Geopolitics Weekly Report-2 (6-12 Jan)
In 2025, cooperation will become more valuable, and those who can get along will minimize geopolitical risks. The struggle between global powers will center on minerals and trade routes.
The struggle between global powers centers on minerals and trade routes. Trump says he needs Greenland, the Panama Canal and Canada for his national security. US Secretary of State Antony Blinken said the idea about Greenland was not a good idea. “But perhaps more importantly, it is clear that it is not going to happen. So we shouldn't waste too much time talking about it,” Blinken said.
The Biden administration has put its allies on the front line in the fight against China. It was trying to contain China by establishing bilateral, trilateral, quadrilateral diplomatic partnerships in the Pacific. Trump seems to have adopted a more Chinese strategy. Trump wants to encircle China with the ancient Chinese doctrine, the art of strategic encirclement. He wants to weaken the influence of the instruments in China's hands. For example, he wants to balance China against Russia by increasing US influence in the Arctic Ocean. He wants to counter China's mining breakthrough by owning mines in Greenland and Canada.
On the other hand, Trump says that NATO allies should increase their military spending targets from the current target of at least 2% of GDP to around 5%. Currently, NATO countries, with the exception of Poland, do not even spend 2%. Trump goes even further, saying that he would encourage Russia to invade NATO countries in Europe! NATO countries are not obliged to confront Russia and China. Naturally, Trump's plan is not foolproof.
While Blinken was on his farewell tour to S. Korea and Japan, N. Korea successfully test-fired a medium-range hypersonic missile at Mach 12.
In South Korea, impeached President Yoon's popularity had fallen to 11 percent before the martial law decision. The South Korean opposition mistook Yoon's strategic mistake as its own doing and started to make things difficult in the parliament. The opposition's uncompromising attitude pushed the public to support Yoon again. Suddenly, Yoon's popularity soared to over 40 percent. Isn't the situation similar in most countries? It's a world full of foolish politicians who mistake the public outcry for their own success.
The Pacific Region - Economics Highlights section is very important this week. It sheds light on the events we will face frequently in 2025. I have taken it title by title for you.
Cooperation Period
Malaysia and Singapore have signed an agreement to establish the Johor-Singapore Special Economic Zone (JS-SEZ). The southern Malaysian state of Johor has vast land and resources, including cheap water and energy, which Singapore covets for its energy-hungry data centers, while Singapore's multinationals have capital and skilled workers looking for space beyond the financial hub.
Non-cooperation is the biggest risk in today's world.
Seeking Geopolitical Balance
LG Electronics CEO Cho Joo-wan announced a “playbook” ready to deal with radical geopolitical shifts, ambitious Chinese competitors and described these challenges as the new normal. On the other hand, META owner Zuckerberg is seeking balance by appointing Trump's friend Dana White to Meta's board.Mine Wars
Mine Wars
The battle over minerals and materials science is intensifying. This week, China discovered more than 20 million metric tons of new copper resources on the Tibetan Plateau, more than 6.5 million tons in a newly discovered 2,800 km spodumene belt in Tibet and possibly up to 30 million tons of lithium resources. At the same time, China is trying to protect its lithium technology by limiting lithium exports.
Ministry of Commerce; China has ordered Chinese investors involved in overseas mining projects to report proven and probable reserves of critical minerals. Chinese companies operating overseas are required to declare more than 41 mineral products, up from 32 previously. Non-metallic critical minerals on the list include new crystalline graphite, amorphous graphite, boron and fluorite.
The value of geopolitical analyses can be measured by the cost of not following them!
Kurakhove, Ukraine's logistical stronghold in the Donetsk region, has fallen to Russia. It was Ukraine's most dramatic loss this week. The US has extended sanctions against the Russian energy sector. But despite the sanctions over the past three years, Russia increased its revenues from energy and gas exports by 25.7% last year. In Romania, supporters of Georgescu, who was deprived of electoral victory in a NATO coup, are organizing large demonstrations in the streets of Bucharest. Allegations of “Russian influence” in Georgescu's campaign remain unproven. New elections are scheduled for May.
Recently, France and Turkey have been confronting each other on several diplomatic fronts. Turkey has been instrumental in awakening France's former colonies in Africa, often driving France out of those territories. After being slapped by Turkey in Africa, France has declared that it will not leave Kurdish terrorists alone in Syria. Turkish Foreign Minister Hakan Fidan announced that he does not address the small country (France) that speaks under the US umbrella in Syria. Let's see if they can come to the region without the Americans. But we know this is not the case. Our interlocutor is America. We talk to America. Not with the countries behind it. We do not take others as interlocutors.
