Chicago Federal Reserve Bank President Charles Evans visits the online music retailer Sweetwater, in Fort Wayne, Indiana, U.S. September 14 2018. REUTERS/Ann Saphir
March 25, 2019
By Noah Sin
HONG KONG (Reuters) – With downside risks looming and uncertainties rife, the U.S. Federal Reserve is prudent to wait for more economic data before deciding whether its next move will be to raise rates, or cut them, Chicago Fed Bank President Charles Evans said on Monday.
“If growth runs close to its potential and inflation builds momentum, then some further rate increases may be appropriate over time to ensure that the economy settles in on its long-run sustainable growth path and that inflation runs symmetrically about our 2 percent target,” Evans said in remarks prepared for delivery in Hong Kong.
“In contrast, if activity softens more than expected or if inflation and inflation expectations run too low, then policy may have to be left on hold – or perhaps even loosened – to provide the appropriate accommodation to obtain our objectives.”
Last week the U.S. central bank left rates steady in a range of 2.25 percent to 2.5 percent. Fresh forecasts showed 11 of 17 Fed policymakers expected no rate change for the rest of the year, up from just two in December. That unexpectedly dovish signal had financial markets quickly pricing in a rate cut next year.
Fed Chairman Jerome Powell cited low inflation, a slowing global economy and risks like U.S. trade tensions with China for the need to remain patient “for some time.”
Evans, who votes on interest-rate policy this year, had as recently as January said it was entirely plausible the Fed could raise rates twice this year.
While his comments Monday did not rule out such a scenario, he said he had become less sanguine about the economic outlook since last autumn as uncertainties over global growth and trade policies increased. Recent economic data, he said, has been softer than anticipated.
Though there could be upside surprises, he said, including 3.8 percent unemployment fueling stronger consumer spending or accelerating inflation, downside scenarios in his view “loom larger.”
And even if prices do start to rise, he said, “given how muted inflationary pressures appear today, a rise to 2.25 to 2.5 percent is not a big concern to me at the moment.” That assessment suggests Evans has set the bar fairly high for further rate hikes, considering that inflation by the Fed’s preferred gauge has not been that much above the Fed’s 2-percent goal since before the financial crisis.
Still, Evans’ view that both rate hikes or rate cuts are in the realm of possibility echoed that of fellow policymaker Atlanta Fed President Raphael Bostic, who on Friday said both possibilities are on the table for him.
(Writing by Ann Saphir; Editing by Chris Reese)
China’s Minister of Industry and Information Technology Miao Wei speaks at the annual session of China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse in Beijing, China March 26, 2018. REUTERS/Jason Lee
March 25, 2019
BEIJING (Reuters) – China will reduce direct government intervention in its vast industrial sector, the industry minister said on Monday, as Beijing seeks to ease concerns about its industrial policy, core to Washington’s complaints in the Sino-U.S. trade war.
The government’s pledge to reduce its influence over operational matters in China’s manufacturing sector follows an apparent toning down of its high-tech industrial push, which has long annoyed the United States.
“We will gradually reduce the government’s micro-management and direct intervention, in order to allow the market to effectively decide resource allocation and support the development of the manufacturing industry”, Miao Wei, minister of industry and informational technology, said at the China Development Forum.
But China will continue to encourage higher-value production, he said.
In his speech, Miao did not touch on the so-called “Made in China 2025” plan, an initiative intended to help China catch up with global rivals in sophisticated technologies such as semiconductors, robotics, aerospace and artificial intelligence (AI).
The state-backed industrial policy has provoked alarm in the West, due to China’s open efforts to deploy state support and subsidies.
The comments came days ahead of the latest round of high-level trade talks between China and the United States starting in Beijing on Thursday.
Washington has threatened further action if China does not change its practices on issues ranging from industrial subsidies to intellectual property.
China is not conceding to U.S. demands to ease curbs on technology companies, the Financial Times reported on Sunday, citing three people briefed on the discussions.
‘VALLEY OF DEATH’
The latest conciliatory tone struck by Beijing to placate Washington does not mean China is less serious about its high-tech manufacturing drive, with local governments still rolling out plans to help manufactuers move up the value chain.
