Flagship

Debt ceiling clears Congressional hurdle

The U.S. House of Representatives passed a debt ceiling deal, sending it to the Senate. Confident that the agreement will clear the remaining hurdles, analysts were divided over who scored a political victory, but agreed that both U.S. President Joe Biden and his negotiating partner House Speaker Kevin McCarthy were underestimated. Edward Luce in the Financial Times argued that “Biden played the game of chicken well,” taking Republicans’ threats seriously while maintaining calm. In The Washington Post, Jennifer Rubin agreed: “It’s hard to conceive of an outcome more favorable to Biden.” McCarthy also won plaudits, largely controlling his party without conceding to the GOP’s right wing, “no easy feat in the modern Republican party,” our colleagues in Principals note.

— For more on the debt ceiling and U.S. politics, one-click subscribe to Principals.

Experts worry over China AI rules

Experts are increasingly concerned that China is the tech power most likely to suffer an artificial-intelligence-related catastrophe. Beijing has pushed AI development aggressively, and last month won some acclaim for its draft regulations on generative AI. But the rules may yet be watered down according to a Chinese legal expert, and in any case the penalties for infringement — at most about $15,000 — are unlikely to deter companies from forging ahead, MIT Technology Review said. China also has a “lax approach towards technological hazards” and suffers from “chronic mismanagement of crises,” two analysts wrote in Foreign Affairs. To make matters worse, Chinese authorities promote a “culture of disaster amnesia” to ensure accidents do not result in lasting political change.

Climate push rejected at oil and gas AGMs

Chevron and ExxonMobil shareholders overwhelmingly rejected climate-related proposals at the companies’ annual meetings. Investors submitted motions calling on the firms to set medium-term goals for cutting emissions, create committees to assess their decarbonization benchmarks, and disclose their risks from oil spills, but the vast majority of the 20 proposals garnered less than 25% support. Climate activists have had little success in changing the strategy of major U.S. oil and gas companies, with even an apparent recent victory — the climate-conscious activist hedge fund Engine No. 1 winning three seats on Exxon’s board two years ago — now being dismissed as a “disappointment,” The New York Times reported.

Europe’s automotive threat from China

Europe’s car industry risks being hammered by the twin threats of China’s fast-growing electric-vehicle companies and enormous U.S. subsidies luring away future investments. Chinese automakers have been extremely successful producing the price-competitive smaller EVs that are more commonplace in Europe than the U.S., making them “the number one risk” for European competitors, a recent Allianz report warned. At the same time, European policymakers worry that the Inflation Reduction Act, the U.S.’s mammoth green-tech program, will siphon investment across the Atlantic. “It’s definitely attractive to be in America right now,” an executive at Northvolt, a rare homegrown European battery company, told The New York Times.

Indonesia softens mineral ban

Indonesia relaxed a ban on mineral exports that was due to come into effect today. Jakarta’s planned restrictions on overseas sales of metal ore will instead be put in place next year. Indonesia has emerged as an increasingly important geopolitical hub thanks to its vast store of minerals necessary to build batteries and other technologies central to the green energy transition. The country’s president, whose second and final term ends next year, insists the ban is necessary to help Indonesia build domestic refining capacity and capture more of the economic value of the minerals it holds. “The next leader must fearlessly pursue industrialization,” he said this month, “whatever the risks.”

France backs Ukraine in NATO

Ukraine should be offered a path to NATO membership, French President Emmanuel Macron said. The remarks represent a marked shift in Paris’s position: Along with Berlin, it blocked U.S. calls in 2008 to grant Ukraine a road map to joining NATO, and since Moscow launched its full-scale invasion last year, Macron has seemingly tried to placate Russian President Vladimir Putin. Macron “has been changing his language for some months now,” the Eurasia Group’s Mujtaba Rahman noted. The change in stance isn’t limited to NATO expansion: Macron’s Europe minister said this week that France — long an opponent of EU expansion — now believed of growing the bloc, “we need to do it, and we need to do it quickly.”

IMF upgrades Ukraine estimates

The International Monetary Fund upgraded its growth forecasts for Ukraine, but noted that Russia’s full-scale invasion “continues to have a devastating impact on the economy.” The Washington-based lender projects Ukraine’s economy will expand between 1% and 3% this year, from a range of -3% to 1% earlier. The country’s businesses have shown remarkable resilience, with 98% of companies surveyed by McKinsey managing to continue operating despite “extremely deep and wide ranging” hits to sales. Ukrainian firms adapted quickly and focused on maintaining morale, resulting in most retaining the vast majority of their staff. Their top priority now: diversifying their supply chains and their revenue sources.

Mexico offers fentanyl ‘truce’

Mexican President Andrés Manuel López Obrador proposed “a truce” with China over fentanyl being trafficked to the United States. López Obrador has insisted that Mexico was merely a trading post for fentanyl en route to the U.S., despite once conceding that his country was also a producer of the drug. López Obrador’s comments came after talks with a U.S. Homeland Security Department official to discuss drug flows and reflect the delicate balancing act he is undertaking between Washington and Beijing. “We don’t want to blame anyone,” López Obrador said after the meeting. “We don’t achieve anything with confrontations.”

China keeps Taiwan options open

Beijing has not signaled any definitive timeline for unifying mainland China with Taiwan, a recent analysis of the Chinese Communist Party’s public statements showed. The report by the Center for Strategic and International Studies comes amid growing Western fears that Beijing is readying to overrun Taiwan, which China regards as a renegade province. The CSIS study said that while U.S. officials have largely cited classified intelligence, economic shifts, and military trends in their warnings of Chinese aggression, public statements “play a disproportionate role as instruments of alignment” within China’s political system. Beijing wants to avoid “an overly rigid or near-term timeline that would limit its flexibility and options,” the CSIS report’s authors said.

Ghanaian literary giant dies

The iconic Ghanaian anti-colonialist and feminist writer Ama Ata Aidoo died, aged 81. Her play The Dilemma of a Ghost was taught to children across West Africa, and her novel Changes won the Commonwealth Writers’ Prize. She was briefly Ghana’s education minister but resigned after it became clear she could not follow through on her efforts to make schooling free. She said she sought to oppose the “Western perception that the African woman is a downtrodden wretch,” and, in an interview that was widely shared after the announcement of her death, said of Western colonialism: “Everything you are, is us … In return for all of this, what have we got? Nothing.”

• Judgment and sentencing are expected in Senegalese opposition leader Ousmane Sonko’s rape trial.
• Chile President Gabriel Boric will deliver his annual address to Congress.
• The Scripps National Spelling Bee finals take place in Maryland, U.S.

Iran increased its stockpile of enriched uranium by about a ton since February, according to the International Atomic Energy Agency, the UN nuclear watchdog. Its total stockpile is now 23 times larger than limits agreed in the 2015 Iran nuclear deal. Efforts to revive the deal, which the U.S. withdrew from in 2018, have stalled.

A new Saudi drama series highlights the problems of under-the-radar “misyar” marriages that can leave women vulnerable to abuse. Dahaya Halal (Halal Victims) is a rare and provocative show that exposes how people manipulate the Islamic and legal system in Saudi Arabia, Ola Salem wrote in New Lines. When it was first broadcast in 2020 on Shahid, the kingdom’s rival to Netflix, it was so controversial that the series was pulled off air after the first few episodes. But a 10-part show returned this month. The reasons for its revival are not entirely clear but Salem noted that new laws passed by Saudi Arabia last year, “to address the very issues the show depicts … might be why the series found a new life.”

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