On October 21 last, the Russian Federation and the People’s Republic of China began their joint exercises in the Sea of Okhotsk, the most suitable maritime area to hit the US bases in the Pacific.
It may seem strange – but it is not so for those who look to the issue carefully- that in the same days there was a Sino-Russian joint naval-air-land action in the North Sea.
It is by no mere coincidence.
The Sino-Soviet joint operation in Asia took place after checking President Trump’s statements at the United Nations on September 19 last, when he had claimed he could “completely destroy” North Korea and its nuclear stations.
The more Trump is in military contrast with North Korea, as well as with China and Russia, two of the major military fleets after the United States – although this assessment is no longer fully true – the more Putin and Xi Jinping take joint action to indirectly defend North Korea, the terrestrial axis of their security against the possible US penetration from the Korean peninsula and the nearby areas.
North Korea is the point where the Sino-Russian security is weaker, at least for the time being. Hence, regardless of the North Korean leader’s assessment, both Putin and Xi Jinping convey incontrovertible signs to the United States.
The message conveyed is the following: do not touch our border north of South Korea, which is too full of US soldiers and nuclear bombs.
It is by no mere coincidence that the Sino-Russian joint training operations began on both national territories exactly on September 18 last.
The joint exercises – formally started on September 18, the day when Trump had brought the world leaders together to discuss the UN reform – were organized with a sequence of operations less than 100 miles off the North Korean coast.
This happened while the Chinese ships came to the bay of Peter the Great, outside the port of Vladivostok and while the United States, Japan and South Korea carried out operations to simulate an aircraft attack on North Korea with B1B bombers, as well as four F-35 fighters from Japan and two other ones from Guam.
Four other South Korean F-15K fighters added to the operation already underway but – before the UN Security Council meeting and after the bilateral USA-Japan-South Korea and Russia-China exercises – the US Ambassador to China reported that China “would never accept North Korea as a nuclear State.”
It will never accept a nuclear State, but it will certainly accept a buffer State against South Korea, a US and a quasi-nuclear base.
This means that China does not want a strategic threat on its border, nor a structural weakening and full denuclearization of North Korea, which would pave the way for the hegemony of the United States and South Korea (which is de facto a nuclear State) over Southern China and the South-Western maritime border of the Russian Federation, which is short but of utmost strategic importance to it.
China has not officially accepted that the United States could put pressures on it to convince North Korea to lower the threshold of its military programme.
China attaches particular importance to form and it does not certainly want to be “second” to the United States in the Korean peninsula.
Conversely, the true Chinese project is to reduce the North Korean missile, nuclear and chemical-bacteriological umbrella to create a friendly shield towards its Southern stations. This would ensure full strategic autonomy also to North Korea.
Nor should we forget that China accounts for 90% of North Korean trade and economy.
The United States has also a stealth base in Japan, from which aircrafts only partially protected and covered by North Korean and Chinese radars can leave.
The United States has also a base in Kadena, on the Japanese island of Okinawa. Nevertheless, as demonstrated in their joint manoeuvres, China and Russia can immediately show five major ships, two nuclear submarines and some support ships.
China, which is traditionally cautious in the manoeuvres showing its strength off, sent three surface ships and two support submarines.
In short, the “long arm” of the US Navy cannot do much against the mix of Russian and Chinese naval forces in the region which, in the event of a final US action, would defend North Korea as if it were their metropolitan territory.
Russia and China are close, the United States and Japan not.
On top of it, South Korea does not want to definitively sacrifice itself to “democratize” North Korea.
Hence Russia and China will never accept a “serious” Western and Japanese military operation on the Korean territory. They have said so in all possible military languages. On the contrary, as Xi Jinping and Putin underlined in the meeting they held in Moscow on July 5, they want “to cool the North Korean programme down”, in connection with a substantial denuclearization of South Korea and, above all, of the Japanese areas in the Pacific Ocean.
The United States has 35,000 soldiers in South Korea and 40,000 in Japan, deployed in eleven bases, many of which very close to North Korea and, above all, to the Chinese coast.
As was easy to imagine, Trump’s tour in the region was interpreted as a scarcely friendly sign by North Korea.
