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US President Joe Biden, Mexican President AMLO and Canadian PM Justin Trudeau arrive for a joint news conference at the conclusion of the North American Leaders' Summit in Mexico City.
What We’re Watching: Three Amigos huddle, Peruvian violence, East Asia travel curbs
Three Amigos talk and ... that's all, folks
Well, some progress is better than none at all — at least among “friends.” At their “Three Amigos” summit on Tuesday, US President Joe Biden, Canadian PM Justin Trudeau, and Mexico’s President Andrés Manuel López Obrador — known as AMLO — announced a slew of agreements on things like moving some US production of semiconductors to Mexico, cutting methane emissions to fight climate change, and installing EV charging stations on shared borders. But they failed to make significant headway on the thorniest issues: the record numbers of asylum seekers entering the US from Mexico; Mexican-made fentanyl causing a public health catastrophe for los gringos; and USMCA-related trade disputes such as Mexico's energy reforms or Canadian grumbling at the Biden administration's EV subsidies. Indeed, perhaps the best thing to come out of the summit is that Biden and AMLO — who had tense exchange on Day 1 — showed that despite their lack of personal chemistry, maybe they can be compadres after all.
A deadly day in Peru
Peruvian authorities announced a three-day curfew in the southern region of Puno after at least 18 people were killed Monday in clashes between protesters and police. It was the deadliest day since the country descended into chaos after the ouster of former President Pedro Castillo in early December. The mostly rural supporters of Castillo, a leftist newcomer to politics who faced multiple impeachment attempts during his 17 months in office, have been blocking roads across the country and calling for him to be immediately released and reinstated. Crucially, they have still not accepted the pledge by acting president Dina Boluarte, Castillo’s former VP, to bring forward the scheduled 2026 general elections to April of next year. Meanwhile, a confidence vote to approve Boluarte’s new cabinet easily passed on Tuesday night (the alternative would have caused a cabinet reshuffle and even more chaos). Authorities have also blocked Evo Morales – Bolivia’s former leftist president and a Castillo ally who was himself ousted amid mass protests in 2019 – from entering Peru to cheer on the protesters. What's more, Peru's chief prosecutor is opening an investigation against Boluarte and members of her cabinet on charges of “genocide, qualified homicide and serious injuries.”
East Asian COVID visa beef
China is lashing out at COVID travel restrictions after reopening to the world. On Tuesday, Beijing responded to the latest curbs by Japan and South Korea by canceling short-term visas for their citizens. Tokyo and Seoul are ostensibly worried about new COVID variants being spread by arrivals from China, where Xi Jinping has relaxed his zero-COVID policy with the same lack of transparency that allowed COVID to spread beyond China’s borders in the first place in early 2020. For its part, Beijing resents being singled out by its neighbors while many other countries are welcoming Chinese tourists. In the near term, the impact of the visa tit-for-tat will be limited because few people are now traveling between China and the two countries. But if the restrictions stay in place for weeks or months, it might delay a much-anticipated revival of business activity in East Asia.
Episode 9: US/China power struggle, the global political balance, and your finances
Listen: “China's ability to grow in unprecedented fashion came because they had really cheap labor, and wealthy countries around the world were very happy to take advantage of that labor. Those two things are no longer true,” said Ian Bremmer, president of Eurasia Group and GZERO Media. From the state of the great technological decoupling to China's zero-COVID policy, the relationship between the US and China remains both critically important and deeply fraught.
In this episode of “Living Beyond Borders,” a special podcast produced in partnership between GZERO and Citi Private Bank, we’re assessing where the two nations stand today, and what some recent developments like a Chinese banking crisis, knock on effects of Russia's war in Ukraine, and a renewed debate over tariffs mean for the world and for your money.
This episode, moderated by Shari Friedman, Eurasia Group’s Managing Director of Climate and Sustainability, features Ian Bremmer in conversation with David Bailin, Chief Investment Officer and Global Head of Investments at Citi Global Wealth.
Shari Friedman
Managing Director of Climate and Sustainability, Eurasia Group
David Bailin
Chief Investment Officer and Global Head of Investments, Citi Global Wealth
Ian Bremmer
President, Eurasia Group and GZERO Media
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Boris Johnson is going to be out, one way or the other
Ian Bremmer shares his insights on global politics this week on World In :60:
First, will Boris Johnson step down?
I certainly think it is getting likely. He's going to be out, one way or the other. The question is, is it as a result of a second in one month no-confidence vote that he loses this time around, or he reads the writing on the wall, knows he's going to get voted out and so decides to resign himself. If you made me bet, I think he's going to resign, but he might well just force them to do it. He's lost… a majority of conservative voters in the United Kingdom now want Boris Johnson to step down. He's had scandal after scandal after scandal, lied, been caught lying about so many of those scandals, and it's just a disaster, frankly. While the economy's doing badly, while Brexit has not played out the way he said it would, this is a man that has well passed his sell-by date and I don't expect he will be there as prime minister for much longer.