Local governments have also been told to pursue new engines of industrial growth by developing innovative technologies, such as new energy vehicles (NEVs) and artificial intelligence (AI).
Miao said technology manufacturers needed to survive “the Valley of Death” as they seek to turn laboratory samples into mass production.
The southern province of Hunan this month issued a three-year plan for the AI sector, pledging more support for a local industry whose size is projected to reach 10 billion yuan ($1.49 billion) by 2021.
In the central province of Henan, production of service robots rose 14.3 times in January-February from a year earlier, according to local media. [nL3N216108]
When asked to comment on President Donald Trump’s wish to bring manufacturing jobs back to the United States, Miao said that such decisions could not be made by a single person because an entire supply chain was involved.
“Every company will consider putting its supply chain in a country were costs are relatively lower, this the purpose of the law of economics,” he said.
“If, after comparisons are made, that the United States has lower costs and possess advantages versus other countries, I’m sure that a company…will bring its manufacturing back to the United States.”
In a bid to support to small companies, many of which have been struggling to get financing, Miao said small and medium-sized companies will play a bigger role in the sector’s innovation.
China is planning to launch a highly-anticipated Nasdaq-style technology board – a move by Beijing to counter U.S. curbs on China’s technology advances.
The government’s next move is to implement policies such as tax reductions and to improve the protection of intellectual property rights, according to Miao, adding that the general manufacturing sector will be fully liberalized.
(Reporting by Brenda Goh and Shu Zhang; Writing by Stella Qiu and Ryan Woo; Editing by Kim Coghill)
FILE PHOTO: U.S. President Donald Trump listens to a question as he meets with former hostage Danny Burch, an oil engineer who was taken hostage in Yemen in September 2017, in the Oval Office at the White House in Washington, U.S. March 6, 2019. REUTERS/Jonathan Ernst/File Photo
March 25, 2019
By David Lawder, Philip Blenkinsop and Michael Martina
WASHINGTON/BRUSSELS/BEIJING (Reuters) – U.S. President Donald Trump’s blunt-force use of tariffs in pursuing his “America First” trade agenda has angered many, from company executives to allied governments and members of both parties of Congress.
But there’s one effort which has drawn broad support from those who oppose him on almost everything else – his push to force Beijing to change what are widely viewed as China’s market-distorting trade and subsidy practices.
As U.S.-China talks to end a trade war reach their endgame, politicians, executives and foreign diplomats are urging Trump and his team to hold out for meaningful structural reforms in China to address entrenched problems in the relationship that hurt U.S. and other foreign companies and workers.
Trump’s trade war “has let the genie out of the bottle” by lifting expectations that the trade war will force China to reform policies that businesses and foreign governments regard as unfair, said Steven Gardon, vice president of indirect taxes and customs at Lear Corp. Gardon’s firm is an automotive seating and electrical supplier with plants in 39 countries, including the United States and China.
“Now that all these issues have been raised, there’s a lot more domestic political support to address these issues, and I don’t think you can pull back from that,” Gardon said at a Georgetown Law School forum this month. “There’s now pressure politically that they have to be addressed for the long term.”
Gardon’s comments reflect a broad shift in U.S. and international business sentiment towards China’s economic and trade policies, one that is aligned with Trump’s goals, if not his tactics.
Trump’s trade team say they are in the final stages of negotiating what would be the biggest economic policy agreement with China in decades. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin head to Beijing this week to try to accelerate talks with Chinese Vice Premier Liu He. Liu is set to travel to Washington for another round of negotiations in early April.
Eight months into the trade war that has disrupted the flow of billions of dollars of goods between the world’s two largest economies, it is unclear if a deal acceptable to both sides can be done.
China’s President Xi Jinping is seen as reluctant to make economic reforms under pressure from the United States, and Trump has said he may keep tariffs on Chinese goods in place for “a substantial period” even if a deal is struck.
Xi may find it easier to live with the tariffs Trump has imposed on trade than to change China’s model for economic development.
As part of a deal, Beijing has offered to make big-ticket purchases from the United States to help reduce a record trade gap. Trump’s team has said those purchases would be worth more than a trillion dollars over about six years.
