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Transport disaster strikes Black Friday purchasing amid Europe, China floods

TOPSHOT – The aerial photo shows an area in the Blessem district of Erftstadt on July 16, 2021, which was completely destroyed by the flooding.

SEBASTIEN BOZON | AFP | Getty Images

The 2021 Christmas shopping season could be impacted by out of stock and shipping delays as recent floods in Europe and China exacerbate already tight global supply chains.

Western Europe and the Chinese province of Henan – an important transport hub and headquarters of several large companies – are grappling with the aftermath of devastating floods.

The disasters damaged railways in both regions, which are used to deliver goods and raw materials. Water entered industrial areas and damaged facilities, machinery and warehouses, supply chain industry companies told CNBC.

“Black Friday and the holiday season for which products (and raw materials) are staged will have the brunt of the impact,” Pawan Joshi, executive vice president of supply chain software company E2open, told CNBC in an email.

“Consumer electronics, dorm furniture, clothing and appliances will all continue to be in short supply as shopping starts early in school and enters the main Christmas shopping season,” he said.

Delays in the distribution of raw materials needed to manufacture goods will have a cascading effect and disrupt supply chains “for weeks and months,” Joshi said.

The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage.

Pawan Joshi

Executive Vice President, supply chain software company E2open

Several companies, including Germany’s largest steel manufacturer Thyssenkrupp, have declared force majeure. A force majeure event occurs when unforeseeable circumstances, such as natural disasters, prevent a party from fulfilling its contractual obligations and release it from sanctions.

Some of the industries hardest hit by the floods include automobiles, technology and electronics, according to those CNBC spoke to.

Car production started again after lack of chips

Auto production is likely to be affected by production delays as many of the world’s largest automakers and their suppliers are based in the flood-ravaged regions.

“The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage,” said Pawan.

Production facilities in Germany, the Netherlands, Luxembourg and Belgium are expected to bear the brunt of the flood damage, supply chain risk management company Everstream told CNBC via email. Many suppliers that provide specialty parts for the automotive, technology and aerospace industries are based there, said Shehrina Kamal, vice president of Intelligence Solutions at Everstream.

“When the floods receded, most major highways and roads were expected to be cleared this past weekend,” she said.

“Given that some companies have issued profit warnings and even declared acts of God, the effects of the flood are likely to drag on through supply chains for several weeks,” concluded Kamal.

Zurich-based company Klingelnberg, which makes transmission components, warned that the damage to its Hückeswagen plant in Germany could affect its sales targets for 2021.

Disruption of copper is bad news for electronics

The floods could also disrupt supplies of copper, which is used in many products from electronics to electric vehicles.

Flood-hit Henan Province in China is a major center of copper production, said Vivek Dhar, a commodities analyst with the Commonwealth Bank of Australia.

Copper prices rose sharply last week on delivery concerns, he said, as Henan has seen strong growth in copper smelting in recent years.

“Hopes for copper demand are linked to the rebuilding of damaged infrastructure in central China. China’s electricity sector is a particularly strong driver of copper demand,” Dhar wrote in a note last week.

In Europe, Aurubis GmbH – a provider of high-precision copper wires for the electronics and electrical appliance industries – declared force majeure in the case of deliveries after extensive floods in their plant, according to Everstream Analytics.

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Meanwhile, in Henan’s capital, Zhengzhou, the disruption could hit a wide range of industries, from automotive to pharmaceuticals to biotechnology, said Ryan Seah, APAC intelligence analyst at Everstream.

“Zhengzhou is a major transportation hub and one of the most important cities in China along the Belt and Road Initiative,” said Seah, referring to China’s gigantic infrastructure plan that spans several countries and continents. He added that the city is home to 91 China-listed companies and a variety of sectors.

Zhengzhou is also home to a large factory operated by Hon Hai Precision Industry, also known as Foxconn. It is the world’s largest assembly plant for Apple’s iPhones. Foxconn previously told CNBC that it had “activated an emergency plan for flood control measures at this location.”

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World News

With #MeToo Case In opposition to Kris Wu, China Hits Out at Celebrities

China’s ruling Communist Party has seized on the high-profile detention of a Canadian Chinese pop singer in Beijing on suspicion of rape to deliver a stark warning against what it regards as a social ill: celebrity obsession.

In less than a month, the pop singer Kris Wu, 30, has gone from being one of China’s biggest stars, with several lucrative endorsements and legions of young female fans, to perhaps the most prominent figure in the country to be detained over #MeToo allegations. The police said over the weekend that Mr. Wu was being investigated after weeks of public accusations of sexual wrongdoing against him, though officials provided few details.

Born in China and raised partly in Canada, Mr. Wu rose to fame as a member of the Korean pop band EXO, before striking out on his own as a singer and actor. He built a huge following in China with his manicured good looks and edgy swagger. He amassed endorsement deals with many domestic and international brands, including Bulgari and Louis Vuitton.

Mr. Wu has not been formally charged, but his career in China has already taken a big hit. After mounting public pressure, more than a dozen brands cut ties with him. His Weibo social media account, where he had over 51 million followers, was taken down shortly after the news of his detention. His songs have also disappeared from Chinese music platforms.

Chinese women’s rights activists have hailed the detention as a rare victory for the country’s fledgling #MeToo movement. But the Communist Party’s official news outlets have largely cast the investigation into Mr. Wu as proof that the party, led by Xi Jinping, one of its most hard-line leaders in decades, defends the interests of ordinary people.

