WASHINGTON – Washington does not see any change in China’s tone on Taiwan, US Commerce Secretary Gina Raimondo told CNBC on Thursday when asked about media reports that Chinese President Xi Jinping told President Joe Biden that Beijing will reunify Taiwan with China.

THE TAKE

NBC News and other media outlets reported on Wednesday that Xi told Biden in a recent summit in San Francisco that Beijing will reunify Taiwan with mainland China but that the timing has not yet been decided.

Biden and Xi met at the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco in mid-November in what was their first face-to-face meeting in a year, with the high-stakes diplomacy aimed at curbing tensions, including over Taiwan, between the two superpowers.

KEY QUOTES

“I don’t see any change. I was in the meeting. President Xi didn’t say anything to us that he hasn’t said before,” Raimondo said in the CNBC interview.

“It was a good discussion between the two world leaders. It was frank, it was positive, it was direct. Taiwan came up but no new news,” the U.S. commerce secretary added.

BACKGROUND

Biden and Xi agreed during their meeting to open a presidential hotline and resume military-to-military communications, showing some tangible progress.

Xi urged Washington to stop sending weapons to Taiwan and support China’s peaceful “reunification” with Taiwan, Chinese state media said at the time.

Biden said he stressed the need for peace in the Taiwan Strait. A US official added that Biden argued to maintain the status quo and for China to respect Taiwan’s electoral process. In a press briefing after the summit, Biden called Xi a dictator.

The US is Taiwan’s most important international backer and arms supplier even though Washington does not formally recognize its government, maintaining official relations only with Beijing which claims the island as its own territory. — Reuters

VIENNA – A new reactor at North Korea’s Yongbyon nuclear complex appears to be operating for the first time, the United Nations nuclear watchdog and independent experts said on Thursday, which would mean an additional potential source of plutonium for nuclear weapons.

North Korea has for years used spent fuel from a 5-megawatt nuclear reactor at Yongbyon to produce plutonium for its nuclear arsenal but a telltale discharge of warm water from a larger light-water reactor suggests it is coming online, too, the International Atomic Energy Agency said.

“The discharge of warm water is indicative the reactor has reached criticality,” IAEA chief Rafael Grossi said in a statement, meaning the nuclear chain reaction in the reactor is self-sustaining.

The IAEA has not had access to North Korea since Pyongyang expelled its inspectors in 2009. The agency now observes the country mainly using satellite imagery. Without access, the IAEA cannot confirm the reactor’s operational status, Grossi said.

The IAEA says it has observed a strong outflow of water from the light-water reactor’s cooling system since October, suggesting ongoing commissioning of the reactor. More recent indications are that the water was warm, Grossi said.

“The LWR, like any nuclear reactor, can produce plutonium in its irradiated fuel, which can be separated during reprocessing, so this is a cause for concern,” he said, adding that the advancement of North Korea’s nuclear program was “deeply regrettable”.

‘SURGE IN PLUTONIUM’

Researchers at the James Martin Center for Nonproliferation Studies (CNS) in California also concluded the reactor is most likely operating, adding that it may be “a significant source of nuclear material” for the nuclear weapons program, which is banned by UN Security Council resolutions.

In an April report, the D.C.-based Institute for Science and International Security estimated the light-water reactor “could allow a surge in plutonium quantities at an estimated rate of about 20 kilograms of plutonium per year, a rate four to five times larger than that of the small adjacent reactor”.

That study concluded North Korea may have anywhere from 31 to 96 nuclear warheads, depending on the types of devices being built and which fuel is being used.

News of the reactor’s operation comes as North Korean leader Kim Jong Un said an intercontinental ballistic missile (ICBM) test this week showed his country would not hesitate to launch a nuclear attack if an enemy provokes it with strategic weapons.

North Korea has conducted six nuclear tests; the last one was in 2017.

Activity at North Korea’s nuclear test site at Punggye-ri has led to months of speculation that it could resume nuclear weapon testing as it seeks to miniaturize warheads for use in ballistic missiles. — Reuters

TOKYO – Japanese Industry Minister Ken Saito said on Friday that the United States-Japanese ties were “stronger than ever”, although he declined to comment directly on growing scrutiny in the United States of a proposed deal for Nippon Steel to buy US Steel.