While big Chinese purchases might be tempting for Trump’s administration, they would do nothing to address what U.S. firms competing in China or against Chinese firms say are structural problems with a system stacked against them.
The United States complains China engages in systematic intellectual property theft, forces foreign firms to give up trade secrets for market access and spends huge sums subsidizing its own industry. Redressing those complaints would require policy reform at the highest level from Xi and China’s ruling Communist Party.
A survey released by the American Chamber of Commerce in China in late February showed that a majority of member U.S. companies supported increasing or maintaining tariffs on Chinese goods, and nearly twice as many as last year want the U.S. government to push Beijing harder to create a level playing field.
The U.S. tariff demands have even encouraged some reform-minded Chinese officials and private-sector business executives to call for a faster pace of reform in China as it celebrates the 40th anniversary of its first steps toward capitalism.
Lighthizer told lawmakers in late February that Chinese-American business people in particular have urged him to “hang tough” in the talks and not to “sell out for soybeans.”
STAY THE COURSE
When Trump delayed a threatened tariff increase well before a March 1 deadline for a deal, he stoked fears that he may be swayed by the big purchase order and leave longstanding structural problems unresolved.
Since then, a steady drumbeat of lobbyists, company executives, foreign diplomats and U.S. lawmakers from both parties have urged Trump to stay the course on his structural demands.
Representative Kevin Brady of Texas, one of the most pro-trade Republicans and a critic of Trump’s tariffs, recently joined that call.
“While we want China to buy more U.S. goods … it’s even more important for us to hold China accountable to meeting high international standards on intellectual property rights, subsidization, overcapacity, and the other structural ways in which China distorts the global economy,” he said at a House Ways and Means Committee hearing just days after the tariff delay was announced.
Last week, Senate Democratic leader Chuck Schumer, a longtime China trade hawk, took to the Senate floor to urge Trump not to “back down” and take a deal based largely on Chinese purchases of American soybeans and other goods.
On Thursday, Schumer tweeted: “Now’s not the time to drop $200B in tariffs just because China’s close to a deal, @realDonald Trump.”
QUIETLY ROOTING FOR TRUMP
European Union members, traditional allies of the United States, are still smarting about the steel and aluminum tariffs Trump imposed on imports into the United States last year. The EU is also worried that Trump will impose duties on autos. But the bloc shares many of the same frustrations over China’s technology transfer policies and market access constraints.
“We get complaints every day from our companies,” one European official told Reuters in Beijing, noting that despite repeated pledges from the Chinese government to make life easier for foreign companies, little had changed.
EU trade commissioner Cecilia Malmstrom’s assessment of China’s behavior sounds almost like it was written by the U.S. Trade Representative’s office, charging that China has abused global trading rules.
China has “blurred the lines between state and private sector. The state has undue influence,” she said in a Washington speech this month. “Intellectual properties of companies are stolen. State subsidies, direct or indirect, are common. And these impacts are felt at home and abroad.”
Malmstrom says that while the U.S. and EU “agree on the diagnosis,” they differ on tactics, and she argues for a more multilateral approach, citing the EU’s work with the United States and Japan to address the issues through reform of World Trade Organization rules.
Some worry that Europe could lose out if Washington and Beijing strike a deal to purchase billions of dollars more in products to try to shrink the U.S. goods trade deficit with China.
“If China is buying more from America then inevitably it will buy less from Europe,” a second European official based in Beijing said, adding that could in particular affect large European multinationals.
But European diplomats and officials acknowledge a begrudging support for Trump’s goals, even if they are repulsed by his blunt tactics. Many are secretly rooting for his success.
“We are against unilateral measures, but nobody is exactly sorry for China. On content we think he does have a point,” said one EU diplomat who spoke on condition of anonymity in Brussels. “Beijing has to understand that without reform, the system could just stop working.”
Trump administration officials insist that he has gotten the message and is holding out for “structural changes” to the U.S.-China relationship, along with an enforcement mechanism that holds China to its pledges.
Clete Willems, a White House trade adviser, told the Georgetown Law School forum that Trump is determined to fix problems with China’s trade relationship that he has railed against for years, long before he ever sought office.