Secondly, with Beijing rolling out China's first vaccine mandate, how soon will China ease its lockdowns?
Not soon enough. This is a big mistake for the Chinese. They're the one country in the world, of course, that had no problem, at scale, doing lockdowns and surveillance for their population and yet they didn't bother with vaccine mandates, and they should have, especially for older populations, especially for vulnerable populations. This mandate is only in Beijing. It's not hitting restaurants. It's just hitting a bunch of other public venues. It's not hitting public transportation. It will matter for Beijing, but it's not enough. They need to be much more extensive around the country before they're going to be able to start loosening zero-COVID policy. I think we're still looking at early to mid next year at the earliest.
Is the United States the only developed country struggling with mass shootings?
Yeah, nobody else close than the United States, and the US is the only country that has assault type weapons that are so easily accessible in the hands of its population. That is the fundamental policy difference between the United States and Canada, between the US and Australia, between the US and Japan, the US and the Europeans. If you look at all of these different countries, they all have various amounts of mental illness, they have different amounts of economic inequality, they have different amounts of racial challenges than the rest. The United States is the one where you have all of this gun violence. Yes, a lot of the gun violence isn't mass shootings. A lot of it is, frankly, in inner cities. It's poor, it's overwhelmingly Black in the United States, but it's with guns. And if you look at how many people are killed through violence and it's not with guns, it's a tiny fraction of that. And so if you had more effective background checks on who's able to get guns, if you had effective checks on assault weapons, assault type weapons, it would be a very different story in the US. The US is very significantly struggling with it and is doing absolutely nothing to make a difference.
NATO Summit most important post-Berlin Wall
Ian Bremmer shares his insights on global politics this week on World In :60:
First, what is the significance of Japan and South Korea's presence at the NATO summit?
First of all, this is by far the most important NATO summit we've seen since the Wall has come down. Japan and South Korea, a very big deal. Trilateral meeting with President Biden, the two American allies most important that have a dysfunctional relationship, fundamentally dysfunctional on the global stage, and increasingly they are trying to align Kishida, the Prime Minister, and Yoon, the President of South Korea, trying to make that happen. Also, we're increasingly seeing a transformation of NATO to not just being a North Atlantic Alliance, but increasingly taking on global security issues. China's more of a focus. Asian allies, more of a focus. Keep in mind, New Zealand and Australia also there.
Okay, with China lowering its quarantine period, do they finally have control of COVID-19?
No, they're lowering their quarantine period, but it's still very extended for anybody that would be thinking about coming. It's not like they're going to open up for tourists all of a sudden, or even a lot of business travel. And secondly, they are also increasing testing. Those are all things that are going to eventually help move them towards normalization, but they are still minimum of months away from anything that would look like a post zero-COVID policy. I think it's probably mid-2023 is what we're really looking at.
Also, will new G7 sanctions on Russia be effective at stopping the war in Ukraine?
No, no they won't. The only thing that's going to stop the war in Ukraine, frankly, is the Russians running out of troops and getting exhausted, which is closer to coming. And that means territorial gains are going to be harder to come by over the coming months and then we're closer to a frozen conflict. But that doesn't end the war, it just freezes the war. And that's a big problem because it means that Russia's relationship with NATO going forward is fundamentally broken, fundamentally hostile, and cold war with elements of hot war.
How depoliticizing the US health response will save lives (COVID isn't over)
We're not done with the pandemic — yet.
Although COVID will likely become endemic sometime this year in some parts of the world, the virus will still rage on everywhere else.
On GZERO World, Ian Bremmer catches up on the pandemic's state of play with former CDC chief Tom Frieden, who has a message for everyone who hasn't gotten vaxxed yet: do it.
Why? New variants could emerge, making the virus more deadly.
Frieden also shares his thoughts on why China needs to transition to "almost" zero-COVID, the post-pandemic need to invest more in public health, and whether we should worry about monkeypox.
Bonus: we mark Pride month by looking at the history of the AIDS quilt.
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- Coming soon: the State of the World with Ian Bremmer - GZERO Media ›
- Coming soon: Ian Bremmer gives his 2022 update on the State of the World - GZERO Media ›
Hungary's Prime Minister Viktor Orban and European Commission President Ursula von der Leyen during their meeting in Budapest.
What We're Watching: Hungarian holdout, hope in Shanghai, US troops return to Somalia
Is Hungary holding the EU “hostage”?
