A look at the world of business this week. Could the United States punish china for tightening its grip on hong kong. Turkeys theater of war does the country on the verge of another currency shock have the money for conflict. And president putin hope to kick start the economy this year but how will he pay for his big plans amid low oil prices and the pandemic. Xi jinping as china has put aside the niceties of economic power for a more aggressive posture to neighbors and liberal democracies President Trumps america 1st policy triggered a trade war that morphed into a technological war but chinas security measures to rein in hong kong and Human Rights Violations of wiggle muslims have pushed the u. S. To sanction chinese officials responsible for the policy and more sanctions could be on the way as the new bamboo curtain comes down after 20 soldiers were killed in hand to hand combat in disputed territory in the himalayas india banned more than 50 chinese apps including ticktock new delhi accused beijing of infringing on its National Security by moving soldiers and artillery to the disputed territory in lead back or that led to the worst conflict between the 2 Nuclear Neighbors in 60 years australian Prime Minister Scott Morrison is call for an investigation into the origins of the coronavirus prompted beijing to slap tariffs and ban imports of australian beef avatars and barley morris and pushed further offering to extend visas to hong kong us and that as bloomberg 1st reported washington has considered going beyond sanctions and restricting hong kongs ability to use dollars a move that would undermine the hong kongs dollar peg and seriously damage the Financial Operations of the territory if not chinas access to dollars. Well how plausible is that well joining me now from london is patrick peregrine patrick is the head of global Macro Economic strategy at ad macro good to have you with us so 1st of all do you think the trumpet ministration will actually push ahead with this threat to restrict access to dollars not you know not yet i think were a long way off from that. I think its its more like targeted sanctions at the moment so if you look at the hong kong autonomy act or the or the bills of gone through its about trying to cover dollars dollars to specific individuals or entities for now but at the same time even even after the president s announcement of the house wait he has backed off from applying sanctions to certain individual to 2 individuals so you have this. A congress that is very very anti china and you have trump that basically has had to go along and sign these bills because they will be to proof but hes very reluctant still to actually do anything that might upset the stock market and you think congress will not be able to get its way i mean what happens if any of that change when we get towards elections where you could have a new president in the White House Well i think what we get and if you if we do get a new president in the white house then that that becomes a distinct possibility but it also depends on the trajectory of the relationship and i think thats the other issue as well and thats thats the. The most concerning thing because it seems that we are on this sort of downhill slope where almost every week theres something that goes wrong or worsens the relations between the 2 countries in any case do you see that china is already readying itself shall we say for this sort of development is it learning from russias experience. No i think you know i think we hear the rhetoric but i think its very different for china. Rather than russia russia has russia has many ways its not if you compare russia and china russia is not that they can the connally it can find lots of work arounds of dollars and stuff like that its not all russia that banned from from from dollars. But to china given that you know its role in International Trade the lack of. Exchange ability of the of the land which basically even now only accounts for less than 2 percent of International Foreign exchange transactions. I think china is saying its preparing for it but ultimately theres very little it can do about it and i dont i find it hard to see china being cut out of the dollar system and i think the economic consequences that for the world especially now would be far too grave so theres i think there has to be other pressure points rather than the the wiping out of the currents of currency access it would impose a huge cost to the world just bring it into perspective for us what would it mean for hong kong for hong kongs peg to the dollar whats at stake here for the territories well i think for now again. Getting rid of the peg or. Applying. The sort of restrictions on the hong kong dollar that weve talked about in terms of other currencies i think its far too early yet. But also what we would say weve already gone to 11. 00 china one system as far as hong kong is concerned. Most of hong kongs business is actually with china and what we see is that they have a. Situation where it would probably become more fixed to the to the yuan eventually obviously that would be it would be very disruptive but i still find it very hard to say in the. In the short to medium term and by that i mean over the context of perhaps the next year weve seen president xi taking a much harder stance on issues whether its hong kong the weaker muslims does this reflect some thinking that now its time to focus perhaps a little more on the domestic economy rather than worrying too much about globalization on the priority shifting do you think. Well there has been for some time you know we had china 2025 which is all about building up the domestic protection production capability in the higher end goods and her thing whats happened well