Happy Wednesday.
Here’s today’s ITK Daily.
To be ITK, know this:
Pentagon trying to get weapons to allies faster: WSJ reports the goal is to train 1,400 military officers as part of an effort to speed up foreign military sales.
US set to approve depleted-uranium tank rounds for Ukraine: WSJ reports the armor-piercing ammunition has raised concerns over health and environmental effects.
Biden reaffirms support of NATO alliance, announces more military aid to Ukraine: Politico reports the president and US Secretary of State also offered a “broad and deep” agenda of next month’s NATO summit.
Putin admits Russia doesn’t have enough weapons and drones: Politico reports Moscow’s forces have been plagued by shortages, while Kyiv is taking delivery of advanced Western hardware.
US lawmakers ask White House to punish South Africa for supporting Russia: NYT reports South Africa is accused of helping supply Russia with weapons for the Ukraine war, a charge that South Africa denies.
NATO warfare: Drones vs. jets in the future of air power: NATO's Air Defender exercise using traditional fighter jets contrasts with new tactics in aerial combat. Drones may turn out to be a cheaper and more efficient option, but Germany remains skeptical. DW
+ Proponents of traditional air power argue drone technology still can't beat human flight. Planes are more powerful, allowing them to deliver bigger payloads, and are less susceptible to the kinds of cyber attacks and electronic jamming that could knock a drone out of the sky.
NATO to upgrade ties with Australia, New Zealand, South Korea: Nikkei reports together with Japan, four nations will have tailored partnership programs.
How the US is pushing China out of the internet’s plumbing: Experts say the subsea cable market is in danger of dividing into eastern and western blocs amid fears of espionage and geopolitical tensions. FT
+ Nearly 1.4mn kilometres of metal-encased fibre criss-crosses the world’s oceans, speeding internet traffic seamlessly around the globe.
+ The supply and installation of these cables have been dominated by companies from France, the US and Japan.
+ There are more than 500 active and planned submarine cables, transporting 99 per cent of intercontinental data, arriving at around 1,400 coastal landing stations around the world.
+ TeleGeography, a consultancy for the sector, estimates that more than $10tn-worth of financial transactions are transmitted via these cables every day.
+ “China now sees the ability to build its own cables as strategically important, because no one else can do it for them”
+ “The South China Sea is one of the most critical sea areas in China’s military strategy. Every link and component of the infrastructure must be controllable”
Cuban spy base or not, China is looking at the Caribbean: Beijing is probably looking to distract the US with espionage efforts, although Florida offers some juicy targets. James Stavridis
+ There are lots of different ways to spy on your rivals: sophisticated satellites, agents operating under cover in the enemy country, cyber-espionage, electronic “vacuum cleaners” that scoop up everything from secure cell-phone calls to what is popping up on the video displays of your opponent’s systems.
+ In addition to surveillance, there is another game afoot. In the philosophical style of military master Sun Tzu, China’s playbook is simple: Distract the US by causing it to expend time, energy and resources in its own neighborhood; this will take away from US efforts in Asia.
+ The Chinese perhaps don’t desire significant security influence in the world to America’s south — at least for now — but they hope to misdirect us.
+ China, meanwhile, is annoyed by a new US agreement with the Philippines for access to a base on Luzon, around 250 miles from the southern tip of Taiwan.
+ US and Chinese military jets and ships are nearly bumping into each other in the South China Sea and Taiwan Strait.
The end of Western naivety about China: A new China debate pits optimists against fatalists. Economist
Yellen says bid to decouple from China would be ‘disastrous’: WSJ reports the Treasury secretary, speaking to a House committee, said trade and investment were crucial in US-Chinese relations.
Yuan under pressure as US, China rates set to diverge further: WSJ reports central banks in both countries will make key interest-rate decisions this week.
Bloomberg: China is biggest loser of millionaires globally, report says
+ Nation to see net outflow of 13,500 in 2023: Henley & Partners
+ UK’s exodus of millionaires to double amid Brexit, tax debate
Chinese businesses look to new frontiers in Middle East: Investors have streamed into Saudi Arabia since Xi Jinping’s visit in December. WSJ
+ This week, several thousand Chinese businesspeople—including the chair of the Hong Kong stock exchange and the chief executive of the Bank of China—gathered in Riyadh to explore investment opportunities in energy, mining, infrastructure, manufacturing and tech sectors such as gaming and artificial intelligence.