Speaking at a regularly scheduled press conference, Saito said he was aware of a statement by the US National Economic Council director that the purchase deserves “serious scrutiny” but would not comment directly on private deals.

“I believe Nippon Steel simply needs to take the proper steps in the procedure,” he said. “In any case, the Japan-US alliance is stronger than ever … and it is important to work together in the field of economic security.”

The White House on Thursday said Nippon Steel’s $14.9 billion proposed acquisition of US Steel needed to be carefully scrutinized given the company’s core role in US steel production that is critical to national security.

The strongly worded White House statement comes amid growing criticism of the proposed deal by both Democratic and Republican lawmakers and the powerful United Steelworkers union, the main union at the third-largest US steel company.

US Ambassador to Japan Rahm Emanuel had welcomed the deal shortly after its announcement on Monday, saying in an X social media post the two companies were “defining the future of the key steel industry and forging a strong bond as they face a more competitive environment.”

He added that the deal would “deepen the bonds” between the US and Japan.

A US embassy spokesperson said on Friday the ambassador had no further comment on the deal. — Reuters

BEIJING – China will resume importing grouper fish from Taiwan from Friday, the Chinese government announced, just one day after angering Taipei with the ending of tariff cuts on some chemical imports less than a month before Taiwanese elections.

China put the grouper ban in place in June of last year saying it had detected banned chemicals, an accusation Taiwan denied, as part of a broader ban on Taiwanese food imports that infuriated the government of the Chinese-claimed island.

China’s Taiwan Affairs Office said Taiwanese industry representatives had visited China and provided “rectification” information, so now approved companies can resume grouper exports.

“We are willing to work together with relevant parties on the island to continue to provide assistance for the resumption of the import of Taiwan’s agricultural and fishing products into the mainland,” it said in a statement carried by China’s official Xinhua news agency.

China has already eased some import bans on Taiwanese pineapples, sugar apples and wax apples, which it put in place citing concerns about pests.

On Thursday, Taiwan accused China of economic coercion and election interference after Beijing announced the end of tariff cuts on some chemical imports from the island, saying Taipei violated a trade agreement.

Taiwan’s Jan. 13 presidential and parliamentary elections are taking place as China has sought to force Taiwan to accept Chinese sovereignty claims.

Taiwan’s government and the ruling Democratic Progressive Party (DPP) have repeatedly said China is trying to interfere in the vote, whether by military means or with economic pressure, to ensure an outcome favorable to Beijing. — Reuters

WASHINGTON – The United States and China have delivered big wins in climate diplomacy through the unique relationship of their chief climate envoys, but the two countries are bracing for change as the Chinese envoy retires and the U.S. readies for an election.

In an interview with Reuters, U.S. Special Climate Envoy John Kerry was vague about his plans for the future.

“No matter what, I am going to try to do what works best,” he said after last week’s U.N. climate summit, COP28, in Dubai. “I haven’t made any decisions about anything, and I will continue as long as God gives me the breath and work on it one way or the other.”

The COP28 summit’s final deal also marked the last official action by Kerry’s longtime ally – China’s ailing 75-year-old climate envoy, Xie Zhenhua, who had guided China’s international climate talks for 16 years.

The deal’s success came partly from a U.S.-China proposal – brokered by the two sides a month earlier during a bilateral meeting in California. In that so-called Sunnylands agreement, Kerry and Xie ditched a controversial call to “phase out” fossil fuels, and used a new phrase that essentially meant the same thing – “accelerate the substitution for coal, oil and gas generation.”

That new phrasing, used alongside a joint pledge to boost renewable energy, evolved into the COP28 deal’s central call for countries to triple renewable energy capacity as a way of “transitioning away from fossil fuels.”

The Sunnylands pact ended up being “very important” at COP28, Kerry told Reuters. We “created something different in the air.”

That unique U.S.-China cooperation on climate change has also been key to driving climate action globally, as policies set in the world’s two largest economies – and biggest polluters – can impact energy trends internationally.

