The Japanese navy conducted a military drill in the South China Sea. According to the Ministry of Defense, a Japanese submarine linked up with three Japanese destroyers for anti-submarine drills, before moving on to a port call at a Vietnamese naval base in Cam Ranh Bay. According to the Asahi Shimbun, a senior naval official said the drill was meant to contain China’s territorial ambitions in the South China Sea. But if the purpose of the drill is interesting, the timing is perhaps more so. The vessels were dispatched in late August, and the exercise was held Sept. 13 – the day after Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe met on the sidelines of the Eastern Economic Forum in Vladivostok and declared that the two sides would “deepen cooperation.” At the time, we noted that relations between the two weren’t as good as the headlines made them seem – and that was before we knew such a provocative exercise had been scheduled. China’s response was bland and confounding. A Foreign Ministry spokesman did not even single out Tokyo directly. Either China was taken by surprise by the drill, or it is willing to look the other way. Ultimately, this falls into the category of a “gesture” more than a challenge, but it’s notable that Japan is the one making it, and in waters China claims no less.
Iran has more to worry about than U.S. sanctions – namely, losing market share. Speaking to SHANA, Iran’s news agency for all things oil, the Iranian governor of OPEC criticized Russia and Saudi Arabia for cooperating with the United States to boost production, thus giving oil importers viable alternatives to Iran. The Iranian official isn’t wrong. While Iranian production declined by 150,000 barrels per day last month (exports declined by 280,000 bpd), OPEC increased production overall, led by Saudi Arabia, Libya, Iraq and Nigeria. Last week, shortly before meeting with the U.S. energy secretary, Russia’s energy minister said Russia could increase its production by 300,000 bpd within a year. Meanwhile, non-OPEC production was up 2.6 million bpd year-on-year, thanks largely to near-record production levels in the U.S., according to a report from the International Energy Agency. (The IEA estimates that production will rise next year.) All told, global oil suppliers are producing 100 million bpd – a record for global oil supply. But the big takeaway is that the U.S. is focusing on crippling Iran, even if it means coordinating with Russia.
Calls for a second Brexit referendum are getting louder. To be clear, we still believe that one was enough, but still, high-profile officials such as the mayor of London are calling for one, citing what he described as the current government’s “confused” handling of negotiations. Of course, this may amount to little more than palace intrigue – the mayor is a member of the Labour Party, which is set to hold its annual conference next week, and he may just be trying to score points with (or against) current party leader Jeremy Corbyn. We also note the results of a recent YouGov poll, which found that Wales would vote 51 percent to remain in the EU if a referendum were held today, having voted 53-47 percent to leave the EU during the Brexit referendum. Then again, the same poll found that less than half of Wales actually wants another vote anyway. The change of heart in Wales gives ammunition to Northern Ireland and Scotland, both of which voted to remain. England stands alone.
- The Wall Street Journal and Reuters report new U.S. tariffs on Chinese imports are imminent.
- China unexpectedly pumped about 265 billion yuan ($39 billion) into its financial system to stimulate the economy. The move is in line with previous efforts, and it is at least partly in anticipation of the forthcoming tariff announcement.
- Data from the People’s Bank of China indicate that growth in household deposits fell to 8.3 percent, the lowest official figure since 1979.
- Three Argentine labor groups have announced they will go on strike on Sept. 24-25 in response to as yet unannounced austerity measures to satisfy the International Monetary Fund.
- Former Iranian President Mahmoud Ahmadinejad spared no one in a recent video about the political climate in Iran. Targets included the Rouhani administration, the Islamic Revolutionary Guard Corps and the judiciary.
- Iraq says it will deploy security forces on the border with Turkey.
- Speaking at a press conference in Cucuta, Colombia, the leader of the Organization of American States refused to rule out military intervention in Venezuela.