperation on crucial regional and global issues such as fighting climate change, and inequality, accelerating growth and energy transition, reforming international institutions, and promoting world peace. Wang Yi's trip will reaffirm this commitment and boost the China-Brazil strategic partnership.
*My article that first appeared at CGTN:
February 2, 2024
Why are Americans so disappointed?
By: Azhar Azam
2023 was a "great year" for American workers as the economy created 2.7 million jobs, said U.S. President Joe Biden in a statement on the December jobs report, arguing strong job creation continued despite inflation dropping to the pre-pandemic level of 2 percent over the last six months.
But polls show the voters, ahead of elections, are unenthused about his handling of the economy. Frustration within the White House is growing as Biden's approval ratings plunge to as low as 34 percent with about two-thirds of Americans disapproving of his performance including on inflation and jobs.
Polling averages compiled by FiveThirtyEight, showing the gap between Biden's approval and disapproval had doubled in the last 12 months, and other unacceptably low poll numbers, finding him particularly vulnerable vis-a-vis economic concerns, refute his claim that 2023 was "one more great year in the books."
The Federal Reserve Bank of New York's survey expected a 0.2 percentage point decline in short-term inflation in November to 3.4 percent, the lowest reading since April 2021; it far exceeded the Fed's 2 percent annual target. Prices fell in the month for the first time in more than three and a half years but just marginally over sinking gas prices as underlying pressures on services such as apartment rents, restaurant meals and auto insurance were stubbornly high.
While an increase in core inflation indicates interest rates will likely remain on hold for many months to follow, the Federal Reserve Bank of Cleveland's nowcast data estimates inflation measured by headline consumer price index (CPI) and core CPI to rise 0.30 percent and 0.33 percent respectively. This would represent a surge from October and November readings and mark a stunning increase of more than 17 percent since Biden took office even if it doesn't change much, which is highly unlikely as December data is expected to show headline inflation rose 0.2 percent in the month and by 3.2 percent on an annual basis.
America added 216,000 jobs in December, according to the U.S. Bureau of Labor Statistics, beating all forecasts; experts saw "a lot of noise" in the data once the agency revised down its October and November job total by a combined 71,000 jobs. These cracks further urged them to see the labor market slow "pretty substantially" unless the Fed cut the interest rate.
Payroll employment did rise, as Biden boasted, by 2.7 million in 2023 yet it dwarfed 4.8 million and 7.27 million jobs created in 2022 and 2021. The unemployment rate also remained unchanged at 3.7 percent, keeping some 6.3 million people unemployed. Per Gallup, Biden's approval slightly improved yet it was worse than the past seven U.S. presidents at this point in time.
Nominal wages increased; inflation generally eroded Americans' earnings, a trend that continued throughout the year. Average hourly earnings rose but economists warned the report "speaks to the bumpy road ahead for the Fed's journey back to 2 percent inflation." The data didn't account for the rising geographic income inequality, which according to the country's Department of Commerce, had continued to climb in recent years, skyrocketing by more than 40 percent between 1980 and 2021.
Household income is unevenly distributed across America. The U.S. Congressional Budget Office (CBO) in November described this huge disparity in its November report that projected average income before transfers and taxes of the highest quintile or one fifth of 129 million American households ($357,800) in 2020 to be 16 times the average income of the lowest fifth ($21,900).
Income after transfers and taxes reduced the great discrepancy but the gap between low- and high-income households was, notwithstanding, very significant. These revelations will stoke sentiments of many Americans who believe "inequality is rising."
Moody's is the only one of the three main rating agencies that in November maintained its highest AAA credit rating for the U.S. yet it also lowered the U.S. outlook from stable to negative, raising the risk that America's rating may be downgraded in a year or two. The potential of such a scenario cannot be ruled out as the two primary reasons for downgrading the U.S. outlook, weakening debt affordability and intensifying political polarization, won't go away anytime soon.
In 2020, the CBO predicted the U,S, gross federal debt would eclipse $34 trillion in 2029; it exceeded the forecast several years sooner just recently after topping $33 trillion in September, translating into an addition of $1 trillion roughly in the quarter. This "boiling frog" phenomenon with government bills exceeding revenue by the early 2030s and despair of not seeing an end to the poisonous polarization is posing political and economic challenges to the U.S. economy, prompting the country to create greater economic equality to prevent the downfall of capitalism against rival economic systems.
The U.S. federal agency further sees America's economic growth slowing to 1.5 percent and unemployment rising to 4.4 percent in 2024 amid calls of not ruling out another rate hike, which together will undo the U.S. sporadic progress on inflation and job and wage growth.
The successive U.S. administrations' protectionist policies, a trade war with China, and slow motion decoupling (now de-risking) indeed have added to pressure on the country's economy and shifted focus from Americans. As a result, they, a majority of whom are still living paycheck to paycheck and considering rate inflation as their top concern, believe the country's economy is in recession and rate it negatively.