But the momentum could be challenged if Kerry’s boss, President Joe Biden, loses next year’s U.S. election. With the vote still 11 months away, Biden’s biggest challenge is coming from former President Donald Trump – a vocal climate denier who scuppered U.S. climate diplomacy for years.

“Despite the divergent national interests they represent, Kerry and Xie share the firm belief that to solve the climate crisis the U.S. and China need to engage with each other,” said Li Shuo, incoming director of the China Climate Hub at the Asia Society.

“For the ones coming after them, the drive will be bumpy,” Li said.

CHINA READIES FOR CHANGE

Whichever way the White House vote swings, China is readying a new climate diplomacy effort and is expected to announce Xie’s replacement as the English-speaking diplomat Liu Zhenmin, who once worked as China’s deputy foreign minister.

Described as “affable” by one former colleague, Liu shadowed Xie at COP28, meeting national delegates, offering several speeches on China’s green energy achievements, but otherwise remaining tight-lipped with journalists.

Liu later told the Chinese financial news outlet Caijing that he had participated in COP28 as “an old comrade” in climate talks and described the broader negotiating team.

“Our negotiators are very young, and this is a good thing,” he is quoted as saying in the interview published on Monday. “Addressing climate change requires not only old comrades, but also for the young generation to participate more and better.”

Some COP28 observers questioned whether his foreign ministry background might mean China would seek to align its climate plans more closely with its foreign policy objectives.

Kerry also has a foreign policy background, having served as the U.S. secretary of state under President Barack Obama.

Foreign policy issues have previously dogged climate relations, most notably in 2021 after U.S. Rep. Nancy Pelosi visited Taiwan as the House Speaker and declared U.S. support for the self-governing island claimed by China.

But the two sides continued to talk climate, with Kerry insisting on separating the issue from other disputes. China and Liu have said recently, however, that climate talks cannot be a diplomatic “oasis.”

After his term in China’s foreign ministry, Liu was appointed in 2017 as under-secretary-general at the U.N. Department of Economic and Social Affairs (UN-DESA), with a broad brief that touched on climate change. He also helped China negotiate both the 1997 Kyoto Protocol and the 2015 Paris Agreement on climate change.

Two former Western diplomats familiar with Liu’s work predicted he would do well as China’s climate envoy – having deep experience in climate issues and in multilateral negotiations.

Still, Xie will be a tough act to follow, one diplomat said. “Xie has this human warmth, hugging and embracing people, which is very rare in China. No one in the negotiating community has anything close to the respect of Xie.”

PERSONAL DIPLOMACY

During his interview with Reuters, Kerry emphasized his achievements with Xie, a Communist Party technocrat with a background in engineering.

The warmth between Kerry and Xie, built over some 60 face-to-face meetings, helped broker agreements including the 2015 Paris deal and a bilateral deal that helped countries agree at COP26 in Glasgow to “phase down” coal use.

“We did more than plant the seeds for future cooperation,” Kerry told Reuters.

“We created a working group. We agreed to a process and created an institutional structure,” he said. “There is a process in place going forward.”

That process could be jeopardized if Trump retakes the U.S. presidency. One of Trump’s signature acts was to pull the U.S. out of the Paris Agreement.

China shifted its diplomatic focus on climate toward U.S. states like California, with former Governor Jerry Brown visiting China’s President Xi Jinping in 2017. Chinese provinces and U.S. states also collaborated on climate research and diplomatic exchanges.

Brown told Reuters this year that those subnational partnerships helped to keep the U.S.-China climate relationship alive under Trump.

China’s outgoing Xie sought to reassure at COP28 that the commitment to climate cooperation remained strong, acknowledging that it “also played a role in improving the complicated bilateral relationship between China and the United States.”

He and Kerry made several appearances together, with Xie warmly wishing Kerry a happy 80th birthday.

“Neither of us will leave this community or depart from this great cause,” Xie told reporters in a summit briefing. “Both of us will continue to make contributions and efforts to bring this process forward.” — Reuters

Russia has handed out more than $12 billion in state subsidies and loans to keep its aviation sector afloat since Western sanctions over Moscow’s invasion of Ukraine cut off supplies of key parts and maintenance services, a Reuters analysis shows.