Guo Ting, a gender studies scholar at the University of Hong Kong, said, “Xi has tried to reinvent the party as the legitimate party for the people and the party of Chinese socialism for the people.” By going after Mr. Wu, she added, the party is “targeting the so-called rich and powerful, while evading the real kind of gray area of that wealth and power within the party elite.”

When the accusations against Mr. Wu first emerged weeks ago, the party’s propaganda outlets largely stayed quiet. But after his detention, they put out commentaries and news reports hailing it as a lesson to celebrities.

“Wu Yifan has money, he’s handsome and he has the status of being a ‘top star,’” read a commentary in The Global Times, a Communist Party-run newspaper, referring to the singer by his Chinese name. “Perhaps he thought that ‘sleeping with women’ was his advantage, maybe even his privilege.”

“But on this precise point he has made a mistake,” the newspaper noted.

Some of the rhetoric noted that foreign citizenship did not place celebrities beyond the reach of the law, pointing in part to continuing tensions between China and Canada as well as rising anti-Western sentiment among Chinese.

CCTV, China’s state broadcaster, said in a commentary, “No one has a talisman — the halo of celebrity cannot protect you, fans cannot protect you, a foreign passport cannot protect you.”

The state news media’s approach reflects the Chinese government’s recent crackdown on the entertainment industry and the culture of celebrity worship that Beijing has accused of leading the country’s youth astray. The authorities have stepped up censorship, cracked down on the widespread practice of tax evasion within the industry and ordered caps on salaries for the country’s biggest movie stars.

Concerns about the outsize influence of celebrities on the country’s youth reached a peak in May when fans supporting contestants in a boy band competition spent huge sums of money buying — then apparently dumping — yogurt drinks to vote for their favorite idols. The government promptly issued regulations aimed at cracking down on what they called “chaotic” online fan clubs and their “irrational” behaviors. The authorities on Monday said they had already taken down thousands of “problematic groups” as part of an ongoing effort to address “bad online fan culture.”

The authorities “are concerned about the impact on the youth,” said Bai Meijiadai, a lecturer at Liaoning University in northeastern China who studies fan culture. “They want to see the youth studying and working, not spending excessive amounts of money to chase stars.”

Mr. Wu, too, had an army of fans eager to open their wallets to bolster his image by buying albums and even making donations to charities in his name. He has also sought to use his influence to pressure his critics into silence, according to his accuser and a producer of a popular showbiz program.

The producer, Xiao Wei, said his show, “Xiu Cai Kan Entertainment,” had been compelled to remove a video it had posted online in which its hosts criticized Mr. Wu after the allegations of sexual misconduct had emerged. Mr. Xiao said the short-video platform Douyin had told the program that they had been contacted by Mr. Wu’s lawyers.

“This is an age of stars, fans and traffic,” Mr. Xiao said in an interview. “Money has become the only criterion to success — this is not right.”

China’s Tightening Grip

    • Xi’s Warning: A century after the Communist Party’s founding, China’s leader says foreign powers would “crack their heads and spill blood” if they tried to stop its rise.
    • Behind the Takeover of Hong Kong: One year ago, the city’s freedoms were curtailed with breathtaking speed. But the clampdown was years in the making, and many signals were missed.
    • One Year Later in Hong Kong: Neighbors are urged to report on one another. Children are taught to look for traitors. The Communist Party is remaking the city.
    • Mapping Out China’s Post-Covid Path: Xi Jinping, China’s leader, is seeking to balance confidence and caution as his country strides ahead while other places continue to grapple with the pandemic.
    • A Challenge to U.S. Global Leadership: As President Biden predicts a struggle between democracies and their opponents, Beijing is eager to champion the other side.
    • ‘Red Tourism’ Flourishes: New and improved attractions dedicated to the Communist Party’s history, or a sanitized version of it, are drawing crowds ahead of the party’s centennial.

The police investigation into Mr. Wu came weeks after a university student, Du Meizhu, now 18, accused the singer of enticing young women like herself with the promise of career opportunities, then pressuring them into having sex.

Ms. Du’s public accusations were met with an outpouring of support, but also criticism from the singer’s fans, prompting debates about victim shaming, consent and abuse of power in the workplace.

Some women’s rights activists saw Mr. Wu’s detention as a sign that feminist values had finally permeated the mainstream to the extent that the authorities could no longer afford to look the other way. They said they were hopeful that it would encourage more women to come forward to share their experiences and that it could lead to wider avenues for legal recourse for sexual assault survivors.

“This time, progress was made very suddenly, but it was very satisfying,” said Li Tingting, a gender equality activist in Beijing. “Everyone is looking forward to what will happen in the future.”

But it remained unclear if the police in Beijing were looking specifically into Ms. Du’s complaints. The authorities last month released initial findings about her allegations that said she had hyped her story to “enhance her online popularity.”

Ms. Du did not respond to requests for comment. Emails to Mr. Wu’s studio and his lawyer received no response. Mr. Wu denied the allegations on his personal Weibo account last month, saying he would send himself to jail if they were true.

Despite the surprise development, activists know that China’s #MeToo movement is tightly constrained by the government’s strict limits on dissent and activism. Women who have previously come forward with accusations of sexual harassment and assault against prominent men have often become targets of threats and defamation lawsuits. Feminist activist accounts and chat groups on Chinese social media sites are routinely shut down.

The swift manner in which the authorities have addressed the complaints against Mr. Wu contrasts with how they responded to #MeToo accusations against Zhu Jun, a prominent television personality at CCTV, the state broadcaster. Mr. Zhu was accused by a former intern, Zhou Xiaoxuan, in 2018, of forcibly kissing and groping her in 2014 while she was working on his program, accusations that he has denied. Ms. Zhou has sued Mr. Zhu for damages, but three years later, her complaint remains unresolved.

