Taking Berlin to task. With her government still wobbling following the resignation the leader of her coalition partner, German Chancellor Angela Merkel encountered harsh criticism from the president of the Federation of German Industries, or BDI, at its annual conference. BDI President Dieter Kempf took Berlin to task on a range of issues: high corporate tax rates, low investment, the poorly managed energy transition, and social spending levels that kept “growing and growing.” Merkel acknowledged that tax cuts in the U.S. had disadvantaged German businesses and said her government would work to remedy that, but she also hit back, noting that scandals in the German auto industry had occupied significant government time and attention. And she diverted blame, pointing out that France had blocked trade talks with the U.S. and that EU anti-trust laws had obstructed some merger plans. The German economy’s slowdown is coinciding with a wider global slowdown, but there is also no doubt that the uncertainty at the top in Berlin is contributing to the country’s problems.
China’s land grab. Vietnam’s Ministry of Public Security accused China of using Vietnamese proxies to acquire land in Vietnam. In a report submitted to the National Assembly, the ministry said Chinese nationals and companies are buying up or renting land along strategic coastal areas like Da Nang in the names of Vietnamese citizens. It noted that Chinese citizens are marrying Vietnamese citizens and having children without informing authorities, and that from January to May this year, newly registered Chinese investment for 233 projects in Vietnam totaled $1.56 billion. Vietnamese Deputy Prime Minister Trinh Dinh Dung has said the government will start cracking down on locals acting as proxies for foreigners to purchase land. China has been accused of similar activity in the past. In 2016, Kazakhstan declared a moratorium on the sale of land to foreigners and legal entities with foreign ownership following reports of Chinese purchases of land in eastern Kazakhstan.
Polls and protests. Despite high approval ratings of Russian President Vladimir Putin, a new poll by the Levada Center showed that 25 percent of all respondents acknowledge the possibility of a large-scale movement against deteriorating living conditions, as well as for broader political changes. Specifically, about 26 percent of respondents expect strikes and protests in their cities or towns, and about 27 percent do not oppose participating in such events. In addition, Russian newspaper Izvestia published a survey saying about 20 percent of Russian citizens complained about wage cuts.
Keep a close watch on China’s food supplies. As African swine fever spreads across Asia, pork prices in China have risen 40 percent year over year. Current estimates say Chinese pork production has been reduced by 30 percent, and as many as 200 million pigs will be culled. Meanwhile, armyworm has damaged at least 222,000 acres of grain production in China, namely corn, and is expected to spread farther north as temperatures warm. The Chinese government has also confirmed the outbreak of H5N6 bird flu in Horgos, Xinjiang. While this outbreak only killed 1,015 of 2,545 birds in the area, an additional 11,900 will be culled to prevent the spread of the disease. Even if food supplies can be met (which is in question at this point), rising prices also pose a threat to food availability to a country with high levels of low-income and poverty stricken families.
- The U.S. House Judiciary Committee will launch an anti-trust investigation into Amazon, Apple, Facebook and Google.
- Israel launched a second day of airstrikes in Syria, hitting an airfield east of Homs.
- Latvian Foreign Minister Edgars Rinkevics called Russia an important trade partner for his country and expressed an interest in further developing economic ties, particularly in transit and tourism.
- Turkish military forces began arriving in Nakhchivan for exercises to be held from June 7-11.
- The U.S. approved the sale of eight F-16 aircraft and related equipment to Bulgaria for $1.67 billion.
- The U.S. Department of Defense will sell 34 ScanEagle drones to Malaysia (12), Indonesia (8), the Philippines (8), and Vietnam (6). Spare and repair parts, support equipment, tools, training and technical services are included in the deal.
- The Confederation of Indian Industry called on the Modi government to reform labor, land and capital market regulations to attract more investment. It said India needed $5.7 trillion in investment over the next five years, 21 percent of which would go toward infrastructure.
- Iraq and Iraqi Kurdistan’s combined oil exports in May totaled 4.1 million barrels per day, the second-highest level on record.
- Over 1,000 servicemen from motorized rifle units are taking part in snap combat readiness checks in Russia’s Far East. Russian Pacific Fleet vessels have also held drills on locating and destroying enemy submarines.
- Russia signed bilateral defense agreements with the Central African Republic and Sudan that allow its Ministry of Defense to set up permanent missions in both countries.
- Islamic State supporters in Sudan called for jihad against the country’s Transitional Military Council, saying peaceful protests have gotten the people nowhere.