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IMF head expects less than 3% global economic growth in 2023
The International Monetary Fund chief said Thursday the world economy is expected to grow less than 3% this year, down from 3.4% last year, increasing the risk of hunger and poverty globally.
Kristalina Georgieva said the period of slower economic activity will be prolonged, with the next five years of growth remaining around 3%, calling it “our lowest medium-term growth forecast since 1990, and well below the average of 3.8% from the past two decades.”
Georgieva said slower growth would be a “severe blow," making it even harder for low-income nations to catch up. "Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis,” she said.
Georgieva’s comments at a Politico event at the Meridian International Center come ahead of next week’s spring meetings of the IMF and its sister lending agency, the World Bank, in Washington, where policymakers will convene to discuss the global economy’s most pressing issues.
The annual gathering will take place as central banks around the world continue to raise interest rates to tame persistent inflation and as an ongoing debt crisis in emerging economies pushes debt burdens higher, preventing nations from developing.
Roughly 15% of low-income countries are already in debt distress, and another 45% face high debt vulnerabilities, according to the IMF.
Georgieva said high interest rates, a series of bank failures in the U.S. and Europe, and deepening geopolitical divisions are threatening global financial stability.
Given the economic projections, non-governmental organizations are calling for the IMF to allocate more funds to low-income countries through Special Drawing Rights, which are an IMF international reserve asset that can be exchanged for hard currency.
More than 50 NGOs, labor unions and civil organizations sent a letter to the U.S. Treasury Department and the White House on Thursday calling for the U.S. representative at the IMF to support a new allocation of Special Drawing Rights for use by low-income countries.
Center for Economic and Policy Research co-director Mark Weisbrot said the funds could be used for food and medicine and to help countries “avoid destructive economic crises."
President Joe Biden’s budget proposal requests $2.3 billion for contributions to multilateral development banks, including the IMF. Republicans have yet put forth their own budget plan before negotiations start with the Democratic president.
Georgieva said that countries have thus far been “resilient climbers” out of the coronavirus pandemic, which has killed almost 6.9 million people globally, according to the World Health Organization, and has disrupted global supply chains and exacerbated worldwide food insecurity.
Based on her report, countries see stark differences in the possibility of recession risks. “Asia especially is a bright spot,” she said, as India and China are expected to account for half of global growth in 2023.
Advanced economies face the challenge of high inflation, as 90% of them are projected to see a decline in their growth rate this year.
This all comes as the United States, the European Union and others are rethinking their trade relationships with China.
Tensions with China accelerated after Russia’s invasion of Ukraine in February 2022, with Chinese President Xi Jinping pledging a friendship without limits to Russian President Vladimir Putin.
Georgieva warned in her speech: “But the path ahead — and especially the path back to robust growth — is rough and foggy, and the ropes that hold us together may be weaker now than they were just a few years ago.”
“Now is not the time to be complacent,” she said. “We are in a more shock-prone world, and we have to be ready for it.”
UN calls ban on Afghan female staffers by Taliban an 'unparalleled' violation of rights
The United Nations said Wednesday it cannot accept a Taliban decision to bar Afghan female staffers from working at the agency, calling it an “unparalleled” violation of women's rights.
The statement came a day after the U.N. said it had been informed by Afghanistan's ruling Taliban that Afghan women would no longer be allowed to work for the world body. That announcement came after the U.N. mission in the country expressed concern that its female staffers were prevented from reporting to work in eastern Nangarhar province.
Prior to Tuesday, Afghan women were already barred from working at national and international non-governmental organizations, disrupting the delivery of humanitarian aid. But the ban did not cover working for the U.N.
That changed this week. On Wednesday, the U.N. mission said that under the Taliban order, no Afghan woman is permitted to work for the U.N. in Afghanistan, and that “this measure will be actively enforced.”
The ban is unlawful under international law and cannot be accepted by the United Nations, the statement said.
The Taliban decision is “an unparalleled violation of women’s rights, a flagrant breach of humanitarian principles, and a breach of international rules,” Wednesday's statement said.
The Taliban have not commented publicly on the ban.
The U.N. statement said several U.N. national female personnel have already experienced restrictions on their movements, including harassment, intimidation and detention.
“The UN has therefore instructed all national staff — men and women — not to report to the office until further notice,” the statement said.
The Taliban decision drew condemnation from the world's most recognized organizations. A joint statement singed by the Save the Children, Norwegian Refugee Council, Danish Refugee Council, INTERSOS, Action Against Hunger, and World Vision urged the lifting of the ban on Afghan women aid workers that has been extended to U.N. agencies.
“Without our female staff, the humanitarian community cannot effectively reach women and girls. With more than 28 million people in desperate need of aid to survive, this act will cut off people’s lifelines," said the statement.
“We call on the De Facto Authorities to lift the ban and allow all female aid workers in Afghanistan to return to work immediately," it said. "With Afghanistan facing record levels of hunger, the cost of this ban will be measured by lives lost.”
Separately, UNICEF Executive Director Catherine Russell said Afghanistan is home to one of the world’s worst humanitarian crises. More than 28 million people, including over 15 million children, need humanitarian and protection assistance this year — a staggering increase of 4 million people over 2022. Hunger and disease are lurking and the economy is in tatters.
“Yet despite this devastating situation, the de facto authorities have taken the unconscionable and confounding decision to ban Afghan women from working with the United Nations in Afghanistan, including UNICEF," Russell said in a statement. “Coming on the heels of the decree banning Afghan women from working with NGOs, this decision is yet another affront to women’s fundamental rights and further undermines the delivery of humanitarian assistance across the country.” She said Afghan women are the lifeblood of the humanitarian response. They are highly skilled and uniquely placed to reach the most vulnerable Afghans, including children and women, the sick and elderly, and those living with disabilities.
