ITK Daily | January 31

Happy Tuesday.

Here’s today’s ITK Daily.

To be ITK, know this:

A new threat to relations between America and China: As Xi Jinping tries to ease tensions, a congressional committee risks exacerbating them.?Economist

Air mobility command boss predicts war with China in 2025 in dire memo: A USAF memo calls for aggressive efforts to prepare for a major fight with China, including orders to ‘aim for the head’ in firearms training.?The Drive

Telling the truth about possible war over Taiwan: Gen. Minihan shocks Washington by telling his troops to be ready to fight against China.?WSJ - Editorial

Can China take Taiwan? Why no one really knows.?Michael E. O’Hanlon

New Czech president risks China’s rage with call to Taiwanese leader: Politico reports EU will watch Beijing for economic retaliation after Petr Pavel breaks Chinese diplomatic taboo.

US military poised to secure new access to key Philippine bases: WP reports the expansion is part of a broader push in the Indo-Pacific to buttress US force posture, reinforce alliances and deter China.

NATO's chief urges South Korea to step up military support for Ukraine: Reuters reports NATO Secretary-General Jens Stoltenberg urged South Korea on Monday to increase military support to Ukraine, citing other countries that have changed their policy of not providing weapons to countries in conflict following Russia's invasion.

Will more NATO support increase tensions in Asia??A visit to South Korea and Japan by the head of NATO this week highlights the alliance's strategic priority to push back against China and North Korea while addressing the global impact of Russia's war in Ukraine.?DW

Bloomberg: China presses students to head back to overseas universities

+ Government warns it will no longer accredit distance learning.

+ Normal life resuming in China after three years of COVID-zero.

Russia’s new meddling in the Caucasus: Peace between Armenia and Azerbaijan is possible — but a Russia-backed oligarch is trying to stop it.?Maurizio Geri

+ Maurizio Geri is a former analyst on the Middle East and North Africa at the NATO Allied Command. He was also previously an analyst for the Italian Defence General Staff.

German Chancellor Olaf Scholz?ruled out sending fighter jets to Ukraine, saying that the war cannot escalate into a battle between NATO and Russia.

The Times: Finland intent on joining NATO with Sweden

Ukraine wants to join EU within two years, PM says: Brussels says: ‘Not so fast.’?Politico

How to get a breakthrough in Ukraine: The case against incrementalism.?Michael McFaul

+ Australia will partner with France to produce thousands of artillery shells for Ukraine.

Everything Ukraine is going through today, we've already experienced: 'I'm imprisoned by a regime that is using my captivity as an act of allegiance to Vladimir Putin.'?Mikheil Saakashvili

+ Mikheil Saakashvili is the former president of Georgia.

+ Russian hybrid warfare – gas supply cuts in the middle of winter, ballistic missiles against vital civilian infrastructure, cyberattacks, disinformation, terrorist attacks, the migration crisis and illegal deportation by cargo planes of Georgians living in Russia, armed support to separatists in Abkhazia and Tskhinvali (Ossetia) and the issue of Russian passports, constant harassment by violation of our air and sea spaces, and so on.

+?Everything Ukraine is going through today, we've already experienced during my presidency.

+ In Ukraine and Georgia, we were fighting the same enemy: corruption, oligarchs, ethnoreligious obscurantism, and their natural supporters and allies outside.

How the war in Ukraine met the culture wars.?Gideon Rachman

Labour is winning the Brexit revolution: The party can capitalize on Tory failure.?Tom McTague

+ Three years after Britain finally left the European Union, Brexit has not only lost its popularity, but also, it seems, its power.

+ Brexit has been done and most people have concluded it was a mistake.?

+ Swing areas in northern England, Wales and the Midlands have turned against Brexit more strongly than traditional Tory areas.

+ The problem for the Tories is that all those voters who regret Brexit also see it as synonymous with the Conservative Party.

+ This current shift in public mood against Brexit isn’t just a Labour victory — it is very much a Tory defeat.