The North Korean leadership always speaks about the “huge US power in the region” – and this is not just propaganda. It also recalls the long story of the unresolvable conflict of the 38th parallel, which was a show of strength of the Korean Army and the Chinese forces, as well the attack and capture of the “Pueblo” spy ship in 1968, whose sailors were released after a long negotiation between North Korea and the United States on December 23, 1968.
North Korea’s propaganda continues with other examples of US weakness in defying its seas and skies. Indeed, I do not care about the sequence of North Korea’s victories.
It should be noted, however, that the United States must finally accept a share of North Korea’s defence on all sides, in relation to the protection that Russia – which is not always co-ordinated with China – will wish to provide to their buffer State in the Korean peninsula, while North Korea shall eventually agree on a wide protection area for its defence apparatus, which will mean integration with the Russian and Chinese economies, in particular.
The United States will deal with the South Korean border, now drilled and crossed by many new tunnels, in addition to those who are now visited tourists, while the North Korean-Russian-Chinese axis will control – with possibilities of credible threats and retaliation – the entire Southern China Sea and the South Pacific, by defusing the US bases in the region and threatening the rational rearmament of the Japanese “Self-Defence Forces”.
For Shinzo Abe that wanted it, the reform of the Japanese “pacifist” Constitution is a delicate balance in making the United States understand that Japan is a good proxy army in the Pacific, while it shall soon leave for economic crisis or other reasons; and that Japan, in particular- if it reams itself – is the true bulwark against China.
Paradoxically Japan reasons in the same way as North Korea: it no longer trusts a seventy-year-old equilibrium and wants to military balance – on its own – the economic integration with China and South-East Asia, where the United States has completely different aims than Japan.
With a view to countering this project, we would need much more than President Trump’s polemic against the North Korean “weapons of mass destruction” – a script for failure already seen at work against Saddam Hussein in Iraq.
This happened after his weakening with a ten-year war against Khomeini’s Iran, when even the United States had forced the Shah to “democratic elections,” which were to overthrow him, and while US State Department emissaries ordered to Artesh, the Iranian army, to stage a coup against the Shah himself.
The lesson that Kim Jong-Un has learnt from the United States is that of the Balkans and Iraq – and it is very hard for someone to make him change his mind.
We would need a clear declaration recognizing the State of North Korea to open a channel to put pressure on China and Russia in North Korea. We would also need nuclear talks like the Six Party Talks, exactly where they ended in 2007, when North Korea agreed to close its nuclear facilities in exchange for fuel and “steps forward” towards mutual recognition between North Korea, the United States and Japan.
Still a good start, to which we could add some economic actions that could integrate North Korea in the European markets, as well as the Japanese and Sino-Russian ones.
We should fully assess the North Korean production formula to include it in the matrix of economic internationalization that currently characterizes the whole South-East Asia with different and symbiotic productive structures.
The letter sent by North Korea to the President of the UN Security Council – later filed as document A/72/545-S/2017/882, both for the UN Security Council and for the UN Assembly on October 28 – must be seen in this sense.
In said letter North Korea pointed out that the naval and air operations organized by the United States and its allies in the Pacific could be defined as “acts of war”.
From a certain viewpoint, this is legally legitimate.
Later the aforementioned North Korean document was handed out as official document of the Council on October 30.
Furthermore, another North Korean official document shows that the country will not accept the recent charge of “money laundering” directed to it, because – if the financial transactions are designed to purchase technologies or military components for self-defence – there is no infringement of the rules of the Financial Action Task Force (FATF) established, exactly for North Korea, in the FATF meeting held in Buenos Aires On November 1-3 last.
With specific reference to the sanctions against North Korea, the United States can currently hit the textile, the banking and the fishing sectors.
It is also said that China advised its banks and financial companies to block trade with North Korea.
Furthermore, Europe added to the sanctions already decided by the United Nations also a ridiculous block of trade for luxury goods and purebred horses.
Ironically, since the current year the North Korean economy has been growing by 4%, the fastest rate over the last seven years.
Certainly, China’s “covert” market network has been widely used in these years of sanctions, while Chinese banks have done everything – through the Chinese companies – to link North Korea to the global market.
From this viewpoint, there is no hope for an effective regime of sanctions against North Korea.
Too important for Russia and inevitable for China, which would like to see it powerful enough to close its Southern border, but not too nuclearized to force it to negotiate with North Korea.