“They have access to populations that their male colleagues cannot reach,” she said.
Despite initial promises of a more moderate rule than during its previous stint in power in the 1990s, the Taliban have imposed harsh measures since taking over the country in 2021 as U.S. and NATO forces were pulling out of Afghanistan after two decades of war.
Girls are banned from education beyond sixth grade. Women are barred from working, studying, traveling without a male companion, and even going to parks. Women must also cover themselves from head to toe.
The secretary-general’s special representative for Afghanistan, Roza Otunbayeva, was engaging Taliban authorities to convey the U.N.'s protest and to seek an immediate reversal of the order. The U.N. said it is also engaging member states, the donor community and humanitarian partners.
“In the history of the United Nations, no other regime has ever tried to ban women from working for the Organization just because they are women," said Otunbayeva. “This decision represents an assault against women, the fundamental principles of the U.N., and on international law.”
Ramiz Alakbarov, the U.N. deputy special representative for Afghanistan, said at a news conference in New York that both male and female Afghan national staff have been asked to stay home until they can return to work under “normal conditions.”
“We will not have a situation where we are only working with all-male teams,” he said.
The U.N. has a staff of about 3,900 in Afghanistan, including approximately 3,300 Afghans and 600 international personnel. The total also includes 600 Afghan women and 200 women from other countries.
Alakbarov said this means all 3,300 U.N. national staff will stay home until the women can return to work, and they will be paid.
He said the ban doesn’t apply to international female staff and they are able to move freely and provide aid. But he said they are only about 30% or less of the total U.N. Afghanistan staff.
Alakbarov said the new U.N. policy in the country will be revised depending on what sort of exemptions or operational environment can be negotiated. However, he said there is no scenario in which the U.N. would provide aid in the country with men only.
“It is not possible to reach women without women. And without women, they will not be reached. And that’s the unfortunate reality," he said.
Alakbarov said U.N. officials led by Otunbayeva met Tuesday with the Taliban’s foreign minister and they were told “there will be no additional order because the order was already issued in December,” apparently a reference to the Taliban decision that month to bar women from working for NGOs.
Taliban restrictions in Afghanistan have drawn fierce international condemnation. But the Taliban have shown no signs of backing down, claiming the bans are temporary suspensions in place allegedly because women were not wearing the Islamic headscarf, or hijab, correctly and because gender segregation rules were not being followed.
Missouri tornado kills 5 in latest wave of severe weather
A tornado ripped through southeastern Missouri before dawn on Wednesday, killing five people and causing widespread destruction as the third in a series of deadly massive storms over the past two weeks struck the nation's heartland.
Forecasters are keeping a wary eye out for more extreme weather as this year's early severe storm season continues. The storms have spawned dozens of tornadoes, mainly in the South and Midwest, that have killed at least 63 people. Just last weekend, confirmed or suspected tornadoes in at least eight states laid waste to neighborhoods across a broad swath of the country.
The Missouri tornado touched down around 3:30 a.m. Wednesday and moved through a rural area of Bollinger County, about 50 miles (80 kilometers) south of St. Louis. Trees were uprooted, homes turned into piles of splinters, and one building was flipped on its side.
Five people were killed and five were injured, State Highway Patrol Superintendent Eric Olson said at a news conference. Residents in the village of Glen Allen said at least some of the victims were members of a family who lived in a trailer along a state highway.
Little was left of the trailer Wednesday beyond its concrete pads and an axle. A large stuffed animal was lodged in the branch of a downed tree, and furniture, clothing and kitchenware were scattered in a field.
Also read: Storms strike Arkansas, Illinois, Indiana; 7 reported dead
Olson said 12 structures were destroyed and dozens more damaged.
The damage was concentrated around Glen Allen and the small rural community of Grassy, which are separated by a hunting area, said Bollinger County Sheriff Casey Graham in a Facebook post. He didn’t immediately release the victims’ names.
Charles Collier, 61, said he saw the coroner’s van drive by with its lights on in Glen Allen, where he owns a storage facility.
“That was a sad, sad sight -- knowing there was bodies in there,” said Collier. “I was just numb, thinking about all these other people, what they’re going through.”
Josh Wells said that the tornado tore half of the roof off his Glen Allen home and pushed in his bedroom wall. Luckily, he fled beforehand with his son to his sister’s home because it has a basement.
“We all ran down and huddled against the wall and my brother-in-law made it down just seconds before we heard the roaring sound of the wind and debris crashing around us,” he said.
While his sister’s home held up, the area reeked of gas because a propane unit was damaged.
Midwest tornadoes have typically occurred later in the spring, but this year’s early spate of severe weather continues a trend seen over the past few years, said Bill Bunting, chief of forecast operations at the National Weather Service Storm Prediction Center in Norman, Oklahoma.
“Although we will likely have several relatively quiet days after the current weather system has moved east of the U.S., we are entering the time of the year where the potential for severe weather increases and much more of the U.S. becomes at risk,” Bunting said in a email.
Typically, dry air from the West going up over the Rockies and crashing into warm, moist air from the Gulf of Mexico are what make the U.S. so prone to tornadoes and other severe storms, experts say.
Missouri Gov. Mike Parson toured the storm damage area Wednesday and said President Joe Biden had called to assure him of federal help. Local agencies anticipate months of recovery efforts, he said.
“I will tell you, I just know because I grew up in a little small town, these small towns, these counties and these cites will come together to help one another out,” Parson said.
Justin Gibbs, a National Weather Service meteorologist in Paducah, Kentucky, said the tornado remained on the ground for roughly 15 minutes, traveling an estimated 15-20 miles (24-32 kilometers).
Based on early data, the tornado received a preliminary EF-2 rating, packing wind speeds of 130 mph (228 kph).
Gibbs noted that tornadoes are especially dangerous when they touch down late at night or early in the morning, as this one did.
