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March
Germany, Japan seek cooperation on economic security amid supply chain strains
Written by Nur Yasmin
Germany and Japan agreed to cooperate closely on economic security on Saturday during their first ever high-ministerial government consultations, held amid tensions over global supply chains and economic disruptions caused by the war in Ukraine.
German Chancellor Olaf Scholz, accompanied to Japan by six ministers, is looking at ways to reduce German dependence on Chinese raw materials.
"The Russian invasion of Ukraine as well as the COVID-19 pandemic have made us painfully aware of the difficulties that can arise when there is too much economic dependency in critical areas," Scholz said at a news conference following the talks.
"We must react to this. Together with Japan and other partners, we are working on drawing the right conclusions from these experiences," he added.
In a joint statement, the two countries "affirmed their intention to strengthen cooperation on economic security" and to work towards establishing "a legal framework for bilateral defence and security cooperation activities, such as rendering logistical assistance and support".
'STRATEGIC AREAS'
Japanese Prime Minister Fumio Kishida said Germany and Japan aimed to boost cooperation "in strategic areas including mineral resources, semiconductors, and batteries, and share our best practices to counter risks in order to build a resilient supply chain that is safe and sustainable".
Germany holds inter-governmental consultations with a number of countries including France and China. German officials said the decision to hold its first such consultation with Japan was of considerable political and symbolic importance.
Given Japan's passing of a bill on economic security, Berlin hopes to learn about its raw material strategy and follow Tokyo's lead on how to cut dependency on imports, a German government official said of the visit.
In a move primarily focused at China, Japan's parliament passed an economic security bill last year aimed at guarding technology and reinforcing critical supply chains.
Trade between Germany and China rose to a record level last year, making the Asian country Germany's most important trading partner for the seventh year in a row despite political warnings in Berlin about excessive dependence.
Goods worth around 298 billion euros were traded between the two countries in 2022, up around 21% from a year before, according to data from the German statistics office.
Japan is Germany's second largest trading partner in Asia, but volumes in 2022 were less than a fifth of those with China.
Germany's centre-left government is now taking a tougher line towards Beijing than its centre-right predecessor and is exploring ways to wean itself off heavy reliance on China's economy.
"As democracies and as highly industrialized, export-oriented economies, Japan and Germany face similar challenges in shaping the digital and ecological transformation and strengthening the resilience of their economy in difficult geopolitical times," Franziska Brantner, state secretary in Germany's economy ministry, told Reuters. (Reuters)
March
North Korea claims almost 800,000 have signed up to fight against US
Written by Nur Yasmin
North Korea claims that about 800,000 of its citizens volunteered to join or reenlist in the nation's military to fight against the United States, North Korea's state newspaper reported on Saturday.
About 800,000 students and workers, on Friday alone, across the country expressed a desire to enlist or reenlist in the military to counter the United States, the Rodong Sinmun newspaper reported.
"The soaring enthusiasm of young people to join the army is a demonstration of the unshakeable will of the younger generation to mercilessly wipe out the war maniacs making last-ditch efforts to eliminate our precious socialist country, and achieve the great cause of national reunification without fail and a clear manifestation of their ardent patriotism," the North's Rodong Sinmun said.
The North's claim came after North Korea on Thursday launched its Hwasong-17 intercontinental ballistic missile (ICBM) in response to ongoing U.S-South Korea military drills.
North Korea fired the ICBM into the sea between the Korean peninsula and Japan on Thursday, hours before South Korea's president flew to Tokyo for a summit that discussed ways to counter the nuclear-armed North.
The North's ballistic missiles are banned under United Nations Security Council resolutions and the launch drew condemnation from governments in Seoul, Washington and Tokyo.
South Korean and American forces began 11 days of joint drills, dubbed "Freedom Shield 23", on Monday, held on a scale not seen since 2017 to counter the North's growing threats.