Hence either North Korea is accepted as regional nuclear power or it is destroyed with nuclear weapons.
Moreover, the US propaganda itself, which sometimes emphasizes the need for a “preventive nuclear attack” against North Korea is a demonstration – according to the same and opposite propaganda of North Korea – of the “necessary” military autonomy of Kim Jong-Un’s Korea.
North Korea also believes that the very presence of US military bases, both in South Korea and elsewhere in the Pacific, is in itself a threat to its strategic autonomy.
This is also true, but here Kim Jong Un speaks on behalf of China and, partly, of Russia, which is less interested in the South Pacific, but considers the non-hegemonic freedom of the region a necessary protection for the Russian operations between the Kurili Islands and Siberia.
According to its official documents, North Korea “is careful in observing the US movements and the renewal of the US forces and its allies in the Pacific”.
This is the right time to rethink new “Six Party Talks” to: a) set the limits of the US direct hegemony in the South Pacific; b) set the limits of the North Korean nuclear power, if this can still play a real protection role; c) establish official relations between the United States and North Korea, and also with Japan; d) provide the economic support to the differentiation of the North Korean production system, which could find itself better in the world market than as Russian and Chinese sub-supplier.
Chinese Communist Party and the path of “high-quality development” at Guangdong Province
During the meeting of “Huang Kunming”, Secretary of Guangdong Provincial Party Committee mentioned that it is significant for Guangdong embark on a path of high-quality development fit for its own situation. According to my highly understand of China’s high-quality development and analysis to the nature of the Chinese society and the polices of the Communist Party of China regarding the development is meaning (all-round building a strong modern socialist country) and all-round rejuvenation of the Chinese nation still need to rely on development.
With the continuous development of the Chinese economy and the deepening of reforms, China put forward a new expression of “high-quality development” for the first time at the 19th National Congress of the Communist Party of China in 2017, which indicates that China’s economy has moved from a stage of rapid growth to a stage of high-quality development.
Changing China’s economic development strategy is an inevitable choice in line with the law of development and the demands of its development. Now, China is seeking to change its previous development pattern of relying on a large number of factors of production to focus more on quality and efficiency. It has begun to adhere to the implementation of the new development philosophy that emphasizes innovative, coordinated, green and open development for all, and to build a new development pattern that relies on domestic trade and promotes integration between domestic and foreign trade to enable the Chinese society to complete the building of a strong modern socialist country in an all-round way, Chinese side should stick to advancing high-quality development as the top priority, as President Comrade “Xi Jinping” stressed in the report.
High-quality development mainly depends on the economy’s vitality, innovation and competitiveness. In order to improve these capabilities, China is accelerating the implementation of the innovation-driven development strategy, intensifying its efforts to achieve a high level of self-reliance in scientific and technological research, mobilizing forces and focusing on solving intractable problems in original and pioneering science and technology research to achieve breakthroughs in some crucial and pivotal technologies, which are guided by these strategies, China has achieved good results in manned space industry, lunar and Mars sounding, deep-sea and land exploration, supercomputers, satellite navigation, quantum information, electro-nuclear technologies, large-scale passenger aircraft, medicine, biopharmaceuticals and other fields over the past years, and joined the ranks of innovative countries in the world.
Green development is an important symbol of the transition of China’s economy from the stage of rapid growth to the stage of high-quality development. In recent years, China has pushed the green transition to a development mode, implemented the comprehensive rationalization strategy, developed green and low-carbon industries, and advocated green consumption.
The bright future of China’s economy stems from more flexible and high-quality development. In 2021, China calmly responded to changes in the world as well as the COVID-19 epidemic, took new steps to build a new development pattern, achieve new results in high-quality development, and achieve a good start for the 14th Five-Year Plan. China has maintained a leading position in the world in economic development and in epidemic prevention and control, accelerated the growth of national strategic scientific and technological forces, improved the flexibility of the industrial chain, continued to deepen supply-side structural reforms, and made solid progress in the green transformation of the low-carbon economy and prosperity subscriber.
