At the Intersection of Geopolitics and Geoeconomics

November 16, 2022 | Volume 5, Issue 11 | Rachel Poole Mustor

North America

• US President Joe Biden and Chinese President Xi Jinping met in Bali for their first in-person meeting of Biden’s presidency. During the meeting, the two leaders signaled an interest in improving cooperation on global issues including climate change. The leaders also discussed policy toward Taiwan, human rights, and Russia’s invasion of Ukraine. The White House readout of the conversation indicates Biden reiterated that the US policy toward Taiwan has not changed and that the White House objects to “coercive and increasingly aggressive reactions” toward Taiwan. The meeting preceded the Group of 20 (G20) summit held in Bali which both Biden and Xi attended.

• According to the confirmed results from last week’s midterm elections, Republicans are set to narrowly gain control of the US House of Representatives, while the re-election of Nevada’s Democratic senator gives Democrats 50 seats, confirming their continued control of the Senate. Democrats fared better than expected as most polls forecasted that Republicans would gain a comfortable majority in the House and a narrow majority in the Senate in the days prior to the election.

• Yesterday, former US President Donald Trump announced that he will be running for president in the 2024 election. Trump’s official filing for the presidential race comes just a week after a lackluster performance from several Trump-backed Republicans vying for seats in the House and the Senate. It remains unclear whether President Joe Biden will run for reelection.

• The United Nations (UN) voted to condemn the decades-long US economic embargo of Cuba. A non-binding resolution was approved by 185 countries, with the US and Israel opposing the resolution and Brazil and Ukraine abstaining from the vote. US President Joe Biden has eased sanctions that were implemented during the Trump administration by loosening restrictions on flights, tourism, migration, and remittances. However, the US told the UN General Assembly that it would hold the Cuban government accountable for alleged human rights violations following widespread protests in July 2021.

Europe

• In a significant victory for Ukraine, Russian troops retreated from the key southern city of Kherson. On Friday, Ukrainian soldiers began entering the city to recapture it, marking a major setback for Russia in the war. Kherson, a vital Black Sea port and a gateway to Crimea was the only regional capital seized by Russian troops since Russia began its invasion of Ukraine in late February. On the other hand, Moscow has escalated its military offensive in the northeastern part of Ukraine, attacking civilian infrastructure and causing massive power outages. A blast in a Polish city near the Ukrainian border threatened to cause an escalation between NATO and Russia, however, the Polish president and NATO have said a Ukrainian air defense missile triggered by a Russian attack most likely caused the explosion. In other related news, Russia returned to the UN-Turkey-brokered grain deal with Ukraine after previously backing out.

• German Chancellor Olaf Scholz visited Beijing on Nov 4th to meet with Chinese President Xi Jinping. The meeting centered around economic cooperation as chief executives from a dozen German companies including BioNTech, Deutsche Bank, and Volkswagen, accompanied President Chancellor Scholz. During the meeting, Scholz also urged Xi to pressure Russia to stop its invasion of Ukraine. Despite calls for a tougher stance towards Beijing back home and from Germany’s Western allies, Scholz has largely sought to sustain commercial ties with China. In addition to several business deals, Scholz announced new collaborations with China on public health and climate. Scholz’s visit to Beijing has raised concerns in Washington that Germany has now provided an opening for China in Europe; “China’s agenda is to divide through commerce”, warned White House officials.

•  The US, the European Union (EU), Australia, and the Group of 7 (G7) – made up of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – are negotiating a price cap on Russian oil aimed at hampering its energy sector as Russia continues its war in Ukraine. Beginning December 5th, shipping, and insurance companies will not be allowed to service tankers carrying Russian crude unless the oil is sold at or below a set price which is likely to be set just above oil production costs.

• Rishi Sunak has become the United Kingdom’s 57^th prime minister following the resignation of Liz Truss, who held the role for just 7 weeks. He is the country’s first prime minister of color and of the Hindu religion. Sunak is taking the reins as the UK faces rampant inflation, rising interest rates, a looming recession, and an energy crisis that has engulfed Europe. Furthermore, Sunak will be tasked with bringing stability to the factionalized Conservative Party.

Asia, Eurasia, & the Pacific 

• North Korea has continued provoking South Korea over the last month with a series of ballistic missile tests. Over the last week, North Korea launched a flurry of missiles in reaction to a joint aerial exercise conducted by the US and South Korea. Pyongyang has stoked tensions further by stating its missile launches were simulations to practice striking South Korean and US targets such as air bases and command centers. Nuclear talks between North Korea and the US have stalled in recent years over disagreements in US-led sanctions, North Korea’s nuclear disarmament, and US-South Korea military exercises.

• Just days before the G20 summit in Bali, India’s External Affairs Minister S Jaishankar visited Moscow for bilateral meetings with his Russian counterpart, Sergey Lavrov. Jaishankar said the primary objective of his visit was to assess the entire “gamut of our steady and time-tested relationship.” Relations between India and Russia have come under pressure following repeated criticism from Moscow on India’s Indo-Pacific policy and increased alignment with the US and its allies in the region. However, New Delhi has made an effort to balance its relationship with Moscow, including not voting against Russia in the United Nations, despite increased pressure from the US to distance itself from Russia. There are rumors that India is interested in purchasing Russian oil, which has sparked concerns from the US and its European allies of India potentially undermining the group’s efforts to penalize the Russian economy.

•  A rise in Covid-19 cases in the central Chinese city of Zhengzhou has triggered a lockdown as Beijing continues to promote its zero-Covid policy. Zhengzhou is an industrial center that houses the massive factory campus of iPhone supplier Foxconn and of electric vehicle maker NIO. The lockdown has forced these and other factories to shut down production. Apple has recently warned it would ship fewer devices than anticipated during the US holiday season due to such production issues in Zhengzhou and other areas. At the Chinese Communist Party’s Congress last month, President Xi Jinping signaled he would stick with his zero-Covid policies despite the toll lockdowns have taken on Chinese industry and the psychological well-being of the Chinese people. 

• At the end of October, protests sprang up in Sri Lanka’s capital again as the country’s political and economic crisis continues to push inflation ever higher. The annual food price inflation in the country has reached 85.8% while the prices of non-food items have increased 62.8%. Thousands of demonstrators, including human rights groups, trade unions, and students, have expressed their discontent over the economic situation and the brutal crackdown of police forces on demonstrators. While Sri Lanka is expecting a $2.9 billion bailout from the International Monetary Fund, it is unclear when the country will officially receive the funds. The deal rests in the hands of Sri Lanka’s private creditors and negotiations are ongoing.

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