Daily Memo: India’s Move on Kashmir, the Yuan’s Value, Hong Kong’s Protests

All the news worth knowing today.

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India makes a move on Kashmir. It turns out that last Friday’s rumors were true. Earlier today, India’s interior minister told the upper house of Parliament that President Narendra Modi was revoking Article 370 of the Constitution, which granted Jammu and Kashmir special status in India, allowing the state to make its own laws. The Indian government is also ending a ban on property purchases in Jammu and Kashmir by non-residents and reorganizing the state into two separate territories. In addition to the deployment of over 35,000 Indian troops in Jammu and Kashmir last week, close to 8,000 paramilitary troops were airlifted to the region earlier today. Late last night, India placed the former chief ministers of Jammu and Kashmir under house arrest, imposed a strict curfew, and cut off local internet and phone services. There is still some question as to whether Modi’s presidential order is legal, but Modi’s government does not seem to be too worried about that. Pakistani Prime Minister Imran Khan condemned the moves as “irresponsible, unilateral, and irrational,” and the Pakistani government said in an official statement that it would “exercise all possible options” to counter the changes.

The yuan strikes back. The value of the yuan on the dollar dropped 1.4 percent today. This marks the first time it has fallen below $7 since offshore trading started in Hong Kong in 2010 and it’s the lowest point of the yuan’s value since May 2008. Meanwhile, Bloomberg reported that the Chinese government told state-owned enterprises to suspend purchases of U.S. agricultural products and that private Chinese companies had ceased purchasing American soybeans over fears of uncertainty. The governor of the People’s Bank of China said in a statement that China would not “engage in competitive devaluation” of its currency and that he was fully confident of the yuan’s future strength on the dollar – but that lip service and the news about suspended agricultural imports indicate China has not been cowed by U.S. threats to impose 10 percent tariffs on an additional $300 billion of Chinese imports on Sept. 1.

Another Monday in Hong Kong. Weekend protests gave way to calls for a general strike in Hong Kong earlier today. It is unclear how many people actually went on strike, though Hong Kong’s Confederation of Trade Unions said some 2,300 aviation workers took part, which resulted in the cancellation of over 150 flights. (On Saturday, nine protesters claimed at a press conference that they had gathered the support of some 14,000 people from across 20 sectors for the strike – not exactly an overwhelming figure.) Hong Kong police arrested at least 80 people today, the largest single-day total since the protests began in early June. Thousands of protesters blocked roads, and Hong Kong Chief Executive Carrie Lam said demonstrators were pushing Hong Kong to “the verge of a very dangerous situation.”

Another U.S.-Turkey disagreement. On Sunday, ahead of scheduled U.S.-Turkey talks on the future of northeast Syria, Turkish President Recep Tayyip Erdogan said Turkish forces were preparing to enter Syria east of the Euphrates and that he had informed both Washington and Moscow of Turkey’s plans. A U.S. State Department spokesperson urged Turkey to continue cooperating with the U.S. on a joint approach and said any potential Turkish unilateral military action east of the Euphrates – where the U.S.-backed Syrian Democratic Forces are currently in control – was “unacceptable.” Turkey has been threatening to deploy its military east of the Euphrates for a while now, but the alacrity and sharpness of the U.S. response in this specific case is eyebrow-raising.

Mexico responds to El Paso. Mexico is treating Saturday’s mass shooting in El Paso, Texas, which left 20 dead and more than 24 injured, as an act of terrorism against Mexican nationals in the United States. (Seven of the victims were Mexican nationals.) As part of a six-point plan announced yesterday, Mexican Foreign Minister Marcelo Ebrard said his country will seek access to the U.S. investigation into the shooting and will direct the Mexican attorney general to explore whether Mexico should seek extradition of the shooter on terrorism charges. Ebrard will also travel to El Paso to meet with some of the victims today, and he said the Mexican government will present a diplomatic note to the U.S. government urging it to take “a clear and convincing stand against hate crimes.”

South Korea attempts to find its footing. Over the weekend, South Korea fast-tracked a $226 million stimulus package designed to ease the pain of South Korean companies dealing with the Japan-South Korea trade spat. Earlier today, South Korea also announced plans to invest $6.5 billion into research and development for materials, parts and equipment, which South Korea currently depends on Japanese imports for. Even if the plan is successful, it will take at least five years for it to achieve its stated goal of self-sufficiency in over 100 key components, according to the government’s 51-page statement. No resolution to the trade dispute appears in sight.

Honorable Mentions

  • Peruvian President Martin Vizcarra said he was authorizing the Peruvian army to maintain order at Matarani Port Terminal in response to calls for a new round of protests at a $1.4 billion copper mine at Tia Maria.
  • U.S. Secretary of State Mike Pompeo is meeting with the leaders of the Federated States of Micronesia, the Marshall Islands and Palau today in the South Pacific.
  • Japan has objected to Russian shooting exercises on the southern Kuril Islands and is trying to arrange a visit by Prime Minister Shinzo Abe to Russia in September to talk directly about “issues between the two nations.”
  • Between 600 and 800 protesters were arrested in Moscow over the weekend for participating in unsanctioned protests.