Here, with the strong leadership of the Communist Party of China, the significant advantages of the socialist system with Chinese characteristics, the technological foundation accumulated since reform and opening up, the extremely large market advantage and domestic demand potential, and with huge human capital and human resources, the Chinese economy will continue to grow steadily on the path of high-quality development, enabling China to contribute in achieving a steady and stable progress in the recovery of the global economy.
China’s Deflating Population: The Economic Marvel in Eclipse?
So China’s population shrank last year. I admit my first instinct was … well, isn’t this a good thing? I mean, during the entire 1960s and 1970s, global discourse misted around how the world population kept growing beyond the finite resources of this world. And how food scarcity and poverty would create a social depression. China, with a population of roughly 1.4 billion people, was specifically a focal point of population reduction strategies. After the widespread catastrophe of the Great Leap Forward, a debilitating social program orchestrated by Mao Zedong in the late 50s, China’s population was on the up and up in the following decade, to the point that the infamous ‘One-Child Policy’ was introduced in the late 70s to inhibit the burden of a growing population – and concomitant poverty. Since then, however, China has dynamically transformed into an economic powerhouse – a factory floor for global manufacturing. And here lies the answer to this population conundrum: Shrinking population in China is a problem now!
According to the data released by the Chinese government last week, China’s population contracted by circa 850,000 people in 2022; with 9.56 million births against 10.41 million deaths, it was the first time in more than half a century that deaths outnumbered births in China. The initial thought would be to blame it on the pandemic. But that would be a blinkered assumption without gauging the stunted birth rate. It was the sixth consecutive year that the number of births fell, down from 10.6 million in 2021, according to the National Bureau of Statistics. Many demographers and statisticians warned for years about a population decline on the cards, albeit much later in this decade. This presage was why the government reposed its one-child policy in 2016 and extended the limit to three children in 2021. Local governments offered tax rebates and outright cash handouts to couples having children. The source of anxiety was partly social and partly economic – or maybe socioeconomic is the correct juxtaposition.
China is a rising economic power, the world’s second-largest economy, and the strongest contender to dethrone American supremacy. But in listing all the superlatives, we sometimes forget that China is still a developing economy. Despite its phenomenal evolution from endemic poverty, its average population still earns less than the average earnings in advanced economies. And the shrinking population is a two-pronged issue that could constrict China, like other leading developing economies, into a middle-income trap.
Just by simple inference, we can judge that a declining population is also an aging population. Impressive modernity in China’s healthcare system has led to an increase in life expectancy. Meanwhile, a decades-long hiatus in birth-conducive policies and changed mores of young Chinese couples, often antipathetic to having children altogether, have led to a sharp decline in births. A combination of these factors has invited a conspicuous outcome: Shrinkage in China’s working-age population. In fact, China’s working-age population has been in decline since 2015; according to a government spokesman, it could fall to roughly 700 million (approximately 23%) by 2050. This factor would be particularly problematic for China, which has long been a competitive labor market for manufacturing heavyweights like Apple and Microsoft. But moreover, a bulging elderly population amidst falling tax receipts would pose a challenge to government finances, especially given the comparably underdeveloped social safety net programs in China. Therefore, either taxes ought to be raised sharply or state pensions to old-age dependents would hit the skids – a spartan policy dilemma either way.
We can draw apt comparisons from Japan – the world’s third largest economy – which has notoriously suffered from a lopsided aging population and accompanying anemic economic growth since the asset bubble burst of the 1990s. I mean, China’s real estate market does look like a financial crisis just waiting to happen. But post-boom Japan has tried virtually every bizarre economic strategy – from negative interest rates to yield curve control – yet has failed to spark demand-led inflation. Strangely, however, China has sustained its bustling economy on prohibitive rates of investment rather than consumer demand, which has remained relatively lukewarm due to policymakers’ reluctance to pass the complete scope of economic growth to households. Nonetheless, a contracting labor force would perhaps accelerate the exodus of manufacturing from China unless the government finds alternatives to sustain China’s unrivaled productivity levels.