Kim accused the United States and South Korea of increasing tensions with the military drills. (Reuters)
March
Japan, Germany agree to carefully monitor markets, coordinate as needed
Written by Nur Yasmin
Japan and Germany agreed on Saturday to coordinate closely on financial jitters stemming from problems among Western banks while carefully monitoring global markets and economy, a Japanese finance ministry official told Reuters.
The agreement came in a 45-minute meeting between Japanese Finance Minister Shunichi Suzuki and German Finance Minister Christian Lindner, visiting Tokyo for bilateral government consultations.
Banking stocks globally have been battered since Silicon Valley Bank collapsed and Credit Suisse was forced to tap $54 billion in central bank funding, raising questions about other weaknesses in the financial system.
The ministers were meeting as German Chancellor Olaf Scholz and Japanese Prime Minister Fumio Kishida kicked off their first government consultation involving multiple cabinet members from both countries, to discuss ways to secure economic security.
"Risk aversion has been seen in financial markets. We will carefully watch developments and coordinate with the central bank and overseas authorities," Suzuki told Lindner, according to the Japanese official. "Japan's financial system remains stable as a whole."
Both sides agreed on the need to closely monitor financial developments and coordinate as needed, the official said, without elaborating further.
Japan succeeded Germany this year as chair of the Group of Seven industrial powers, a group that also includes Britain, Canada, France, Italy and the U.S.
Suzuki and Lindner agreed to prioritise sanctions against Russia over its invasion of Ukraine and support for Kyiv, while striving to reach agreement on global digital taxation and implement it, and steadily resolve developing countries' debt in line a Group of 20 framework, the official said.
They agreed on the need to strengthen supply chains as an element of economic security. (Reuters)
March
U.S. accuses China of trying to hide North Korea atrocities
Written by Nur Yasmin
The United States accused China on Friday of attempting to hide North Korea's atrocities from the world by blocking the webcast of an informal meeting of United Nations Security Council members on accusations of human rights abuses by Pyongyang.
"Some council members are all too willing to shield the regime from accountability," U.S. Ambassador to the United Nations Linda Thomas-Greenfield told the meeting in a veiled reference to China and Russia.
China and Russia argue that the 15-member Security Council, which is charged with maintaining international peace and security, should not discuss human rights issues. They say such meetings should be confined to other U.N. bodies like the U.N. Human Rights Council or the U.N. General Assembly.
Chinese diplomat Xing Jisheng said the meeting, co-hosted by the United States and Albania, was "not constructive in any way."
"Instead of easing tension it may rather intensify the conflict and therefore is an irresponsible move. Using U.N. WebTV for live broadcast is a waste of U.N. resources," he said.
All 15 council members have to agree to allow such informal discussions to be webcast by the United Nations, and diplomats said it was rare for a broadcast to be blocked. Despite China's move, the meeting on Friday was still public and media attended.
Thomas-Greenfield said North Korea's nuclear and ballistic missile programs were "inextricably linked to the regime's human rights abuses."
"The pursuit of weapons of mass destruction always trumps human rights and humanitarian needs of its people," she said. "(North Korean leader) Kim Jong Un has chosen ammunition instead of nutrition, missiles over humankind."
North Korea did not take part in the meeting. Its mission to the United Nations did not respond to a request for comment.
Pyongyang rejects accusations of human rights abuses and blames sanctions for a dire humanitarian situation in North Korea. The country has been under U.N. sanctions over its ballistic missile and nuclear programs since 2006.
"The feigned hypocritical concern of the West about human rights in North Korea isn't fooling anybody," Russian diplomat Stepan Kuzmenkov told the meeting. "Everybody knows full well that the U.S. uses human rights to settle scores with governments not to their liking."
The U.N. Security Council is likely to hold a formal meeting on Monday, diplomats said, over North Korea's launch on Thursday of an intercontinental ballistic missile. (Reuters)
March
U.N. aviation council votes to hear MH17 case against Russia
Written by Nur Yasmin
The United Nations aviation council on Friday voted to hear a case against Russia over the 2014 downing of Malaysia Airlines Flight MH17, the foreign ministers of Australia and the Netherlands said.