recently is that that that move is being accelerated were seeing it with the sort of the pushing for chinese chip makers as chinas been cut out of a lot of u. S. Technology u. S. Based technology and overall yes the the focus clearly is on the domestic side what were seeing at the moment is a push on the old game of credit infrastructure building property development. In an attempt to sort of balance out the lack of foreign demand into the global recession as we see chinese policy harden on some issues were also seeing in some countries politicians you know calling on their companies to choose other nations for their production or supply chains is that serious could there be an economic backlash is china prepared for it well it is serious without doubt and we are seeing the growth this gradual. Backing off of multinationals moving a lot of a lot of Companies Based in china are actually reducing their activities there and theyre looking to do production elsewhere. And for china but china itself what can china do china exports are still a significant part of the chinese economy it wants to trade with the rest of the world. But increasingly and i think this is the thing well what were in it and its being aggravated by the pandemic and the recession is that youre getting much greater resistance to chinas actions and this is across its not just the economics obviously its security South China Sea and a growing alliance and the relations you know we talk about the 5 eyes european or the e. U. Its still dragging its feet but ultimately in china is. Is being disassociated from the world or is disassociated from the world and that does it present economic challenges to china but right or i or thank you so much for your thoughts on that pattern apparent greene. Turkey is active in 3 theaters of war in libya alongside the u. N. Recognize government of National Accord its managed to push back the advance of warlords. After the loss of 33. 00 soldiers it inflicted heavy losses on Syrian Forces and maintains a buffer zone in the country and from time to time goes after Kurdish Armed groups in iraq well this raises the question of how its managing the costs amid currency challenges turkeys military expenditure increased by 86 percent over the past decade to reach 20000000000. 00 in 2019 as a percentage of g. D. P. It spends slightly more than many nato nations according to fitch turkeys reserves fell to 33000000000. 00 at the end of june from 87000000000. 00 at the end of 2019 the central bank has been using reserves to prop up the lira the lira hit a record low of 7. 00 now into the dollar in may although it has made some strong gains since then turkish president. Has been pushing for unconventional economic policies to suppress Interest Rates as inflation source. Turkey is dependent on foreign money to grow the economy and its introduced bans on some u. S. Banks that are trying to short the stock market well joining me now from london is andrus Craig Anderson is in the system professor at Kings College london with the school of Security Department of defense studies good to have you with us how easy is it right now on the economy to be fighting all of these war zones. Not very easy. As you rightly said is under immense economic pressure following the current 1000 crisis after kind of 820198 prospect for true to those 20 which was relatively positive. Nonetheless turkey is obviously already booked down in iraq and in syria and now as engaging in in libya in quite an extensive way you know in in an expert in an expeditionary operation that is unprecedented in many ways but what tookie has been able to do over the last couple of years is revolutionize its way in style of warfare to use to engage in something that i would call surrogate warfare where theyre externalizing the burden of warfare as much as they can to local forces or to technology which means there are very very few boots on the ground and it creates a relatively economical way of achieving objectives economic or both in terms of financial costs which are minimized but also a political cost for turkey as very very small indigenous turkish boots on the ground will be fighting elsewhere so we have militia groups such as we have when we look at libya for example the g. N. A. T. Being supported and their fighters being supported by turkey where you have directors on the ground that kind of direct these militias into into battle and over have over had you have obviously drones again the Drone Program has been expansive in terms of its reach as well as its used by turkey across all these 3 theaters and they are very very cheap option in terms of financial cost but also in terms of operational risks for turkey because they can operate over a very vast amount of space in integrating these 2 sergeants the technological surrogates of drones as well as the the human sorry goods of militia groups that theyre integrating with also in it. And even in iraq has been a way for turkey to basically its chief objectives on the ground while keeping costs to a minimum. Its interesting that you mentioned drones there should a lot of the credit when it comes to technological advance be down to the Drone Program that turkey has and do you see that is what turkey will perhaps continue to invest in Going Forward with in terms of its military expenditure yes turkey has built over the last couple of years an indigenous military complex that is is far better than anybody expected and theyre producing everything from maritime platforms to land platforms and obviously to high tech platforms such as drones in the Drone Program the togas developed and the drone product that develops as well is so good in comparison that it is really on par with the capabilities there been delivered by israel