+ It was the first Arab-China Business Conference held in Saudi Arabia, geared around the kingdom’s plans to reconfigure its economy in the years to come.
+ Organizers said it drew the biggest crowd in the event’s 10-year history.
From mine to battery: Indonesian nickel drives the world’s EV market: Nickel is an essential component of electric-vehicle batteries, and Indonesia is by far the world’s largest producer. A rare visit to one of its biggest nickel plants reveals the heavy environmental cost of mining and processing the metal. WSJ
Independent: Japan’s lower house passes controversial bill to ‘promote understanding’ of LGBT+ community
America is courting India in part for its growing economic clout: But a young population may not be enough to sustain rapid growth. Economist
+ The partnership between India and America has never been that deep or close. But America’s leaders, both Republican and Democrat, would like it to be.
+ They see India as an indispensable ally in their growing rivalry with China.
+ After all, India recently became the world’s most populous country.
+ Its foreign policy has become more assertive and more hostile to China of late, even if it remains opposed to the idea of an American-led order.
+ Its diaspora is the world’s biggest, and also remarkably influential.
+ Modi has promised growth of a sort that would turn it into pillar of the world economy, on a par with America, China or the European Union.
Israel prepares for vote related to controversial judicial reform plan: Guardian reports the Knesset to elect two members to the judges selection committee, with hardliners in the ruling coalition pushing to pick both members.
Macron's shift from 'start-up nation' to reindustrialization: Since the COVID-19 pandemic, the innovation-loving French president has been advocating for more manufacturing. He is planning three trips this week to highlight his policies in favor of France's competitiveness. Le Monde
Why Berlusconi’s death makes Meloni stronger: Italy’s first female prime minister Giorgia Meloni got her big break thanks to Silvio Berlusconi. Now he’s gone, she stands to benefit once again. Politico
+ Forza Italia’s potential implosion is unlikely to shake the stability of Meloni’s government, however, as most of its lawmakers will still support it. “I don’t think the government is in danger,” said Orsina. “Meloni is way too strong and the people in Forza Italia have nowhere else to go.”
+ Italian media has long speculated that Berlusconi’s eldest daughter, Marina Berlusconi, 56 — currently chair of the family holding company Fininvest — might step forward to reinvigorate Forza Italia and arrest its further decline.
+ Forza Italia — the name means “Come on, Italy” and was a popular football chant — was founded in 1994, when Berlusconi, then Italy’s richest man, entered politics.
+ He tapped popular TV personalities and senior managers from his companies to stand in elections, leveraging his media companies’ reach to engineer a stunning election victory in just two months.
+ “They are a spent force,” said Daniele Albertazzi, a professor of politics at the University of Surrey. “Even if they stand for election another couple of times, are they going to exercise any real influence?”
Forza Italia struggles for survival after Silvio Berlusconi’s death: Splintering center-right party could be an ill-timed distraction for Prime Minister Giorgia Meloni. FT
Trudeau clean grid plan has Alberta leader pledging defiance Bloomberg
+ Alberta Premier Danielle Smith vowed to fight Canadian Prime Minister Justin Trudeau’s environmental initiatives with “every power that we have,” including by having the oil-rich province defy federal legislation.
+ A federal goal of zeroing out the emissions from the nation’s power grids by 2035 and a plan to slash emissions from oil and gas companies by 42% this decade are unachievable for Alberta, Smith said Tuesday at an energy conference in Calgary.
+ If necessary, the province will use the Alberta Sovereignty Within a United Canada Act that was passed last year as grounds to disregard federal laws, Smith said.
+ “The constitution is very clear that we have the authority to develop our electricity grid, we have the authority to develop our resources. That’s what the Sovereignty Act is all about, making sure that we defend our areas of jurisdiction.”
The South is fast becoming America’s industrial heartland: Joe Biden’s manufacturing boom is accelerating the region’s rise. Economist
+ In popular perception America’s industrial heartland is its Midwest.
+ Just look at where President Joe Biden has travelled for many of his big made-in-America speeches: Ohio thrice, Michigan twice and Wisconsin.
+ But take a look at where the money is flowing, and a different picture of manufacturing emerges. It is the South—a region running from Texas to Virginia—that is fast becoming America’s new industrial heartland.