Australia and the Netherlands initiated the action over MH17 last year at the International Civil Aviation Organization (ICAO). The passenger jet was struck over rebel-held eastern Ukraine by what international investigators and prosecutors say was a Russian-made surface-to-air missile, killing all 298 people on board.
Australia has said Russia was responsible under international law and that taking the matter to ICAO would be a step forward in the fight for victims who included 38 Australians.
The ICAO upheld its jurisdiction to hear the matter during a session on Friday, Australian Foreign Minister Penny Wong said in a written statement.
"This decision is an important step in our collective efforts to hold to account those responsible for this horrific act of violence," Wong said.
Dutch Foreign Minister Wopke Hoekstra called the decision to hear the case "an important step towards establishing the truth, justice and accountability".
"Together with Australia, we will continue to do everything in our power to find closure for the loved ones of the 298 victims of flight #MH17," Hoekstra said on Twitter.
Russia has denied any involvement in the incident, and Russia's ICAO delegation was not immediately available for comment. While the outcome at ICAO is uncertain, experts said the move may be seen as a further way to force Russia into negotiations over the incident.
The technical talks by ICAO's 36-member governing council come as Moscow is facing mounting rebukes over aviation-related actions following its invasion of Ukraine.
In October, Russia failed to win enough votes at ICAO's triennial assembly to keep its council seat. The council also called out Russia for the dual registration of commercial aircraft, which the body argued is at odds with parts of a key agreement that sets out core principles for global aviation.
Montreal-based ICAO lacks regulatory power but holds moral suasion and sets global aviation standards overwhelmingly adopted by its 193-member states, even as it operates across political barriers. (Reuters)
March
Exclusive: Pakistan's Imran Khan: committee to lead party if I'm arrested
Written by Nur Yasmin
Pakistan's former Prime Minister Imran Khan has formed a committee to lead his party if he is arrested, he told Reuters hours before an appearance before a court that had issued arrest warrants for him.
The former cricket legend has led country-wide protests after his ouster from power last year and has had a spate of cases registered against him. The police unsuccessfully tried to arrest him on Tuesday, leading to intense clashes with his party workers.
"I have made a committee which will obviously take decisions once - if - I'm inside" jail, the 70-year-old said in an interview in his Lahore home before heading to Islamabad early on Saturday. He said there were 94 cases against him.
Khan, who was shot and wounded while campaigning in November, says the threat to his life is greater than before and asserted - without providing evidence - that his political opponents and the military want to block him from standing in elections later this year.
The military and government did not immediately respond to requests for comment.
Prime Minister Shehbaz Sharif's government has denied being behind the cases. The military - which has an outsized role in Pakistan, having ruled the country for nearly half of its 75-year history - has said it remains neutral towards politics.
Khan said there is no reason he should be arrested now, because he had bail on all his cases. If convicted in a case, Khan could face disqualification from contesting the elections scheduled for November.
"The establishment right now somehow feels threatened by me. And that is the issue," he said.
The police attempt to arrest Khan led to clashes in which dozens of people were injured.
"My life is even more at threat than it was then," he said, adding that he was worried about the reaction to his arrest or any attempt to assassinate him. "I feel that there would be a very strong reaction, and it would be a reaction all over Pakistan."
The former prime minister has generated popular support among Pakistanis amid decades-high inflation and a crippling economic slowdown as the country implements painful fiscal reforms to avert default. Thousands have rallied behind him every time he has called for demonstrations.
"I just think that those who are trying to do this just cannot comprehend the situation. Unfortunately, the mind that is thinking of either killing me or putting me in jail, I don't think they comprehend where Pakistan is situated right now."
Khan said the military had had a role in pushing him out of power after relations soured with the previous army chief, General Qamar Javed Bajwa, who retired in November. He said the new chief, General Asim Munir, was following the same policy.
The military has previously denied his claims.