We could blame China’s ‘zero Covid’ policy for strangling economic growth. It is no surprise that China’s economy grew by a modest 3% in 2022, its slowest rate in nearly four decades, barring 2020. Intermittent lockdowns and pedantic mass testing regimes cast a pall over economic activities. And higher interest rates imposed by the Federal Reserve and other central banks have dampened global demand and diluted appetite for Chinese imports. According to government officials, year-on-year Chinese exports fell by 9.9% in December. While an economic turnaround is widely expected later this year, a falling working-age population; a skyward old-age dependency ratio; and the ongoing trade tussle with the United States could cost China many more decades to supersede the American edge. However, China has been an iridescent success story, an economic miracle of sorts. And therefore, if the Chinese Communist Party (CCP) could somehow prioritize economy over national security; social reforms over governmental control; and collaboration over confrontation, I reckon China can again defy the odds and achieve its dream.
Nepal-China Relations and Belt and Road Initiative
China appears to be more “functional” in Nepal recently. A new administration led by leader Pushpa Kamal Dahal has acted on the same pitch initially also. The Rasuwagadhi border crossing, which had been blocked for three years, has been reopened for two-way trade, and the much-anticipated Gyorong-Kathmandu train project’s final survey has also begun as of January 1, 2023. The second phase of the 10-lane ring road project from Kalanki to Chabhil is anticipated to start soon as well. All these accumulatively demonstrate the current nature of friendship between them and the profound Belt and Road Initiative is the key rostrum for the current complexion of the relationship between them. Hence, the trends are indicating a greater form of cooperation even in the regional domain as well.
Meanwhile, China and Nepal have inked a six-point agreement to strengthen bilateral collaboration and exchanges on governance, legislation, and supervisory practices, in line with Beijing’s Belt and Road Initiative (BRI). On September 12, 2022, in Kathmandu’s federal parliament building, Agni Prasad Sapkota, Speaker of the Parliament, and Li Zhanshu, Chairman of the Standing Committee of the Chinese National People’s Congress, signed the agreement. According to the agreement, the nations would exchange information about each other’s legislative, oversight, and governance activities. Five years after BRI’s founding, on May 12, 2017, Nepal formally joined the process. Nine projects – the upgrading of the Rasuwagadhi-Kathmandu road, the construction of the Kimathanka-Hile road, the construction of the road from Dipayal to the Chinese border, the Tokha-Bidur Road, the Galchhi-Rasuwagadhi-Kerung400kv transmission line, the Kerung-Kathmandu rail, the 762MW Tamor Hydroelectricity Project, the 426MW Phuket Karnali were on the to do list. However, more than any other nation, China invested US$188 million in Nepal during the 2020–21 fiscal year. During KP Sharma Oli’s visit to Beijing in 2016, Nepal and China also ratified a transit transport agreement for commerce with other parties.
However, amidst the current global tension and the changing rapport of international politics, China remains as a key investor in Nepal. Besides, the recent activities from the Nepal administration showed a shift in policy domain from the previous regime which in some cases was rigid to Chinese projects. Meanwhile, the BRI becomes more eminent in the strategic, political and economic domain of the status quo. Against such backdrop, the next sections will discuss current trends of the BRI in Nepal.
Nine Projects: Token of Continuation of the Initiative
Nepal put forward nine potential projects to be undertaken under the BRI at the beginning of 2019. These included setting up a technical institution in Nepal, building new highways, tunnels, and hydroelectricity dams, as well as conducting a feasibility assessment for a trans-Himalayan railway that would connect Jilong/Keyrung, a Chinese port of entry, with Kathmandu. This enhanced the significance of the project which will direct to more prosperous China- Nepal relations.
Nepal, the “Pillar”
Hou Yanqi, the Chinese ambassador to Nepal, stated in April 2022 that Nepal was one of the BRI’s most significant pillars and that projects were still moving forward despite the “speed of pragmatic collaboration” slowing down because of the coronavirus pandemic and Nepal’s changing political climate.
Transit Through China: Better Connectivity and Trade
Kathmandu protocol agreement with Beijing, Nepal will import and export goods from a third country through China through Tianjin, Shenzhen, Lianyungang and Zhanjiang seaports and land ports of Lanzhou, Lhasa and Shigatse. They will also get the facility of transporting goods through six dedicated transit points of the two countries. It will boost the trade for improved connectivity.
Extended Cooperation in Domains Except for BRI
In addition to the BRI projects, China is currently making significant investments in Nepal’s infrastructure, including ring road expansion, dry ports at the border crossings of Larcha and Syabrubesi, the establishment of China Study Centers, a new international airport in Pokhara, and optical fiber cable connectivity from Kathmandu to the Chinese border.