Today: The 3-year anniversary of the UK officially leaving the European Union.

Changing attitudes to Brexit, three years on: Recent polls show a rise in people saying Brexit was wrong. But who is changing their mind – and who is not??Guardian

King Charles?has reportedly asked the Archbishop of Canterbury to negotiate with Prince Harry so that he can attend the coronation in May.

+ King Charles' coronation = Saturday, May 6, 2023 @ Westminster Abbey

Britain’s trade deal architect plots exit after Indo-Pacific pact: Crawford Falconer sees Britain’s planned CPTPP accession as jumping-off point after years at the trade department.?Politico

Cosa Nostra is part and parcel of Italy: The hold of organized crime on the economy and politics in the country is underestimated.?Roberto Saviano

+ The criminal economy of Italy is the only one to rival that of oil. + In Italy alone, the wealth generated by drug trafficking is estimated at around €400 billion according to a major survey conducted in 2020 by the Direzione Investigativa Antimafia (DIA), the country's multi-force investigation body targeting organized crime.

+ To communicate, mafia bosses do not use cell phones but a system of "pizzinis," short handwritten coded letters.

+ The strength of criminal organizations has long lied in their ability to secure the support of the population by implementing targeted charity in their regions.

+ Cosa Nostra is part and parcel of Italy: It infiltrated all areas of citizens' life, from construction to health.

+ Today, the mafia focuses on the management of capital flows that feed politics and parties. It strives to have its men in the state bureaucracy and settles in places where one controls and decides on money spending.

+ The criminal economy is the most powerful economy on the continent. Not talking about it, looking the other way and pretending not to know or not to understand, will not solve the problem.

EU crafts response to US green tech subsidies: AFP reports the EU will present long-awaited proposals on Wednesday to counter sweeping US subsidies on green tech that threaten Europe's industry, already struggling with soaring energy prices and unfair competition from China.

Reuters: Saudi Arabia to invest about $266 bln for clean energy - minister

David McCloskey: The spy who came in from Damascus: The former CIA man’s thriller Damascus Station is stuffed with spycraft and insider insights.?Tim Shipman

'I am Inca blood': Peru protests fire up a divided nation?Reuters

+ The country of some 34 million people has been in the throes of its worst unrest in decades since the abrupt Dec. 7 ouster and arrest of center-left President Pedro Castillo after he tried to illegally shutter Congress to avoid impeachment.

+ The violence has left 48 people dead with 10 more civilians killed in accidents or other issues related to the blockades.

+ Protesters have pledged to fight on until new elections are held, Boluarte resigns and Congress is shut.

+ The protests, which show no sign of abating, threaten to snarl copper supply from the world's No.2 producer of the red metal and destabilize Peru's government with little sign of a political solution to the unrest due to infighting in Congress.

+ The protests have raised the specter of violence of years past in Peru, the center of the Incan empire hundreds of years ago, including clashes between rebel Maoist groups and the government in the 1980s and 1990s that saw thousands killed.

FT: Jair Bolsonaro seeks six-month US tourist visa to extend Florida stay

Mexico president says to meet with Citigroup's CEO Fraser: Reuters reports Mexican President Andres Manuel Lopez Obrador said on Monday he would meet with US Citigroup's Chief Executive Jane Fraser as the bank attempts to finalize the sale of its local retail unit Banamex.

Meet Ron DeSantis’ inner circle: These are the people advising the Florida Republican as he weighs whether to run for president.?Politico

Republicans’ 2024 magical thinking: Lots of Republicans want Donald Trump to disappear from politics. Their main strategy is hope.?McKay Coppins

In 2016, Trump’s GOP rivals failed to beat him because:

1) They were convinced he would self-implode

AND

2) They Wanted his support for the general, so they treated him with velvet gloves

+ Press them hard enough, and most Republican officials—even the ones with MAGA hats in their closets and Mar-a-Lago selfies in their Twitter avatar—will privately admit that Donald Trump has become a problem.

+ Aside from his most blinkered loyalists, virtually everyone in the party agrees: It’s time to move on from Trump.