+ When Japanese and German carmakers started production in America in the 1980s and 1990s, most chose the South. They were attracted by a dearth of unions and generous subsidies.
+ In 1985 the Midwest had 1.25 workers making durable goods such as cars and electronics for each one in the South, according to the Department of Labour. By 2021 the number of durable-goods factory workers in the South had just about drawn even with the Midwest.
Americans say they need $2.2 million to be considered wealthy: Bloomberg reports feeling rich is more common among millennials and Gen Z, according to a new survey from Charles Schwab.
+ This is up from $1.9 million last year.
+ Despite that lofty sum, 48% of respondents said they already feel wealthy today, with an average net worth of just $560,000.
Japan restaurant group Zensho to buy US, UK sushi chains: Nikkei reports the company to gain 3,000 locations via record $625m purchase.
Toyota develops an EV with simulated stick, engine roar: WSJ reports the technology, which hasn’t yet been rolled out, offers the sounds and sensations of a manual transmission.
ChatGPT unleashed an AI race, now regulators are struggling to hold on: Artificial intelligence boom pits US's bottom-up approach against China's top-down take on regulation. Nikkei
+ While most tech moguls resist efforts at government regulation, Altman has taken pains to tell governments that they need to start thinking about regulations now, before it is too late."
+ The stakes are high: Some US policymakers fear too much regulation will slow the development of US AI technology and give China an advantage; regulators such as the Federal Trade Commission say too little regulation in the previous era of social media has eroded transparency and given rise to black box algorithms, abuses of privacy and toxic disinformation.
+ In the absence of federal regulations, Microsoft and Google, the leaders in the field, have set up internal AI governance teams and published their own AI principles of how the company will develop and deploy related technologies responsibly.
+ "Compared to Europe, where they have reasonable data and privacy laws in place now. Big Tech has sort of slowed [data and privacy regulations] down in the US"
Nvidia rides AI boom to become latest US $1 trillion company: WSJ reports the chip company ended trading Tuesday with a valuation of more than $1 trillion, becoming the seventh US company to reach that status.
Four-week-old AI start-up raises record €105mn in European push: FT reports the funding puts the value of Paris-based Mistral AI at €240mn as the dealmaking frenzy around the sector intensifies.
The Times: Elon Musk’s new chief Linda Yaccarino rallies staff for ‘Twitter 2.0’
Golden Globes are sold and Hollywood Foreign Press is no more: NYT reports after a series of ethics, finance, and diversity scandals, the embattled awards show will continue, but the group that was behind it for decades will not.
Jay Monahan: PGA Tour had to do Saudi deal – US Congress isolated us: The Times reports PGA Tour commissioner insists the new arrangement is not a merger between the PGA Tour, LIV Golf, and the PIF, and calls the PIF a ‘minority investor’
Golf’s titanic deal stokes anger on Capitol Hill: American lawmakers and officials are studying the pact between the PGA Tour and Saudi Arabia’s sovereign wealth fund. NYT
+ Even though Saudi Arabia has had plenty of bipartisan tangles, the kingdom’s officials and allies have often enjoyed an uncommon rapport with their American counterparts, as was on display during a visit from Secretary of State Antony J. Blinken last week.
+ Monahan described the tour as “an American institution,” just as Blumenthal would on Monday. But like many executives before him, Monahan is finding that Washington is forever eager to scrutinize American institutions, especially when sports are involved.
Congress prepares to tee off on the PGA Tour’s Saudi deal: The league’s deal with LIV Golf has opened up a world of new problems in Congress. WSJ
+ Recent history shows how problematic congressional probes can be for a leading sports body. When the House Committee on Oversight and Reform investigated the Washington Commanders and the NFL’s handling of workplace issues inside the team beginning in 2021, it surfaced troubling new allegations that generated more problems for America’s most popular sports league.
+ “This tax issue in and of itself is worthy of a hearing…even if we accept a monopoly in professional golf, they sure as hell ought to be paying taxes.”
Messi to Miami shows that Major League Soccer has arrived Will Leitch
+ Messi is still in negotiations to nail down the details — not with his team, mind you, but with the league and its primary broadcast partner, Apple TV. Several reports say a final sticking point is the percentage of new MLS Season Pass subscriptions on Apple TV — which offer every MLS game — Messi will get.
+ Messi is not some foreign novelty coming to America; he’s a star here right now.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal produces ITK Daily.
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