ITK Daily | October 28

Happy Friday.

To be ITK, know this:

A quarter of a million Indians migrated to Canada between 2016 and 2021, accounting for almost 1/5 of the total migrants to the country.

Next week's biggest geopolitical business event = Germany to China

Germany ain't decoupling anytime soon.

Hamburg’s China fudge adds another notch to Xi’s belt: The port investment is a qualified win for Beijing. Detractors were right to be wary. Matthew Brooker

+ The German government’s agreement to sell a stake of less than 25% in one of Hamburg’s port terminals to a state-owned Chinese company is a face-saving compromise that enables Chancellor Olaf Scholz to travel to Beijing bearing at least one gift next week.

+ The investment is a qualified win for Beijing, adding another node to the expanding global network of ports and other infrastructure interests known as the Belt and Road Initiative, a signature project for Xi Jinping.

+ A minority stake in a single container terminal hardly compares with the Nord Stream pipeline as a point of potential economic vulnerability. But every little bit helps in advancing Beijing’s agenda. Scholz’s detractors are right to be wary.

Belgium triggers Chinese backlash with port security warning: Leaked diplomatic cable shows Beijing wanted Belgian minister to ‘retract’ critical comments. Politico

+ A diplomatic dispute has broken out between China and Belgium, amid rising concerns over Beijing's involvement in European infrastructure.

+ The leak provides a rare glimpse into the worsening tensions between Europe and China that normally stay hidden from view in the closely guarded world of diplomatic relations.

+ EU countries are ringing the alarm bells over Beijing, just as Chinese President Xi Jinping secured an unprecedented third term as leader of China’s Communist Party. Concerns are growing in the West that China's alliance with Russia poses a major long-term strategic threat.

+ The Chinese involvement in Belgium is a case in point. In contrast to Hamburg and the Greek port of Piraeus, there was little discussion when Cosco, in 2017, became a majority shareholder of a container terminal in the Belgian port of Bruges.

+ The Chinese shipping company Cosco is taking a 24.9% stake in a port in Hamburg.

Bloomberg: Xi’s vow of world dominance by 2049 sends chill through markets

+ General Secretary has vowed to boost China’s international influence

+ Xi's COVID, tech, and Taiwan policies have cast doubt on the plan

Three arrests, two superpowers, and a secret prisoner swap: The detention of a Chinese executive to stand trial in the US provoked a standoff between global rivals and opened an acrimonious new era. WSJ

Absolute masterwork this.

+ One of the most significant prisoner swaps in recent diplomatic history was under way, after a top-secret negotiation that was three years in the making.

+ The detention of the 50-year-old celebrity businesswoman, and US efforts to extradite her for trial in New York, transformed her into a national martyr in China and a symbol of America’s growing hostility to its nearest rival.

+ Canada was caught in the middle.

+ Dominic Barton, the Canadian ambassador, spent hundreds of hours at a whiteboard in an embassy safe room charting proposals to get his countrymen released and visiting them in prison.

+ He delivered coded messages in rapid-fire English he knew eavesdropping guards would struggle to understand.

+ “Why did you arrest Meng? Don’t you know she’s the Ivanka Trump of China?” -- President Donald Trump to national security adviser John Bolton

+ Throughout the first half of 2019, Trudeau had failed to get an audience with Xi.

+ The Chinese reply to Trudeau was frustrating: It would breach protocol for Xi, China’s head of state, to speak with Trudeau, merely the head of government of Canada, whose head of state was Queen Elizabeth II.

+ Trudeau got his opening by chance. Chile was a guest at the G20 meeting, but its representative didn’t attend a scheduled assembly. That left Canada seated alphabetically between China and Brazil—and Xi seated to the right of Trudeau.

+ The Canadian prime minister passed a note, handwritten in Chinese, to Xi. “We have to communicate,” it said. Trudeau proposed they select two confidants to begin backchannel talks.