+ Terry Sullivan, who ran Marco Rubio’s 2016 presidential campaign, told me that Trump’s rivals failed to beat him that year in large part because they were “always convinced that his self-inflicted demise was imminent.”

Donors slow as the realization hits that Trump can’t beat feeble Joe Biden?Charles Gasparino

+ What initially made Trump so appealing to the party, large swaths of the electorate and the donors was that aside from his policies, he was unconventional, an outsider, populist and original. He didn’t read from the establishment script.?

+ What makes him so unappealing now: He has become all too predictably crazy and politically toxic.

+ Recall, while the country was looking for stable leadership during the early stages of COVID, his meandering and sometimes inane press conferences.?

+ When he left the White House, he didn’t do much to change the narrative that he was erratic and unfit for office.

+ They don’t want to spend it on Donald Trump, I am told, because even against Sleepy Joe in 2024, it’s probably a waste of money.

45%: The share of adults who approve of President Biden’s job in the latest NBC News poll.?

+?71% of Americans in the latest NBC News poll say the US is headed in the wrong direction.

The power couple at the center of Biden’s political universe: Bob Bauer and Anita Dunn are two of the most powerful people in the president's circle, and they've been at the center of his response to the discovery of classified documents.?NBC News

Some Democrats are worried about Harris’s political prospects: At a pivotal point in Biden’s term, many party activists are not sure the vice president has shown she is up to winning the top job.?WP

+ Many of the activists reached by The Washington Post said they like Harris personally and would support her if she became the nominee, but they are not convinced she has separated herself sufficiently from other potential White House aspirants.

+ Several Democratic governors in particular have emerged in recent months, from Michigan’s Gretchen Whitmer and California’s Gavin Newsom to, more recently, Maryland’s Wes Moore and Pennsylvania’s Josh Shapiro.

+ Harris’s office declined to comment for this story.?

+ Every sitting or former vice president who has sought the Democratic nomination since 1972 has gotten it.

+ Biden is the only one of those who went on to capture the White House.

+ Harris has her second chief of staff and her second chief spokesperson, and she will soon hire her third communications director.

Wednesday: Most analysts expect the Fed to announce a 25 basis points increase, smaller than recent bumps.

Friday: The Bureau of Labor Statistics will release the January jobs numbers.

+ US offices reached 50% occupancy last week—the first time since the pandemic hit.

More than $50 billion: The amount of money the federal government will start spending for semiconductor manufacturing, as allocated in the CHIPS Act signed into law last year.

Politicians want to keep money out of ESG funds. Could it backfire??States are supposed to act in the best interests of citizens and retirees. Divesting from ESG funds and companies like BlackRock that run them may create legal jeopardy.?NYT

+ The fight is over BlackRock’s stance on ESG investing.?

+ BlackRock believes that a focus on a company’s environmental, social and governance challenges is the very definition of prudence — and that how investors address those challenges will increasingly affect profits, too.?

+ State officials are calling out what they say is overly “woke” behavior by the asset manager.

+ The big challenge here is the differences of opinion about what constitutes an asset manager’s fiduciary duty.

+ “Stakeholder capitalism is not about politics. It is not ‘woke.’ It is capitalism.”?

+ These days, ESG means 1,500 things to any 1,000 given investment professionals.?

+ “There is a cognitive dissonance between political narratives and people’s practical obligations. If there is reason to believe that companies are vulnerable to climate risk or the impact of some other ESG factor, fiduciaries are obligated to consider those factors.”

This group is sharpening the GOP attack on ‘woke’ Wall Street: Consumers’ Research, bolstered by millions in undisclosed donations, targets investment firms and their evaluation of climate risks.?WP

+ Vanguard, one of the world’s three biggest financial asset managers, recently dropped out of a coalition of firms committed to sustainable investing.?

+ A little-known group named Consumers’ Research has emerged as a key player in the conservative crusade to prevent Wall Street from factoring climate change into its investment decisions.

