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China’s Oil Lifeline to North Korea Targeted After Nuclear Blast

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Trump XI
  • China’s Oil Lifeline to North Korea Targeted After Nuclear Blast

Even before North Korea detonated its most powerful nuclear bomb yet, Japan was calling for moves to cut off its oil supply.

Afterward, U.S. President Donald Trump threatened to halt all trade with any country that does business with Kim Jong Un’s regime. China, which supplies most of its food and fuel, on Monday called the warning “unacceptable.”

Some sort of oil embargo is likely to come up as the international community discusses a response to the nuclear test, starting with a United Nations Security Council meeting later Monday. China has resisted such a move in the past over fears that North Korea might collapse, but has grown increasingly frustrated with its rogue ally.

Still, while China might make a gesture to Trump in an effort to defuse his criticisms, it may not be the panacea the U.S. president is looking for, and do little in a practical sense to slow Kim down.

“A temporary or partial ban is possible, but the Chinese government will definitely refuse to cut off oil exports completely or permanently to North Korea,” said Shi Yinhong, an adviser to China’s cabinet and international relations professor at Renmin University in Beijing. “If China agreed to cut off oil exports completely, China would use all its tools but not achieve any purpose, and the consequence could be costly.”

Since the Korean War, Beijing has avoided prodding North Korea to the point it might collapse, fearing a destabilizing economic blow and the possibility of the U.S. military gaining influence on its border via a unified Korea. That calculation has held even while China’s interests have diverged from those of North Korea.

Relations between President Xi Jinping and Kim have been cool — a shift from prior leaderships in both countries — with state-run media occasionally sparring. Kim’s decision to conduct the nuclear test as China prepared to host leaders from the so-called BRICS nations was seen as a slight to Xi.

China supplies most of North Korea’s crude oil, according to the U.S. Energy Information Administration, but it’s hard to know exactly how much: China hasn’t reported any volumes in its published customs data since 2013. Based on reported volumes, North Korea’s oil use over an entire year would be less than the U.S. East Coast consumes in a single day.

Oil products are transported by North Korean tanker to the port of Nampo, near the capital Pyongyang, while crude oil is sent via an aging pipeline from the Chinese border city of Dandong, Reuters reported earlier this year. While other countries supply the regime with fuel, the total figures are suspected to be under-reported, according to the EIA.

Even if China did agree to ban all oil supplies, North Korea would likely have stockpiles to sustain critical operations for months and could earn cash for its weapons programs from its remaining non-sanctioned exports, Rajiv Biswas, Asia-Pacific chief economist for IHS Markit, said in an email.

Paltry Consumption

“These FX inflows may be sufficient to allow the North Korean ballistic missiles and nuclear weapons programs (to continue) operating,” he said. It would take a ban on all exports, a complete blockade of fuel and the elimination of remittances from North Korean workers abroad to bring North Korea to the negotiating table, he said.

North Korea’s oil consumption last year was paltry. It averaged 15,000 barrels a day, according to an EIA estimate based on reported trade information, compared with almost 2.6 million barrels a day in South Korea and 12.5 million in China.

The agency estimates North Korea crude imports at about 10,000 barrels a day, all of which goes to its only operating refinery, the Ponghwa chemical facility, located near the Chinese border. China also reported sending 6,000 barrels a day of oil products to North Korea last year, according to the EIA, citing UN customs data. Figures from China’s General Administration of Customs shows those shipments include fuel oil, gasoline, diesel, jet fuel and lubricants.

China says it will only implement sanctions agreed by the UN. In February it banned purchases from North Korea of coal and iron ore for the rest of the year, and in August it supported the Security Council vote to tighten sanctions that targeted about a third of North Korea’s $3 billion in exports. Around 90 percent of North Korea’s documented trade was with China in 2016.

Economists at Citigroup Inc. said the nuclear test could be the “red line” sufficient for China and Russia to back additional UN sanctions, including curbs on oil and energy exports. But it’s less clear if agreement can be reached for a complete embargo.

“It is also unclear if more sanctions would suffice to change North Korea regime behavior,” the Citigroup analysts wrote in a note.

An editorial in the Communist Party-affiliated Global Times on Sunday questioned if a ban would deter Kim.

“If China completely cuts off the supply of oil to North Korea or even closes the China-North Korea border, it is uncertain whether we can deter Pyongyang from conducting further nuclear tests and missile launches,” it said.

Any further sanctions against North Korea would be meaningless, said Shen Dingli, deputy dean of Fudan University’s Institute of International Studies in Shanghai.

“Sanctions would be more like gestures,” Shen said. “North Korea is engaged to develop nuclear weapons, and none of the two powers can change that.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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COVID-19 Vaccine: African Export-Import Bank (Afrexim) to Purchase 270 Million Doses for Nigeria, Other African Nations

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African Export-Import Bank (Afrexim) Approves $2 Billion for the Purchase of 270 million Doses for African Nations

African Export-Import Bank (Afrexim) said it has approved $2 billion for the purchase of 270 million doses of COVID-19 vaccines for African nations, including Nigeria.

Prof. Benedict Oramah, the President of the Bank, disclosed this at a virtual Africa Soft Power Series held on Tuesday.

He, however, stated that the lender is looking to raise more funds for the COVID-19 vaccines’ acquisition.

He said: “The African Union knows that unless you put the virus away, your economy can’t come back. If Africa didn’t do anything, it would become a COVID-19 continent when other parts of the world have already moved on.
“Recall that it took seven years during the heat of HIV for them to come to Africa after 12 million people had died.

