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Venezuela is Another Black Eye for China’s Economic Diplomacy

BEIJING – China and Venezuela seemed like natural bedfellows: one is the planet’s top crude-oil importer and the other possesses the world’s largest reserves.

But Venezuela’s descent into crisis — with President Nicolas Maduro and self-proclaimed leader Juan Guaido vying for control as the economy unravels — has highlighted the gamble inherent in China’s $60 billion investment in the South American nation.

Over the past decade Beijing has extended vast amounts of credit to Caracas for oil shipments and infrastructure deals, in what China has touted as a “mutually beneficial” relationship.

Yet Venezuela is wracked by recession and hyperinflation while millions of people are suffering from shortages of basic necessities such as food and medicine — and vital oil production has dropped to a three-decade low.

“Venezuela’s story is an important one,” said Margaret Myers, director of the Asia & Latin America Program at the Inter-American Dialogue, a US-based think tank.

“Other countries in the region commonly reference Venezuela as a cautionary tale when determining how best to engage with China.”

The situation also shines more unflattering light on Beijing’s $1 trillion “Belt and Road” project, a Chinese initiative to offer loans or investment in infrastructure and other projects across a range of countries.

Critics say the project saddles countries with debt that they cannot repay, increasing China’s influence over them.

“By playing such a central role in Venezuela, China has provided evidence for the US government’s argument that Beijing’s financing worsens corruption and ensnares emerging-market borrowers in a debt trap,” said Benjamin Gedan, senior advisor at the Wilson Center’s Latin American Program.

Missing Funds

China began lending to Venezuela more than a decade ago, reaching a peak in 2010 when state-backed China Development Bank offered $20 billion in soft loans, according to Chinese official news agency Xinhua.

That same year, Venezuela’s then-leader Hugo Chavez announced a $16 billion investment package from China involving multiple energy deals as he leveraged the country’s oil wealth for financing.

Increasing oil shipments to China also fulfilled a political goal of the socialist Chavez — reducing the nation’s reliance on US purchases of its oil.

But in the chaos after the 2013 death of Chavez — who was succeeded by his anointed successor Maduro — followed a year later by the cratering of world oil prices, Venezuela is buried under about $150 billion in external debt, of which roughly $20 billion is Chinese.

Instead of working more with other international financial institutions and oil firms and adhering to their best practices, Venezuela’s leadership essentially rejected them and turned to Russia and China instead, said Matt Ferchen, a scholar with the Carnegie-Tsinghua Center for Global Policy.

China facilitated “poor decision-making on the part of Venezuela, especially in the aftermath of the financial crisis… when Venezuela may have been forced to go in a different direction,” he said.

“Chinese loans to Venezuela have had few conditions and little accountability,” said Myers of the Inter-American Dialogue, which she said speeds up lending but can lead to the abuse of funds.

“In Venezuela, billions of dollars were used for politically-motivated projects or, in some cases, disappeared altogether,” she said.

Warning Signs

China has tamped down the stream of lending as concerns mounted over Venezuela’s decreasing oil output and its ability to repay debt.

A report by the Inter-American Dialogue said Venezuela received no financing from government-controlled Chinese “policy” banks in 2017, despite being among the top recipients of their lending previously.

China has signalled its readiness to work with whomever leads Venezuela, and opposition leader Guaido can ill-afford to alienate deep-pocketed China.

He said earlier this month that he will honour Venezuela’s commitments to China if he assumes full control.

But analysts warn that nothing is certain.

The political crisis “could imperil China’s oil deliveries from Venezuela, disrupt Chinese state-owned enterprises operating in Venezuela, and ultimately bring to power new Venezuelan authorities who might repudiate China’s multi-billion-dollar loans,” said Gedan.

Already, some infrastructure deals backed by China have stalled or been shelved.

In October, Sierra Leone scrapped plans for a $400 million Chinese-built airport, calling it “uneconomical,” and last month Malaysia suspended a multi-billion dollar China-backed rail project that was approved by a previous corruption-riddled government, citing its high cost.

“There’s a sense that China actually believes and wants others to believe that… as a developing country, China understands and cares about the concerns of other developing countries,” said Ferchen.

“And here it watched as its developing-country partner, with which it had built up a special relationship, faced political, economic, and humanitarian crisis — and China’s done nothing.”