+ Days later, Dominic Barton, the former global managing partner of consulting firm McKinsey & Co., carried a thin folder of notes into the gated Diaoyutai state guesthouse in Beijing. His meeting was unofficial and secret. He told his secretary he was on vacation.

+ The 60-year-old Canadian had risen in the slipstream of China’s economic miracle, and through more than a decade living and working in the country had ties with Chinese entrepreneurs, executives and party leaders. He had written two books on China and taught at Tsinghua University in Beijing.

+ Barton wasn’t a diplomat. Yet Trudeau believed he could break the diplomatic logjam and bring home the two Michaels.

+ The proposed exchange—seven Chinese for seven Americans, plus the two Canadians—would make it one of the largest prisoner swaps since the Cold War.

+ As Biden took office, the Chinese leader came to see the case as an obstacle to restoring US-China ties under the new administration. Xi felt his country had demonstrated sufficient resolve against Western provocation.

+ Trudeau and a small entourage greeted their return in Calgary, Spavor’s hometown. They were welcomed with to-go cups of Tim Hortons coffee.

COVID-19 ‘most likely’ leaked from lab in China, Senate GOP report says: WSJ reports more evidence needed for definitive conclusion on the origin of the virus, report says; findings seen likely to fuel calls for more probes.

US views China as top security threat despite Russia's war: DW reports US Defense Secretary Lloyd Austin said Beijing is the only competitor capable of reshaping the international order. The Pentagon maintains that Russia still represents an "acute threat" amid its war on Ukraine.

+ National Defense Strategy: The Defense Department for the first time released the public versions of three strategic documents — the National Defense Strategy, the Nuclear Posture Review, and the Missile Defense Review — together after having developed both the classified and unclassified versions of all three in conjunction with one another. Access the full reports here.

+ "By weaving these documents together, we help ensure that the entire department is moving forward together, matching our resources to our goals. The strength and combat credibility of the joint force remains central to integrated deterrence." -- Secretary of Defense Lloyd J. Austin III

+ The 2022 National Defense Strategy, or NDS, places a primary focus on the need to sustain and strengthen US deterrence against China. It also advances a focus on collaboration with a growing network of US allies and partners on shared objectives.

+ The NDS lays out four top-level defense priorities the department must pursue:

1. Defending the homeland, paced to the growing multi-domain threat posed by China

2. Deterring strategic attacks against the United States, allies, and partners

3. Deterring aggression while being prepared to prevail in conflict, when necessary; prioritizing the challenge posed by China in the Indo-Pacific region the Russia challenge in Europe

4. Building a resilient joint force and defense ecosystem

London’s hold on global currency market weakens, BIS survey shows: FT reports that the UK capital remains the most important hub for global interest rate derivatives trading.

+ @bkownacki: Who had a bigger week...@RishiSunak or @elonmusk?

EU reaches deal to ban new combustion engine cars by 2035: DW reports a provisional deal reached by the European Parliament and European Council calls for zero emissions from new cars and vans as of 2035.

War in Ukraine strains ties between Africa and West AFP

+ Russia's invasion is "an existential threat to the stability and integrity of our continent. That's why we expect solidarity from Africa." -- French Minister of State Chrysoula Zacharopoulou

+ "Russia is solely responsible for this economic, energy and food crisis."

+ "Africans say that even while Ukraine is at war, is being invaded, is being attacked, Africa is under permanent attack from terrorism" -- Senegal's President Macky Sall

+ "It's shocking for Africans to see the billions that have rained down on Ukraine while attention has been diverted from the situation in the Sahel." -- Former Nigerien President Mahamadou Issoufou

+ Nearly half of African countries either abstained or did not vote in a UN resolution on October 13 on whether to condemning Russian annexation of more Ukrainian territory.

Biden must prepare for the worst in Ethiopia: If last-ditch peace talks don’t succeed, the US should brace for a humanitarian disaster. Bobby Ghosh

+ The African Union has begun a last-ditch effort to end the civil war in Ethiopia, arguably the world’s deadliest ongoing conflict.

