In Geopolitics Today: Friday, May 12th
China's Focus on Food Security Intensifies, The Decline of Cuba's Sugar Industry, and other stories.
China's Focus on Food Security Intensifies
Recent developments in China have brought attention to the issue of food security, with President Xi Jinping emphasizing the importance of agricultural self-reliance. The Russo-Ukrainian War has highlighted the significance of agriculture as a foundation for national security, prompting China to prioritize food self-sufficiency. However, despite efforts to increase grain output, China's per capita production has only seen marginal growth, leading to a growing dependency on imports. This reliance on imported food items, coupled with China's status as the largest global importer, creates vulnerabilities that can be exploited in times of crisis.
China's import dependency extends to key commodities such as soybeans, corn, wheat, rice, and dairy products, which have experienced significant growth in import volume and value. While China has made efforts to diversify its sources of imports to mitigate vulnerabilities, its heavy reliance on a few countries, particularly the US and Brazil, remains a concern. The US-China trade war demonstrated the risks associated with such dependency, as disruptions in the soybean trade became a contentious issue. To address these vulnerabilities, China is focusing on increasing domestic production, expanding arable land, and improving the quality of seeds through state-sponsored breeding and production centres.
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Australia-China Trade Surge Indicates Thaw in Trade Relations
Australia and China witnessed a significant surge in trade in March, with exports reaching new heights. The data reveals a notable increase in Australia's exports to China, particularly in coal and iron ore. Thermal coal exports rose by 122%, reaching $238 million, while iron ore lump and fines increased by 28% and 22.5% respectively, amounting to $380 million and $973 million. This positive trend is seen as an indication of a potential thaw in the otherwise strained relationship between the two nations.
Despite the challenges posed by mutual trade restrictions and political conflict, Australia has remained a crucial supplier of commodities to China. China has historically been Australia's largest trading partner, accounting for nearly one-third of its overseas trade. The depth of their relationship is exemplified by the fact that Australia has continued to supply significant amounts of iron ore to China. While there are early signs of improved relations, Australia has indicated that trade levels with China may not return to previous levels, emphasizing the need for diversification and a careful balance between economic relationships with China and strategic alliances with the United States.
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BRICS Alliance Plans Major Membership Expansion
BRICS, the alliance of Brazil, Russia, India, China, and South Africa, is set to expand its membership, potentially increasing its economic and political influence. The bloc's foreign ministers will meet in South Africa to discuss the enlargement and consider applications from 19 countries, including Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates. The expansion is driven by China and Russia's desire to counter the US-dominated Group of Seven. However, internal disagreements among the existing members and their diverse views on non-economic issues may limit the bloc's cohesiveness.
Apart from expanding its membership, BRICS aims to establish viable alternatives to US-dominated institutions and challenge the dominance of the Western currencies. The New Development Bank and the Contingent Reserve Arrangement are two key institutions created by BRICS, offering development financing and addressing short-term balance of payments pressures, respectively. To make these institutions more competitive, the addition of countries like Saudi Arabia and the United Arab Emirates would increase their size and effectiveness. BRICS cooperation may gain momentum in areas such as climate change and energy transition, with the bloc potentially becoming a major player in climate negotiations by uniting countries with shared positions, including the world's largest coal consumers and major oil producers.
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The Decline of Cuba's Sugar Industry
For centuries, sugar has played a central role in Cuba's history and identity. From the days of Spanish colonization to the struggles for independence, sugar has been intertwined with the nation's story. However, the once-thriving sugar industry is now facing a severe decline. Last season, Cuba's sugar production dropped to just 480,000 tonnes, a fraction of its output in the 1980s. This year, the situation is even worse as the country braces for its worst sugar harvest in over a century.
Various factors have contributed to the industry's decline. Economic sanctions imposed by the United States have taken a toll, cutting off a crucial market for Cuban sugar. The collapse of the Soviet Union in 1991, which was a major buyer of Cuban sugar, further destabilized the industry. In recent years, tougher US sanctions have exacerbated the challenges, nearly bankrupting the island's economy and leaving little resources for the sugar industry. The industry has been forced to shut down several refineries and cannibalize parts from others to keep operations running. The decline of Cuba's sugar industry serves as a reminder of the complex interplay between geopolitical factors, economic pressures, and historical legacies.
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Yemen's Stalled Peace Negotiations and Fragile Ceasefire
Efforts to achieve a lasting peace in Yemen have hit a roadblock, as peace negotiations between the Shia rebels, the Yemeni government, and Saudi Arabia have stalled. Disagreements over the distribution of power and resources have prevented progress, and the rebels' demands for cash payments and concessions have been rejected by the government. Despite some brief ceasefire agreements, the fighting has resumed in Taiz province and Marib, albeit at a lower intensity.
Direct negotiations between the rebels and Saudi Arabia have resulted in a temporary halt to airstrikes. The decline in Iranian support for the rebels and internal factionalism among the rebels themselves have contributed to the changing dynamics of the conflict. The situation is further complicated by the UAE's support for the South Transitional Council (STC) and the potential revival of the north-south divide. Despite the decline in Iranian aid, tensions persist, and negotiations between Saudi Arabia and Iran are ongoing, with efforts to reduce tensions in Yemen and the broader Persian Gulf.