Mr. Wu, by comparison, is not part of the party establishment.

Professor Guo, of the University of Hong Kong, said, “It is still a state capitalist system and Wu Yifan is not a part of that official establishment,” adding, “His nationality and his status, I think, make it easy for the party to on one hand cut him off, while still maintaining its own legitimacy.”

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Entertainment

Police in China Detain Canadian Pop Star Kris Wu on Suspicion of Rape

The police in Beijing said Saturday they had detained Kris Wu, a popular Canadian Chinese singer, on suspicion of rape amid a #MeToo controversy that has set off outrage in China.

The police did not provide details of their investigation into Mr. Wu. But it comes several weeks after an 18-year-old university student in Beijing accused him of enticing young women like herself with the promise of career opportunities, then pressuring them into having sex.

Known in China as Wu Yifan, Mr. Wu, 30, is the most prominent figure in China to be detained over #MeToo allegations.

He rose to fame as a member of the Korean pop band EXO, then started a successful solo career as a model, actor and singer. Though he denied the allegations when they first surfaced, they set off an uproar that led at least a dozen companies, including Bulgari, Louis Vuitton and Porsche, to sever ties with the singer.

The Chaoyang District branch of the Beijing police said in a statement on social media on Saturday night that it had been looking into accusations posted online that Mr. Wu “repeatedly deceived young women into sexual relations.” It said that Mr. Wu had been detained while the criminal investigation continued.

Mr. Wu’s accuser, Du Meizhu, has said publicly that when she first met Mr. Wu in December last year, she was taken by the singer’s agent to his home in Beijing for work-related discussions. She said that she was pressured to drink cocktails until she passed out, and later found herself in his bed.

They dated until March, according to her account of the events, when he stopped responding to her calls and messages. She has also said she believed that he targeted other young women.

Mr. Wu’s lawyer did not immediately respond to requests for comment. Ms. Du could not be reached.

It was not immediately clear if the police were specifically investigating Ms. Du’s claims. In a statement in July, the police had released what appeared to be preliminary findings about Ms. Du’s allegations. The police had said Ms. Du had hyped her story “to enhance her online popularity,” an assessment that was criticized by her supporters as victim shaming.

The outpouring of support for Ms. Du was a sign that the country’s nascent #MeToo movement continues to grow despite the government’s strict limits on activism and dissent. After Ms. Du spoke out, her supporters flooded the social media pages of several brands, threatening boycotts if they did not drop their partnerships with Mr. Wu, a campaign that quickly forced the companies to distance themselves from him.

The accusations have triggered a heated debate on issues like victim-shaming, consent and abuse of power in the workplace — concepts that had rarely featured in mainstream discussions before the #MeToo movement went global.

The authorities in China often discourage women from filing sexual misconduct complaints, and sexual assault or harassment survivors are frequently shamed and even sued for defamation. Censorship and limits on dissent have also stymied efforts among feminist activists to organize, even as trolls are given cover to spew abuse.

Yet the high-profile nature of the controversy made Ms. Du’s allegations impossible to ignore for Chinese authorities, who are always on the lookout for what they deem to be potential sources of social unrest.

The police announcement, posted on the country’s popular Weibo social media platform, immediately started trending, drawing more than six million likes.

Lu Pin, a New York-based feminist activist, said the detention of Mr. Wu was a major step forward for the #MeToo movement in China.

“Regardless of what the motivation of the police may have been, just the fact that he was detained is huge,” Ms. Lu said.

“For the last three years, a number of prominent figures have faced #MeToo accusations but nothing ever happened to them,” Ms. Lu said. “Now with Wu Yifan, #MeToo has finally taken down someone with real power in China — it has shown that no matter how powerful you are, rape is not acceptable.”

The detention of Mr. Wu comes amid a broader government crackdown on the entertainment industry.

In recent years, Chinese authorities have moved aggressively to clean up the industrywide problem of tax evasion and to cap salaries for the country’s biggest movie stars. In June, the country’s internet watchdog began a crackdown on what it called the country’s “chaotic” online celebrity fan clubs, which the government has come to see as an increasing source of volatility in public opinion.

The People’s Daily, the mouthpiece of the ruling Communist Party, depicted Mr. Wu’s detention as a warning to celebrities that neither fame nor a foreign citizenship would shield them from the law.

“A foreign nationality is not a talisman. No matter how famous one is, there is no immunity,” the propaganda outlet wrote. “Remember: The higher the popularity, the more you must be self-disciplined, the more popular you are, the more you must abide by the law.”

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Politics

Vice President Kamala Harris to go to Vietnam and Singapore amid tensions with China

U.S. Vice President Kamala Harris waves as she boards Air Force Two June 14, 2021 in Joint Base Andrews, Maryland.

Alex Wong | Getty Images

Vice President Kamala Harris will travel to Singapore and Vietnam next month to strengthen the U.S.’s relationship and economic ties with the Indo-Pacific region, the White House said in a statement on Friday. 

Harris will be the first U.S. vice president to visit Vietnam, and the highest-ranking official from the Biden administration to visit the Indo-Pacific, and Asia overall. Indo-Pacific refers to the region that lies between the Indian and Pacific Oceans, bordered by Japan, India and Australia.

The visit comes as the administration works to fortify regional ties with Southeast Asian nations, while pushing back on China’s influence in the region and globally. 