or by the United States but with the except with the with the difference of turkey no no longer being able or needing to rely on u. S. Support or western support to actually procure these kind of this kind of technology no longer behind pendent up on political risks and they now can use it themselves or thats an Interesting Development on the other side youve got huffed and his allies have to had some setbacks lately has france in particular found itself kind of on the wrong side of the battle joining the u. A. E. Stroke egypt stroke russia after camp. Look the battle in libya is the war in libya is not over i think the battles recently have been won by turkey and certainly the u. A. E. And egypt and also france had to accept some defeats especially when it comes to have to and i think after is very much on the way out in libya because hes proven to be an unreliable impulsive actor that even the u. A. E. Cannot control however the war isnt over yet and the spoils of war as it stands at the moment are really really only supporting Eastern Libya not western libya and i think the turks still have to make sure that this western libyan enclave that they have now a liberal as liberal as it is somewhat sustainable and its economically not sustainable as it stands on more territory needs to be acquired to actually achieve this split and i think france is just backing the uys approach for very much ideological reasons its anti islam its against Civil Society in Northern Africa and in that respect i think france on the wrong side of history but so far they still havent been defeated yet what about russias are going to separate back and watch after the recent battle defeats now again russia is a lot more flexible in libya than the u. A. E. Or france are russias a disruptive factor in the middle east they dont have any really clicked clearly set out strategic objectives apart from obviously trying to exploit american withdrawal and thats what theyre doing in syria thats what theyre doing in libya theyre playing a big power game and they will go with whoever actor can support russian interests in the end of the day and if after is no longer someone that they can or want to support they might go for someone else so theyre not firmly on the east libyan side they have so far only supported the l n a and after but i think looking forward i think the russians are more flexible to actually strike a deal with turkey on finding a solution for libya that is sustainable unlike egypt the u. A. E. Or france or i some good analysis there thanks so much and discreet thank you. President Vladimir Putin is the longest serving russian leader since dictator Joseph Stalin before my k. G. B. Colonel could potentially go stand his 2 decade rule and till 2036 or despite his handling of the pandemic putin one overwhelming approval from the electorate for constitutional change putin insists he has not decided to run for 2 more 6 year terms thats raise concerns though in many capitals while President Trump has been keen to reduce americas presence overseas putin has been filling in the vacuums in the middle east and africa. But what of his economic record has he delivered for the russian people well take a look at this we have 2 data points g. D. P. Is the bar chart here in the white line thats for unemployment lets start before putin took power in 2000 in 1998 that as you can see marked a low for the nation the economy collapsed under president yeltsin but the real impact is felt in 1999 unemployment at 12. 5 percent in the economy just 195000000000. 00 putin introduced Economic Reforms and a boom in all prices meant the country felt richer now by 2008 unemployment and the economy shoots up to 1. 00 trillion dollars that all came crashing down though with more than 400000000000. 00 wiped off the value of the economy after the north Atlantic Financial crisis again the impact is felt a year later in 2009 with unemployment now at 8 percent and the economy worth 1. 00 trillion dollars the annexation of the crimea and conflict in Eastern Ukraine soar sanctions cripple the economy after rising in value to 2. 00 trillion the economy shrinks to 1. 00 trillion now at the end of 2018 the economys becoming more resilient to sanctions its worth almost 1. 00 trillion and unemployment at a respectable 4. 8 percent but the economy has been stagnant of late so what can we expect from president putin over the next 15 years when joining us via skype from london is darren mack door hes head of europe risk insight and principal russia analyst good to have you with us why is putin been so successful and hanging on to power for so long. Well d one of the main reasons is simply that he been very good at ensuring there is no alternative to him part of this is due to the weakness of russian institutions particularly the lack of kind of tried and trusted mechanism for the transfer of power to designated successor. His control over the political landscape. Prevention and any alternative president or leadership figure for merging the ranks of the opposition. Or the technical. Political control. To sanctions what does that mean for europe and the United States how do they deal with. Well essentially the same way theyve been dealing with him for the past 10 years or so or particularly since the invasion of crimea and ukraine its very clear that there are some very. Almost irreconcilable differences between russia and the west on key issues again ukraine is one of the biggest of those. So far what weve seen is a mixture of confrontation at key moments of punishment for action such as the screen poisoning work or where other incidents were europe and america seem to think that russia has gone too far in one direction. Alongside you know exploring opportunities for