+ " I didn’t know Vanguard would just capitulate.”

+ Consumers’ Research accused Vanguard of “meddling with [the] energy industry to achieve progressive political goals at the expense of market efficiency.”

Corporations can’t ignore geopolitics anymore: The global division into competing blocs comes at a high price for multinationals.?Elisabeth Braw

+ Companies are responding to the increasing risk by friendshoring, a process of redirecting parts of their manufacturing, supply chains, and sales to friendlier countries.

+ The world is dividing into two increasingly clear geopolitical blocs.?

+ WTW and the research firm Oxford Analytica assessed 61 countries found that 25 of the countries lean West, while 18 lean East, opposing the Western powers on many key issues.

+ Of the 61 countries assessed by WTW and Oxford Analytica, 18 have attempted to be neutral.

+ The West is losing friends. Five years ago, 13 of today’s Western-aligned countries were bosom buddies of the West. Today, only five countries—including Jordan, Mexico, and Qatar—are, as is the unique island of Taiwan.

+ Friendshoring is accelerating, and having crucial goods made in countries on which one can rely is indisputably a good thing.

+ Western governments and companies need enough countries they can rely on, even if those countries are not as close friends of the West as Taiwan. Otherwise, deglobalization will result in very small trading blocs. Friendshoring requires friend-winning.

Washington halts licences for US companies to export to Huawei: FT reports the White House is moving closer to imposing a total ban on the sale of American tech to a Chinese company.

TikTok on the Hill: TikTok CEO Shou Zi Chew will appear before Congress on March 23. He'll speak with the House Energy and Commerce Committee.

+ Republicans are expected to use the hearing to highlight security and privacy concerns over the video app.

House panel zeroes in on Chinese-owned app TikTok over security fear: House Republicans and Democrats plan much more scrutiny of the US's economic entanglement with China, and fears over TikTok are growing.?WP

+ The new House select committee charged with alerting Americans to the perils of a rising China is zeroing in on TikTok, the Chinese-owned social media application that has built a massive American following despite suspicions that it could be used as a tool of foreign espionage or influence.

+ Washington remains torn over whether it should ban the wildly popular app, order it sold or allow TikTok to keep scrolling across 100 million American smartphones.?

+ The debate also highlights a key challenge confronting the administration: How to define the parameters of an economic relationship with a nation it regards as the United States’ principal strategic rival — one many in Congress describe as an outright enemy.

+ In a sign of the bipartisan appeal of a tough-on-China stance, the new House committee on “strategic competition between the United States and the Chinese Communist Party” was established on a lopsided 365-65 vote.

+ The former Marine chairing the panel is a Princeton graduate with a doctorate in international relations from Georgetown.

+ TikTok says it already has spent $1.5 billion on its proposal to address Washington’s security concerns by removing its U.S. operations from ByteDance’s control.

+ Either a ban on TikTok or a forced sale could dent ByteDance’s value and thus cost its US investors.

+ “I am not making the case for total decoupling. It’s not in our economic interest. I don’t have a problem with Wisconsinites buying cheap T-shirts from China or with Wisconsin farmers selling soybeans to China. But it’s almost going to be on a case-by-case basis.” -- Rep. Mike Gallagher (R-WI)

Banning TikTok won’t do much good: Although satisfying — and justified — a ban on the video-sharing app would amount to a missed opportunity for the US.?Bloomberg - Editorial

+ Banning the company outright — as Congress is now contemplating — is a bad idea.

+ TikTok’s threats shouldn’t be exaggerated. The US has already banned the app on government devices, thereby eliminating the most pressing risks it posed.

TikTok’s coming for Amazon’s search traffic: Young shoppers want to be entertained, engaged, and surprised, things the biggest online e-commerce company is surprisingly bad at.?Leticia Miranda

+ TikTok’s growing influence has exposed Amazon’s big weakness: for all its success in retail logistics, it’s not really a fun place to browse or discover new trends.???

