Good morning, and welcome to the Global Situation Report for Thursday, 06 July 2023.
- FIRST UP: China’s Xi tells military to deepen war planning to safeguard China’s sovereignty and territory
- State-backed media reported Chinese President Xi Jinping said the world has entered a new period of turmoil and conflict during a visit to inspect troops of China’s Eastern Theater Command.
- The Eastern Theater Command is responsible for the security of eastern China, including the East China Sea and the Taiwan Strait.
Why It Matters: Xi’s comments are part of an increase in bellicose language that could signal coming Chinese military action against Taiwan or other nations in the South and East China Seas. In addition to China’s threats against Taiwan, Chinese officials have begun openly discussing China’s historical claims to the Japanese Ryukyu Islands – where the U.S. has several large military bases. – M.M.
- YELLEN MAKES ANOTHER PASS AT CHINA: U.S. Treasury Secretary Janet Yellen is in China for talks with high-level officials
- Yellen is on a four-day visit in an attempt to improve relations between Beijing and Washington.
- She is expected to address unfair trade practices, market access barriers and punitive measures against U.S. companies.
Why It Matters: Yellen received a low-key welcome from a finance ministry official. Her visit comes after U.S. Secretary of State Antony Blinken’s largely unsuccessful visit for the same purpose. U.S.-led restrictions on semiconductor technology transfer have had a negative impact on U.S.-China trade relations and it is apparent from Chinese state-backed media commentary that Yellen’s visit is both unwelcome and irrelevant. – M.M.
- MYSTERY MAN PRIGOZHIN IN RUSSIA: Wagner PMC chief Yevgeny Progohzin reportedly in St. Petersburg, working on the transfer of his business to Belarus
- About 80% of Wagner forces are now in their new camps in Belarus, while 20% took contracts with the Russian military.
- Prigozhin has reportedly been given back the cash and weapons that were confiscated by Russian authorities following his march on Moscow.
Why It Matters: Despite western and Russian media reports that Prigozhin is on the outs with Moscow, Prigozhin is freely moving between Belarus and Russia, has retained his financial assets and a significant number of his paramilitary forces, including now, their heavy weaponry. It is likely there are more interesting revelations coming in the Wagner PMC “deal” worked out between Belarus President Lukashenko and Russian President Valdimir Putin. – M.M.
- U.S. TO SEND CLUSTER MUNITIONS TO UKRAINE: The White House is expected to provide Ukraine with cluster munitions
- Congress has applied restrictions on the export of cluster munitions, and several allies have expressed concern over Washington’s plan to provide them to Kiev.
- Cluster munitions are often indiscriminate weapons with a high dud rate and can remain in place for years creating a potent threat to the civilian population.
Why It Matters: Air and artillery-delivered cluster munitions could provide Ukraine a significant advantage against mobile Russian armor and lightly fortified supply depots; however, they would be less practical against Russia’s dug-in and fortified defensive lines. Any areas where cluster munitions were used would have to be de-mined after the conflict. – M.M.
- INDIA TAKES CARBON PUNCH FROM EU: India prepares for heavy “carbon tax” tariffs on steel, iron and cement exports to Europe
- India’s finance ministry said it expects new 20-35% tariffs on high-carbon exports to Europe, following a reduction in demand from developed nations.
- In April, the EU approved the world’s first plan to tax high-carbon goods imports, with the goal of becoming a net zero emitter of greenhouse gasses.
Why It Matters: Self-imposed climate taxes on infrastructure materials will mean more costly infrastructure improvements and maintenance. Many of the climate-change initiatives being discussed in Western parlors will negatively impact developing nations as they attempt to build sustainable middle-classes and bring their citizens out of poverty. Nations that largely ignore climate activism, such as China and Russia, will likely take advantage of this opportunity to outbid Western consumers for valuable commodities.
DON’T MISS my next Early Warning report, focusing on developments in the global balance of power. It’s released to DailySA subscribers each Friday.
THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.M.