Countries Beware, Populism can be Expensive
Populism has become a defining feature of the political landscape on both sides of the Atlantic. In addition, populists succeed by “instilling fear of various real or imagined dangers.”
Category: Economics
China and the Philippines Historic Window of Opportunity
After the South China Sea arbitration ruling, uncertainty and friction may increase in the region. However, the economic promise of China’s rise and the Asian century will only materialize with peace and stability in the region.
On July 12, the international court in The Hague ruled in the dispute between China and the Philippines over the South China Sea. In international media, the ruling of the Permanent Court of Arbitration (PCA) has been characterized as a sweeping rebuke of Chinese claims in the South China Sea.
Changing Russia and Japan’s Status to Friends
According to conventional wisdom, regarding Russia–Japan relations there is no prospect for the resolution of the territorial dispute between these ‘distant neighbours’ over the Northern Territories/southern Kuril Islands. However, the words and actions of both countries’ leaders in recent times may be cause for optimism.
Top 5 Tuesday
The US dollar is sporting a firmer profile today, but it is not the driver. Heightened speculation that Australia and New Zealand may cut interest rates next month is pushing those respective currencies more than 1% lower today. The Canadian dollar is being dragged lower (~).5%0 in what looks to be primarily sympathy, but it had seemed vulnerable to us in any event.
Can The Hague’s South China Sea Ruling be Enforced?
Southeast Asia has descended into a maritime insecurity spiral since the April–June 2012 standoff at Scarborough Shoal between Chinese maritime security forces and the Philippine Navy, which motivated Manila to initiate legal arbitration proceedings in The Hague.
The Permanent Court of Arbitration’s (PCA) ruling in favour of the Philippines will be difficult to enforce. To forestall an even more intense security dilemma in the South China Sea, regional policymakers should not lose sight of four vital underlying strategic trends.
North Korea is the Thorn in Russia and China’s Side
On 25 June 2016, Russian President Vladimir Putin met his Chinese counterpart Xi Jinping in Beijing to discuss expanding the China–Russia strategic partnership. Much of their efforts in this direction so far have entailed taking steps to promote bilateral cooperation on economic issues and security. However, beyond this bilateral arrangement a recurring theme in the China–Russia rapprochement in recent years has been the need to balance out a unipolar US-centric global order.
I See Your (Article) 7 and Raise You 50
Due to an unlikely string of events, the UK had sorted out its government more than two months quicker than it had looked likely in the immediate aftermath of the referendum when Cameron resigned.
However, to the frustration of others in the EU, May not only named Johnson, who insulted nearly every country, as the Foreign Minister, indicated she is in no hurry to trigger Article 50 of the Lisbon Treaty that formally begins the negotiations of the separation.
Turkish Coup Over, Risk Assets Rise
The US dollar and the yen are trading heavy, while risk assets, including emerging markets, and the Turkish lira, have jumped. Sterling is the strongest of the majors. It is up about 0.5% (~$1.6365), helped by the opportunity of GBP23.4 bln foreign direct investment and comments from a hawkish member of the MPC suggesting not everyone is onboard necessarily for a rate cut next month.
The Markets’ Eyes Turn Towards the EMU
Four large dramas being played out among the major high income countries. The drama in the Eurozone moves center stage in the days ahead, with an important European Court of Justice ruling due and the ECB meeting.
Lost at Sea
Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea. Reuters
It’s now official: the South China Sea does not belong to China.
