Bolton’s departure. On Tuesday, U.S. President Donald Trump announced that John Bolton would no longer be serving as national security adviser. Today, Bolton claimed that he was not fired but rather resigned. Whatever the case may be, one of the more controversial figures in the Trump administration, and one of the architects of the U.S. war in Iraq – which led to a massive imbalance of power in the Middle East that paved the way for Iranian expansion – is out of the White House. The announcement came days after Trump canceled a private meeting with the Taliban at Camp David. The relationship between the president and his adviser has been emblematic of the U.S. push and pull toward the world, and Trump claimed that Bolton’s views, which were largely seen as hawkish toward Iran and Venezuela, no longer aligned with the president’s policy objectives.
China in Central Asia. On Wednesday, during Kazakh President Kassym-Jomart Tokayev’s visit to Beijing, China and Kazakhstan agreed to a “permanent comprehensive strategic partnership.” Kazakhstan is hoping to boost its agricultural exports to China and, in return, receive support in finance, energy, transportation and logistics under China’s Belt and Road Initiative. Central Asia is Russia’s historical sphere of influence, but as China has grown more powerful, it too has sought influence in this strategically located part of the world that connects East to West. This collision of interests is one reason we remain skeptical of a long-term Sino-Russian alliance.
Al-Sadr goes to Iran … again. Muqtada al-Sadr, a controversial Iraqi political leader and Shiite cleric, paid another visit to Supreme Leader Ayatollah Ali Khamenei in Iran in the past week. While al-Sadr holds no official office, he leads Iraq’s Sairoon party, which won the most seats in Iraq’s 2018 election. Al-Sadr had close ties to Iran during the height of the U.S. war in Iraq but has since focused on defending Iraq’s national sovereignty from Iranian overreach. Al-Sadr is, in other words, willing to play whatever cards he needs to depending on the circumstance. It’s hard to tell what a visit to Iran means, but if nothing else, it’s clear that he’s keeping communication open with his erstwhile ally.
China and the Philippines at sea. Philippine President Rodrigo Duterte said Tuesday that Manila intends to move forward with a contentious maritime oil and gas exploration deal with China – and that his government would ignore The Hague’s landmark 2016 arbitration ruling invalidating China’s sweeping claims in the South China Sea, including waters around the resource-rich Reed Bank in the Philippines’ exclusive economic zone. Duterte said that, during last week’s visit to Beijing, Chinese President Xi Jinping had agreed to a 60-40 revenue sharing scheme favoring the Philippines. As we’ve previously noted, China’s primary goal here is not to take the hydrocarbons for itself but to force regional states into joint exploration agreements that implicitly acknowledge China’s distended territorial claims. As a result, it has repeatedly blocked Manila’s attempts to launch joint exploration with firms from other countries. The Philippines needs the gas, and thus it’s reluctantly going along with China. But the deal may run afoul of the Philippine constitution, not to mention nationalist political forces in the country. Indeed, attempts at energy cooperation with China have contributed to the downfall of a Philippine leader in the past.
- A report from Russian firm RosBusiness Consulting showed that Russia has no net debt for the first time since oil prices fell and sanctions were imposed on Russia. This means the country has sufficient cash on hand to cover its aggregate debt balance.
- North Korea on Tuesday tested what’s believed to be a new type of “super-large” multiple rocket launcher system. North Korea is known to have 300-mm multiple rocket launchers, which are perhaps just big enough to carry a miniaturized warhead. A larger multiple rocket launcher system could be tested for its capacity to carry a nuclear payload.
- China announced one-year exemptions from 25 percent tariffs for 16 U.S. goods. The list of goods included some cancer drugs, lubricant oils and some chemicals that China doesn’t produce domestically.
- Credit continues to grow in China. In August, aggregate financing totaled 1.98 trillion yuan ($278 billion), compared to 1.01 trillion yuan the previous month.
- On Tuesday, Serbia and China announced a plan for joint military exercises. China also agreed to the sale of armed drones to Serbia, which will be the first export of a Chinese unmanned aerial vehicle to a European country.
- A Brazilian trade official announced that Brazil and Mexico have begun talks for a free trade agreement.
- As the damage from the African swine fever epidemic continues, China is in the process of launching pork futures contracts. The goal will be to allow Chinese pork traders and farmers to hedge risks posed by the severe supply shortage.
- Canadian warships again sailed through the Taiwan Strait, three months after the first such operation.
- China plans to begin importing soymeal livestock feed from Argentina; the two countries are planning to sign an accord today.
- Hong Kong’s stock exchange made a surprise bid for the London Stock Exchange Group, offering $36.6 billion to purchase the foreign bourse operator.
- Russia and China are planning to sell debt to one another in their own currencies. Russia plans to issue its first-ever yuan-denominated debt. The goal is to limit the role of the dollar in international transactions, which could help the two countries skirt sanctions.
- Canadian Prime Minister Justin Trudeau has called an election for Oct. 21. Most polls currently show the Liberals and Conservatives in a virtual tie.