“President [Joe] Biden and Vice President Harris have made it a top priority to rebuild our global partnerships and keep our nation secure, and this upcoming visit continues that work — deepening our engagement in Southeast Asia,” Symone Sanders, senior advisor and chief spokesperson for Harris, said in the White House statement.

The White House did not provide details on the dates of the trip. It will also serve as Harris’ second international trip in office after she visited Guatemala and Mexico in June as part of her diplomatic efforts to address the root causes of migration to the U.S. 

Harris will meet with the leaders of Singapore and Vietnam to discuss regional security, climate change and the coronavirus pandemic, according to the White House. She will also discuss joint efforts with the leaders to “promote a rules-based international order.”

The announcement also comes just days after Defense Secretary Lloyd Austin’s own trip to Singapore, the Philippines and Vietnam, which focused on offering support to Southeast Asia nations as territorial rifts with China unfold. 

The vice president’s visit affirms the strength of the relationship between the U.S. and Singapore, according to a statement released on Friday by the press secretary to Singapore Prime Minister Lee Hsien Loong, the Business Times reported. 

Harris will meet with Singapore leaders to discuss ways to cooperate in areas such as defense, digital trade and cyber security, according to the Business Times. 

“I am delighted to welcome Vice-President Harris on her first official visit to Singapore,” the statement said, according to Business Times. “I look forward to our discussions on strengthening bilateral cooperation and working together on global challenges such as the Covid-19 pandemic and climate change.”

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World News

‘They Have My Sister’: As Uyghurs Communicate Out, China Targets Their Households

She was a gifted agricultural scientist educated at prestigious universities in Shanghai and Tokyo. She said she wanted to help farmers in poor areas, like her hometown in Xinjiang, in western China. But because of her uncle’s activism for China’s oppressed Muslim Uyghurs, her family and friends said, the Chinese state made her a security target.

At first they took away her father. Then they pressed her to return home from Japan. Last year, at age 30, Mihriay Erkin, the scientist, died in Xinjiang, under mysterious circumstances.

The government confirmed Ms. Erkin’s death but attributed it to an illness. Her uncle, Abduweli Ayup, the activist, believes she died in state custody.

Mr. Ayup says his niece was only the latest in his family to come under pressure from the authorities. His two siblings had already been detained and imprisoned. All three were targeted in retaliation for his efforts to expose the plight of the Uyghurs, he said.

“People are not only suffering there, they are not only being indoctrinated there, not only being tortured, they are actually dying,” said Mr. Ayup, who now lives in Norway. “And the Chinese government is using this death, using these threats to make us silent, to make us lose our hope.”

As Beijing has intensified its repression in Xinjiang in recent years, more Uyghurs living overseas have felt compelled to speak out about mass internment camps and other abuses against their families back home. Their testimonies have added to a growing body of evidence of China’s crackdown, which some have called a genocide, prompting foreign governments to impose sanctions.

Credit…Abduweli Ayup

Now the Chinese authorities are pushing back against overseas Uyghurs by targeting their relatives.

The Communist Party has long treated the relatives of dissidents as guilty by association and used them to pressure and punish outspoken family members. With the courts under the control of the authorities, there is little recourse to challenge such prosecutions. Liu Xia, the wife of Chinese activist Liu Xiaobo, spent nearly eight years under house arrest after he was awarded the Nobel Peace Prize in 2010. Her younger brother, Liu Hui, served two years in prison for a fraud conviction she called retaliation.

But with the Uyghurs, the authorities seem to be applying this tactic with unusual, and increasing severity, placing some Uyghur activists’ relatives in prison for decades, or longer.

Dolkun Isa, the German-based president of the World Uyghur Congress, a Uyghur rights group, said he believes his older brother is in detention. He learned in late May that his younger brother, Hushtar, had been sentenced to life in prison. “It was connected to my activism, surely,” Mr. Isa said.

Radio Free Asia, a United States-funded broadcaster, says that more than 50 relatives of journalists on staff have been detained in Xinjiang, with some held in detention camps and others sentenced to prison. The journalists all work for the broadcaster’s Uyghur language service, which has in the past several years stood out for its reporting on the crackdown, exposing the existence of camps and publishing the first accounts of deaths and forced sterilizations.

The sister of Rushan Abbas, a Uyghur American activist, was sentenced in December to 20 years in prison for terrorism. The sister, Gulshan Abbas, and her aunt had been detained in 2018, days after Rushan Abbas spoke at an event in Washington denouncing the crackdown and widespread detention in Xinjiang.

“As retaliation against me because I made that public speech, as a tool to silence me, they abducted my sister,” Ms. Abbas said. “They have my sister as a hostage right now.”

At Beijing’s request, some countries have also sent more than 300 Uyghurs back to China since 2010, according to a study by the Oxus Society for Central Asian Affairs, and the Uyghur Human Rights Project, nonprofits based in Washington, D.C. One Uyghur now fighting extradition is Idris Hasan, whom activists say has been detained in Morocco.

In the case of Ms. Erkin, the scientist, her uncle first drew the attention of the authorities in Xinjiang for trying to expand the use of the Uyghur language. The government regarded even the most moderate expression of ethnic identity as a threat and Mr. Ayup was arrested in 2013 and spent 15 months in prison. After he was released, he fled abroad, but his experience emboldened him to continue campaigning.

Back home, Mr. Ayup’s brother, Erkin Ayup, a local Communist Party official, knew that his own situation was precarious. In 2016, he told his daughter that a crackdown was unfolding, and he feared he could be caught up in it, according to Asami Nuru, a friend of Ms. Erkin’s in Tokyo.