“The notion that he’s just going to suddenly accept a bad deal is totally inaccurate. The president is going to walk away from bad deals,” said Willems, who announced on Friday that he is leaving the White House for family reasons.
(Reporting by David Lawder; Editing by Simon Webb and James Dalgleish)
FILE PHOTO: New Zealand’s Prime Minister Jacinda Ardern leaves after the Friday prayers at Hagley Park outside Al-Noor mosque in Christchurch, New Zealand March 22, 2019. REUTERS/Jorge Silva
March 25, 2019
WELLINGTON (Reuters) – New Zealand Prime Minister Jacinda Ardern said on Monday she will travel to China at the end of the week for a meeting with Chinese President Xi Jinping.
Ardern said she would travel to Beijing on Sunday.
She first announced her plans to visit China last year but no final dates had yet been announced.
(Reporting by Charlotte Greenfield; Writing by Praveen Menon; Editing by Paul Tait)
The U.S. Coast Guard Legend-class maritime security cutter USCGC Bertholf (WMSL 750) pulls into Joint Base Pearl Harbor-Hickam, Hawii, U.S. to support the Rim of the Pacific (RIMPAC) 2012 exercise in this June 29, 2012 handout photo. Mass Communication Specialist 2nd Class Jon Dasbach/U.S. Navy/Handout via REUTERS
March 25, 2019
By Idrees Ali
WASHINGTON (Reuters) – The United States sent Navy and Coast Guard ships through the Taiwan Strait on Sunday, the military said, as the United States increases the frequency of movement through the strategic waterway despite opposition from China.
The voyage risks further raising tensions with China but will likely be viewed by self-ruled Taiwan as a sign of support from Washington amid growing friction between Taipei and Beijing.
The two ships were identified as the Navy Curtis Wilbur destroyer and the Coast Guard Bertholf cutter, a U.S. military statement said.
“The ships’ transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific,” the statement said.
“The U.S. will continue to fly, sail and operate anywhere international law allows,” it added.
Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include a trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom of navigation patrols.
Washington has no formal ties with Taiwan but is bound by law to help defend the island nation and is its main source of arms. The Pentagon says Washington has sold Taiwan more than $15 billion in weaponry since 2010.
China has been ramping up pressure to assert its sovereignty over the island, which it considers a wayward province of “one China” and sacred Chinese territory.
China has repeatedly sent military aircraft and ships to circle the island on drills in the past few years and worked to isolate the island internationally, whittling down its few remaining diplomatic allies.
The U.S. Defense Intelligence Agency released a report earlier this year describing Taiwan as the “primary driver” for China’s military modernization, which it said had made major advances in recent years.
U.S. President Donald Trump has said trade negotiations with China were progressing and a final agreement “will probably happen,” adding that his call for tariffs to remain on Chinese imported goods for some time did not mean talks were in trouble.
(Reporting by Idrees Ali; Editing by Sandra Maler)
A Japan Yen note is seen in this illustration photo taken June 1, 2017. REUTERS/Thomas White/Illustration
March 24, 2019
By Swati Pandey
SYDNEY (Reuters) – The Japanese yen hovered near a six-week high on Monday while Asian shares are expected to start lower as risk assets fell out of favor on growing worries about an impending U.S. recession, sending global bond yields plunging.
In Asia, Nikkei futures pointed to a weak start for Japan. Australian shares fell 0.3 percent at the open while New Zealand’s benchmark index faltered 0.9 percent.
Investors also kept one eye on the details of a nearly two-year U.S. investigation which found no evidence of collusion between Donald Trump’s election team and Russia, in a major political victory for the U.S. President.
U.S. stock futures were marginally higher during early Asian hours.
On Friday, all three major U.S. stock indexes registered their biggest one-day percentage losses since Jan.3 with the Dow sliding 1.8 percent, the S&P 500 off 1.9 percent and the Nasdaq dropping 2.5 percent.
Concerns about the health of the world economy heightened last week after cautious remarks by the U.S. Federal Reserve sent 10-year treasury yields to the lowest since early 2018. Adding to the fears of a more widespread global downturn, manufacturing output data from Germany showed a contraction for the third straight month.