Energy Exploration: New Domain of Cooperation
China is also looking into the prospect of discovering gas and oil deposits in Nepal and is building a border river crossing at Hilsa, Humla. It will open a new domain of cooperation based on mutual interest.
Poverty Reduction and Generating Newer Income Sources
Currently, roughly six Chinese airlines offer regular flights to Nepal. Nepal has the fastest-growing Chinese tourist industry. Nepal granted China access to choose 16 Himalayan regions that border China to develop as part of a program to fight poverty.
Security: Bringing Peace
Joint military drills between China and Nepal are also a new development in security cooperation. It will bring peace in the region since the image of Nepal is very clean.
Increased Diplomatic Connectivity
The BRI appears to be one of the three priority pillars for the Chinese government’s organizing principles of foreign policy, along with the Global Development Initiatives and the Global Security Initiatives, in terms of developing successful international relations rather than just an economic endeavor. It will bring a fresh start in the diplomatic domain of both countries and the future prospects of ties in the diplomatic arena can be discussed robustly.
No More Landlockedness
Under BRI and the Trans-Himalayan Multi-dimensional Connectivity Network, which will transform Nepal from a landlocked country to a land-linked one, there are multiple road, sea, and corridor networks throughout the world. It will boost the relationship to a great extent while there will be a surge in the arena of export and import.
The extension of the Qingzang railway from Tibet to Nepal and the border with India is among the most significant BRI projects. Three routes are being considered for this railway. The first would connect Shigatse to Kathmandu via Kerung and continue on to Pokhara and Lumbini before reaching the Indian border. The second would run from Shigatse to the Burang border and connect Humla and Darchula districts in Nepal with Pithoragdh, Uttarakhand, while the third would link Shigatse to the Yandong border of Sikkim, India.
As China and India have no trade disputes with one another, India would gain from this project as well after trading through this route. In comparison to other industrialized parts of the world, South Asia could see an increase in commerce and investment if this project is carried out on a win-win basis between China and Nepal.
Additionally, loans are typically provided on commercial terms through the Silk Road Fund and the Asian Infrastructure Investment Bank (AIIB), both of which are led by China (SRF). Due to project site clearance delays and the nation’s political instability, along with its comparatively short repayment time, Nepal’s big projects have raised concerns that they may not get off the ground.
Besides, three primary issues with China are of particular concern to the Nepalese government. First, instead of commercial loans, the nation favors grants and lenient loans from China. Second, it wants the interest rate and repayment period to be comparable to those of multilateral funding organizations like the Asian Development Bank and the World Bank. Thirdly, it thinks that bid competitions ought to be allowed for the BRI projects. But the Chinese authorities are not responding on the same page.
The Inception of a Recommenced Cooperation
Pradeep Gawali, Foreign Minister in the KP Sharma Oli’s government, said that from the perspective of Nepal, the BRI projects were the way to be connected to the trans-Himalayan multipurpose connectivity network. Nepal had been able to select the nine projects included in the BRI with great success. However, Chinese authority said on December 26 that it looks forward to cooperating with the new government to advance projects under the ambitious Belt and Road Initiative, a day after the Maoist party chairman Pushpa Kamal Dahal alias Prachanda was named as Nepal’s new prime minister (BRI). China aims to develop initiatives under the Belt and Road collaboration, according to Mao Ning, the official spokesperson for the Chinese foreign ministry, who congratulated Prachanda on his appointment. Beijing claims that as a longtime ally and neighbor of Nepal, China cherishes Nepali relations very highly. China is prepared to collaborate with the new Nepalese administration to broaden and deepen friendly relations and cooperation on all fronts, pursue high-quality Belt and Road cooperation, strategic cooperative alliance marked by enduring friendship for growth and prosperity new impetus, and bring more benefits to peoples from both sides.
Hence, it is evident that China’s policy toward Nepal is generally stable and uncomplicated, and the two countries’ bilateral relations have been cordial and shaped by Nepal’s strategy of balancing the divergent impact of China and its southern neighbor. Through BRI projects, Nepal could gain better connectivity relations with its northern neighbors, but in order to do so, Nepal must enhance its negotiations with China.
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