The father and daughter devised a simple system to let Ms. Erkin know he was safe: he would send her a smiley face sticker on WeChat every morning.

“One day, he didn’t send the sticker,” Ms. Nuru said. “She called her mother and she learned her father was in a camp. She was very upset, and from then on she would cry every day.”

Mr. Ayup believes the authorities took his brother into custody in mid-2017.

In the years that followed, Ms. Erkin’s anxiety over her father’s situation bore down on her, and she even lost weight, Ms. Nuru said. She began to receive adamant messages from her mother, likely at the behest of the authorities, telling her to stop her uncle’s activism or return home.

Her family and friends say her decision to return to China in June 2019 was sudden. She left her suitcases in the house where she lived.

Ms. Erkin called Ms. Nuru from the airport and told her that she wanted to try to find her father, even though she knew he was still in detention. Ms. Nuru said she tried to persuade her against the idea.

“She told me, ‘I want to try to find my father, even if it means I might die,’” Ms. Nuru said.

Mr. Ayup says he believes that the authorities arrested Ms. Erkin in February 2020 to punish him after he helped international news outlets report on a leaked government document outlining how Uyghurs were tracked and chosen for detention.

The circumstances of Ms. Erkin’s death remain unclear.

Her death was first reported by Radio Free Asia, which cited a national security officer from Ms. Erkin’s hometown as saying she had died while in a detention center in the southern city of Kashgar. Mr. Ayup said he believed it was the same place where he himself had been beaten and sexually abused six years earlier.

Ms. Erkin’s family was given her body, Mr. Ayup said, but were told by security officials to not have guests at her funeral and to tell others she died at home.

In a statement to The New York Times, the Xinjiang government said that Ms. Erkin had returned from overseas in June 2019 to receive medical treatment. On Dec. 19, she died at a hospital in Kashgar of organ failure caused by severe anemia, according to the statement.

From the time she went to the hospital until her death, she had always been looked after by her uncle and younger brother, the government wrote.

Before she returned to China, Ms. Erkin seemed to be aware that her return could end tragically.

“We all leave alone, the only things that can accompany us are the Love of Allah and our smile,” she wrote in text messages to Mr. Ayup when he tried to dissuade her from going home.

“I am very scared,” she admitted. “I hope I would be killed with a single bullet.”

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World News

Floods in Europe and China disrupt international delivery, provide chains

The floods in China and Europe are another “body blow” for global supply chains, the CEO of a shipping company told CNBC on Monday.

“Seldom goes a week without something new,” says Tim Huxley, CEO of Mandarin Shipping.

Shipping has already experienced massive disruptions this year. As parts of the world recovered from the pandemic, increased spending resulted in a shortage of containers, causing delays and driving up prices.

In April one of the largest container ships in the world got wedged in the Suez Canal and stopped traffic for almost a week. The waterway is one of the busiest in the world, carrying about 12% of all trade.

In June, a spike in COVID cases in southern China caused further delays in the region’s ports, pushing shipping prices soaring again.

“Broken railway connections” due to floods in Europe

Heavy rains and floods have devastated parts of Western Europe. Some of the worst floods occurred in Germany and Belgium. Parts of Switzerland, Luxembourg and the Netherlands are also affected.

“This will really disrupt the supply chain because the rail links have all been cut,” Huxley told CNBC’s Squawk Box Asia.

These include railways from the Czech Republic and Slovakia to the German ports of Rotterdam and Hamburg, which are “seriously disrupted”.

“And that will delay freight movements back and forth,” he said. “This is going to really mess up the industry.”

Huxley pointed to Thyssenkrupp and stated that the German steel giant could not get any raw materials because of the flooding.

“That will ultimately affect industries like automotive, home appliances and the like,” he said.

S&P Global Platts reported, citing a customer letter, that Thyssenkrupp had declared force majeure on July 16. A force majeure event occurs when unforeseeable circumstances, such as natural disasters, prevent a party from fulfilling its contractual obligations and release it from sanctions.

A source at the company’s plants told S&P Global Platts that parts of the railroad in Hagen were “missing”, adding that it was even more difficult than before to get trucks for delivery. Hagen is a city in western Germany that has been hardest hit by the floods.

Floods in inland Henan cut the supply of wheat and coal

The disruption caused by the floods in China’s Henan Province, meanwhile, is made worse by the province’s being inland, Huxley said.

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The interruption of the railway will again have “great effects”, he said.

“Of course that will affect the shipping, that will increase the shipping costs,” said Huxley.

The distribution of wheat and coal is affected, said Huxley, who pointed out that Henan is China’s “bread basket” and has produced 38 million tons of wheat this summer.

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Politics

A 2nd New Nuclear Missile Base for China, and Many Questions About Technique

In the barren desert 1,200 miles west of Beijing, the Chinese government is digging a new field of what appears to be 110 silos for launching nuclear missiles. It is the second such field discovered in the past few weeks by analysts studying commercial satellite imagery.

It could mean a huge expansion of China’s nuclear arsenal – the need for an economic and technological superpower to show that, after decades of reluctance, it is ready to deploy an arsenal the size of Washington or Moscow.

Or it can simply be a creative, albeit costly, negotiating trick.

The new silos are apparently built to be discovered. The latest silo field, which began in March, is located in the eastern part of Xinjiang Province, not far from one of the notorious Chinese “re-education camps” in the city of Hami. It was identified late last week by nuclear experts from the Federation of American Scientists from images of a fleet of Planet Labs satellites and shared with the New York Times.

