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Spectre of ‘Indo-Pacific Nato’ accelerates China’s decoupling from the west

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For weeks Chinese officials and analysts have endorsed Russia’s claims that Nato’s expansion in Europe triggered its invasion of Ukraine. Now they are pointing to a new spectre to justify their support of Russia’s war: an “Indo-Pacific Nato” that could ultimately force China to decouple from the west and achieve self-sufficiency in everything from food to semiconductors.

Ever since Xi Jinping and Joe Biden refused to budge from their opposing assessments of the conflict during a two-hour phone call on March 18, Chinese diplomats have gone on a rhetorical offensive, arguing that US-led alliances are as much a threat to Beijing as they are to Moscow.

Most of their ire is directed at the “free and open Indo-Pacific” strategy Biden inherited from Donald Trump, which seeks to bind the US, Japan, Australia and India in a united front against China.

“Nato has kept strengthening and expanding, and intervened militarily in countries like Yugoslavia, Iraq, Syria and Afghanistan,” Le Yucheng, vice-foreign minister, said a day after the presidents’ call.

“The Indo-Pacific strategy is as dangerous as the Nato strategy of eastward expansion in Europe,” he added. “If allowed to go unchecked, it would bring unimaginable consequences and ultimately push the Asia-Pacific [region] over the edge of an abyss.”

Indian foreign minister S. Jaishankar’s and his Chinese counterpart Wang Yi greet media before their meeting in New Delhi on March 25
Indian foreign minister S. Jaishankar’s and his Chinese counterpart Wang Yi greet media before their meeting in New Delhi on March 25 © Indian Foreign Minister S. Jaishankar/Twitter/AP

In an attempt to counter Biden’s “real goal” of establishing “an Indo-Pacific version of Nato”, Le’s boss, foreign minister Wang Yi, met his Indian counterpart in New Delhi on Friday.

On Tuesday Wang addressed the Organisation of Islamic Cooperation in Islamabad, where he touted $400bn in Chinese-led projects across 54 Islamic countries. China, India and Pakistan, which have a combined population of 3bn, all abstained on the UN resolution condemning Russia’s invasion of Ukraine.

Alicia García Herrero, Asia-Pacific chief economist at French investment bank Natixis, said that as the Ukraine crisis drove the US and EU closer together, China was seeking to complement its Russian partnership with stronger economic and diplomatic ties to large countries across the developing world and resource-rich nations in the Middle East.

While the US and EU are trying to push China into a corner, she said “China has taken and enlarged that corner . . . China is building this sphere of influence which makes its self-reliance [strategy] much more credible”.

Ni Lexiong, an independent military analyst in Shanghai, said China needed to adopt a long-term perspective when making assessments about the situation in Ukraine and its relationship with Russia. “If we don’t [handle the Ukraine crisis] right, 30 years from now the west will treat China the same way it is treating Russia,” Ni said.

Chinese officials increasingly worry that such treatment could include wide-ranging sanctions similar to those imposed by the US and EU on Russia. In that event, they argued, China would need Russia’s support as much as Russia now needed China’s support.

Hu Xijin, former editor of the Chinese nationalist Global Times newspaper, said that Xi’s “no-limits” partnership with Putin would serve China well in any “strategic showdown” with the US over Taiwan or a similar flashpoint.

“With Russia as a partner, if the US carries out maximum strategic coercion against China, China won’t be afraid of [a] US energy blockade, and our food supply will be secure,” he wrote in a recent column. “So will [our supply of] other raw materials

“We must constantly boost our own strength to make the US feel that having a conflict with China is more and more unbearable. Russia is China’s most crucial partner to achieve this goal.”

Russia, however, will be of little help to China in securing supplies of high-tech components vital to its vast manufacturing base, such as semiconductors as well as the largely western machinery and software needed to make them.

Dan Wang at Gavekal Dragonomics, a Beijing-based consultancy, noted that if China ever faced sanctions similar to those imposed on Russia, “they would be devastating for China’s ability to remain a manufacturing superpower”.

As result, argues Andrew Gilholm at Control Risks, a consultancy, Xi must pursue “decoupling on China’s terms”. That will entail securing, with Russia’s help, food and energy supplies while avoiding US sanctions on technology, finance and other areas where it is still dependent on the west.