“It’s definitely a nightmare from a warning standpoint,” Gibbs said. “It’s bad anytime, but it’s especially bad at 3:30 in the morning.”
A phone weather alert awakened Bobby Masters, who said debris was slamming his Glen Allen home as he took shelter in his basement with his family. He recalled hearing a roar as the tornado passed.
“I had never heard a tornado before. They say it sounds like a freight train and that is exactly what it sounds like,” he said. “The good Lord spared us, our family and our house.”
Keith Lincoln, 56, also was awakened by a phone alert. He huddled in a bathtub with his wife and 18-year-old daughter and prayed: “Just save us and the house.” Lincoln spent the afternoon patching his roof but was thankful his prayer was mostly answered.
Chris Green, 35, found a small black dog dead in the debris. “I can’t just leave it here,” he said as he and his father buried the animal.
The area is rural, with residents mostly farming, cutting timber or working construction jobs, said Larry Welker, Bollinger County's public administrator. The county's population is around 10,500. The battered communities are tiny, little more than a few scattered homes and businesses.
The storms moving through the Midwest and South had threatened some areas still reeling from the deadly bout of bad weather last weekend. At one point, the Storm Prediction Center said up to 40 million people were at risk in an area that included Chicago, Indianapolis, Detroit and Memphis, Tennessee.
In central Illinois, authorities said five people were hurt and about 300 homes were without power due to a tornado that struck in Fulton County on Tuesday evening. Chris Helle, who directs the county’s Emergency Services Disaster Agency, said one of the people injured was in critical condition.
Helle said the damage was concentrated near the town of Bryant, about 200 mile (322 kilometers) southwest of Chicago. Helle said numerous homes were destroyed, but he credited people for listening to advance warnings and taking shelter.
Officials said another tornado touched down Tuesday morning in the western Illinois community of Colona. Local news reports showed wind damage to some businesses there.
Besides Trump, these are the current and former world leaders facing criminal charges
Donald Trump may be the first former US president to face criminal charges, but many current and past leaders around the world have been tried or even jailed.
Several of those leaders described the charges leveled against them as “politically motivated”. Yet, the charges have not always been a barrier to holding political office, reports CNN.Here are some notable recent examples:
Israel’s Benjamin Netanyahu
No one has served as Prime Minister of Israel longer than Benjamin Netanyahu, who was sworn in for his sixth term late last year.
He is also being tried for corruption on counts of fraud, bribery, and breach of trust. The Israeli PM, however, called the trial a “witch hunt.”
While the case continues, Netanyahu has pushed a contentious plan to weaken Israel's judiciary, the report also said.
One of the measures limits the methods by which a sitting prime minister may be judged unfit for office, prompting many Israeli opposition lawmakers to accuse Netanyahu of manipulating the judicial makeover to protect himself. He denies the charges.
Read More: Trump's day in court as criminal defendant: What to know
Brazil’s Luiz Inácio Lula da Silva
Brazil's Luiz Inácio Lula da Silva was imprisoned in April 2018, and was released in November 2019.He was jailed for corruption and money laundering after a construction business reportedly paid him and his wife $1.1 million in renovations and costs for a beachfront condominium.
Prosecutors claimed that in exchange, the business received lucrative contracts from Petrobras, the state-controlled oil giant.
Lula has referred to the allegations as a "farce," stating that they are politically driven. Upon his release from jail in 2019, a Brazilian court overturned his corruption convictions, allowing Lula to run for president in 2022, when he beat Jair Bolsonaro. In January, he was sworn in for the third time as president.
Bolsonaro is now facing potential legal problems, including allegations that he incited violent attacks in the Brazilian capital of Brasilia in January.
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Argentina’s Cristina Fernández de Kirchner
Cristina Fernández de Kirchner, Argentina's current vice president, was sentenced to six years in jail last December after being found guilty of corruption during her two stints as president, from 2007 to 2011 and 2011 to 2015, the report also said.
She was accused of conspiring with other government officials to grant contracts worth millions of dollars for road construction that were unfinished, expensive, and useless, according to the complaint.The charges against her were politically-motivated, Kirchner stated.
The Argentine court convicted the 70-year-old former president of the country guilty of "fraudulent administration" and barred her from holding public office again.
She does, however, have temporary immunity because of her present employment, which means she will not be going to jail anytime soon and can appeal.
Read More: Trump indictment ends decades of perceived invincibility
Malaysia’s Anwar Ibrahim
After two stints in jail prior to his premiership, Anwar Ibrahim became Malaysia's prime minister in November 2022, in an unprecedented turn of events.
Anwar was sentenced to prison in April 1999 after being convicted of sodomy. Sodomy, even if consensual, is a crime punishable by up to 20 years in jail in Muslim-majority Malaysia. He has always vigorously denied the allegations, claiming they were politically motivated.
In 2004, a court reversed that conviction. Further claims of sodomy were leveled against him after his comeback as an opposition figure, and he was remanded to prison in 2014 after a lengthy legal struggle that lasted years.
Anwar was freed from jail in May 2018 after receiving a royal pardon. He immediately returned to parliament before leading the Pakatan Harapan coalition to a majority of seats in Malaysia's general election in 2022.
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Italy’s Silvio Berlusconi
Before 2011, the flamboyant Italian billionaire was a serial prime minister.
Berlusconi was the dominating figure in Italian politics for over two decades, during which time he was prosecuted on at least 17 counts of embezzlement, tax fraud, and bribery, said the CNN report.He has consistently denied any wrongdoing, and several of his convictions have been overturned on appeal.
His resignation in 2011 was not due to legal concerns, but rather to Italy's debt crisis.The 81-year-old gained a seat in Italy's Senate in September 2022, and his party is a member of the country's ruling coalition.