For decades, since its first successful nuclear test in the 1960s, China has maintained a “minimal deterrent” that most outside experts estimate at around 300 nuclear weapons. (The Chinese won’t say so, and the US government’s assessments will be classified.) If that’s true, that’s less than a fifth of the number deployed by the United States and Russia, and in the nuclear world, China has always considered itself an occupier of moral height and avoids expensive and dangerous arms races.

But that seems to be changing under President Xi Jinping. While China is cracking down on dissent at home, claiming new control over Hong Kong, threatening Taiwan and using cyber weapons much more aggressively, it is breaking new ground with nuclear weapons.

“The silo construction at Yumen and Hami represents the most significant expansion of the Chinese nuclear arsenal of all time,” write Matt Korda and Hans M. Kristensen in a study on the new silo field. They found that China has operated about 20 silos for large liquid-fuel missiles called DF-5s for decades. But the newly discovered field, combined with one hundreds of miles away in Yumen, northeast China, discovered by the James Martin Center for Nonproliferation Studies in Monterey, California, will bring about 230 new silos to the country. The Washington Post previously reported the existence of this first field with around 120 silos.

The puzzle is why China’s strategy has changed.

There are several theories. The simplest is that China now sees itself as a comprehensive economic, technological and military superpower – and wants an arsenal to match that status. Another possibility is that China is concerned about the increasingly effective American missile defense and India’s nuclear build-up, which is advancing rapidly. Then there is Russia’s announcement of new hypersonic and autonomous weapons and the possibility that Beijing may want a more effective deterrent.

A third is that China is concerned that its few ground-based missiles are vulnerable to attack – and by building more than 200 silos spread across two locations, they can play a shell game, move 20 or more missiles, and unit make states guess where they are. This technique is as old as the nuclear arms race.

“Just because you build the silos doesn’t mean you have to fill them all with missiles,” says Vipin Narang, a professor at the Massachusetts Institute of Technology who specializes in nuclear strategy. “You can move them.”

Updated

July 26, 2021, 5:21 p.m. ET

And of course you can swap them. China may believe that sooner or later it will be drawn into arms control negotiations with the United States and Russia – something President Donald J. Trump tried to force in his final year in office when he said he would not renew the New START treaty on Russia unless China, which never participated in nuclear arms control, was included. The Chinese government rejected the idea, saying if Americans were so concerned they should cut their arsenal by four-fifths to Chinese levels.

The result was a standstill. At the very end of the Trump administration, Secretary of State Mike Pompeo and his arms control officer Marshall Billingslea wrote: “We have asked Beijing for transparency and, together with the United States and Russia, to work out a new arms control agreement covering all categories of nuclear weapons.”

“It is time for China to stop posing and acting responsibly,” they wrote.

But the Biden government had come to the conclusion that it would be unwise to phase out New START with Russia just because China refused to join. After his term in office, President Biden acted quickly to renew the treaty with Russia, but his administration has said that at some point it would like China to make some kind of deal.

These conversations have yet to begin. Assistant Secretary of State Wendy Sherman is this week for the first visit by a senior American diplomat to China since Mr Biden took office, although it is not clear that nuclear weapons are on the agenda. In addition to leading nuclear talks with Russia.

At the White House, the National Security Council declined to comment on evidence of China’s growing arsenal.

It is likely that American spy satellites picked up the new build months ago. But it all came public after Mr. Korda, a research analyst with the Federation of American Scientists, a private group in Washington, used civilian satellite imagery to survey the arid hinterland of Xinjiang Province, a rugged area of ​​mountains and deserts in northwest China . He looked for visual clues about the silo construction that matched what the researchers had already discovered.

In February, the Federation of American Scientists reported the expansion of missile silos at a military training area near Jilantai, a city in Inner Mongolia. The group found 14 new silos under construction. Then came the discovery in Yumen.

While searching the wilderness of Xinjiang Province, Mr. Korda specifically looked for inflatable domes – similar to those that house some tennis courts. Chinese engineers erect them over the construction sites of underground missile silos to hide the work underneath. Suddenly, about 250 miles northwest of the recently discovered base, he found a series of inflatable domes, almost identical to those in Yumen, on another sprawling military compound.

The new construction site is in a remote area that the Chinese authorities have cut off from most of the visitors. It is about 60 miles southwest of the city of Hami, known as the site of a re-education camp where the Chinese government detains Uyghurs and members of other minorities. And it’s about 260 miles east of a tidy complex of buildings with large roofs that can open to the sky. Recently, analysts identified the site as one of five military bases where the Chinese armed forces have built lasers that can fire concentrated beams of light at reconnaissance satellites, which are mainly sent into the air by the United States. The lasers blind or deactivate fragile optical sensors.

Working with his colleague, Mr. Kristensen, a weapons expert who leads the group’s nuclear information project, Mr. Korda used satellite photos to explore the site.

The new silos are a little less than two miles apart, according to their report. In total, the sprawling construction site covers around 300 square miles – similar in size to the Yumen base, also in the desert.

Mr. Narang said the two new silo fields gave the Chinese government “many options”.

“It’s not crazy,” he said. “You are making the United States target many silos that may be empty. They can slowly fill these silos when they need to build their strength. And they get influence in arms control. “

“I’m surprised they didn’t do that a decade ago,” he said.

Categories
Politics

Biden’s China Technique Meets Resistance on the Negotiating Desk

In an effort to maintain an increasingly strained relationship, the Biden government has developed a strategy to confront China on disputes while leaving the door open to cooperation against global threats.

On Monday, China appeared to slam the door on the idea that the two countries could work together in one day and clash the next.