Chinese Foreign Minister Wang Yi completed his visit to four African countries. On the evening of the day Wang Yi visited Chad, the Chadian presidential palace was attacked. 18 attackers were killed. Chad had recently stopped military cooperation with France and agreed with Turkey to train its army. In Mali, another Sahel country that expelled France, a terrorist attack took place on the border with Mauritania, and the Malian army neutralized the terrorists.
Pacific Region
Trump said the US should take Greenland, threatened to take back the Panama Canal and considered using “economic power” to make Canada the 51st American province - underscoring his willingness to pick fights with allies and make sweeping threats. He said he would rename the Gulf of Mexico the “Gulf of America”. Trump said that if the hostages in Gaza are not returned by Inauguration Day, “all hell will break loose” in the Middle East.
Greenland's rare earths, oil and gas deposits, and its dominant position on key trade and military arteries have made it a focal point for major rival powers such as the US, China and Russia. “We need it for our national security,” Trump said in a statement. US Secretary of State Antony Blinken said the idea about Greenland was not a good one. “But perhaps more importantly, it's clear that it's not going to happen. So we shouldn't waste too much time talking about it,” he said. The US Geological Survey estimates that Greenland holds 1.5 million tons of rare metal reserves.
Trump said NATO allies should raise their military spending targets from the current target of at least 2% of GDP to about 5%. Trump said NATO allies were “not paying their bills”. “I said if you don't pay your bills, we won't protect you.” He said European countries should pay back decades of US protection and called them freeloaders for not adequately funding their own security.
Denmark admitted it had long neglected the defense of Greenland, a vast and strategically important Arctic island. “For many years we have neglected to make the necessary investments in ships and aircraft to help monitor our kingdom, and now we are trying to do something about it,” Defense Minister Troels Lund Poulsen said. The US military maintains a presence at Pituffik airbase in northwest Greenland. Greenland is vital for the US military and its ballistic missile early warning system, as the shortest route from Europe to North America passes through the island.
The Pentagon on Monday (January 6) added a number of prominent Chinese businesses, including some of the country's largest internet, battery, science and shipping firms, to a list of companies it has designated as military-grade. The new names on the list of more than 50 organizations include shipping and port industry giants China Overseas Shipping - or Cosco-Sinotrans & CSC Holdings and China International Marine Containers; aircraft manufacturer Comac; battery maker CATL; telecommunications modular manufacturer Quectel Wireless Solutions; facial recognition company SenseTime Group; and WeChat owner Tencent Holdings.
Chinese Foreign Ministry spokesperson Guo Jiakun told a routine press conference that China strongly opposes the US exaggerating the concept of national security, creating discriminatory lists under various names, and going after Chinese companies to hinder China's high-quality development. China will take all necessary measures to firmly defend the legitimate rights and interests of Chinese companies and safeguard the legitimate right of development.
North Korea said the missile flew about 1,500 kilometers at 12 times the speed of sound during the test, which was supervised by leader Kim Jong-un through a monitoring system the previous day, according to the Korean Central News Agency (KCNA). “The hypersonic missile system will reliably contain any opponent in the Pacific region that could affect the security of our state,” KCNA quoted Kim as saying.
US Secretary of State Blinken has suggested that Moscow may be planning to share advanced space and satellite technology with N. Korea. If true, this development could help the isolated DPRK advance its goal of deploying multiple spy satellites to monitor its enemies. As the US and South Korean foreign ministers were having lunch, K. Korea launched a new intermediate-range ballistic missile (IRBM).
In South Korea, impeached President Yoon's popularity had fallen to around 11 percent before the martial law decision. In recent polls, Yoon's popularity has risen above 40 percent. Yoon's decision to impose martial law was reacted by the public and the opposition was on the rise. The opposition's uncompromising attitude pushed the public to support Yoon again.
In a secret meeting at the White House in the fall of 2023, Jake Sullivan told telecommunications and technology executives that Chinese hackers had the ability to shut down dozens of US ports, the power grid and other infrastructure targets at will. There was one thing no one at the briefing, including Sullivan, knew: China's hackers were already at work deep inside US telecom networks. “The US needs to stop its own cyberattacks against other countries and refrain from using cybersecurity to defame and slander China,” said Liu Pengyu, spokesman for the Chinese Embassy in the US. Many senior lawmakers and US officials have switched to encrypted apps like Signal amid concerns that China may be listening in.