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Oil producers’ cuts could boost gasoline prices, help Russia
Major oil-producing countries led by Saudi Arabia said they're cutting supplies of crude — again. This time, the decision was a surprise and is underlining worries about where the global economy might be headed.
Russia is joining in by extending its own cuts for the rest of the year. In theory, less oil flowing to refineries should mean higher gasoline prices for drivers and could boost the inflation hitting the U.S. and Europe. And that may also help Russia weather Western sanctions over its invasion of Ukraine at the expense of the U.S.
The decision by oil producers, many of them in the OPEC oil cartel, to cut production by more than 1 million barrels a day comes after prices for international benchmark crude slumped amid a slowing global economy that needs less fuel for travel and industry.
It adds to a cut of 2 million barrels per day announced in October. Between the two cuts, that's about 3% of the world's oil supply.
Here are key things to know about the cutbacks:
WHY ARE OIL PRODUCERS CUTTING BACK?
Saudi Arabia, OPEC's dominant member, said Sunday that the move is “precautionary” to avoid a deeper slide in oil prices.
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Saudi Energy Minister Abdulaziz bin Salman has consistently taken a cautious approach to future demand and favored being proactive in adjusting supply ahead of a possible downturn in oil needs.
That stance seemed to be borne out as oil prices fell from highs of over $120 per barrel last summer to $73 last month. Prices jumped after Sunday's announcement, with international benchmark Brent crude trading at about $85 on Monday, up 6%.
With fears of a U.S. recession exacerbated by bank collapses, a lack of European economic growth and China’s rebound from COVID-19 taking longer than many expected, oil producers are wary of a sudden collapse in prices like during the pandemic and the global financial crisis in 2008-2009.
Capital markets analyst Mohammed Ali Yasin said most people had been waiting for the June 4 meeting of the OPEC+ alliance of OPEC members and allied producers, most prominently Russia. The decision underlined the urgency felt by producers.
“It was a surprise to all, I think, watchers and the market followers,” he said. “The swiftness of the move, the timing of the move and the size of the move were all significant.”
The aim now is to ward off "a continous slide of the oil price” to levels below $70 per barrel, which would be “very negative” for producer economies, Yasin said.
Also Read: Saudis, other oil giants announce surprise production cuts; prices could go up
Part of the October cut of 2 millions barrels per day was on paper only as some OPEC+ countries aren’t able to produce their share. The new cut of 1.15 million barrels per day is distributed among countries that are hitting their quotas — so it amounts to roughly the same size cut as in October.
Governments announced the decision outside the usual OPEC+ framework. The Saudis are taking the lead with 500,000 barrels per day, with the United Arab Emirates, Kuwait, Iraq, Oman, Algeria and Kazakhstan contributing smaller cuts.
WILL THE PRODUCTION CUT MAKE INFLATION WORSE?
It certainly could. Analysts say supply and demand are relatively well balanced, which means production cuts could push prices higher in coming months.
The refineries that turn crude into gasoline, diesel and jet fuel are getting ready for their summer production surge to meet the annual increase in travel demand.
In the U.S., gasoline prices are highly dependent on crude, which makes up about half of the price per gallon. Lower oil prices have meant U.S. drivers have seen the average price fall from records of over $5 per gallon in mid-2022 to $3.50 per gallon this week, according to motor club AAA.
The cuts, if fully implemented, “would further tighten an already fundamentally tight oil market,” Jorge Leon, senior vice president at Rystad Energy, said in a research note. The cut could boost oil prices by around $10 per barrel and push international Brent to around $110 per barrel by this summer.
Those higher prices could fuel global inflation in a cycle that forces central banks to keep hiking interest rates, which crimp economic growth, he said.
Given the fears about the overall economy, “the market may interpret the cuts as a vote of no confidence in the recovery of oil demand and could even carry a downside price risk — but that will only be for the very short term,” Leon said.
WHAT WILL THIS MEAN FOR RUSSIA?
Moscow says it will extend a cut of 500,000 barrels per day through the rest of the year. It needs oil revenue to support its economy and state budget hit by wide-ranging sanctions from the U.S., European Union and other allies of Ukraine.
Analysts think, however, that Russia's cut may simply be putting the best face on reduced demand for its oil. The West shunned Russian barrels even before sanctions were imposed, with Moscow managing to reroute much of its oil to India, China and Turkey.
But the Group of Seven major democracies imposed a price cap of $60 per barrel on Russian shipments, enforced by bans on Western companies that dominate shipping or insurance. Russia is selling oil at a discount, with revenue sagging at the start of this year.
WHAT DOES THE WHITE HOUSE SAY?
President Joe Biden addressed the OPEC+ cut on Monday before returning to the White House from a trip to Minnesota, predicting, “It’s not going to be as bad as you think.”
Earlier, White House National Security Council spokesman John Kirby expressed U.S. opposition to the move, saying, “We don’t think that production cuts are advisable at this moment given market uncertainty, and we made that clear.”
But he insisted that the oil market is in a different place from last year when prices surged following Russia’s invasion of Ukraine.
“We’re focused on prices, we’re not focused on barrels,” he told reporters Monday, adding that the U.S. was given a heads-up before the announcement.
The White House response was milder than in October, when cuts came on the eve of U.S. midterm elections in which soaring gas prices were a major issue. Biden vowed at the time that there would be “consequences,” and Democratic lawmakers called for freezing cooperation with the Saudis.
Caroline Bain, chief commodities economist at Capital Economics, said the cutback shows "the group's support for Russia and flies in the face of the Biden administration’s efforts to lower oil prices.”
China seethes as US chip controls threaten tech ambitions
Furious at U.S. efforts that cut off access to technology to make advanced computer chips, China’s leaders appear to be struggling to figure out how to retaliate without hurting their own ambitions in telecoms, artificial intelligence and other industries.