The European Commission is pushing hard for a bloc-wide ban on Russian oil imports. But one member state — Hungary — has gone rogue and is holding up the embargo. At a meeting of EU foreign ministers on Monday, Lithuania’s representative accused Hungary of holding the bloc “hostage,” after PM Viktor Orbán demanded that Brussels dole out hundreds of millions of dollars to offset losses from moving away from cheap Russian fossil fuels. Orbán is buddies with Vladimir Putin and has been trying to expand Hungary’s economic relationship with the Kremlin in recent months, so he is driving a hard bargain, saying that ditching Russian oil would be an “atomic bomb” for his country’s economy. Landlocked Hungary relies on Russia for around 45% of its total oil imports, and finding alternative sources could lead to shortages and price hikes at a time when Hungarians are already grappling with sky-high inflation. Still, Brussels says Budapest is being greedy because Hungary has already been given a longer window — until the end of 2024 — to phase out Russian imports. But Orbán is hoping to get more concessions ahead of a big EU summit on May 30, when the bloc aims to find a political solution to this stalemate.
Shanghai’s June bloom
Officials in China’s most populous city say they are planning for life to return to normal by June 1 following a draconian COVID lockdown that has kept most of Shanghai’s 26 million residents cooped up since early April. China’s zero-COVID policy, which imposes harsh restrictions in response to even the smallest outbreaks of the virus, has wreaked havoc not only on the lives of tens of millions of people in Shanghai and other Chinese cities but on global supply chains too. When the world’s second-largest economy buys and makes fewer things, the world quickly feels it. Public health experts, including the head of the World Health Organization, have said that zero-COVID is unsustainable due to the high transmissibility of omicron, but Beijing remains unmoved. Given the low vaccination rates among China’s elderly (and most vulnerable) population and questions about the efficacy of Chinese-made jabs more broadly, researchers warn that if omicron were left to spread freely in China, more than 1 million people could die in the coming months. That’s something that Xi Jinping seems keen to avoid ahead of this fall’s 20th Party Congress, where he’s aiming to be re-“elected” to an unprecedented third term as party boss and president. Will Shanghai soon find a way out of lockdown, and will the city become a model for other Chinese urban centers looking to get back to normal?
US troops return to Somalia
The Biden administration has approved a Pentagon request to redeploy US troops to conflict-ridden Somalia. This comes less than two years after the Trump administration withdrew almost all 700 US ground troops from the East African nation as part of a broader effort to pull back from “forever wars” in faraway places. Fewer than 500 troops will be stationed in Somalia, according to the US Department of Defense, which says that since Trump’s pullback, al-Shabab — a militant group loosely aligned with al-Qaida — has expanded its reach across the country. As part of Washington’s new counterterrorism mission, President Joe Biden has also reportedly authorized the targeting of al-Shabab leaders. It remains unclear, however, whether this will allow the US military to conduct airstrikes inside Somalia. Hassan Sheikh Mohamud, Somalia’s newly tapped president, welcomed the US’ return, but many Americans who supported Biden’s pledge to end US involvement in foreign conflicts might not feel the same way, particularly given the symbolism associated with the previous (and disastrous) US presence in Somalia.
China isn't budging on zero-COVID
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here. And yes, we are seven weeks into the war, but we also have real problems in containing COVID in China.
In the United States and the rest of the developed world, everyone's saying, "We're done with COVID. We don't want to wear masks anymore. We want to get our lives back." But in China, the zero-COVID policy means that they've got still major lockdowns. In particular, in Shanghai, the largest city in China, which is now entering a second week of lockdown. And record numbers of cases in Shanghai, nothing close to the numbers of cases you were seeing in the United States or in Europe, but in China -- where very few people have gotten COVID, and so there's no natural immunity, vaccines don't work very well and the hospitals would get overwhelmed very quickly if they were just going to let COVID rip -- understandable that they are extremely nervous about these small numbers and as a consequence, they're locking down the entire city.
Now, one thing I can say is that the Chinese government is very effective in terms of lockdown. So the province of Jilin, which had also significant outbreak, and they started locking down a month ago, that looks like those cases are almost down to zero. So the lockdown with four weeks has been almost completely effective and they'll be able to reopen completely in relatively short order. Shanghai, very far from that. Also, Shanghai is not only the largest, but also the wealthiest city in China. Their per capita income is higher than a lot of European countries, very well educated. And people in Shanghai are not at all happy with the idea that they have to sit in their apartments for weeks on end, they're having difficulty getting food, that their pets are being rounded up and destroyed, that at the beginning that their kids, if their kids were COVID positive and the parents weren't, the children were separated from the parents. There was a very significant outcry over that. The Chinese government actually changed that policy guidance within just a few days as consequence.