+ Many giants have fallen in the cut-throat world of retail, and Amazon’s frumpy, catalogue-style platform risks pushing it into irrelevancy among those in their teens and early twenties — the shoppers of tomorrow — who demand entertainment, engagement and a dash of the unexpected from the brands and platforms they spend time on.

+ Last month, Amazon announced steps to catch up with a new feed called Inspire, billed as helping it break into what retail experts call social commerce.

+ More than 60% of shoppers start their search on Amazon with a high intention to buy, according to a September report from search and marketing analytics firm Jungle Scout.

+ Amazon has made billions of dollars from being predictable, efficient and competitive on price.?

+ Losing its hold as the place shoppers go first to discover things means losing dollars. The more shoppers browse TikTok and are directed to purchase straight from a brand, the less they spend with Amazon.

Technology makes us more human: When techno-optimists use ChatGPT, they see Star Trek: a future in which opportunities for personal fulfillment are as large as the universe itself.?Reid Hoffman

+ Techno-humanism is typically conflated with transhumanism, referring to the idea that we are on a path to incorporating so much technology into our lives that eventually we will evolve into an entirely new species of post-humans or superhumans.

+ What defines humanity is not just our unusual level of intelligence, but also how we capitalize on that intelligence by developing technologies that amplify and complement our mental, physical, and social capacities.?

+ Is there a future where the massive proliferation of robots ushers in a new era of human flourishing, not human marginalization?

China’s Baidu developing its own ChatGPT, joining global AI race: WSJ reports the search giant plans to release chatbot powered by artificial intelligence and integrate it into its engine.

The race of the AI labs heats up: ChatGPT is not the only game in town.?Economist

ChatGPT: Inside the mind of OpenAI, the software's creator: Behind the software is OpenAI, a startup with a messianic vision and global ambitions, founded by Silicon Valley heavyweights, including Elon Musk.?Le Monde

+ Now 300 people strong, OpenAI began in earnest in early 2016, with a dozen engineers, including five poached from Google.

+ Microsoft would be willing to invest $10 billion in OpenAI. In exchange, it would receive 75% of future profits, until it recoups its investment, and then 49%, up to a "cap" of less than 100 times its initial investment, according to Fortune.?

+ For some, OpenAI is distinguished less by its superior technology than by its choice to make its tools accessible to the general public.

+?"AI is much more complex than a purely technological problem. We realized that we must incorporate the societal aspect."?

Twitter?made its first interest payment under Elon Musk after he took it private last year using about $12.5 billion of debt.

Ford?slashed about $4,500 from the price of its electric Mustang Mach-E in response to Tesla’s recent cuts.

Tesla?says it will invest $3.6 billion to expand the Reno Gigafactory to build Tesla Semis and enough batteries to supply 1.5 million vehicles annually.

General Motors hires former Tesla executive Zach Kirkman for corporate development role?DFP

+ GM is in the midst of transitioning to selling all zero-emissions vehicles by 2035 and will be rolling out 30 new EVs over the next 24 months.

General Motors?started production Monday of the second electric vehicle in the Hummer family: The 2024 GMC Hummer SUV. That vehicle will hit dealership lots later in the first quarter.

Toyota?outsold No. 2 VW in 2022 by more than 2 million vehicles.

India's EV dawn fans expectations fuel demand may peak early?Reuters

+ While EVs make up just 1% of the 3 million cars sold each year, New Delhi wants to grow this to 30% by 2030 and has introduced a range of policies to get there, including tax breaks for consumers.

+ India’s state refiners, which dominate fuel retailers, plan to set up EV charging facilities at more than 22,000 fuel stations and highways by 2024.

+ About 40% of India’s fuel demand is for diesel, which is mostly used by trucks.

A mining boom — but without the waste to match??Growing demand for clean-energy minerals copper and nickel means more unwanted material will be dug up, too. It doesn’t need to become a hazard.?Clara Ferreira Marques

+ In a paper this month, researchers at the University of Queensland in Australia forecast a dramatic increase in waste as the global energy transition takes hold. Copper tailings are set to increase from an annual rate of about 4.3 gigatons in 2020 to 16 gigatons in 2050. Annual production of nickel tailings is predicted to increase sixfold over the same period.