“With the assistance of the AU, we were able to get 270 million vaccines and financing need of about $2 billion. Afreximbank then went ahead to secure the $2 billion. But that money for the 270 million doses could only add 15 per cent to the 20 per cent that Covax was bringing.

He added that this is not the time to wait for handouts or free vaccines as other countries will naturally sort themselves out before African nations.

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China Calls for Better China-U.S. Relations

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China Calls for China-U.S. Relations

Senior Chinese diplomat Wang Yi said on Monday the United States and China could work together on issues like climate change and the coronavirus pandemic if they repaired their damaged bilateral relationship.

Wang, a Chinese state councillor and foreign minister, said Beijing stood ready to reopen constructive dialogue with Washington after relations between the two countries sank to their lowest in decades under former president Donald Trump.

Wang called on Washington to remove tariffs on Chinese goods and abandon what he said was an irrational suppression of the Chinese tech sector, steps he said would create the “necessary conditions” for cooperation.

Before Wang spoke at a forum sponsored by the foreign ministry, officials played footage of the “ping-pong diplomacy” of 1972 when an exchange of table tennis players cleared the way for then U.S. President Richard Nixon to visit China.

Wang, a Chinese state councillor and foreign minister, said Beijing stood ready to reopen constructive dialogue with Washington after relations between the two countries sank to their lowest in decades under former president Donald Trump.

Wang called on Washington to remove tariffs on Chinese goods and abandon what he said was an irrational suppression of the Chinese tech sector, steps he said would create the “necessary conditions” for cooperation.

Before Wang spoke at a forum sponsored by the foreign ministry, officials played footage of the “ping-pong diplomacy” of 1972 when an exchange of table tennis players cleared the way for then U.S. President Richard Nixon to visit China.

Wang urged Washington to respect China’s core interests, stop “smearing” the ruling Communist Party, stop interfering in Beijing’s internal affairs and stop “conniving” with separatist forces for Taiwan’s independence.

“Over the past few years, the United States basically cut off bilateral dialogue at all levels,” Wang said in prepared remarks translated into English.

“We stand ready to have candid communication with the U.S. side, and engage in dialogues aimed at solving problems.”

Wang pointed to a recent call between Chinese President Xi Jinping and U.S. President Joe Biden as a positive step.

Washington and Beijing have clashed on multiple fronts including trade, accusations of human rights crimes against the Uighur Muslim minorities in the Xinjiang region and Beijing’s territorial claims in the resources-rich South China Sea.

The Biden administration has, however, signalled it will maintain pressure on Beijing. Biden has voiced concern about Beijing’s “coercive and unfair” trade practices and endorsed of a Trump administration determination that China has committed genocide in Xinjiang.

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U.S. Supreme Court Allows Release of Trump Tax Returns

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President Trump Signs Executive Order In Oval Office Of The White House

U.S. Supreme Court Allows Release of Trump Tax Returns

The U.S. Supreme Court on Monday paved the way for a New York City prosecutor to obtain former President Donald Trump’s tax returns and other financial records as part of a criminal investigation, a blow to his quest to conceal details of his finances.

The justices without comment rebuffed Trump’s request to put on hold an Oct. 7 lower court ruling directing the former Republican president’s longtime accounting firm, Mazars USA, to comply with a subpoena to turn over the materials to a grand jury convened by Manhattan District Attorney Cyrus Vance, a Democrat.

“The work continues,” Vance said in a statement issued after the court’s action.

Vance had previously said in a letter to Trump’s lawyers that his office would be free to immediately enforce the subpoena if the justices rejected Trump’s request.

A lawyer for Trump did not immediately respond to a request for comment.

The Supreme Court, which has a 6-3 conservative majority included three Trump appointees, had already ruled once in the dispute, last July rejecting Trump’s broad argument that he was immune from criminal probes as a sitting president.

Unlike all other recent U.S. presidents, Trump refused during his four years in office to make his tax returns public. The data could provide details on his wealth and the activities of his family real-estate company, the Trump Organization.

Trump, who left office on Jan. 20 after being defeated in his Nov. 3 re-election bid by Democrat Joe Biden, continues to face an array of legal issues concerning his personal and business conduct.

Vance issued a subpoena to Mazars in August 2019 seeking Trump’s corporate and personal tax returns from 2011 to 2018. Trump’s lawyers sued to block the subpoena, arguing that as a sitting president, Trump had absolute immunity from state criminal investigations.

The Supreme Court in its July ruling rejected those arguments but said Trump could raise other objections to the subpoena. Trump’s lawyers then argued before lower courts that the subpoena was overly broad and amounted to political harassment, but U.S. District Judge Victor Marrero in August and the New York-based 2nd U.S. Circuit Court of Appeals in October rejected those claims.

Vance’s investigation, which began more than two years ago, had focused on hush money payments that the president’s former lawyer and fixer Michael Cohen made before the 2016 election to two women – adult-film actress Stormy Daniels and former Playboy model Karen McDougal – who said they had sexual encounters with Trump.

In recent court filings, Vance has suggested that the probe is now broader and could focus on potential bank, tax and insurance fraud, as well as falsification of business records.

In separate litigation, the Democratic-led U.S. House of Representatives was seeking to subpoena similar records. The Supreme Court in July sent that matter back to lower courts for further review.

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