As US National Security Advisor Jake Sullivan wraps up a visit to India aimed at strengthening a key technology partnership with the country, analysts say there are concerns that Donald Trump could undermine a deal seen as crucial to countering China's rapid advances. Jake Sullivan is believed to have strengthened the India-US Initiative on Critical and Emerging Technologies (iCET) during his recent trip.
At least six people, including paramilitary troops, were killed and scores injured in a bomb attack claimed by the Balochistan Liberation Army (BLA) in Balochistan province, Pakistan. Much of the violence is aimed at Chinese infrastructure projects in Pakistan, which aim to connect China's Xinjiang region to the Arabian Sea to reach markets in the Middle East, Europe, Africa and beyond.
Canadian Prime Minister Justin Trudeau announced on Monday (January 6) that he would step down, becoming the latest globalist leader to fall from power and leaving Canada leaderless as it prepares to tackle President-elect Donald Trump's threats to upend free trade in North America.
Indonesia became the newest member of the Brics and the first country to accept full membership since the economic bloc opened for expansion in 2023.
Pacific Region - Economics Highlights
Vietnam's exports in 2024 increased by 14.3 percent to $405.53 billion, while imports increased by 16.7 percent to $380.76 billion, giving a trade surplus of $24.77 billion.
Malaysia and Singapore signed an agreement to establish the Johor-Singapore Special Economic Zone (JS-SEZ). The southern Malaysian state of Johor has vast land and resources, including cheap water and energy, which Singapore covets for its energy-hungry data centers, while Singapore's multinationals have capital and skilled workers looking for space beyond the financial hub. The Johor state government has identified 16 economic zones under the JS-SEZ, ranging from manufacturing, electricity and electronics to halal industry and tourism.
The Chinese Geological Survey said more than 20 million metric tons of new copper resources have been uncovered on the Tibetan Plateau. This compares with 53 million tons of proven copper reserves on the plateau as of 2021, accounting for more than half of China's total copper reserves. Researchers estimate that the plateau's copper potential could reach 150 million tons, spread across four major resource bases. The four leading sectors driving China's copper consumption - electric power, household appliances, transportation and construction - accounted for 79 percent of the country's total copper use in 2023.
China's lithium reserves have almost tripled, making it the world's second largest holder of the metal, which is key for renewable energy technology, Chinese state news agency Xinhua reported. According to the Geological Survey of China, the country now holds 16.5% of global reserves, ahead of Chile, Australia, Argentina and Bolivia. China was previously thought to have 6 percent of the world total, but the increase is attributed to the discovery of new deposits and new techniques that allow the metal to be extracted from minerals. According to Science and Technology Daily, a newly discovered 2,800 km spodumene belt in Tibet contains more than 6.5 million tons of lithium resources and possibly up to 30 million tons.
China is trying to protect its lithium technology by limiting lithium exports. The Commerce Ministry said its proposed export restrictions for lithium battery cathode material preparation technology and lithium extraction technology are designed to protect China's core technologies and provide clear guidance for companies engaged in international technology exchanges.
China has ordered Chinese investors involved in overseas mining projects to report proven and probable reserves of critical minerals. The Ministry of Commerce has expanded the list of mineral resources that Chinese mining enterprises operating overseas must declare, specifically requesting information on rare earth elements, titanium ore, zircon and tantalum ore. Chinese companies operating overseas are required to declare more than 41 mineral products, up from 32 previously. Critical non-metallic minerals on the list include new crystalline graphite, amorphous graphite, boron and fluorite.
Hyundai Steel is considering opening a steel mill in the United States to produce automotive steel supplied to Hyundai Motor and Kia. If Hyundai goes ahead with this plan, it would be the company's first overseas plant, with an estimated investment of more than 10 trillion won ($6.87 billion).
Hyundai Motor announced plans to invest 24.3 trillion won ($16.67 billion) in Korea this year to develop cutting-edge mobility solutions with a focus on electrification, software-defined vehicles (SDVs) and hydrogen energy. This figure represents a 19 percent increase from the previous year.