collaboration on a on a pragmatic basis particularly economically when it comes things like supply of oil and gas to europe were seeing the potential of annas to next year. But its going to be a continuation of this kind of this except ins that putin is a fact of life that hes not going to leave the leadership of russia on a time soon and that the west needs to take a bounce between confronting him when they feel necessary and gauging where they can and amidst all of that hes been quite successful in taking what was an economy the size of belgiums to now the 11th largest in the world how does he manage to grow the economy despite all the crises and sanctions you mentioned. Well its important to know that at the start of term in 1900 the started when he 1st came to power russia was at a particular point due to. Financial crisis and benefited very much. A rapid increase in Global Oil Prices which kind of flooded the russian state coffers and as well as a great deal of access or industrial capacity would be quickly brought back online to grow cheap iraq atlee. What weve seen since really 2012 is that this economic model has. Exhausted itself and russias growth has been quite stagnant around 1. 5 percent 2 percent rate. Punctuated by intermittent crisis such as 20 well crash and 2020 with a pandemic so what youve seen over the past decade is actually. Ordinary russians have generally stagnated or even gone a little bit backwards and who can count on you know the economic success narrative as much as he used to be easy gains. Even stagnation is a success given the crises given the economic sanctions. Well if you look at the sanctions and how theyve been applied they have been primarily focused on the Energy Industry or key into visuals around the Political Leadership and while these are certainly somewhat constraints on growth the bigger issue is commodity dependency and also a lack of key reforms in areas such as rule of law and Property Rights frankly speaking when you have. Problems with corruption its very difficult to get people to invest particularly russians if youre a russian entrepreneur and you know that you cant necessarily look to the agencies Law Enforcement youre going to. Hurt yeah just very briefly in 60 seconds he had planned these massive Infrastructure Investment projects would he still be able to go ahead. It doesnt look like it. When the Prime Minister announced yesterday. That the National Project spending would be delayed from 2024 to 2030. The scale of pressures that russias going to be under as a result of the pandemic and the Oil Price Crash what abidin victory finally mean full putin russia do you think. Well there are 2 sides of this 1st off you know there are certainly very bitter memories of within the Democratic Party in the u. S. Over 2016 and generally more hawkish stance towards moscow in the party as whole that being said it looks like if joe biden wins hes going to be taking office in the midst of a very unsettled economic condition as well as an ongoing pandemic so whether or not hes going to have the bandwidth to really put into a program a confrontation with russia or whether it will be more focused on domestic issues clear we will see is an increasing multilateral cooperation with europe to impose sanctions when the west feels necessary not to make those sanctions more active and that if some were targeted all right down like bill thanks for insight thank you. And thats our show for this week remember you can get in touch with us via twitter use the hash tag a. J. C. To see when you do or drop us an email counting the cost of aljazeera dot that our address theres more for you online of aljazeera dot com slash c. T. C. Will take you straight to our page which has individual reports links and entire episodes for you to catch up on. Thats it for this edition of counting the cost im sam is a then from the whole team here thanks for joining us the news and aljazeera is next. Jump into the stream and julian on Global Community this generation will have to create its own democracy social media and will online be part of the debate let me put some comments to you when no topic is off the table is taking on all the systemic violence that people of color have suffered not only now but for decades we are going to be to transform lives the way he keeps you going to your business if were going to adapt to climate break down this street on out is there. A team of chinese scientists going bought on a deep sea mission searching for rare was also a new space one who want to use previews chinas underwater. 0. After months of deaths infections and lock downs finally a hopeful sign early trials for a Coronavirus Vaccine are showing a positive immune response. From doha everyone come all santamaria with the world news from aljazeera. Were not there yet but things are moving in the right direction clinging to hope european leaders meet for a 4th day try to overcome their differences over a massive Pandemic Recovery budget also the u. K. Suspends an extradition agreement with hong kong after beijing imposed its tough new security law says. Back on the streets of mali demanding the president steps down protesters return after regional mediation fail. So the fight against covert 19 has taken a small but potentially significant step this month the lancet medical journals published results from scientists at Oxford University who have been conducting early human testing for a Coronavirus Vaccine and the results are encouraging they found the vaccine did not cause any serious side effects and produced a strong immune response with more from oxford here is paul brennan it is. The 1st 56. 00 days of the phase one trial that took place end of april beginning of
vimarsana.com © 2020. All Rights Reserved.