But still, I will say from the perspective of the Chinese government, they are not going to change this policy. They think it's a success, the inconveniencing of dozens of millions of Chinese being forced to live in their homes. I mean, even from the American perspective, the idea that they'll take your pets away and they'll kill them, in the case of China, culling pets is seen to be a very small downside for avoiding major hospitalizations and deaths across the country. The Chinese government looks at the US and sees a million people that have died from COVID so far. They look in Europe and see comparative numbers across the European Union in terms of deaths per capita. And they say, "These are countries that aren't actually valuing the lives of their citizens. They're not willing to make any sacrifices for the good of the, for the people, and we are going to do this very, very differently."
And I am sympathetic to that perspective, but I'm not sympathetic to patriotism that says that we are not going to accept Western vaccines because we have to do it all in China. That's stupid. And indeed it's really dangerous for the Chinese people. The fact is that we have massive surplus in terms of vaccines globally, at this point, very different from where we were a year ago or six months ago. The Chinese vaccines work very poorly in stopping spread, especially of these new omicron variants. The Western-made mRNA vaccines are much more effective. The Chinese are working on their own, but they're not ready yet and they won't be until the end of the year at large number.
And in Africa, you couldn't get the vaccines because you didn't have the distribution capability, so a lot of them were actually spoiling before they could get to the citizens on the ground. And so everyone in Africa ended up getting COVID and now they've got natural immunity. It's a much younger population. They're getting back to normal lives as well. In the case of China, the population is much older. A lot of the oldest people haven't been willing to have vaccines. And the Chinese government is unwilling to license Pfizer and Moderna. They say, "Nope, we don't trust it. We're only going to do our own." And when you put that together, well, that's one of the reasons why they're going to be forced to do all of these continual lockdowns.
And I don't see it changing. I think it's going to get worse because this omicron variant and the new variants that are coming are more and more and more transmissible. And that means that in a Chinese population where no one's gotten COVID and the vaccines don't really work, if you were to just let the disease go and not have massive quarantines, as the Chinese government says, you could have five million Chinese citizens die, and I think that's probably right. And they're simply not willing to tolerate that possibility, nor are they willing to accept Western vaccines. Put those things together, means a lot of Chinese citizens are going to get angry. And we have seen some of that. You've seen the yelling and the screaming, for example, from the apartments late night in Shanghai. That's very different from saying there's going to be mass violence. I don't expect that at all because the surveillance system that the Chinese have and their ability to punish non-compliance is so incredibly strong that the average Chinese citizen knows better than to overtly come out and engage in civil disobedience in the country.
But it does mean that their economy is going to have serious problems this year. They're nowhere close to 5% growth. They will need to engage in more fiscal stimulus. They won't be able to deal with a lot of the regulatory responses that they were hoping for in dealing with, for example, the bubble of the real estate sector and other bad debt that's in the corporate sector. And that kicks those issues down the road longer, which means the pain that the Chinese economy will eventually suffer will be much greater as a consequence of this.
One piece of good news is that lower Chinese growth and demand in this environment when you have so much commodity inflation explosion, in terms of oil, and gas and energy, also in terms of food, does help to take some of the air out of that. And so right now, oil prices are a little lower than a hundred. A piece of that is expectation that the world's second largest economy is going to significantly underperform this year. Always silver linings in these sorts of things.
Anyway, something we have to watch very carefully. You'll remember back in January, we thought the number one risk for the world in 2022 was "No zero-COVID", that this policy would fail. The Chinese government came out and was pretty critical. They said, "How can you Americans criticize us? Look at how badly you got it wrong." Well, I mean, we did get it wrong and we have gotten wrong. We still get it wrong. But that doesn't mean that the Chinese government is going to be flexible in responding to their big challenges, and we see that playing out right now.
So we'll watch it carefully and we'll talk to you all real soon. Be good.
For more of Ian Bremmer's weekly analyses, subscribe to his GZERO World newsletter at ianbremmer.bulletin.com
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Should China learn to live with COVID?
If omicron makes cases explode in China, the country's leaders will have to choose between weathering short-term or long-term pain.
Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, predicts that sticking to the zero-COVID approach at all costs will hurt the Chinese and global economy. In his view, learning to live with the virus is the way to go.
China can continue zero COVID until the end of the Beijing Winter Olympics, but after the Games the best move for Xi Jinping is to change direction. But even then, Huang says, it won't be a major shift.
“They're just going to quietly abandon it, or replace it with a new policy.”
Watch his interview with Ian Bremmer on GZERO World: Omicron & the undoing of China's COVID strategy.