Automobile sales in China rose 5.5% last year to 22.9 million vehicles, the China Passenger Car Association said in a statement. In 2025, competition will be fiercer than ever. Among the early losers are foreign brands. General Motors, Volkswagen and Toyota are losing market share to local rivals. Domestic brands accounted for 61% of the local market last year, up 8.6 percentage points year-on-year. Last year, 23 electric vehicle brands exited China or merged with other brands.
Zuckerberg appointed Trump's friend Dana White to Meta's board of directors. Zuckerberg rolled back social media fact-checking protocols introduced after Trump's first election. On Friday, Meta posted a note on a company message board saying it was eliminating its diversity team. “The legal and political environment surrounding diversity, equity and inclusion efforts in the US is changing,” Janelle Gale, vice president of human resources, said in the memo.
LG Electronics CEO Cho Joo-wan announced a “playbook” ready to deal with radical geopolitical shifts, ambitious Chinese competitors and described these challenges as the new normal. We will need to maintain the technological gap, capture the cost competitiveness of Chinese firms and find creative ways of working. Simply put, we need to maintain the technological gap with Chinese firms, but we need to catch up with Chinese firms in terms of cost, Cho said. When we observe the supply chain of Chinese companies, there are several ideas we can take advantage of.
Mine Wars
Take a look at conflict zones around the world;
Ukraine: In an interview last year, Senator Lindsey Graham explained the true intentions of the war, saying that “the United States must not allow Moscow to triumph” in Ukraine, which sits on $10-12 trillion worth of critical minerals. Ukraine is estimated to be worth $3-11.5 trillion in lithium alone, and trillions of dollars in silver, gold, uranium, aluminum, copper, iron, manganese, titanium and hydrocarbons. Ukraine is also said to have Europe's largest source of the rare earth elements beryllium, niobium and zirconium.
Bolivia: Bolivia has faced more than 190 coups and revolutions throughout its history. It is stated that Bolivia has 23 million tons of lithium. Bolivia also has scandium and yttrium, two of the most sought-after rare earths for industrial and military use.
Venezuela: With up to 300 billion barrels of proven oil reserves, it is considered an energy hub. Venezuela also has gold, uranium and iron ore. With its reserves of coltan, a valuable mineral used in a wide range of electronic devices, Venezuela is considered a mining giant. “If we can get American oil companies to actually invest and produce oil in Venezuela, it would make a huge difference economically for the United States,” said former Trump adviser John Bolton.
Iran: Iran is home to an estimated $27 trillion in resource wealth. In 2023, Iran discovered a massive lithium deposit of 8.5 million tons.
Canada: Canada is said to be home to $33 trillion in resources ranging from oil, gas and uranium to phosphate, cadmium, cadmium, lead, titanium, zinc and a range of ferro-alloys, as well as rare earth minerals such as cerium, neodymium and promethium.
Greenland: thought to sit on at least 1.5 million tons of rare earths, including the precious metals and gems graphite, uranium, yttrium, scandium, neodymium and dysprosium, plus a wealth of minerals yet to be fully discovered.
Africa;
The Democratic Republic of Congo is thought to have the world's largest cobalt reserves (6 million tons). In addition to cobalt, the Democratic Republic of Congo is said to be rich in monazite, euxenite, niobium, tantalum and zirconium.
Guinea is the world's second largest producer of bauxite, which is used in the production of the strategic metal aluminum. Guinea is also said to have the world's largest untapped deposits of high-grade iron ore, as well as gold and diamonds.
Zimbabwe, where a coup took place in 2017, has Africa's largest lithium reserves (11 million tons).
Middle East Region
Lebanon has accused Israel of carrying out nearly 800 ground and air strikes since the ceasefire went into effect on November 27. “Our patience may run out before 60 days,” Hezbollah leader Naim Qassem said in a speech on January 4.
Lebanon's parliament elected a US-trained general, Joseph Aoun, as president, filling a two-year vacancy. Hezbollah did not vote for Aoun in the first round, but did in the second. “As head of the armed forces, I promise to insist on the right of the state to have a monopoly on weapons,” Aoun told parliament after his election.
According to a study published in The Lancet medical journal, the death toll in Gaza in the war between Israel and Hamas is about 40% higher than the Palestinian Health Ministry's records. Gaza's health ministry says 46,006 people have died in 15 months of fighting.
China expressed concern over reports that the Syrian army has given top ranks to foreign fighters, including members of the separatist Uighur Turkistan Islamic Party. China's Permanent Representative to the United Nations Fu Cong told a Security Council briefing that the country's new government must “fulfill its counterterrorism obligations and prevent any terrorist forces from using Syrian territory to threaten the security of other countries.”
