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Watch List: Jan. 9, 2018

Intrigue in Iran, money management in China, exports out of Germany

|January 9, 2018

The items listed below represent potential emerging issues that our analysts are tracking. These can be long term or short term, but will be updated daily. If an item on our Watch List becomes critical, we will email you a full analysis explaining its significance.

Each Saturday, we will follow up our daily Watch List for each week with our conclusions on these issues.

  • Iran: Iranian President Hassan Rouhani has reportedly reopened the case of the death of former President Akbar Hashemi Rafsanjani. Yet Rouhani did not attend a ceremony commemorating Rafsanjani’s life on Jan. 9. What, if anything, does this have to do with the recent bout of unrest?
  • Belarus: There are reports that the political opposition in Belarus may soon stage protests against the government, which has been accused of planning to rig local elections. The country has been simmering for some time, of course, and President Alexander Lukashenko has been in power for even longer. Still, we need to develop a framework for assessing the unrest and, if it worsens, what it would mean for the country.
  • China: China is changing the way it manages the yuan. The “counter-cyclical factor,” a policy introduced in 2017 to manage the yuan’s volatility, is being eliminated, or is at least being de-prioritized in calculations. What is the goal of this policy, and what are the ramifications?
  • China: China Central Television reportedly aired footage of an airbase on Fiery Cross Reef in the South China Sea on Dec. 30 – something it supposedly promised the Philippine government it would not do. The Philippine defense secretary has said he will lodge a formal diplomatic protest because China reneged on the deal. An adviser for the U.S. secretary of state, meanwhile, has accused Beijing of “provocative militarization” in the South China Sea and has suggested that Washington would resume freedom of navigation operations there. What prompted Washington’s statements? Is it coordinating with the government in Manila? What is the status of Philippines-China relations?
  • Germany: November was a very good month for German exports. Shipments to eurozone countries increased roughly 9 percent, while shipments to the rest of the European Union increased 8 percent. (Exports to the rest of the world went up by 8.4 percent.) What accounts for the increase? Is this seasonal or something more anomalous? Which countries were the biggest buyers? How much money will this net Germany?
  • European Union: Hungary and Poland, two countries that have been relatively hostile to the EU, have said they would be willing to contribute more money to the multiannual financial framework, which governs the bloc’s long-term budget, once the United Kingdom leaves the EU. What are we to make of this?
  • Yemen: A leader of Yemen’s Houthi rebel movement has threatened to cut off international navigation through the Red Sea. This doesn’t sound credible, but let’s make sure.
  • Uzbekistan: The Uzbek president will travel to Tajikistan to try to mend bilateral ties. Is this politics as usual or does it signify something more? If it’s something more, what would it mean for Central Asia?

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