President Xi Jinping’s government sees the chips that are used in everything from phones to kitchen appliances to fighter jets as crucial assets in its strategic rivalry with Washington and efforts to gain wealth and global influence. Chips are the center of a “technology war,” a Chinese scientist wrote in an official journal in February.
China has its own chip foundries, but they supply only low-end processors used in autos and appliances. The U.S. government, starting under then-President Donald Trump, is cutting off access to a growing array of tools to make chips for computer servers, AI and other advanced applications. Japan and the Netherlands have joined in limiting access to technology they say might be used to make weapons.
Xi, in unusually pointed language, accused Washington in March of trying to block China’s development with a campaign of “containment and suppression.” He called on the public to “dare to fight.”
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Despite that, Beijing has been slow to retaliate against U.S. companies, possibly to avoid disrupting Chinese industries that assemble most of the world's smartphones, tablet computers and other consumer electronics. They import more than $300 billion worth of foreign chips every year.
The ruling Communist Party is throwing billions of dollars at trying to accelerate chip development and reduce the need for foreign technology.
China’s loudest complaint: It is blocked from buying a machine available only from a Dutch company, ASML, that uses ultraviolet light to etch circuits into silicon chips on a scale measured in nanometers, or billionths of a meter. Without that, Chinese efforts to make transistors faster and more efficient by packing them more closely together on fingernail-size slivers of silicon are stalled.
Making processor chips requires some 1,500 steps and technologies owned by U.S., European, Japanese and other suppliers.
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“China won’t swallow everything. If damage occurs, we must take action to protect ourselves,” the Chinese ambassador to the Netherlands, Tan Jian, told the Dutch newspaper Financieele Dagblad.
“I’m not going to speculate on what that might be,” Tan said. “It won’t just be harsh words.”
The conflict has prompted warnings the world might decouple, or split into separate spheres with incompatible technology standards that mean computers, smartphones and other products from one region wouldn’t work in others. That would raise costs and might slow innovation.
“The bifurcation in technological and economic systems is deepening,” Prime Minister Lee Hsien Loong of Singapore said at an economic forum in China last month. “This will impose a huge economic cost.”
U.S.-Chinese relations are at their lowest level in decades due to disputes over security, Beijing’s treatment of Hong Kong and Muslim ethnic minorities, territorial disputes and China’s multibillion-dollar trade surpluses.
Chinese industries will “hit a wall” in 2025 or 2026 if they can’t get next generation chips or the tools to make their own, said Handel Jones, a tech industry consultant.
China “will start falling behind significantly,” said Jones, CEO of International Business Strategies.
Beijing might have leverage, though, as the biggest source of batteries for electric vehicles, Jones said.
Chinese battery giant CATL supplies U.S. and Europe automakers. Ford Motor Co. plans to use CATL technology in a $3.5 billion battery factory in Michigan.
“China will strike back,” Jones said. “What the public might see is China not giving the U.S. batteries for EVs.”
On Friday, Japan increased pressure on Beijing by joining Washington in imposing controls on exports of chipmaking equipment. The announcement didn’t mention China, but the trade minister said Tokyo doesn’t want its technology used for military purposes.
A Chinese foreign ministry spokeswoman, Mao Ning, warned Japan that “weaponizing sci-tech and trade issues” would “hurt others as well as oneself.”
Hours later, the Chinese government announced an investigation of the biggest U.S. memory chip maker, Micron Technology Inc., a key supplier to Chinese factories. The Cyberspace Administration of China said it would look for national security threats in Micron’s technology and manufacturing but gave no details.
The Chinese military also needs semiconductors for its development of stealth fighter jets, cruise missiles and other weapons.
Chinese alarm grew after President Joe Biden in October expanded controls imposed by Trump on chip manufacturing technology. Biden also barred Americans from helping Chinese manufacturers with some processes.
To nurture Chinese suppliers, Xi’s government is stepping up support that industry experts say already amounts to as much as $30 billion a year in research grants and other subsidies.
China’s biggest maker of memory chips, Yangtze Memory Technologies Corp., or YMTC, received a 49 billion yuan ($7 billion) infusion this year from two official funds, according to Tianyancha, a financial information provider.
One was the government’s main investment vehicle, the China National Integrated Circuit Industry Investment Fund, known as the Big Fund. It was founded in 2014 with 139 billion yuan ($21 billion) and has invested in hundreds of companies.
The Big Fund launched a second entity, known as the Big Fund II, in 2019 with 200 billion yuan ($30 billion).
In January, chip manufacturer Hua Hong Semiconductor said Big Fund II would contribute 1.2 billion yuan ($175 million) for a planned 6.7 billion yuan ($975 million) wafer fabrication facility in eastern China's Wuxi.
In March, the Cabinet promised tax breaks and other support for the industry. It gave no price tag. The government also has set up “integrated circuit talent training bases” at 23 universities and six at other schools.
“Semiconductors are the ‘main battlefield’ of the current China-U.S. technology war,” Junwei Luo, a scientist at the official Institute of Semiconductors, wrote in the February issue of the journal of the Chinese Academy of Sciences. Luo called for “self-reliance and self-improvement in semiconductors.”
The scale of spending required is huge. The global industry leader, Taiwan Semiconductor Manufacturing Corp., or TSMC, is in the third year of a three-year, $100 billion plan to expand research and production.
Developers including Huawei Technologies Ltd. and VeriSilicon Holdings Co. can design logic chips for smartphones as powerful as those from Intel Corp., Apple Inc., South Korea’s Samsung Electronics Co. or Britain’s Arm Ltd., according to industry researchers. But they cannot be manufactured without the precision technology of TSMC and other foreign foundries.