"Throughout our 70-75 year history, you know, (the military) have a role. But that role has to be balanced now. You have to have that equilibrium now, because that previous balance is not workable anymore," he said. (Reuters)
March
Vietnam plans tighter limits on stakes in banks in blow to foreign investors
Written by Nur Yasmin
Vietnam's central bank is seeking to reduce the maximum stake investors can hold in Vietnamese banks, according to a published draft document on a regulatory change that would make the sector less attractive to foreigners.
Under the proposal, published by State Bank of Vietnam on its website, individual investors would be allowed to hold up to 3% of the shares of a credit institution, down from 5% currently.
The limit for institutional shareholders, like investment or pension funds, would be reduced to 10% from the current 15%, but the draft proposal did not specify how long investors would be given to reduce their holdings to comply with the lower cap.
Currently, the combined stake of foreign investors in a bank cannot exceed 30%, while the cap for stakes in companies in many other sectors is set at 49%.
The central bank's move to change the ownership limits follows several cases of fraud, including one that led to a run on a bank that a prominent real estate tycoon controlled through nominees and his own small holding.
In February, police in Vietnam opened an investigation into transactions made by foreign investors concerning listed domestic lender Eximbank (EIB.HM) as it suspected the share value had been manipulated, according to documents seen by Reuters and sources. The outcome of that probe is unclear.
The central bank said its proposed changes would reduce risks of market manipulation.
A Bangkok-based fund manager who declined to be named as he was not authorised to talk to media, said the lower cap would impact foreign investors more as their holdings were more often closer to the current maximum.
Foreign investors have repeatedly called for the caps on ownership to be raised, and they are often cited as a reason why Vietnam is still classified by index managers as a risky frontier market, depriving it of billions of dollars of investment.
Despite being an open economy that relies on foreign direct investment in its industries and whose exports are as much as its gross domestic product, Vietnam has for years limited foreigners access to its equity market.
The central bank also proposed a reduction to the maximum that a bank can lend to a single borrower, lowering it to 10% of the bank's equity from 15% currently.
Analysts said tighter caps on banks' stake holders and borrowing could exacerbate liquidity challenges in Vietnam, at a time when the country's property developers are under pressure.
Earlier this month authorities approved regulatory changes in order to help developers by extending bond maturities and allowing debtors to pay back in assets.
The central bank also cut interest rates this week to spur growth and reduce pressure on debtors. (Reuters)
March
Australia report calls for tax, migration reforms as productivity stalls
Written by Nur Yasmin
Australia's Productivity Commission called on the federal government on Friday to improve tax and migration systems, remove import tariffs and secure net-zero carbon emissions at the lowest cost to boost stalling economic productivity.
The report titled "Advancing Prosperity" and produced once every five years, made 71 recommendations, while warning that the country's low productivity growth, which has hit the slowest since the 1970s, would curtail long-term prosperity.
While acknowledging that productivity improvement in a services-driven economy is hard, the report urged the Labour government of Prime Minister Albanese to tax activities at a more even rate and scrap the skilled nomination list for migrant workers - a list of jobs that Australia critically needs filled but which can be slow to be updated.
Treasurer Jim Chalmers has warned that Australians' incomes would fall 40% and the working week would get 5% longer by 2063 without major boosts to productivity.
"The Albanese government takes the productivity challenge seriously which is why we've committed to a range of productivity-enhancing investments and reforms," said Chalmers in a statement on Friday.
Chalmers said the government would not be taking up every single recommendation from the report, but that government plans are aligned with the proposed themes. (Reuters)
March
Xi heads to Russia next week after China touts Ukraine peace plan
Written by Nur Yasmin
Chinese President Xi Jinping will travel to Russia next week to hold talks with President Vladimir Putin, the two countries said on Friday, as Beijing touts a plan to end the grinding Ukraine war that has received a lukewarm welcome on both sides.
Xi's March 20-22 trip comes after China last month published a 12-point plan for "a political resolution of the Ukraine crisis" and after a senior Chinese diplomat called on Thursday for negotiations in a call with Ukraine's foreign minister.