According to the New York Times, Hamas is demanding detailed maps of the areas from which Israel will withdraw, but Tel Aviv has yet to provide them. Israel has not agreed on a precise formula to end the war in Gaza and insists on a vague one.
A government committee in Israel said Israel should prepare for a possible war with Turkey, the Jerusalem Post reported. “The threat from Syria and Turkey could become more dangerous than the Iranian threat,” the report submitted to the country's leadership said.
Twice this week, the Houthis targeted the USS Harry Truman, an American aircraft carrier that was preparing to attack Yemen. Houthi military spokesman Yahya Seri said the strikes forced the ship to leave the area of operations.
Ukraine-Russia Region
Kurakhove, a logistical stronghold in Ukraine's Donetsk region, has fallen into Russian hands.
In their last meeting, Ukrainian President Zelensky and US Defense Secretary Lloyd Austin (January 9) pressed the new Trump administration not to give up on Kiev's struggle, while Austin warned that cutting military support now would “only invite more aggression, chaos and war.” “We have come such a long way that it would be really crazy to throw the ball away now and not continue to develop the defense coalitions we have built,” Zelensky said.
“Ukrainian defense forces struck a Russian oil depot in Engels, Saratov region,” the Ukrainian General Staff said in a statement.
The United States (January 10) tightened sanctions on the Russian energy sector, the latest blow in a financial war designed to encourage Russia to end its war in Ukraine. The sanctions target two major oil producers, liquefied natural gas production and Russia's shadowy fleet of tankers used to transport oil to non-Western buyers. The US avoided blacklisting Russia's largest energy company, Rosneft Oil, and left untouched the biggest oil traders that Moscow uses as conduits for crude exports. Russia has increased oil and gas revenues despite US and EU sanctions and low global prices, bringing 10.34 trillion rubles ($99.86 billion) to the federal budget in the first 11 months of 2024, 25.7 percent more than in the same period a year earlier.
In Romania, pro-Russian Georgescu's victory in the first round was annulled in court by the NATO-controlled Romanian authorities. Protests exceeding 100,000 people are organized in Bucharest. Allegations of “Russian influence” in Georgescu's campaign remain unproven. New elections are scheduled for May.
Africa Region
An attack on Chad's presidential palace on Wednesday night left 18 attackers dead, six detained, one soldier dead and three wounded. President Mahamat Deby Itno was in the palace at the time. Chinese Foreign Minister Wang Yi visited the country on the day of the attack and congratulated Deby Itno for restoring constitutional order. Last week, Chad suspended military cooperation with France and agreed with Turkey to train its army.
Blinken said he had concluded that Sudan's Rapid Support Forces and the militias it supports had committed genocide through a campaign of ethnically targeted violence, which he blamed for killing tens of thousands of people and causing the worst famine in Sudanese history.
Chinese Foreign Minister Wang Yi said Namibia has unique resources and great development potential. Namibia, rich in uranium and critical minerals, is seeking Chinese investments in nuclear, wind and solar energy to strengthen its position in the global push for a transition to green energy, President Nangolo Mbumba said. Namibia is the world's third-largest producer of uranium, and two of the most productive mines for the element are majority-owned by Chinese companies. Most of the country's uranium and other radioactive materials are exported to China, but in recent years Namibia has been demanding that its critical raw materials be processed domestically and added value before going abroad.
China and Congo have established a “timeline and roadmap” on how President Xi Jinping's $50 billion financing pledge will be channeled into African infrastructure projects over the next three years. Wang said the two countries will host a ministerial coordination meeting to implement the outcomes of the Forum on China-Africa Cooperation (FOCAC) summit. Congo was elected FOCAC co-chair last year and the oil-rich country will host the 2027 forum.
The China Development Bank announced that it will provide the first tranche of $245 million in financing for the Kaduna-Kano railway project, part of a larger rail corridor linking Nigeria from north to south. However, the financing deal also signals China's growing wariness of large-scale infrastructure construction in developing countries, as the country shifts its lending strategy towards “small but smart” projects. The 203-km Kaduna-Kano railway line, connecting Nigeria's northern Kaduna state to the country's second largest city Kano, is estimated to cost US$1.2 billion, with China providing 85 percent of the financing and the Nigerian government the rest.