Talks with Assistant Secretary of State Wendy R. Sherman – the highest-ranking government official to visit China – began with a spate of public criticism from the Chinese side and ended with little evidence that the two powers were closer to narrowing their differences.

“The relationship between the United States and the PRC is complex, so our policies are very complex,” Sherman said in a telephone interview following the meetings on the People’s Republic of China. “We believe our relationship can tolerate this nuance.”

The meetings, held in northeast China’s Tianjin city, covered the range of disputes between the two countries, she said. Many of them are bitter and defy a simple solution.

These included human rights, the rapid curtailment of political freedoms in Hong Kong, and what Ms. Sherman called “the horrific acts in Xinjiang,” the largely Muslim region of western China where hundreds of thousands of detention and re-education centers passed.

Ms. Sherman also raised China’s demands over Taiwan, its military operations in the South China Sea, and allegations by the United States and other nations last week that China’s Department of State Security was behind the hacking of Microsoft email systems and possibly other cyber attacks.

“This is very serious – that the Department of State Security would help criminals hack Microsoft and possibly others,” she said, adding that many countries had joined the United States, saying that “such behavior is absolutely irresponsible, reckless and totally irresponsible is out of place ”. in our world. “

China gave no reason, at least publicly, saying that the United States had no right to lecture the Chinese government or anyone else. Before Ms. Sherman finished their meetings, the State Department released a series of six harsh statements from the first official she met, Xie Feng, the assistant secretary of state overseeing relations with the United States.

Mr Xie accused the United States of committing Native American genocide and botching the response to the coronavirus pandemic that killed 620,000 Americans.

The Biden government’s policy is nothing more than a “thinly veiled attempt to contain and suppress China,” Xie told Ms. Sherman, according to a summary of his comments the Chinese State Department sent reporters on Monday before the Americans could show up provide your own account.

“It appears that a nationwide and societal campaign is being waged to bring China down,” Xie told Ms. Sherman, according to the summaries of his comments, which were also posted on the ministry’s overseas website.

Updated

July 26, 2021, 9:15 a.m. ET

Ms. Sherman’s meetings provided the latest measure of how the Biden administration’s strategy is working. At least so far, it has done little to mitigate China’s behavior. Mr. Xie’s remarks underscored the anger that has been building in China towards the United States and undermines the chances that the approach will gain ground.

After a second meeting with China’s Foreign Minister Wang Yi, Ms. Sherman pointed out that the two sides had discussed global and regional issues on which the two governments could potentially work together, including North Korea and the proliferation of nuclear weapons. However, she warned of concrete progress, adding that she did not come to the talks with immediate results.

“We were pretty straight forward with each other in the areas of big differences,” she said.

“In areas where we have common interests and there are major global interests, we have had very substantial discussions and exchanged some ideas,” said Sherman. “We’ll have to see where this leads.”

Drew Thompson, a former director of China for the US Department of Defense, said the underlying intent behind Ms. Sherman’s visit appears to be to ensure that the worsening of differences does not lead to dangerous stalemates.

“Beijing is taking a maximalist approach to US-China relations, issuing lists of demands, insisting that Washington adopt reverse policies and actions,” said Thompson, now a researcher at the Lee Kuan Yew School of Public Policy the National University is from Singapore.

“The main goal for Washington is to deepen understanding of China’s positions, reduce the potential for misjudgment and avoid misjudgment that could lead to open conflict,” he said.

The tone on Monday reflected the opening of high-level talks between senior Chinese and Biden government officials in March when Beijing’s senior foreign policy leader Yang Jiechi gave a 16-minute talk accusing Americans of arrogance and hypocrisy. The controversial start with the Biden administration caught officials in China by surprise, who thought relations hit rock bottom in the last year of the Trump presidency and therefore could only get better with the new president.

Mr. Xie told the Chinese news media after meeting that he had forwarded two requests to Ms. Sherman, including lifting the visa restrictions on Communist Party members, lifting sanctions against Chinese officials and shutting down major Chinese news agencies in the United States as foreign agents. All of these were introduced during Donald J. Trump’s presidency, but President Biden did nothing to repeal any of them.

While Mr Biden has largely avoided it the heated ideological sparring with the Chinese Communist Party that the Trump administration led in its final year, relations remain strained.

Washington has sought allies to pressure Beijing on many of these issues. Ms. Sherman’s trip also took her to Japan, South Korea and Mongolia to rebuild regional ties that were strained under Mr. Trump.

And the Chinese government has resented calls by the United States, the World Health Organization and others for a new investigation into whether the coronavirus might have hatched from a laboratory in China and set off the pandemic.

Last week, Chinese officials said they were “extremely shocked” at a WHO proposal to reconsider laboratory leak theory. A report in March of a first WHO investigation said it was “extremely unlikely” that the coronavirus jumped into the wider population after escaping from a laboratory.

Ms. Sherman said she has urged China to cooperate in the international investigation into the spread of Covid. “I’ll let them speak for themselves,” she said, “but from my point of view I certainly didn’t get the answer I wanted or hoped for.”

China’s belligerent tone seems to flow from above. The country’s head of state, Xi Jinping, has signaled a growing impatience with criticism and demands from Washington, particularly with regard to Beijing’s internal problems such as Hong Kong and Xinjiang.

Beijing has fought against sanctions against Hong Kong and Xinjiang with its own against Western politicians, human rights groups and academics.

“We will never accept excruciatingly arrogant lectures from these ‘master teachers’!” Mr. Xi said in a speech on July 1 to commemorate 100 years since the Chinese Communist Party was founded.

Keith Bradsher contributed to the coverage.