Trump in 2019 crippled Huawei’s smartphone brand by blocking it from buying U.S. chips or other technology. American officials say Huawei, China’s first global tech brand, might facilitate Chinese spying, an accusation the company denies. In 2020, the White House tightened controls, blocking TSMC and others from using U.S. technology to produce chips for Huawei.
Washington threw up new hurdles for Chinese chip designers in August by imposing restrictions on software known as EDA, or electronic design automation, along with European, Asian and other governments to limit the spread of “dual use” technologies that might be used to make weapons.
In December, Biden added YMTC, the memory chip maker, and some other Chinese companies to a blacklist that limits access to chips made anywhere using U.S. tools or processes.
China’s foundries can etch circuits as small as 28 nanometers apart. By contrast, TSMC and other global competitors can etch circuits just three nanometers apart, ten times the Chinese industry’s precision. They are moving toward two nanometers.
To make the latest chips, “you need EUV (extreme ultraviolet lithography) tools, a very complicated process recipe and not just a couple of billion dollars but tens and tens of billions of dollars,” said Peter Hanbury, who follows the industry for Bain & Co.
“They’re not going to be able to produce competitive server, PC and smartphone chips,” Hanbury said. “You have to go to TSMC to do that.”
China's ruling party is trying to develop its own tool vendors, but researchers say it is far behind a global network spread across dozens of countries.
Huawei said in a video on its website in December it was working on EUV technology. But creating a machine comparable to ASML’s might cost $5 billion and require a decade of research, according to industry experts. Huawei didn’t respond to a request for comment.
The day when China can supply its own EUV machine is “very far away,” said Hanbury.
1st moon crew in 50 years includes woman, Black astronaut
NASA on Monday named the four astronauts who will fly around the moon late next year, including the first woman and the first African American assigned to a lunar mission.
The first moon crew in 50 years — three Americans and one Canadian — was introduced during a ceremony in Houston, home to the nation’s astronauts as well as Mission Control.
“This is humanity’s crew,” said NASA Administrator Bill Nelson.
The four astronauts will be the first to fly NASA’s Orion capsule, launching atop a Space Launch System rocket from Kennedy Space Center no earlier than late 2024. They will not land or even go into lunar orbit, but rather fly around the moon and head straight back to Earth, a prelude to a lunar landing by two others a year later.
The mission’s commander, Reid Wiseman, will be joined by Victor Glover, an African American naval aviator; Christina Koch, who holds the world record for the longest spaceflight by a woman; and Canada’s Jeremy Hansen, a former fighter pilot and the crew’s lone space rookie. Wiseman, Glover and Koch have all lived on the International Space Station. All four are in their 40s.
“This is a big day. We have a lot to celebrate and it’s so much more than the four names that have been announced,” Glover said.
This is the first moon crew to include someone from outside the U.S. — and the first crew in NASA’s new moon program named Artemis after the twin sister of mythology’s Apollo. Late last year, an empty Orion capsule flew to the moon and back in a long-awaited dress rehearsal.
“Am I excited? Absolutely,” Koch said to cheers from the crowd of schoolchildren, politicians and others. “But my real question is: ‘Are you excited?’ ” she said to more cheers.
The Canadian Space Agency snagged a seat because of its contributions of big robotic arms on NASA’s space shuttles and the space station. One is also planned for the moon project.
Hansen said he’s grateful that Canada is included in the flight.
“We are going to the moon together. Let’s go!” he said.
During Apollo, NASA sent 24 astronauts to the moon from 1968 through 1972. Twelve of them landed. All were military-trained male test pilots except for Apollo 17′s Harrison Schmitt, a geologist who closed out that moonlanding era alongside the late Gene Cernan.
Provided this next 10-day moonshot goes well, NASA aims to land two astronauts on the moon by 2025 or so.
NASA picked from 41 active astronauts for its first Artemis crew. Canada had four candidates. Almost all of them took part in Monday’s ceremony at Johnson Space Center’s Ellington Field, a pep rally of sorts that ended with Wiseman leading the crowd in a chant.
Congratulations streamed in from retired astronauts, including Apollo 11’s Buzz Aldrin and Scott Kelly, the first American to spend close to a year in space. “Huge risks, huge commitment, eternal benefits for all. What a crew!” tweeted Chris Hadfield, the first Canadian commander of the space station a decade ago who performed David Bowie’s “Space Oddity” from orbit.
President Joe Biden spoke with the four astronauts and their families on Sunday. In a tweet Monday, Biden said the mission “will inspire the next generation of explorers, and show every child — in America, in Canada, and across the world — that if they can dream it, they can be it.”
Trump to surrender today: First former US president to face criminal charges
An extraordinary moment in U.S. history is scheduled to unfold in a Manhattan courthouse today: Former President Donald Trump, who faces multiple election-related investigations, will surrender to face criminal charges stemming from 2016 hush money payments.
The booking and arraignment are likely to be relatively brief — though hardly routine — as Trump is fingerprinted, learns the exact charges against him and pleads, as expected, not guilty.
Trump, who was impeached twice by the U.S. House but was never convicted in the U.S. Senate, will become the first former president to face criminal charges. The nation's 45th commander in chief will be escorted from Trump Tower to the courthouse by the Secret Service and may have his mug shot taken.
New York police are braced for protests by Trump supporters, who share the former president’s belief that the New York grand jury indictment — and three additional pending investigations — are politically motivated and intended to weaken his bid to retake the White House in 2024.
Trump, a former reality-TV star, has been hyping that narrative to his political advantage, raising millions of dollars since the indictment on claims of a “witch hunt.” He has personally assailed the Manhattan district attorney, egged on supporters to protest, and claimed without evidence that the judge presiding over the case “hates me” — something Trump’s own lawyer has said is not true.
Also read: New York, city of Trump’s dreams, delivers his comeuppance
Trump is scheduled to return to his Florida home, Mar-a-Lago, Tuesday evening to hold a rally, punctuating his new reality: submitting to the dour demands of the American criminal justice system while projecting an aura of defiance and victimhood at celebratory campaign events.