+ This is potentially an inflection point for Africa’s second-most populous country, once its most promising economy. Few expect the negotiations to end the civil war, which is nearing the close of its second year. But a return to the humanitarian ceasefire announced in the spring might be within reach.

+ The African Union’s track record as a mediator, in a conflict that has raged uncomfortably close to its headquarters in the Ethiopian capital, doesn’t allow for much optimism.

+ The US should also subject Ethiopian and Eritrean military and government officials responsible for war crimes and abuses to the kinds of sanctions that have been slapped on Russian and Belarus commanders and officials for similar offenses in Ukraine.

+ Having sanctioned the top Russian leadership, including President Vladimir Putin, the Biden administration should make clear that no Ethiopian official is exempt — not even a Nobel laureate. Abiy, too, should prepare for the worst.

Weirdly, Taylor Swift is extremely close to creating a true metaverse: It’s just missing the 3-D space to virtually hang out in. Caroline Mimbs Nyce

+ To call what Swift is doing with this album release “online savvy” or “audience engagement” or “marketing” is to undersell it. She has, in a way, created a virtual universe in which fans can experience the launch.

+ The result is a near-year-round ecosystem that’s pretty much constantly bubbling away online. Fans gather in the tens of millions to obsessively dissect every move she makes.

+ "Taylor Swift could launch a Fortnite island on her own, and she would have 100 million users within a month."

+ "The world’s her oyster. The virtual world’s her oyster."

+ @mims: now that elon owns this site please join me at the only social network that really matters, burning man

My guide to a deglobalizing world: As nations retreat behind borders, a new global order offers new opportunities, argues Rana Foroohar — if we are willing to embrace them. Rana Foroohar

1. Globalization isn’t dead — it’s just different

2. All economics will be local

3. It’s the politics, stupid . . .

4. The age of ‘dual circulation’

5. Think citizens, not consumers

6. Own your own networks

The problem with social media is that it is not a real place: For too long digital platforms have said they are not responsible for what they publish. Jemima Kelly

+ "This is the problem with social media: while we might try to use real-world examples to make some kind of sense of it — like Elon Musk’s idea that Twitter is the “digital town square” — it is in fact, to quote Dave Chappelle, not a real place at all."

Get to know Section 203 - Congressional Research Service briefing paper - click here.

Paris wants to kick ‘dark stores’ out of the city center: The city began imposing fines on distribution centers run by rapid-delivery startups last month. But a court decision has thrown those plans in the air. Bloomberg

+ Startups that took off during the pandemic promising rapid deliveries of everything from fresh produce to laundry detergent, opened distribution centers on the ground floors of underutilized buildings.

+ So-called “dark stores,” around 100 such centers in Paris that are at the heart of a legal and political battle over the type of business-space use that should be allowed in the city center.

+ Firms like Getir, Flink, Frichti, Gorillas and Gopuff, all of whom deliver groceries, leased spaces reserved for businesses that, under Paris urban-planning laws, require the presence of actual shoppers.

+ Paris authorities began slapping fines on dark stores. Each site faced penalties of up to 500 euros ($487) per day, with a maximum of 25,000 euros, for failing to register as a warehouse. Officials said nearly 50 were operating illegally.

+ Paris’s clash with rapid-delivery companies will likely serve as a further indicator of how cities adapt to disruptive services.

+ Several Dutch cities imposed a one-year freeze on new warehouses, while Flink, Getir and Gorillas agreed to delivery riders’ e-bike speed limits of 25 kilometers (16 miles) per hour in the Netherlands.

+ Opposition to the dark stores has also revealed a desire to protect local shops and a certain idea of how cities should be.

+ In Paris, about 300 of the 2,000 kilometers of streets are reserved for businesses, and of those, 25 kilometers are dedicated to artisans, or those who produce or prepare products on-site, such as bakers and florists.