Dependent on foreign-made aircraft, Russia faces the daunting task of developing its aviation industry alone with domestically sourced parts, while buying aircraft from foreign lessors to avoid more of its fleet being seized.

Western planemakers Airbus and Boeing halted supplies of services and spare parts in March 2022 and dropped regular maintenance support for flag carrier Aeroflot and other Russian airlines.

Since then, Russia has spent 1.09 trillion roubles ($12.07 billion) supporting the civil aviation industry, including aircraft manufacturing and financial assistance for airlines, Reuters calculations show, based on data from the Ministry of Finance and the Accounts Chamber, which oversees budget execution.

The spending is almost twice as much as 547 billion roubles in payments made in 2020-21, when the COVID-19 pandemic caused a drastic reduction in air travel, and highlights the scale of the Kremlin’s effort to wrest control of a crucial industry.

“Our fleet of aircraft is very overloaded … with foreign-made planes,” President Vladimir Putin said last week. “We plan to produce more than 1,000 aircraft by 2030, our own planes. Work is needed.”

According to Swiss aviation intelligence provider ch-aviation, Russian airlines currently operate 991 aircraft, including 405 made in Russia.

But just 133 are Superjets made by state-owned producer United Aircraft Corporation. Other Russian-produced aircraft – Tupolev, Yakovlev and Ilyushin – are rarely used for commercial flights.

Support for aircraft manufacturing, a key industry, will be maintained for years to come, the industry and trade ministry said in response to Reuters’ findings.

“The main emphasis is on supporting sales, expanding production capacity and creating a post-sales service system,” the ministry said.

The importance of a reliable air industry is particularly crucial for Russia, both for transporting people and goods across its enormous territory and to bolster Moscow’s narrative that sanctions have had but a minimal impact.

With voters heading to the polls in three months, the collapse of an airline could apply reputational and electoral pressure on Putin who is running again for president.

As a key aviation power since Soviet times, Russia’s technical ability is not in doubt.

Western aviation analysts say the investments will at best keep the fleet flying but doubt its aircraft will return to Western markets any time soon, even if the conflict in Ukraine ends. That’s because of the cost and bureaucracy involved in rebuilding a fleet with a clean and traceable safety record and approved parts.

RAINY DAY FUNDS

Russia has dipped into reserve funds, the data showed, spending 110 billion roubles in 2022 on compensating airlines for losses from a sharp rise in jet fuel costs.

This year, the National Wealth Fund (NWF) has played a bigger funding role with Moscow drawing almost 400 billion roubles for aviation spending so far in 2023.

The scale of spending in 2022-23 is equivalent to just under 1% of projected gross domestic product (GDP) for 2023. Russia has spent an additional 2.3 trillion roubles in 2022-23 on developing transport outside the aviation sector.

The country’s domestic air passenger traffic began to rebound in late 2022, as airlines found ways to import spare parts through a grey import scheme the government introduced.

Russian airlines have kept their fleet of Western jets in the air, partly by importing spare parts via third countries without the manufacturers’ – mainly Airbus and Boeing – consent.

Passenger numbers are recovering but still lag pre-COVID levels. Meanwhile, the loss of foreign parts and maintenance expertise has raised concerns about aircraft safety.

Some airlines have stripped airplanes for parts, aviation industry sources told Reuters last year.

Moscow hurriedly localised the registration of its fleet and has used NWF funds to buy back aircraft from foreign lessors to avoid the risk of their confiscation when flying abroad.

Transport Minister Vitaly Savelyev said 300 billion roubles could be used for buying aircraft from foreign lessors in 2023.

So far, 190 billion roubles has been spent, the data showed, with state-owned insurance company NSK holding aircraft on airlines’ behalf.

A government document setting out strategic spending plans for aviation, seen by Reuters last autumn, said that Russia would have to spend at least 711 billion roubles on “achieving technological independence from foreign suppliers”.

Aeroflot, the transport and finance ministries did not respond to requests for comment. — Reuters