A conviction would not prevent Trump from running for or winning the presidency in 2024.
Inside the Manhattan courtroom, prosecutors led by New York’s district attorney, Alvin Bragg, are expected to unseal the indictment issued last week by a grand jury. This is when Trump and his defense lawyers will get their first glimpse of the precise allegations against him.
The indictment includes multiple charges of falsifying business records, including at least one felony offense, two people familiar with the matter told The Associated Press last week.
After the arraignment, Trump is expected to be released by authorities because the charges against him don’t require that bail be set.
The investigation is scrutinizing six-figure payments made to porn actor Stormy Daniels and former Playboy model Karen McDougal. Both say they had sexual encounters with the married Trump years before he got into politics. Trump denies having sexual liaisons with either woman and has denied any wrongdoing involving payments.
The arraignment will unfold against the backdrop of heavy security in New York, coming more than two years after Trump supporters stormed the U.S. Capitol in a failed bid to halt the congressional certification of President Joe Biden’s win.
Though police said they had no intelligence suggesting any violence was likely, they were on high alert for any potential disruptions.
“While there may be some rabble rousers thinking of coming to our city tomorrow, our message is clear and simple: Control yourselves,” Mayor Eric Adams said at a news conference Monday.
Trump pollster John McLaughlin said the former president would approach the day with “dignity."
“He will be a gentleman,” McLaughlin said. “He'll show strength and he'll show dignity and ... we'll get through this and win the election.”
The public fascination with the case was evident Monday as national television carried live images of Trump’s motorcade from his Mar-a-Lago club to his red, white and blue Boeing 757. From there, he was flown to New York, where he was expected to spend the night at Trump Tower before turning himself in the following day.
The former president and his aides are embracing the media circus. After initially being caught off guard when news of the indictment broke Thursday evening, Trump and his team are hoping to use the case to his advantage. Still, they asked the judge in a Monday filing to ban photo and video coverage of the arraignment.
Though prosecutors routinely insist that no person is above the law, bringing criminal charges against a former president carries instant logistical complications.
New York’s ability to carry out safe and drama-free courthouse proceedings in a case involving a polarizing ex-president could be an important test case as prosecutors in Atlanta and Washington conduct their own investigations of Trump that could also result in charges. Those investigations concern efforts to undo the 2020 election results as well as the possible mishandling of classified documents at Mar-a-Lago.
Top Republicans, including some of Trump’s potential rivals in next year’s GOP presidential primary, have decried the case against him. President Joe Biden, who has yet to formally announce that he’s seeking reelection next year, and other leading Democrats have largely had little to say about it.
Trump’s former U.N. ambassador, Nikki Haley, was campaigning on Monday near the U.S.-Mexico border as part of her presidential bid and suggested that coverage of the former president’s indictment was distracting from other key issues, like immigration. But even she added, “You’ve got a liberal prosecutor that’s doing political revenge against a former president.”
Prosecutors say their case against Trump has nothing to do with politics.
Twitter removes blue tick from main New York Times account
Twitter has removed the verification check mark on the main account of The New York Times, one of CEO Elon Musk's most despised news organizations.
The removal comes as many of Twitter’s high-profile users are bracing for the loss of the blue check marks that helped verify their identity and distinguish them from impostors on the social media platform.
Musk, who owns Twitter, set a deadline of Saturday for verified users to buy a premium Twitter subscription or lose the checks on their profiles. The Times said in a story Thursday that it would not pay Twitter for verification of its institutional accounts.
Early Sunday, Musk tweeted that the Times' check mark would be removed. Later he posted disparaging remarks about the newspaper, which has aggressively reported on Twitter and on flaws with partially automated driving systems at Tesla, the electric car company, which he also runs.
Also Read: Twitter now valued at less than $20bn: Elon Musk suggests
Other Times accounts such as its business news and opinion pages still had either blue or gold check marks on Sunday, as did multiple reporters for the news organization.
“We aren’t planning to pay the monthly fee for check mark status for our institutional Twitter accounts," the Times said in a statement Sunday. "We also will not reimburse reporters for Twitter Blue for personal accounts, except in rare instances where this status would be essential for reporting purposes," the newspaper said in a statement Sunday.
The Associated Press, which has said it also will not pay for the check marks, still had them on its accounts at midday Sunday.
Twitter did not answer emailed questions Sunday about the removal of The New York Times check mark.
The costs of keeping the check marks ranges from $8 a month for individual web users to a starting price of $1,000 monthly to verify an organization, plus $50 monthly for each affiliate or employee account. Twitter does not verify the individual accounts to ensure they are who they say they are, as was the case with the previous blue check doled out to public figures and others during the platform’s pre-Musk administration.
While the cost of Twitter Blue subscriptions might seem like nothing for Twitter’s most famous commentators, celebrity users from basketball star LeBron James to Star Trek’s William Shatner have balked at joining. Seinfeld actor Jason Alexander pledged to leave the platform if Musk takes his blue check away.
The White House is also passing on enrolling in premium accounts, according to a memo sent to staff. While Twitter has granted a free gray mark for President Joe Biden and members of his Cabinet, lower-level staff won’t get Twitter Blue benefits unless they pay for it themselves.
“If you see impersonations that you believe violate Twitter’s stated impersonation policies, alert Twitter using Twitter’s public impersonation portal,” said the staff memo from White House official Rob Flaherty.
Alexander, the actor, said there are bigger issues in the world but without the blue mark, “anyone can allege to be me” so if he loses it, he’s gone.
“Anyone appearing with it=an imposter. I tell you this while I’m still official,” he tweeted.