+ “We need people to go into the streets to buy toothpaste and then be drawn in by something they see in the bakery. Dark stores are businesses without life.” -- Lionel Livet, head of a business association in Paris' 15th arrondissement

2024 Rolls Royce Spectre EV: The car that lets the world know you sell weapons on the black market.

Bloomberg: Researchers find possible replacement for rare earth in magnets

+ New way of making tetrataenite could help produce magnets

+ More work is needed to determine if the method is suitable

Battery-makers are powering a circular economy: “Gigafactories” are being designed to recycle raw materials. Economist

+ In only 50 years, the world’s consumption of raw materials has nearly quadrupled, to more than 100bn tonnes, according to the latest Circularity Gap Report from the World Economic Forum. Less than 9% of this is reused, resulting in a big waste of materials.

Democrats scramble into defensive posture in final stage of midterms: Less than two weeks before the midterm elections, Democrats are trying to shore up the party’s candidates as Republicans charge deeper into their terrain. WP

Not a good sign.

+ Democrats on Wednesday pumped at least $6.3 million worth of advertising investments into a trio of congressional districts in New York and New Jersey.

Not a good sign.

+ First lady Jill Biden spent the afternoon in Rhode Island trying to help save a Democrat running in a district her husband carried by nearly 14 points.

Not a good sign.

+ Less than two weeks before the midterm elections, Democrats have moved into a defensive crouch, scrambling to shore up the party’s candidates as Republicans charge deeper into their terrain.

Not a good sign.

+ Some Democrats pointed to fatigue in blue areas over pandemic restrictions, one-party dominance, and concerns about violent crime and quality of life in large cities such as Portland, New York City, and San Francisco.

Not a good sign.

+ In New York, Biden appeared with Democratic Gov. Kathy Hochul, who is struggling to fend off attacks from Rep. Lee Zeldin.

Not a good sign.

Tim Ryan thinks everybody is wrong. Is he right? A Democrat pursues the elusive white working-class Trump voter. Ross Barkan

+ Ryan’s bet is that he can be the Democrat whom a person in Youngstown or Lordstown who agreed with Trump could actually vote for: a white male maverick willing to stick it to his own party.

+ “You can’t say the fundamentals of the economy are good when gas is $4 a gallon. It doesn’t work.”

+ “The home health-care worker in Cleveland, the construction worker in Toledo driving to Detroit to do their job, you tell them economists say it’s not a good idea to put money in your pocket. It’s total crap. You know, get out of the ivory tower. Get down with the people.”

+ “We are building a coalition of the exhausted majority of Democrats, Republicans, and independents against the extremists. I believe we are assembling that majority and Ohioans are once again going to lead the country.”

DJT 2024: I am guessing that Donald J. Trump will announce a 2024 presidential campaign on November 15.

Fear of catching COVID has cost US economy $250 billion this year: Bloomberg reports the researchers estimate a phenomenon they’ve dubbed “Long Social Distancing” kept 3 million people out of the workforce.

Brazil election: What you need to know: With the Brazilian presidential election race set for a runoff between Lula and Jair Bolsonaro on October 30, DW has a guide to the election system and the candidates. DW

+ Brazil's presidential elections are headed for a second round runoff on October 30 as neither current President Jair Bolsonaro nor former President Luiz Inacio Lula da Silva were able to claim an outright victory.

+ Voting is compulsory in Brazil for all those who are literate and aged between 18 and 70.

+ There are more than 156 million registered voters in Brazil for this election.

Pierre Soulages, leading French abstract painter, dies at 102: Once called “the world’s greatest living artist,” 50 years ago, Stevie Wonder heard the future: On the anniversary of the landmark 1972 album “Talking Book,” musicians who made it and artists who cherish it share their stories. NYT

+ “Talking Book” was a breakthrough on multiple fronts. It demonstrated, with the international smash “Superstition,” that Wonder didn’t need Motown’s “hit factory” methods — songwriters and producers providing material that singers would dutifully execute — to have a No. 1 pop blockbuster.

+ Wonder’s first Motown Records contract ended as he turned 21 in 1971.