+ It’s not just about the latent risk — the additional storage cost could amount to $1.6 trillion, the researchers estimate.

Southwest hires its first new lobbyist in years amid multi-prong controversies: The hiring comes after the company stranded millions of passengers over the busy holiday travel period.?Politico

Southwest?got the SNL treatment this weekend. Watch?here .

Inside the secretive process to select the first astronauts for NASA’s next moon mission?CNN

+ Sometime this spring, NASA will make one of the biggest announcements in its history when it names the initial four-person crew for its flagship Artemis program to return astronauts to the moon for the first time in 50 years.

+ Scheduled to launch in 2024, Artemis II will be the program’s first crewed mission to orbit the moon.

+ What is known is that NASA Administrator Bill Nelson, a former Democratic senator from Florida, will have no role in the process.

+ The only thing set in stone is that the Artemis II crew will consist of three American astronauts and one Canadian, terms that were cemented in a 2020 treaty between the two countries.

+ Typically, NASA also strives for a professionally diverse crew with a healthy blend of rookies and veterans, aiming for a mix of military pilots and citizen scientists — doctors, engineers, astrophysicists, biologists and geologists — with a range of strengths.

What do Gucci and Unilever have in common??Much is at stake for both companies after some surprising leadership changes, including a possible breakup at the consumer goods group.?Andrea Felsted

‘I want to caress the lift!’: The eco office block miracle made entirely from wood: It’s renewable, strong as steel, astonishingly fireproof – yet it’s easy and quiet to build with. Could timber construction be the future? We step inside the revolutionary new London workplace that everyone wants to touch.?Guardian

+ Just as covering concrete with plants does not make it green, filling a high-energy, high-rise glass office tower with low-energy gadgets does not make it carbon-neutral.

+?Claims of “net zero” almost always mean that someone else is picking up the carbon tab.?

+ A recent investigation found that more than 90% of rainforest carbon offsets approved by the world’s largest provider are largely worthless – and could actually be making global heating worse

+ In architecture, the focus has long been on reducing the amount of energy a building consumes once it is occupied – known as operational carbon.

+ Up to three-quarters of a building’s total emissions over its lifespan come not from leaving the lights on and cranking up the thermostat but from the energy consumed in the production of the materials used to build it – known as embodied carbon.

+ “We’re getting a really clear understanding of the biophilic benefits of natural environments, beyond the carbon savings,” says Andrew Waugh of Waugh Thistleton, the architects behind the project.

+ Waugh is one of the UK’s most vocal advocates for mass timber construction, having worked with wood for the last 20 years.

+ To most people, wood is something you throw on the fire, not build towers from.?

+ The beauty of building with wood is that it is truly renewable, and actively sequesters carbon from the atmosphere as it grows.The trees used for the project were grown in vast certified forests in Austria and Germany, where five trees were planted for every one cut down.

‘The best-kept secret in the State Department.’ How sports help US diplomats: State Department’s sports diplomacy program has sent surfers to Papua New Guinea, taken ambassadors such as Shaquille O’Neal to Cuba and organized sports camps in which Israelis and Palestinians both have taken part. It also brought hundreds of leaders from grassroots sports organizations from around the world to the US as part of a mentoring program designed to encourage and empower leaders while expanding athletic opportunities for young athletes back home.?LAT

+ "We use sports as a way of connecting people, connecting people to our country. Whenever I go around the world — whatever, again, our differences may be — sports brings us together, unites us, connects us."?

Trump courses will host three tournaments for Saudi-backed LIV Golf: NYT reports as the league announced more details of a 14-stop second season, former President Donald J. Trump’s courses remained central to the schedule, deepening his ties to Riyadh.?

Enjoy the ride + plan accordingly.

-Marc?

Marc A. Ross | Chief Communications Strategist @ Caracal

Caracal produces ITK Daily.

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