By Agence France-Presse

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Marine Le Pen’s National Rally Wins the First Round in France 2024 Election

Marine Le Pen's far-right National Rally (RN) party scored historic gains in France

Exit polls in France showed that Marine Le Pen’s right-wing National Rally (RN) party made huge gains to win the first round of election on Sunday. However, the final outcome will depend on how people trade votes in the days before next week’s run-off.

Exit polls from Ipsos, Ifop, OpinionWay, and Elabe showed that the RN got about 34% of the vote. This was a big loss for President Emmanuel Macron, who called the early election after his party lost badly in the European Parliament elections earlier this month.

The National Rally (RN) easily won more votes than its opponents on the left and center, including Macron’s Together group, whose bloc was predicted to get 20.5% to 23% of the vote. Exit polls showed that the New Popular Front (NFP), a hastily put together left-wing alliance, would get about 29% of the vote.

The results of the exit polls matched what people said in polls before the election, which made Le Pen’s fans very happy. But they didn’t say for sure if the anti-immigrant, anti-EU National Rally (RN) will be able to “cohabit” with the pro-EU Macron in a government after the runoff election next Sunday.

Voters in France Angry at Macron

Many French people have looked down on the National Rally (RN) for a long time, but now it is closer to power than it has ever been. A party known for racism and antisemitism has tried to clean up its image, and it has worked. Voters are angry at Macron, the high cost of living, and rising concerns about immigration.

Fans of Marine Le Pen waved French flags and sang the Marseillaise in the northern French district of Henin-Beaumont. The crowd cheered as Le Pen said, “The French have shown they are ready to turn the page on a power that is disrespectful and destructive.”

The National Rally’s chances of taking power next week will rest on what political deals its opponents make in the next few days. Right-wing and left-wing parties used to work together to keep the National Rally (RN) out of power, but the “republican front,” which refers to this group, is less stable than ever.

If no candidate gets 50% of the vote in the first round, the top two candidates and anyone else with 12.5% of the registered voters immediately move on to the second round. The district goes to the person who gets the most votes in the runoff.

France is likely to have a record number of three-way runoffs because so many people voted on Sunday. Experts say that these are much better for the National Rally (RN) than two-way games. Almost right away on Sunday night, the horse trade began.

Macron asked people to support candidates who are “clearly republican and democratic.” Based on what he has said recently, this would rule out candidates from the National Rally (RN) and the hard-left France Unbowed (LFI) party. Leaders on the far left and the center left both asked their third-placed candidates to drop out.

Minority government

Jean-Luc Melenchon, leader of France Unbowed, said, “Our rule is simple and clear: not a single more vote for the National Rally.” But the center-right Republicans party, which split before the vote when some of its members joined the RN, didn’t say anything.

The president of the RN party, Jordan Bardella, who is 28 years old, said he was ready to be prime minister if his party gets a majority of seats. He has said he won’t try to make a minority government, and neither Macron nor the communist NFP will work with him.

“I will be a “cohabitation” Prime Minister, respectful of the constitution and of the office of President of the Republic, but uncompromising about the policies we will implement,” he said.

A few thousand anti-RN protesters met in Paris’s Republique square on Sunday night for a rally of the leftist alliance. The mood was gloomy.

Niya Khaldi, a 33-year-old teacher, said that the RN’s good results made her feel “disgust, sadness, and fear.”

“This is not how I normally act,” she said. “I think I came to reassure myself, to not feel alone.”

Election Runoff

The result on Sunday didn’t have much of an effect on the market. In early Asia-Pacific trade, the euro gained about 0.23%. Fiona Cincotta, a senior markets expert at City Index in London, said she was glad the outcome “didn’t come as a surprise.”

“Le Pen had a slightly smaller margin than some of the polls had pointed to, which may have helped the euro a little bit higher on the open,” she noted. “Now everyone is waiting for July 7 to see if the second round supports a clear majority or not. So it does feel like we’re on the edge of something.”

Some pollsters thought the RN would win the most seats in the National Assembly, but Elabe was the only one who thought the party would win all 289 seats in the run-off. Seat projections made after the first round of voting are often very wrong, and this race is no exception.