In response, 10-year treasury yields slipped below the three-month rate for the first time since 2007. Historically, an inverted yield curve – where long-term rates fall below short-term – has signaled an upcoming recession.
“We have re-run our preferred yield curve recession models, which now suggest a 30-35 percent chance of a U.S. recession occurring over the next 10‑18 months,” said Tapas Strickland, markets strategist at National Australia Bank.
Typically a 40-60 percent probability sees a recession within the next 10-18 months, Strickland added, basing the analysis on previous recessions.
“The risk of a U.S. recession has risen and is flashing amber and this will keep markets pricing a high chance of the Fed cutting rates.”
Much of the concerns around global growth is stemming from Europe and China which are battling separate tariff wars with the United States. Political turmoil in Britain over the country’s exit from the European Union is also a major overhang for risk assets.
On Sunday, Rupert Murdoch’s Sun newspaper said in a front page editorial British Prime Minister Theresa May must announce on Monday she will stand down as soon as her Brexit deal is approved.
The British pound was last flat at $1.3209 after three straight days of wild gyrations. The currency slipped 0.7 percent last week.
Politics was also in focus in the United States.
The long-awaited Mueller report into whether Trump’s campaign colluded with Russia to help Trump defeat his Democratic opponent, Hillary Clinton, marked a major milestone of his presidency as he prepares for his 2020 re-election battle.
In currency markets, the Japanese yen – a perceived safe haven – held near its highest since Feb. 11. It was last off 0.1 percent at 110.04 per dollar.
The Australian dollar, a liquid proxy for risk play, was down for its third straight session of losses at $0.7072.
(Editing by Shri Navaratnam)
Over the past several decades, the think tank world in Washington has led the conservative movement down a path in which it is essentially the president of the local debate society but has precious little impact on public policy outcomes that affect the lives of real Americans.
Recent criticisms of the Kigali Amendment to the Montreal Protocol by the Competitive Enterprise Institute demonstrate this clearly. In addition, these criticisms make plain that the same think tank culture has yet to grapple with the ascent of President Trump and all he represents.
The Kigali Amendment is a relatively obscure proposal, but one that would have a significant and positive impact on American manufacturers and their employees.
In the next decade, one billion air-conditioners will be installed around the world, making it a good time to be in the air conditioning business. America has been the global AC leader since American innovation first brought it to market in 1902. The Heating, Ventilation, Air Conditioning, and Refrigeration industry — or HVACR — is a domestic powerhouse. It is responsible for over 2.5 million American jobs, almost 700,000 manufacturing jobs, and $621 billion of economic output per year.
Kigali initiates a phase down of hydrofluorocarbons (HFCs) in air conditioning systems and replaces them with new coolants. As it happens, American manufacturers hold the patents on the bulk of those new products. By signing onto Kigali, America will remain the global leader in the industry.
Despite the undeniable advantages Kigali provides to American manufacturers, it deals with a climate-related issue, so the folks at CEI have adjusted their spectacles and straightened their bow ties and have begun to lecture American workers on how terrible it is.
CEI argues that China gets more lenient treatment under Kigali. While it’s true that China will be permitted to continue producing HFCs under Kigali, as he states, they will not be permitted to sell these products in the U.S if we sign on Kigali. It’s irrelevant how many HFCs China will be permitted to make, let alone for how long, if it’s illegal to sell them.
Kigali will have a positive impact on U.S. manufacturing and the U.S. economy. A recent study conducted by Inforum and JMS Consulting titled, “Economic Impacts of U.S. Ratification of the Kigali Amendment,” shows is will have a net positive impact on America’s trade imbalance of more than $12.5 billion by 2027.
But China cheats, they argue in their second point. Well, duh. Of course China cheats. They’ve already gotten pinched for dumping cheap coolants into the U.S. market. But that was under a different president. If nothing else, President Trump has shown he will not stand by as China cheats its way to global economic dominance. The truth is, Kigali stops Chinese cheating. This is a principal reason why the economic impact study cited above found that ratification would lead to $6.5 billion in reduced imports.
