China is this week projecting an alternative vision for the world order, including at a massive military parade yesterday. Also in today's trade news, there’s rumours of more Russian sanctions, the EU-Mercosur deal goes before the European Parliament and air cargo prices might be set to surge.
Military might in Beijing
China put on the biggest military display in its history, marking 80 years since the defeat of Japan in World War II, as Chinese president, Xi Jinping, continues his political maneuvers from yesterday.
After gathering leaders for a summit of the Shanghai Cooperation Organisation (SCO), China showcased its military arsenal, replete with new nuclear ballistic missiles, cutting edge aerial and underwater drones, as well as laser weapons.
In addition to Russian president, Vladimir Putin, and North Korean leader, Kim Jong Un, who featured prominently in the day’s events, heads of state from 24 other nations – including Iran, Pakistan and Vietnam – and diplomats from western nations like Serbia and Slovakia attended.
Commentators have called the event China’s attempt to set out an alternative world order amid the US’ withdrawal from a number of multilateral bodies and wider participation on the global stage.
US president Donald Trump, who was not invited, asked China to “give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America” on his Truth Social account.
North Korean support for Russia
On the sidelines of China’s military parade, those two leaders showed signs of greater cooperation as Kim pledged greater support for Russia in its war against Ukraine.
During a press conference, he said North Korea had a “fraternal duty” to support Russia, and he would do “everything possible to help”.
Putin praised the North Korean troops Kim has already sent to Ukraine, saying they “fought courageously”. The BBC reported South Korean estimates from January suggest that up to 15,000 troops had been sent since Russia’s invasion of Ukraine in February 2022, with approximately 4,700 casualties, including 600 deaths.
New Russia sanctions
The warm words come as the UK weighs up a fresh round of sanctions on Russia.
Foreign secretary, David Lammy, told the recent reassembled House of Commons that they could be on the way “very shortly”.
This echoes defence secretary, John Healey, who made a statement to the house on Monday (1 September) in which he spoke of “stepping up military support” alongside other ‘coalition of the willing’ members.
He welcomed news that Trump is considering “serious” Russian sanctions, and added “the foreign secretary will have more to say on similar UK action very soon”.
EU-Mercosur deal
The trade accord between the EU and South American trade bloc, Mercosur, will be presented to European Parliament today (3 September).
Although the EU-Mercosur partnership agreement was reached in December, after a staggering 25 years of negotiations, the deal still needs to secure enough votes amid fierce opposition from some quarters, Reuters reports.
France has repeatedly called the deal “unacceptable”, with claims of unfair competition between farmers – held to higher environmental standards under EU law than their South American counterparts. France, which is the bloc’s biggest producer of beef, has been a long-time, vocal critic of the deal.
RTE reports that the text of the agreement will include protections for European agriculture if the deal has marketing distorting effects.
Ireland, the Netherlands, Poland and Austria have all raised doubts. It would take at minimum of four member states, representing at least 35% of the EU population to block the deal.
Air freight crunch
The FT reports that two of the world’s largest air cargo operators could struggle for capacity amid ageing fleets.
Boeing and Airbus both warned that older models nearing retirement, alongside delays in commissioning new planes, could diminish their ability to meet the world’s growing demand.
This, experts warn, could push freight prices higher, with Saudia Cargo CEO Loay Mashabi, telling the publication:
“There will be a few years of challenge… it will hit us severely before we know it.”
The report notes that a third of global trade was moved by air cargo last year, driven by increases in e-commerce trade from Asia.
Illustrating the region’ significance, WorldACD reported that air cargo from the Asia-Pacific spiked 8% following a return to business in Japan, as it’s Obon holiday period ended. This drove an overall global boost of 4% on the previous week.
Yesterday in trade
- More on the geopolitical conference from the Shanghai Cooperation Organisation (SCO)
- Russia outlawed UK thinktank Royal United Services Institute for Defence and Security Studies (RUSI)
- The UK’s Green Party elected new leader in former deputy Zack Polanski. The Hackney-based MP described himself as an “eco-populist”, who wants to challenge Farage’s growing hold on the electorate.
You can read that here.
