US Government Evades Shutdown Whilst Huawei Continues to Shine

‘Bewitched, Bothered, and Bewildered’ would appear to be the state of onlookers with respect to the geopolitical developments of the past week.

The US narrowly evaded a shutdown as a deal was reached to fund the government until November. For the once most powerful country in the world, it perhaps does not bode well to have to struggle to keep the government afloat for the next two months, whilst the most popular Republican Presidential candidate and the incumbent’s son face court charges. It also would not have boded well for the global economy. A US shutdown would lead to short-term volatility in global stock markets at the least, and a potential downgrading of US credit rating. With President Biden aiming for a wider circle of allies, and establishing security agreements with its partners, global confidence in the US government could have been at risk too.

In the East, prospects seem brighter for the Chinese economy as September showed signs of recovery. After the success of Huawei’s new smartphone, it is now on course to championing technology and circumventing Western sanctions by setting up a cathode materials plant in Morocco. A $2bn investment in a country already in a free trade agreement with the US and sturdy relations with the EU is a safe bet for Chinese battery production and sales.

However, not too far away in South Korea, materials manufacturer Korea Zinc is set to expand its nickel business to cater to US demand for batteries. The $370mn investment could catapult production capacity from 22k to 65k tonnes. It could also make Korea Zinc the largest non-Chinese nickel sulphate producer, and effectively the largest supplier for the states decoupling from China.

Another response to Chinese action occurred in Taiwan, where the first locally produced submarine was revealed to counter China’s growing naval arsenal, despite Chinese pressure on states not to provide submarine technology to Taiwan.

Defence is perhaps not a success story everywhere though, as the Middle East faced two challenges in the past week.

In Turkey, a bomb attack attributed to Kurdish group PKK ahead of the re-opening of Parliament in Ankara led Turkish forces to raid 20 PKK targets in Iraq This attack, in the run-up to local elections in Izmir, Ankara, and Istanbul, comes less than a year after the bombing in Istanbul, which was close to the Presidential elections. Domestic and regional dynamics will have to be closely watched – if the disturbances become a norm as in 2015/16 it could complicate Turkey’s relations with Iraq and Syria. Domestically while popular anger is expected against the government, a flip side could be political consolidation for AKP in Istanbul’s local elections, which is a close race.


On the Saudi- Yemen border, a fourth Bahraini soldier in one week was allegedly killed by Iranian-backed Houthi rebels. Should the group claim official responsibility, it could dampen the repairing of KSA-Iran relations and delay peace in the region where the Yemen war has been ongoing for years.




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