“The idea was always to build up China’s diversification and self-reliance as fast as possible,” Gilholm said. But after Russia’s invasion of Ukraine “the motivation has gone to another level: this now must be seen almost as a national security issue, and an existential one at that”.

China rescinded phytosanitary restrictions on Russian wheat exports on February 24, the same day that Putin’s troops invaded Ukraine, and can now congratulate itself for having resisted US demands for reforms of its state-led agriculture sector during the two countries’ trade war in 2018 — 19.

“Beijing probably feels very validated in their approach,” said Darin Friedrichs at Sitonia Consulting, an agriculture consultancy in Shanghai. “They have kept a high level of state control and stockpiles.

“And now, while a lot of other countries are scrambling for supplies, they are relatively insulated,” he added. “Those policies were pretty successful and meant for a time like this.”

Additional reporting by Emma Zhou in Beijing



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27-year-old pays $1,850 to live in a former NYC laundromat

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While Sampson Dahl’s ex-girlfriend thought the old laundromat he was considering as a potential new apartment was “disgusting,” he saw the potential for a great live-work space. He moved in a month later.

“I don’t think a space needs to be a perfect representation of what we hope a simple mind looks like,” Dahl tells CNBC Make It. “I think a space should be an imperfect representation of the people who are in it at that moment in their lives.”

The 27-year-old production designer is no stranger to living in commercial spaces; he used to live in a warehouse in Chicago, so he knew going into his apartment hunt that he wanted to repeat that experience.

“I like the freedom of a commercial space, even though there are definitely fewer tenant rights,” he said. “Something feels more ethical about moving into a vacant storefront that’s been empty for years than taking up an apartment in some residential neighborhood that you’re not familiar with.”

Dahl found the former laundromat in Maspeth, Queens, in an online forum in 2019 and has been living in it since then.

Mickey Todiwala. Photo by CNBC Make It

Dahl found the former laundromat in Maspeth, Queens, in an online forum in 2019. A former tenant added a small kitchen that gives Dahl enough space to have a sink, stovetop, and toaster oven. The laundromat hasn’t been in working order since 2005.

When he first moved in March 2019, the rent was $1750, and he paid two months’ rent up front and an $875 security deposit. In 2021, his rent went up to $1850, and on average, he pays $120 for electricity and $60 for the internet.

Dahl is in production design, and one of the perks of the job is access to a lot of free furniture after the projects are done, so he’s used that to decorate the space.

“This space enables some [my] hoarding tendencies, but I try to be as decorative with it as possible,” Dahl says. “While most of the stuff is technically trash, and a lot of it was free, I try to curate it in the way that is most comfy to me.”

Dahl sleeps in a lofted bed that cost him $25 to make.

Mickey Todiwala. Photo by CNBC Make It

For Dahl, his favorite part of living in the former laundromat is the sense of community he gets from his neighbors because it reminds him of his childhood. The 27-year-old grew up on a commune in Texas that he described as “not a cult [but] a nonprofit humanitarian organization that did disaster relief and homeless outreach.”

“I think that really molded this kind of open door policy that I’ve had and maintained my adult life. That’s how my mom always lived,” he says.

It’s because of that philosophy that Dahl has made it so that his living space is open to others. He even has his fridge and communal swing out front. That community feeling has proved essential for Dahl, especially after he was mugged in the neighborhood a couple of months ago.

“People are looking out for me more than I’m looking out for myself, and that’s a true community. I knew true community as a child, and I know it again now,” he says.

Dahl has the space divided into different areas like the “songwriting” and “piano station” as it’s meant to be a place where creativities can come together.

Mickey Todiwala. Photo by CNBC Make It

Although Dahl loves the space he created, which also includes a songwriting and organ station, he says he only lives there because it’s what he can afford right now, but he hopes to move out and have it continue to be a collaborative studio space.

“It’ll just be an open store for whoever wants to come in and learn to paint or continue a painting or learn to record a song or continue a song. It’s for beginners and people who are already passionate about what they do,” Dahl says.

“Living in a storefront has taught me resourcefulness in a way I’ve never known before. I really can’t be too picky about what comes my way; I just have to make the best of it. And that’s the greatest skill I could ask for, he added.