CEI’s third point is their most onerous and sloppy. They claim U.S. companies like Honeywell and Chemours will just manufacture new products in China anyway. Wrong. So wrong, in fact, that their supporting documentation for this fake news states, “On the fluoroproducts side, Chemours plans to shift most production of its Opteon hydrofluoroolefin (HFO) refrigerant to its new plant in Corpus Christi, Texas, US.” That story went on to quote Chemours’ CEO saying that the company “will shift most of our production to Corpus Christi as soon as possible.”
Overall, American companies have invested more than $1 billion in research, development, and expanded domestic production of next generation coolants. What’s more, Kigali has the support of virtually the entire U.S. business community, large and small.
Donald Trump is a master negotiator whose stated goal as president of the United States is to reconfigure global agreements to benefit America. He isn’t an ideologue. He isn’t concerned with legacy disputes between competing think tanks in Washington. And he’s tired of deals that meet some precious standard for “free market” purity but hurt American workers. These are some of the reasons people like me, regular working Americans, flocked to his campaign early and stuck with him when the establishment tried to take him down.
I trust that President Trump will send the Kigali Amendment to the Senate for ratification on its merits, where it will be well received by Republicans and Democrats alike.
Paul Nagy (SouthTrentonGuy) has worked as a conservative activist in New Hampshire for over 30 years. He is the founder and chairman of Americans for Secure Borders, and worked previously as northeast campaign director for Pat Buchanan’s 1992 presidential campaign and as the northeast regional director for the National Christian Coalition.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.
Source: The Daily Caller
An airplane with the Russian flag is seen at Simon Bolivar International Airport in Caracas, Venezuela March 24, 2019. REUTERS/Carlos Jasso
March 24, 2019
CARACAS (Reuters) – Two Russian air force planes landed in Venezuela’s main airport on Saturday carrying a Russian defense official and nearly 100 troops, according to a local journalist, amid strengthening ties between Caracas and Moscow.
A flight-tracking website showed that two planes left from a Russian military airport bound for Caracas on Friday, and another flight-tracking site showed that one plane left Caracas on Sunday.
The report comes three months after the two nations held military exercises on Venezuelan soil that President Nicolas Maduro called a sign of strengthening relations, but which Washington criticized as Russian encroachment in the region.
Reporter Javier Mayorca wrote on Twitter on Saturday that the first plane carried Vasily Tonkoshkurov, chief of staff of the ground forces, adding that the second was a cargo plane carrying 35 tonnes of material.
An Ilyushin IL-62 passenger jet and an Antonov AN-124 military cargo plane left for Caracas on Friday from Russian military airport Chkalovsky, stopping along the way in Syria, according to flight-tracking website Flightradar24.
The cargo plane left Caracas on Sunday afternoon, according to Adsbexchange, another flight-tracking site.
A Reuters witness saw what appeared to be the passenger jet at the Maiquetia airport on Sunday.
It was not immediately evident why the planes had come to Venezuela.
Venezuela’s Information Ministry did not immediately reply to a request for comment.
Russia’s Defense Ministry and Foreign Ministry did not reply to messages seeking a comment. The Kremlin spokesman also did not reply to a request for comment.
The Trump administration has levied crippling sanctions on the OPEC nation’s oil industry in efforts to push Maduro from power and has called on Venezuelan military leaders to abandon him. Maduro has denounced the sanctions as U.S. interventionism and has won diplomatic backing from Russia and China.
In December, two Russian strategic bomber aircraft capable of carrying nuclear weapons landed Venezuela in a show of support for Maduro’s socialist government that infuriated Washington.
Maduro on Wednesday said Russia would send medicine “next week” to Venezuela, without describing how it would arrive, adding that Moscow in February had sent some 300 tonnes of humanitarian aid.
Venezuela in February had blocked a convoy carrying humanitarian aid for the crisis-stricken country that was coordinated with the team of opposition leader Juan Guaido, including supplies provided by the United States, from entering via the border with Colombia.
(Reporting by Carlos Garcia, Carlos Jasso, Diego Ore and Brian Ellsworth in Caracas, and Maria Tsvetkova and Gabrielle Tetrault-Farber in Moscow; Editing by Leslie Adler)
The race for 5G — the next generation of broadband connection — is currently being won by China, and that could ultimately imperil America, according to commentator Newt Gingrich.
