EsadeGeo Daily Digest, 17/01/2020

The New York Times – Katrin Bennhold & Jack Ewing / In Huawei battle, China threatens Germany ‘where it hurts’: Automakers

  • Germany is embroiled in a tortured debate over whether to allow Huawei to help build its 5G next generation mobile network. But with German automakers, including Audi and Daimler, already working closely with Huawei, China may be in the driver’s seat. Whatever Germany decides will shape its relations with China for years and reverberate across the Old Continent.
  • Like any other European country, Germany is under tremendous pressure by the USA to exclude Huawei, which fears that the Chinese company is a Trojan horse that would allow the Chinese government to spy on or control European and American communication networks. Relations with the Trump administration are infused with threats of tariffs against German automakers, and China is elbowing its way as a new strategic partner.
  • “If we ban Huawei, the German car industry will be pushed out of the Chinese market — and this in a situation where the American president is also threatening to punish German carmakers,” said Sigmar Gabriel, a former German foreign minister and vice chancellor. “Just because we have an American president who doesn’t like alliances, we give all that up?” he said. “Why would we? Especially since he does exactly what the Chinese do and threatens the German car industry.”
  • Financial Times – Lionel Barber & Guy Chazan / Angela Merkel warns EU: ‘Brexit is a wake-up call’
  • EURACTIV – Claire Stam / Germany’s new coal phase-out plan: Lots of money, little climate ambition

Foreign Policy – Reid Standish & Amy Mackinnon / Who is Russia’s new Prime Minister?

  • The resignation of President Putin’s longtime ally Prime Minister Medvedev and the announcement about Mishustin, a technocrat with little power base of his own, caught many analysts by surprise. The 53-year-old bureaucrat became Russia’s newly appointed prime minister and Putin’s second-in-command as the country slowly enters a new period of political transition.
  • However, it is still unclear whether Mishustin is a temporary placeholder or could be groomed as a potential successor down the line. He appears well suited to deliver as prime minister where Medvedev failed, especially in terms of implementing the Kremlin’s so-called national projects: a massive public spending and infrastructure plan of $400 billion that was put forward by Putin after his reelection in 2018.
  • Through his low profile and experience with the country’s vast and cumbersome bureaucracy, Mishustin is now positioned to enact unfulfilled government policies and help quell socioeconomic discontent as Putin’s slow-motion power transfer winds toward 2024. Putin is betting that Mishustin’s pedigree of efficiency will help him deliver on policies and limit public dissatisfaction.
  • The Washington Post – Robyn Dixon & Isabelle Khurshudyan / Putin’s plans post-presidency could see him wielding influence for life

South China Morning Post – Orange Wang / China GDP growth last year was 6.1 per cent, slowest rate for 29 years

  • Chinese economy grew by 6.1 per cent in 2019, the lowest annual growth rate for 29 years, the National Bureau of Statistics announced on Friday. The figure came in a year in which the Chinese economy was hammered by US tariffs as a result of the trade war.
  • However, despite falling to a new low since 1990, when political turmoil drove economic growth down to 3.9 per cent, the 6.1 per cent rate met the target range of between 6.0 per cent and 6.5 per cent set by the central government at the beginning of last year, but was below the market expectation of 6.2 per cent.
  • Chinese policymakers stepped up efforts of curbing a prolonged economic downturn last year, using tax cuts and monetary stimulus regularly. However, the phase one deal led central bank officials to tell a press conference in Beijing on Thursday that its monetary policy would remain “prudent” through this year.
  • Project Syndicate – Jim O’Neill / Has the world economy reached peak growth?

POLITICO – Sabrina Rodríguez / Senate passes USMCA, but much work remains

  • The Senate has approved on Thursday President Donald Trump’s signature trade deal with Mexico and Canada, helping him fulfill a 2016 campaign promise in a rare bipartisan vote. However, it will take several years before workers and business start to benefit from the agreement, which was approved in a 89-10 vote.
  • The passage of the USMCA comes just a day after Trump signed a so-called phase one trade agreement with China, another major focus of the president’s trade agenda. Canada will not approve the text until the House of Commons reconvenes in January, and while Mexico was quick to pass the deal, it still has to deliver on fully implementing its labor reforms that ensure workers have access to organize and participate in independent unions.
  • Lawmakers, economists and trade experts have emphasized that the new deal offers some much-needed certainty for companies and workers in all three countries. However, some progressives were vocal in criticizing the revised deal. The majority of Democrats to oppose the deal did so over frustration that the USMCA does not tackle climate change even after House Democrats negotiated to strengthen environmental protections in the deal.
  • Foreign Affairs – Klaus Schwab / Capitalism must reform to survive

The selected pieces do not necessarily reflect the views of Javier Solana and EsadeGeo. The summaries above may include word-for-word excerpts from their respective pieces.

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