+ The early 1970s were a wide-open — and in retrospect simply remarkable — era for R&B that melded social consciousness and musical creativity.

+ Unlike some of the more heavily orchestrated or earnest efforts of early ’70s R&B, “Talking Book” doesn’t feel vintage. Its arrangements are lean and contrapuntal, uncushioned, making every note earn its place both as a melodic line and a rhythmic push.

+ "The album is like “Goodfellas.” Every time you watch it, you see something different, you know? There’s all these little details, and you’ll hear it once and you listen to it again, or you’ll hear it in different speakers and something will pop out that you didn’t hear in your car." -- Macy Gray

+ "I’m a jazz musician, so especially from a jazz-musician standpoint, the chord changes are crazy. Stevie Wonder is the epitome — he makes complex music very digestible to the world." -- Robert Glasper

Pierre Soulages, leading French abstract painter, dies at 102: Once called “the world’s greatest living artist,” Soulages was best known for exploring the possibilities of the color black. NYT

+ He told Interview magazine in 2014, his paintings “looked like a fly in a glass of milk.”

+ Soulages came to a new understanding of the possibilities of black paint in 1979, after struggling in vain with a canvas in his Paris studio. Throwing up his hands, he retired for the night.

+ He told an interviewer for the Pompidou Center in Paris in 2009, “I saw that it wasn’t the black that made the picture come alive but the light reflected on the black surfaces.”

+ For more than four decades, Soulages worked every possible variation on black in an evolving series of paintings he called “outrenoir,” or “beyond black,” sometimes using spoons or small rakes to create new textures in his thick slabs of paint and evoke subtle effects of color and light.

+ President Fran?ois Hollande of France called him “the world’s greatest living artist.”

You can find his work in DC at the National Gallery of Art - check it out.

How World Series day games went extinct WSJ

+ It has been 35 years since the last World Series day game, and don’t hold your breath for the next one.

+ The Oct. 13, 1971, World Series game between the Pittsburgh Pirates and Baltimore Orioles drew 63 million viewers, the largest TV audience for a prime-time sports broadcast.

+ As the Associated Press wrote a month after the 1972 World Series: “‘Television is calling the shots,’ argued some critics. ‘Baseball has sold its soul to the tube.’”

+ In 1985, Peter Ueberroth announced that every game of that year’s World Series would be played at night — and indeed TV was calling the shots.

+ The last daytime World Series competition was Game 6 of the 1987 World Series between the St. Louis Cardinals and Minnesota Twins — and it was played indoors in the Metrodome, meaning there was no sunshine to make it feel like an afternoon game.

+ Tonight: World Series | Game 1 - Philadelphia Phillies vs Houston Astros @ 8:03 pm ET

Is playoff baseball back? Isn't it almost time for spring training?

World Cup Qatar is messy... AP: FBI probing ex-CIA officer’s spying for World Cup host Qatar

+ Ex-CIA officer who spied on Qatar’s rivals to help the tiny Arab country land this year’s World Cup is now under FBI scrutiny

+ Newly obtained documents show he offered clandestine services that went beyond soccer to try to influence US policy

+ FBI probe focuses on whether Kevin Chalker’s work broke laws related to foreign lobbying, surveillance, and exporting sensitive tech + tradecraft

23 days: Number of days until World Cup 2022 kickoff. The level of excitement seems on par with being told as a kid to eat spinach.

Tour de France 2023: Bilbao departure, Grand Colombier for July 14, and a return to the Puy de D?me volcano: Le Monde reports the route of next year's men's race has been unveiled and includes passages through the five main mountain ranges of France.

Caracal produces ITK Daily.

Caracal is a geopolitical business intelligence firm specializing in global business issues at the intersection of globalization, disruption, and politics.

Clients are Chief Communications Officers with global responsibility who rely on Caracal for help navigating today's interconnected business environment with political intelligence, research, strategic planning, public affairs, and communications.

To receive Caracal ITK Daily by email, subscribe here.