The plan calls for the protection of civilians and for Russia and Ukraine to respect each other's sovereignty.
However, the United States and NATO have said Beijing's efforts to mediate are not credible as it has refrained from condemning Russia's invasion of Ukraine, which Moscow calls a "special military operation".
Chinese foreign ministry spokesperson Wang Wenbin said Xi's visit to Russia - his first in nearly four years - was in part to promote "peace", although he made no explicit mention of the Ukraine war.
He said the leaders would also exchange opinions on major regional and international issues, strengthen bilateral trust and deepen economic partnerships.
'NO LIMITS' PARTNERSHIP
The Kremlin said in a statement that Xi and Putin would discuss "topical issues of further development of comprehensive partnership relations and strategic cooperation between Russia and China". The statement also made no mention of Ukraine.
Xi will hold a telephone call with Ukrainian President Volodymr Zelenskiy following his Russia visit, according to some media reports. Beijing has not confirmed the call.
China and Russia announced a "no limits" partnership in February 2022 when Putin visited Beijing for the opening of the Winter Olympics, days before he sent tens of thousands of troops into Ukraine, triggering the biggest conflict seen in Europe since World War Two.
Beijing and Moscow have since continued to reaffirm the strength of their ties. Bilateral trade has soared since the invasion and China is Russia's biggest buyer of oil, a key source of revenue for Moscow.
Tens of thousands of people have been killed and millions have fled their homes in Ukraine since the invasion and there is currently no sign of either side actively seeking an end to the conflict.
Ukraine has taken issue with Beijing's proposals for not stating that Russia should withdraw behind borders in place since the Soviet Union collapsed in 1991, though it later said it was open to "parts of the plan".
Russia welcomed Beijing's initiative and said it would make a "nuanced study" of the plan but has also said it sees no sign for now of a peaceful resolution.
Moscow says Ukraine must accept its annexation of four regions in the east and south of the country along with the loss of Crimea, the Black Sea peninsula it forcibly annexed in 2014.
Russia says its actions in Ukraine are a defensive pushback against a hostile and aggressive West, while Kyiv and its Western allies say they represent an imperial-style land grab. (Reuters)
March
Japan's labour unions confirm average wage hikes of 3.8%, a three decade high
Written by Nur Yasmin
Japan's major companies have concluded their annual labour talks with average wage hikes of 3.8% for the coming fiscal year, the largest raise in about three decades, trade union confederation Rengo said on Friday.
The preliminary survey of 805 unions affiliated with Rengo showed the average hike rate of 11,844 yen ($89) per month, according to the labour organisation.
While changes in the way the survey is conducted make it difficult to compare with historical data before 2013, this is the first average pay hike of more than 3% since 1994, Rengo officials told a news conference on the spring wage talks.
"Many unions received in full or exceeded their demand for wage hikes," Rengo chief Tomoko Yoshino told a news conference.
She added that consumer price rises had hit workers hard and companies had responded in a "gentle and meaningful manner" to unions' requests on pay hikes.
Prime Minister Fumio Kishida has called for higher wages to offset rising living costs, stepping up his call as a weak yen currency and higher commodities prices have driven up import costs, sending inflation to its highest in four decades.
While Japan's top firms concluded the talks on Wednesday, wage negotiations will get into full swing at small and medium enterprises from April to June.
Rengo, also known as the largest Japanese Trade Union Confederation, will update the pay negotiation results in several stages before compiling the final results in summer.
Japanese salaries have been virtually unchanged since the late 1990s and are now well behind the average for the OECD grouping of rich countries.
While Japan's biggest corporations - including Toyota Motor Corp (7203.T) and Hitachi Ltd (6501.T) - have agreed to the requested increases from unions, the outlook looks less positive for workers at smaller companies - which make up almost 70% of Japan's workforce.
Those businesses have often struggled to pass on rising costs to their customers. It's unclear whether the rising wage trend will be sustainable, let alone create the "virtuous cycle" of stronger economic growth and 2% inflation long sought by Japan's central bank. (Reuters)