After buying Twitter for $44 billion in October, Musk has been trying to boost the struggling platform’s revenue by pushing more people to pay for a premium subscription. But his move also reflects his assertion that the blue verification marks have become an undeserved or “corrupt” status symbol for elite personalities, news reporters and others granted verification for free by Twitter’s previous leadership.
Along with shielding celebrities from impersonators, one of Twitter’s main reasons to mark profiles with a blue check mark starting about 14 years ago was to verify politicians, activists and people who suddenly find themselves in the news, as well as little-known journalists at small publications around the globe, as an extra tool to curb misinformation coming from accounts that are impersonating people. Most “legacy blue checks” are not household names and weren’t meant to be.
One of Musk’s first product moves after taking over Twitter was to launch a service granting blue checks to anyone willing to pay $8 a month. But it was quickly inundated by impostor accounts, including those impersonating Nintendo, pharmaceutical company Eli Lilly and Musk’s businesses Tesla and SpaceX, so Twitter had to temporarily suspend the service days after its launch.
The relaunched service costs $8 a month for web users and $11 a month for users of its iPhone or Android apps. Subscribers are supposed to see fewer ads, be able to post longer videos and have their tweets featured more prominently.
TikTok attorney: China can’t get U.S. data under plan
Under intense scrutiny from Washington that could lead to a potential ban, the top attorney for TikTok and its Chinese parent company ByteDance defended the social media platform’s plan to safeguard U.S. user data from China.
“The basic approach that we’re following is to make it physically impossible for any government, including the Chinese government, to get access to U.S. user data," said general counsel Erich Andersen during a wide-ranging interview with The Associated Press at a cybersecurity conference in Sausalito, California, on Friday sponsored by the Hewlett Foundation and Aspen Digital and featuring top government officials, tech executives and journalists.
ByteDance will continue to develop its new app called Lemon8, Andersen said.
“We’re obviously going to do our best with the Lemon8 app to comply with U.S. law and to make sure we do the right thing here," Andersen said, referring to the new social app developed by ByteDance that resembles Instagram and Pinterest. “But I think we got a long way to go with that application — it's pretty much a startup phase.”
ByteDance’s most known app, TikTok, is under intense scrutiny over concerns it could hand over user data to the Chinese government or push pro-Beijing propaganda and misinformation on its behalf. Lemon8 was introduced across app stores in Japan in April 2020 and has been rolled out in more countries since then. It's available for download in the U.S. and could face similar scrutiny to TikTok.
Leaders at the FBI, CIA and officials at other government agencies have warned that ByteDance could be forced to give user data — such as browsing history, IP addresses and biometric identifiers — to Beijing under a 2017 law that compels companies to cooperate with the government for matters involving China’s national security. Another Chinese law, implemented in 2014, has similar mandates.
To assuage concerns from U.S. officials, TikTok has been emphasizing a $1.5 billion proposal, called Project Texas, to store all U.S. user data on servers owned and maintained by the software giant Oracle. Under the plan, access to U.S. data would be managed by U.S. employees through a separate entity called TikTok U.S. Data Security, which is run independently of ByteDance and monitored by outside observers.
Some lawmakers have said that’s not enough. But despite skepticism about the project, TikTok says it is moving forward anyway.
“We’re investing in a system where people don’t have to believe the Chinese government and they don’t have to believe us,” Andersen said.
He also wondered if the skepticism was being driven by something else.
“Where are we falling short here?” he said. “At some point you get beyond the cybersecurity risk assessment, etcetera, and you get to ‘We don’t like your nationality.’”
TikTok CEO Shou Zi Chew has said the company started deleting all historic U.S. user data from non-Oracle servers this month and expects that process to be completed this year. During a congressional hearing held last week, Chew said migrating the data to Oracle will keep it out of China’s hands, but also acknowledged China-based employees may still have access to it before the process wraps up.
TikTok maintains it has never been requested to turn over any kind of data and won’t do so if asked. But whether those promises, or Project Texas, will allow it to stay operating in the U.S. remains to be seen.
The U.S., as well as Britain, the European Union and others, have banned TikTok on government devices. And the Biden administration is reportedly threatening a U.S. ban on the app unless its Chinese owners divest their stakes in the company.
On Friday, Andersen said a ban would be "basically giving up".
“Banning a platform like TikTok is a defeat, it’s a statement that we aren’t creative enough to find another way,” he said.
China has said it would oppose a possible sale, a declaration that makes it more difficult for TikTok to position itself and ByteDance as a global enterprise instead of a Chinese company. In 2020, the country had also come out in fierce opposition to executive orders by then President Donald Trump that sought to ban TikTok and the messaging app WeChat.
"They were clear about their point of view back in 2020 timeframe when we faced an existential challenge from executive orders under the Trump administration,” Andersen said.
Courts blocked Trump’s efforts, and President Joe Biden rescinded Trump’s orders after taking office. The company has since been in talks about privacy concerns with the Committee on Foreign Investment in the United States, a multi-agency panel that sits under the Treasury department.
Meanwhile, lawmakers on Capitol Hill have been pushing bills that would effectively ban TikTok or give the administration more authority to do so. One bill by U.S. Sen. Josh Hawley was blocked this week by Sen. Rand Paul, the only Republican who has come out in opposition to a TikTok ban. A small number of progressive lawmakers have also said they would oppose a ban, and argued the U.S. should implement a national privacy law to curtail the problem.
Andersen said Friday TikTok would support broad-based privacy legislation.
"Our view is that we would really welcome broad-based legislation that applies broadly and evenly,” he said. “What we don’t like, frankly, is legislation that is sort of targeted at one company.”
TikTok could also be banned through another bill, called the RESTRICT Act, that has garnered broad bipartisan support in the Senate and backing from the White House. The legislation does not call out TikTok but would give the Commerce Department power to review and potentially restrict foreign threats to technology platforms.