“It’s nothing I could teach myself; it’s something you can only learn from life. That’s really in line with the life philosophy I have.”

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Sri Lanka marks independence anniversary amid economic woes

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Sri Lanka’s President Ranil Wickremesinghe attends the the country’s 75th Independence Day celebrations at Galle Face Green in Colombo, Sri Lanka February 4, 2023.

Nurphoto | Nurphoto | Getty Images

COLOMBO, Sri Lanka (AP) — Sri Lanka marked its 75th independence anniversary on Saturday as a bankrupt nation, with many citizens angry, anxious and in no mood to celebrate.

Many Buddhists and Christian clergy had announced a boycott of the celebration in the capital, while activists and others expressed anger at what they see as a waste of money in a time of severe economic crisis.

Despite the criticism, armed troops paraded along the main esplanade in Colombo, showcasing military equipment as navy ships sailed in the sea and helicopters and aircraft flew over the city.

Catholic priest Rev. Cyril Gamini called this year’s ceremony commemorating independence from British rule a “crime and waste” at a time when the country is experiencing such economic hardship.

“We ask the government what independence they are going to proudly celebrate by spending a sum of 200 million rupees ($548,000),” said Gamini, adding the Catholic Church does not condone spending public money on the celebration and that no priest would attend the ceremony.

About 7% of Sri Lanka’s 22 million people in this Buddhist-majority nation are Christians, most of them Catholics. Despite being a minority, the church’s views are respected.

Prominent Buddhist monk Rev. Omalpe Sobitha said there is no reason to celebrate and that the ceremony is just an exhibition of weapons made in other countries.

Sri Lanka is effectively bankrupt and has suspended repayment of nearly $7 billion in foreign debt due this year pending the outcome of talks with the International Monetary Fund.

The country’s total foreign debt exceeds $51 billion, of which $28 billion has to be repaid by 2027. Unsustainable debt and a severe balance of payment crisis, on top of lingering scars from the COVID-19 pandemic, have led to a severe shortage of essentials such as fuel, medicine and food.

The shortages led to protests last year that forced then-President Gotabaya Rajapaksa to flee the country and resign.

There have been signs of improvement under President Ranil Wickremesinghe, but power cuts continue due to the fuel shortages, hospitals face medicine shortages and the treasury is struggling to raise money to pay government employees’ salaries.

The economic crisis has made people angry and apathetic toward political leaders.

To manage the country’s expenses, the government has increased income taxes sharply and has announced a 6% cut in funds allocated to every ministry this year. Also, the military, which had swelled to more than 200,000 members amid a long civil war, will be downsized by nearly half by 2030.

A group of activists began a silent protest on Friday in the capital, condemning the government’s independence celebration and failure to ease the economic burden.



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Musk, Tesla not liable in securities class-action lawsuit

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Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, January 27, 2023.

Jonathan Ernst | Reuters

Elon Musk and Tesla were found not liable by a jury in a San Francisco federal court on Friday in a class-action securities fraud trial stemming from tweets Musk made in 2018.

The Tesla, SpaceX and Twitter CEO was sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “funding secured” to take the automaker private for $420 per share, and that “investor support” for such a deal was “confirmed.”

Trading in Tesla was halted after his tweets, and its share price remained volatile for weeks.

Jurors deliberated for less than two hours before reading their verdict. “We are disappointed with the verdict and considering next steps,” said Nicholas Porritt, partner at Levi & Korsinsky, the firm representing the shareholders in the class action, in an email to CNBC.

“I am deeply appreciative of the jury’s unanimous finding,” Musk wrote on Twitter.

Musk’s lead counsel, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, arguing before the jury earlier Friday, said the matter had to be assessed in context, noting the Tesla CEO was only considering taking the company private. He said fraud cannot be built on the back of a consideration.

Spiro did not immediately respond to requests for comment.

The shareholders in the certified class-action lawsuit included a mix of stock and options buyers who alleged that Musk’s tweets were reckless and false, and that relying on his statements to make decisions about when to buy or sell cost them significant amounts of money.

Musk later claimed that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund, and that he thought funding would come through at his proposed price based on a handshake. However, the deal never materialized.

During the course of this trial, Musk also said he would have sold shares of SpaceX to finance a going-private deal for Tesla, as well as taking funds from the Saudi Public Investment Fund.





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