China hits back at US, Japan, South Korea over comments on Taiwan | East Asia Tonight (Sep 23)

Key Concepts:

• Super Typhoon Ragasa: A powerful tropical cyclone impacting Hong Kong and mainland China.
• UN General Assembly: An annual meeting of world leaders at the United Nations.
• Palestinian Statehood: The recognition of Palestine as an independent state.
• Rare Earths: A set of seventeen chemical elements crucial for modern technology.
• AI Chips: Advanced semiconductors used in artificial intelligence applications.
• Data Centers: Facilities housing computer systems and associated components.
• Foreign Interference: External attempts to influence a country's politics or policies.
• Two-State Solution: A proposed resolution to the Israeli-Palestinian conflict.
• Denuclearization: The process of eliminating nuclear weapons.
• Tokenization: Converting traditional assets into digital tokens on a blockchain.

Typhoon Ragasa Impact and Preparations

• Severity: Super Typhoon Ragasa is described as potentially the most powerful tropical cyclone of the year, with expected winds up to 230 km/h.
• Hong Kong: The Hong Kong Observatory upgraded the typhoon signal to 8, leading to the grounding of hundreds of flights until Thursday. Schools and businesses are shut down. The government is urging people to stay home due to expected heavy rain and storm surges. Drains are being cleared to mitigate flooding, and emergency response teams are on standby. Temporary shelters are being provided for the homeless.
• Mainland China: Residents in Shenzhen and Guangdong are stockpiling essential items. Over 370,000 residents have been evacuated from low-lying areas. The meteorological administration is calling Ragasa the "king of storms," expecting it to be more destructive than previous typhoons this year.
• Shenzhen: The city is in lockdown with a stop-work order issued at 2 PM. People were sent home, and sandbags were placed at building entrances. Public transportation was gradually suspended. Parks along the coastline were cordoned off.
• Comparison to Past Typhoons: Ragasa is being compared to Typhoon Mangkhut (2018), which caused significant devastation in Hong Kong, including over 480 injuries, 500 reports of smashed windows, and 60,000 fallen trees. The insurance payout for Mangkhut was around $400 million USD, and experts predict Ragasa could potentially exceed that.
• Authorities' Response: Authorities in Guangdong have shut down many mega-cities and evacuated about 400,000 people from low-lying coastal areas. Chinese leadership is urging local governments to issue early warning systems and act decisively. Over $130 million USD has been allocated in disaster relief funds to support flood-hit regions.

South Korea's Economic Diplomacy and UN General Assembly

• UN General Assembly: South Korea's president is in New York for the UN General Assembly meeting, focusing on economic diplomacy.
• Investor Outreach: The president is courting global investors as Washington and Seoul negotiate a trade deal. He met with BlackRock CEO Larry Fink to discuss cooperation in AI and renewable energy. BlackRock will work with South Korea to establish a hyperscale data center hub within a decade.
• Trade Pact: South Korea and the US verbally agreed to a trade pact in July, but disagreements over investments remain. The plan involves the US lowering tariffs on South Korean goods in exchange for South Korea investing $350 billion USD in the US. The president warned of a potential economic meltdown similar to the 1997 Asian financial crisis if the government caves to US demands without safeguards.
• Detention of South Korean Workers: The president expressed hope that the recent detention of South Korean workers in the US will not happen again. US lawmakers agreed that the visa system needs improvement and are hoping to advance the Partner with Korea Act.
• North Korea Denuclearization: The top diplomats of the US, Japan, and South Korea reaffirmed their commitment to the denuclearization of North Korea in a joint statement. They emphasized the need to address North Korea's nuclear and missile programs and maintain sanctions.
• China's Reaction to Taiwan Remarks: China called remarks made by South Korea, Japan, and the US on Taiwan "irresponsible" after their diplomats raised concerns about activity around the island. China urged them to oppose "so-called Taiwan independent separatist activities."

Nvidia and Open AI Deal

• Investment: Nvidia is investing up to $100 billion in Open AI to build and deploy new data centers.
• Capacity: The data centers will deploy at least 10 gigawatts of computing capacity equipped with Nvidia's AI chips.
• Partnership: The deal extends beyond financing, turning Nvidia into Open AI's co-builder in infrastructure. Nvidia will be a preferred chip supplier for Open AI.
• Implementation: The deal will be implemented in stages, with the first $10 billion invested when the first gigawatt is complete, targeted for the second half of 2026 using Nvidia's Vera Reuben platform.
• Market Impact: Nvidia shares rose as much as 4.4% after the announcement, raising its value close to $4.5 trillion.
• Revenue Gap Warning: Bane and Company warns that AI companies could face an annual revenue gap of $800 billion by 2030 against the $2 trillion needed to fund computing power. They project global demand for incremental AI computing to climb to 200 gigawatts by 2030.

Financial Markets and Business News

• South Korea: The Cosby index hit an all-time high of 3,886, driven by a surge in Samsung Electronics shares.
• Taiwan: The Taiwan weighted index was up 1.4%, benefiting from optimism around AI.
• China: Chinese markets ended largely flat. The Hong Sing tech index slumped 1.6%.
• Real-World Asset Tokenization: China's securities regulator has reportedly told local brokerages to pause their real-world asset tokenization business in Hong Kong.
• Pinkfong IPO: The entertainment company behind Baby Shark, Pinkfong, is seeking to raise as much as $54.6 million through an IPO in Seoul. The deal values the company at about $390 million.

Palestinian Statehood at the UN

• Support for Two-State Solution: France and Saudi Arabia hosted a summit to rally support for a two-state solution. France is joining Britain, Canada, Australia, and Portugal in formally recognizing Palestinian statehood.
• UN Secretary General's Stance: Secretary General Antonio Gutirez called statehood for Palestine a right, not a reward.
• US Criticism: The US has criticized the recognition as performative and potentially emboldening Hamas.
• Israel's Response: Israel is threatening to annex the West Bank in retaliation.

Singapore's Foreign Interference Countermeasures

• Strengthening Powers: Singapore plans to strengthen its powers to tackle foreign interference threats.
• Advanced Digital Tools: The development of advanced digital tools has increased the ability to mount hostile information campaigns.
• Amending FICA: There are plans to amend the Foreign Interference Counter Measures Act (FICA).
• Public Vigilance: The public is urged to remain vigilant to possible external attempts to influence Singapore's foreign policy.

Europe's Rare Earth Independence Efforts

• France's Leadership: France is building a production facility expected to supply 15% of global demand for heavy rare earths by late 2026.
• Caremag Project: French company Caremag is building a refining facility that combines recycling end-of-life equipment with imported min concentrates. The $245 million project will be Europe's first large-scale plant dedicated to rare earth separation.
• Strategic Advantage: Firms like Caremag are building a strategic advantage based on recycling while partnering with other countries in Asia.
• Other European Initiatives: Less Common Metals is investing $129 million in a plant to produce rare earth metals and alloys in France. Belgian firm Solve has inaugurated its rare earths production line for permanent magnets.
• Challenges: European companies hope to produce 1,000 tons of rare earth magnets a year by 2027, still a long way from challenging the 16,000 tons that Europe needs from China each year.

Conclusion:

The news segment covers a range of critical issues in East Asia, from the immediate threat of Super Typhoon Ragasa to long-term strategic challenges like securing rare earth supplies and navigating geopolitical tensions. The reports highlight the proactive measures being taken by various countries to address these challenges, including disaster preparedness, economic diplomacy, and efforts to diversify supply chains. The segment also underscores the complexities of international relations, particularly in the context of the Israeli-Palestinian conflict and the ongoing competition for technological dominance.