2023 was a "great year" for American workers as the economy created 2.7 million jobs, said U.S. President Joe Biden in a statement on the December jobs report, arguing strong job creation continued despite inflation dropping to the pre-pandemic level of 2 percent over the last six months.
But polls show the voters, ahead of elections, are unenthused about his handling of the economy. Frustration within the White House is growing as Biden's approval ratings plunge to as low as 34 percent with about two-thirds of Americans disapproving of his performance including on inflation and jobs.
Polling averages compiled by FiveThirtyEight, showing the gap between Biden's approval and disapproval had doubled in the last 12 months, and other unacceptably low poll numbers, finding him particularly vulnerable vis-a-vis economic concerns, refute his claim that 2023 was "one more great year in the books."
The Federal Reserve Bank of New York's survey expected a 0.2 percentage point decline in short-term inflation in November to 3.4 percent, the lowest reading since April 2021; it far exceeded the Fed's 2 percent annual target. Prices fell in the month for the first time in more than three and a half years but just marginally over sinking gas prices as underlying pressures on services such as apartment rents, restaurant meals and auto insurance were stubbornly high.
While an increase in core inflation indicates interest rates will likely remain on hold for many months to follow, the Federal Reserve Bank of Cleveland's nowcast data estimates inflation measured by headline consumer price index (CPI) and core CPI to rise 0.30 percent and 0.33 percent respectively. This would represent a surge from October and November readings and mark a stunning increase of more than 17 percent since Biden took office even if it doesn't change much, which is highly unlikely as December data is expected to show headline inflation rose 0.2 percent in the month and by 3.2 percent on an annual basis.
America added 216,000 jobs in December, according to the U.S. Bureau of Labor Statistics, beating all forecasts; experts saw "a lot of noise" in the data once the agency revised down its October and November job total by a combined 71,000 jobs. These cracks further urged them to see the labor market slow "pretty substantially" unless the Fed cut the interest rate.
Payroll employment did rise, as Biden boasted, by 2.7 million in 2023 yet it dwarfed 4.8 million and 7.27 million jobs created in 2022 and 2021. The unemployment rate also remained unchanged at 3.7 percent, keeping some 6.3 million people unemployed. Per Gallup, Biden's approval slightly improved yet it was worse than the past seven U.S. presidents at this point in time.
Nominal wages increased; inflation generally eroded Americans' earnings, a trend that continued throughout the year. Average hourly earnings rose but economists warned the report "speaks to the bumpy road ahead for the Fed's journey back to 2 percent inflation." The data didn't account for the rising geographic income inequality, which according to the country's Department of Commerce, had continued to climb in recent years, skyrocketing by more than 40 percent between 1980 and 2021.
Household income is unevenly distributed across America. The U.S. Congressional Budget Office (CBO) in November described this huge disparity in its November report that projected average income before transfers and taxes of the highest quintile or one fifth of 129 million American households ($357,800) in 2020 to be 16 times the average income of the lowest fifth ($21,900).
Income after transfers and taxes reduced the great discrepancy but the gap between low- and high-income households was, notwithstanding, very significant. These revelations will stoke sentiments of many Americans who believe "inequality is rising."
Moody's is the only one of the three main rating agencies that in November maintained its highest AAA credit rating for the U.S. yet it also lowered the U.S. outlook from stable to negative, raising the risk that America's rating may be downgraded in a year or two. The potential of such a scenario cannot be ruled out as the two primary reasons for downgrading the U.S. outlook, weakening debt affordability and intensifying political polarization, won't go away anytime soon.
In 2020, the CBO predicted the U,S, gross federal debt would eclipse $34 trillion in 2029; it exceeded the forecast several years sooner just recently after topping $33 trillion in September, translating into an addition of $1 trillion roughly in the quarter. This "boiling frog" phenomenon with government bills exceeding revenue by the early 2030s and despair of not seeing an end to the poisonous polarization is posing political and economic challenges to the U.S. economy, prompting the country to create greater economic equality to prevent the downfall of capitalism against rival economic systems.
The U.S. federal agency further sees America's economic growth slowing to 1.5 percent and unemployment rising to 4.4 percent in 2024 amid calls of not ruling out another rate hike, which together will undo the U.S. sporadic progress on inflation and job and wage growth.
The successive U.S. administrations' protectionist policies, a trade war with China, and slow motion decoupling (now de-risking) indeed have added to pressure on the country's economy and shifted focus from Americans. As a result, they, a majority of whom are still living paycheck to paycheck and considering rate inflation as their top concern, believe the country's economy is in recession and rate it negatively.
*My article that first appeared at CGTN:
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