In his latest podcast, and in a commentary for Fox News, the former GOP House Speaker warns “If America does not get its act together, catch up, and do what it takes to win, we are very likely going to end up in a Chinese-dominated world.”
According to Gingrich, the country that wins the 5G technology race “will dominate economically, militarily, and in sheer knowledge.“
“This next generation technology will vastly expand our connectivity and dramatically change our everyday lives,” he writes. “It is so powerful and offers so many opportunities and potential threats, it will fundamentally change the world in which we live.”
The “full deployment” of 5G is destined to be “the backbone of autonomous manufacturing, smart homes, self-driving cars, real-time virtual reality” and other “life-changing technologies,” Gingrich writes.
And that means a multitude of risks.
“If the global system that is built isn’t fully secure, the data that flows through the system will be up for grabs,” he writes, allowing “bad actors” — and governments — “to know who you call, what’s in your bank account, what’s in your health records, and where you physically are at all times.”
“Consider how radically different our lives would be if a totalitarian dictatorship had that kind of access – and control – on our economy, national security, and our daily lives,” he writes.
Source: NewsMax America
General view of Duqm Port in Oman, August 22, 2017. REUTERS/ Nawied Jabarkhyl
March 24, 2019
By Phil Stewart
WASHINGTON (Reuters) – The United States clinched a strategic port deal with Oman on Sunday which U.S. officials say will allow the U.S. military better access the Gulf region and reduce the need to send ships through the Strait of Hormuz, a maritime choke point off Iran.
The U.S. embassy in Oman said in a statement that the agreement governed U.S. access to facilities and ports in Duqm as well as in Salalah and “reaffirms the commitment of both countries to promoting mutual security goals.”
The accord is viewed through an economic prism by Oman, which wants to develop Duqm while preserving its Switzerland-like neutral role in Middle Eastern politics and diplomacy.
But it comes as the United States grows increasingly concerned about Iran’s expanding missile programs, which have improved in recent years despite sanctions and diplomatic pressure by the United States.
A U.S. official, speaking on condition of anonymity, said the deal was significant by improving access to ports that connect to a network of roads to the broader region, giving the U.S. military great resiliency in a crisis.
“We used to operate on the assumption that we could just steam into the Gulf,” one U.S. official said, adding, however, that “the quality and quantity of Iranian weapons raises concerns.”
Tehran has in the past threatened to block the Strait of Hormuz, a major oil shipping route at the mouth of the Gulf, in retaliation for any hostile U.S. action, including attempts to halt Iranian oil exports through sanctions.
Still, the U.S. official noted that the agreement would expand U.S. military options in the region for any kind of crisis.
Duqm is ideal port for large ships. It is even big enough to turn around an aircraft carrier, a second official said.
“The port itself is very attractive and the geostrategic location is very attractive, again being outside the Strait of Hormuz,” the official said, adding that negotiations began under the Obama administration.
COMPETITION WITH CHINA
For Oman, the deal will further advance its efforts to transform Duqm, once just a fishing village 550 km (345 miles) south of capital Muscat, into a key Middle East industrial and port center, as its diversifies its economy beyond oil and gas exports.
The deal could also better position the United States in the region for what has become a global competition with China for influence.
Chinese firms once aimed to invest up to $10.7 billion in the Duqm project, a massive injection of capital into Oman, in what was expected to be a commercial, not military, arrangement.
“It looks to me like the Chinese relationship here isn’t as big as it appeared it was going to be a couple of years ago,” the second official said.
“There’s a section of the Duqm industrial zone that’s been set aside for the Chinese … and as far as I can tell so far they’ve done just about nothing.”
Still, China has in the past shown no qualms about rubbing up against U.S. military facilities.
In 2017, the African nation of Djibouti, positioned at another geostrategic choke-point, the strait of Bab al-Mandeb, became home to China’s first overseas military base. The U.S. military already had a base located just miles away, which has been crucial for operations against Islamic State, al Qaeda and other militant groups.
(Reporting by Phil Stewart; Editing by Lisa Shumaker)