On Sunday night, Reuters reported there were no final results for the whole country yet, but they were due in the next few hours. In France, exit polls have usually been very accurate.

Voter turnout was high compared to previous parliamentary elections. This shows how passionate people are about politics after Macron made the shocking and politically risky decision to call a vote in parliament.

Mathieu Gallard, research head at Ipsos France, said that at 1500 GMT, nearly 60% of voters had turned out, up from 39.42% two years earlier. This was the highest comparable turnout since the 1986 legislative vote. It wasn’t clear when the official number of people who voted would be changed.

 

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Pakistan Seeks US Support for Counter-Terrorism Operation Azm-e-Istehkam

Pakistan

(CTN News) – Pakistan’s Ambassador to the United States, Masood Khan, has urged Washington to provide Pakistan with sophisticated small arms and communication equipment to ensure the success of Operation Azm-e-Istehkam, a newly approved counter-terrorism initiative in the country.

The federal government recently approved the reinvigorated national counter-terrorism drive, which comprises three components: doctrinal, societal, and operational.

Ambassador Khan noted that work on the first two phases has already begun, with the third phase set to be implemented soon.

Addressing US policymakers, scholars, and corporate leaders at the Wilson Center in Washington, Khan emphasized the importance of strong security links, enhanced intelligence cooperation, and the resumption of sales of advanced military platforms between Pakistan and the US.

He argued that this is crucial for regional security and countering the rising tide of terrorism, which also threatens the interests of the US and its allies.

“Pakistan has launched Azm-i-Istehkam […] to oppose and dismantle terrorist networks. For that, we need sophisticated small arms and communication equipment,” said Ambassador Khan.

Pakistan–United States relations

The ambassador observed that the prospects of Pakistan-United States relations were bright, stating that the two countries “share values, our security and economic interests are interwoven, and it is the aspiration of our two peoples that strengthens our ties.”

He invited US investors and businesses to explore Pakistan’s potential in terms of demographic dividend, technological advancements, and market opportunities.

Khan also suggested that the US should consider Pakistan as a partner in its diplomatic efforts in Kabul and collaborate on counterterrorism and the rights of women and girls in Afghanistan.

He stressed that the bilateral relationship should be based on ground realities and not be hindered by a few issues.

“We should not base our engagement on the incongruity of expectations.

Our ties should be anchored in ground realities, even as we aim for stronger security and economic partnerships. Secondly, one or two issues should not hold the entire relationship hostage,” said the ambassador.

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China Urges Taiwanese to Visit Mainland ‘Without Worry’ Despite Execution Threat

China Urges Taiwanese to Visit Mainland Without Worry Despite Threats

China has reassured Taiwanese citizens that they can visit the mainland “without the slightest worry”, despite Taiwan raising its travel alert to the second-highest level in response to Beijing’s new judicial guidelines targeting supporters of Taiwanese independence.

Last week, China published guidelines that could impose the death penalty for “particularly serious” cases involving “diehard” advocates of Taiwanese independence.

In response, Taiwan’s government urged the public to avoid “unnecessary travel” to mainland China and Hong Kong, and raised its travel warning to the “orange” level.

However, Zhu Fenglian, a spokeswoman for a Chinese body overseeing Taiwan affairs, stated that the new directives are “aimed solely at the very small number of supporters of ‘Taiwan independence’, who are engaged in malicious acts and utterances”.

She emphasized that “the vast majority of Taiwan compatriots involved in cross-strait exchanges and cooperation do not need to have the slightest worry when they come to or leave mainland China”.

“They can arrive in high spirits and leave fully satisfied with their stay,” Zhu added.

What’s Behind The China-Taiwan Tensions?

The tensions stem from the longstanding dispute over Taiwan’s status. Mainland China claims Taiwan as part of its territory and has refused to rule out using force to bring the democratic island under its control, while Taiwan sees itself as a sovereign state.

Beijing has not conducted top-level communications with Taipei since 2016, when the Democratic Progressive Party’s Tsai Ing-wen became Taiwan’s leader. China has since branded her successor, President Lai Ching-te, a “dangerous separatist”.

“The DPP authorities have fabricated excuses to deceive the people on the island and incite confrontation and opposition,” Zhu said in her statement.
Despite the political tensions, many Taiwanese continue to travel to mainland China for work, study, or business.

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