Categories
Politics

China sanctions Trump Commerce Secretary Wilbur Ross

China said Friday it had sanctioned seven people, including former Trump Trade Secretary Wilbur Ross, in response to US penalties imposed on Chinese officials for Beijing’s crackdown on democracy in Hong Kong.

The mutual sanctions were imposed under the new Chinese anti-foreign sanctions law passed in June. The sanctions are in response to the recent US warning to businesses about the risks of doing business in Hong Kong.

They also came days before Assistant Secretary of State Wendy Sherman is due to visit China, making her the most senior US official to visit China during the Biden administration.

In addition to Ross, Carolyn Bartholomew, Chair of the US-China Economic Security Review Commission, was sanctioned; Jonathan Stivers, former Executive Commissioner of the Executive Committee for China; and Sophie Richardson, China director for Human Rights Watch.

DoYun Kim from the National Democratic Institute for International Affairs were also sanctioned; Adam Joseph King, Senior Program Manager of the International Republican Institute and the Hong Kong Democratic Council.

Ross, a billionaire businessman and investor, did business in China. As Minister of Commerce, he was one of the faces of former President Donald Trump’s trade war with China.

“I would like to reiterate that Hong Kong is China’s Special Administrative Region and its affairs are an integral part of China’s internal affairs,” Foreign Ministry spokesman Zhao Lijian said in a statement. “Any attempt by outside forces to interfere in Hong Kong affairs would be as futile as an ant trying to shake a large tree.”

White House press secretary Jen Psaki said at a press conference Friday that the US is aware of China’s latest sanctions.

“We will not be deterred by these measures and remain determined to implement all relevant US sanctions against the authorities,” said Psaki at the briefing. “These actions are the latest example of how Beijing is punishing individuals, businesses and civil society organizations for sending political signals and highlighting the deteriorating investment climate and increasing political risks in the PRC.”

Psaki said it was following China’s “baseless sanctions” of two commissioners from the US Commission on International Religious Freedom in March, 28 US officials in January, and sanctions against US officials and organizations in July 2020.

The Chinese embassy in Washington did not immediately respond to a request for comment. The State Department did not immediately respond to CNBC’s request for comment.

Lijian said Friday that China “strongly opposes and strongly condemns” the Biden government’s release of the Hong Kong Business Advisory last week, which warns US firms are exposed to multiple risks posed by China’s extensive national security law in Hong Kong develop.

“These acts seriously violate international law and basic norms of international relations, and severely interfere with China’s internal affairs,” Lijian said in the statement.

China’s national security law was passed and condemned by Washington in June 2020 for aiming to restrict Hong Kong’s autonomy and banning critical literature by the Chinese Communist Party.

A guidebook published by the Biden administration jointly by the ministries for state, finance, trade and homeland security states that companies are exposed to the risk of electronic surveillance without guarantee, the disclosure of data to authorities and “limited access to information”.

It also sanctioned several Chinese officials with the Beijing Liaison Office in Hong Kong for restricting autonomy on the territory.

“Beijing has damaged Hong Kong’s reputation for accountable, transparent governance and respect for individual freedoms and has broken its promise to leave Hong Kong’s high level of autonomy unchanged for 50 years,” Foreign Minister Antony Blinken said in a statement on the advisory.

The Hong Kong warning came days after the Biden government issued a similar recommendation for businesses with businesses and operations in Xinjiang province, where there is growing evidence that the Chinese government has committed genocide and other human rights abuses against Uyghurs and other Muslim minorities committed.

Relations between Beijing and Washington became even more strained under the Trump administration, sparking a trade war and working to ban Chinese tech companies from doing business in the United States

Biden previously said his approach would be different from that of his predecessor, saying he would work closely with allies to push back on Beijing.

The Chinese sanctions against Ross came shortly after the Justice Department refused to prosecute him for allegedly misleading Congress on census citizenship issues.

Categories
World News

Asia-Pacific shares dip as buyers watch China tech shares in Hong Kong

SINGAPORE — Shares in Asia-Pacific were lower in Friday morning trade as investors monitor Chinese tech stocks in Hong Kong after regulatory concerns resurfaced.

South Korea’s Kospi sat below the flatline in early trade. In Australia, the S&P/ASX 200 shed 0.18%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.07% lower.

Markets in Japan are closed on Friday for a holiday.

China tech stock watch

Investors will watch Chinese tech shares in Hong Kong after Bloomberg News reported that Beijing is considering harsh penalties on ride-hailing giant Didi. The penalties being planned range from a fine likely bigger than the record $2.8 billion Alibaba paid earlier this year to even a forced delisting after Didi’s IPO last month.

Shares of Didi stateside plunged more than 11% on Thursday. Earlier in July, the firm was forced to stop signing up new users and also had its app removed from Chinese app stores due to alleged collection and use of personal data.

That development came as Beijing continues its months-long crackdown on China’s tech behemoths, targeting issues from anti-trust to data regulation.

Stock picks and investing trends from CNBC Pro:

Overnight stateside, the Dow Jones Industrial Average edged 25.35 points higher to 34,823.35 while the S&P 500 gained 0.2% to 4,367.48. The Nasdaq Composite rose 0.36% to 14,684.60.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.805 — off levels above 93 seen earlier in the week.

The Japanese yen traded at 110.12 per dollar, weaker than levels below 109.6 seen against the greenback earlier this week. The Australian dollar changed hands at $0.738, above levels below $0.732 seen earlier in the trading week.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.23% to $73.62 per barrel. U.S. crude futures slipped 0.24% to $71.74 per barrel.