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Blackwater USA – Daily Brief

China

  • The NYT called yesterday’s strike the “most dramatic day of demonstrations” in Hong Kong since this round of protests began in June. Chief executive Carrie Lam—who has refrained from public comment for a couple weeks—accused protesters of trying to “topple Hong Kong,” which suggests her stance hasn’t softened at all.
  • The NYT also had the best article I’ve seen about China’s perspective on the protests: even tougher than Lam’s. A Beijing official warned demonstrators that they’d “exceeded the scope of free assembly,” and shouldn’t “take [Beijing’s] restraint for weakness.” Article pasted below.
  • Separately, the U.S. designated China a currency manipulator for letting the yuan weaken. Goldman says the label is just symbolic, with no “major consequences of its own”—except that it raises trade war tensions.

DPRK

  • A new UN report estimates that North Korea has stolen up to $2 billion through cryptocurrency cyberattacks, funneling the proceeds into its banned nuclear weapons programs.

Afghanistan

  • U.S. Envoy Zalmay Khalilzad said this round of talks was making “excellent progress,” and could reach a deal that “would allow for a conditions-based troop withdrawal”…the same day as the Taliban threatened attacks on election campaign rallies in an effort to block the “fake” process of democracy in Afghanistan.

Venezuela

  • Pres. Trump signed an executive order that elevates sanctions on Venezuela to a total economic embargo, freezing U.S.-based assets of the Venezuelan government and its senior officials, and prohibiting U.S. companies from conducting any transactions with them (except official federal government business and humanitarian aid).
  • Meanwhile, Colombia announced that it would grant citizenship to 24,000 children of undocumented Venezuelan migrants, which is partly a nice humanitarian gesture, and partly a middle finger to Pres. Maduro, whose economic mismanagement has pushed his people to flee.

India

  • The Indian government continued to grab power in Kashmir. Indian Pres. Kovind signed a decree revoking the state’s special status after 70 years, and a separate move split it into two federal territories. Though the federal government anticipated protests and sent about 28,000 troops there last week, local reports say it’s still pretty calm.
  • Many analysts say this all came about now because the ruling BJP party decided its strong mandate from April-May elections made this a good time to try to reintegrate Jammu-Kashmir—which the BJP has long wanted to do. Critics say it’s a diversion from criticism over slowing growth, which is perhaps also true.

REEs

  • Australia’s Northern Minerals Ltd terminated a rare earths supply deal that it had signed with China’s Lianyugang Zeyu New Materials Sales Co Ltd, citing breaches of terms—though perhaps that was inspired by better terms from non-Chinese customers.
  • Meanwhile, Malaysia extended a rare earths mining license for Lynas—an Australian company that is the biggest non-Chinese producer of REEs—even though the Malaysian government and Lynas had been bickering over radioactive waste removal.

Other News

  • A terrorist attack killed at least 20 people outside a cancer hospital in the Kasr el Aini district of Cairo on Sunday. Police suspect it was the work of Hasm, the armed wing of the Muslim Brotherhood.

China Warns Hong Kong Protesters Not to ‘Take Restraint for Weakness’ (NYT)

An official in Beijing on Tuesday issued China’s sternest denunciation yet of the demonstrations in Hong Kong, saying they had “exceeded the scope of free assembly” and warning that the semiautonomous city would not be allowed to descend into chaos.

“I want to warn all the criminals to not wrongly judge the situation and take restraint for weakness,” said Yang Guang, a spokesman for the Chinese government’s Hong Kong and Macau Affairs Office. He warned against underestimating China’s “firm resolve and strength to safeguard the prosperity and stability of Hong Kong.”

But Mr. Yang offered little in the way of concrete measures to resolve the political crisis, calling for more patriotic education and encouraging residents to confront protesters. “We need to stand up to protect our wonderful homeland,” he said.

The comments came a day after protesters in Hong Kong carried out their most widespread civil disobedience in weeks of demonstrations, blocking trains and roads and urging workers to strike. Air travel was also snarled, with more than 200 flights canceled after 2,300 civil aviation workers stayed home, according to an estimate by union officials.

Mr. Yang denounced the tactics of protesters who have surrounded police stations, throwing bricks and lighting fires, as “extreme violence that is shocking to see.”

He said, “The central government will never allow any violent attempt to push Hong Kong into a dangerous situation.”

Protesters gathered at more than a half dozen sites across Hong Kong on Monday, and the police fired tear gas and arrested more than 80 people. Since early June, the police have fired more than 1,000 rounds of tear gas, more than 10 times the amount used during a 2014 protest movement that shut down major streets for weeks.

The protests this summer began over a proposal that would have allowed extraditions to mainland China. The government suspended that legislation in mid-June, but the protests have continued, demanding that the government fully withdraw the bill. The protesters are also angry about other issues, including allegations of police brutality and the stalled expansion of direct elections in Hong Kong.

Protesters who have clashed with the police have argued that more confrontational methods became necessary after the government rejected demands made in earlier, peaceful marches, one of which was joined by as many as two million people.

Last week, the Hong Kong and Macau Affairs Office expressed its support for the Hong Kong government and the police, but they offered little new to resolve the political crisis. It was rare for the office to hold a news conference, and even rarer for it to hold another just a week later, an indication of the Chinese leadership’s struggle to respond to the increasingly fraught conflict in Hong Kong.

A spokesman for China’s Ministry of National Defense hinted last month that the People’s Liberation Army could be called on to maintain order in Hong Kong. The military has a garrison of 6,000 to 10,000 soldiers in Hong Kong, but local officials have repeatedly denied rumors that they have been preparing to help quell demonstrations.

Last week, the Hong Kong garrison released a video showing its troops training to confront protesters. And images have been released of large groups of mainland police officers holding drills in preparation for the Oct. 1 celebrations of the 70th anniversary of the founding of the People’s Republic of China. Those images have also fueled unsubstantiated rumors about the possible intervention of Chinese forces.

Carrie Lam, Hong Kong’s chief executive, warned on Monday of a crisis of “security and safety” and said “a series of extremely violent acts” was “pushing Hong Kong into very precarious circumstances.””

A group of protesters met with reporters on Tuesday to challenge the government’s portrayal of them, accusing Mrs. Lam and other top officials of dodging responsibility for the crisis.