Commentary on Political Economy

Thursday 7 December 2023



Israeli Warning on Hamas Tunnels

Israel’s military said its mission to destroy an estimated 500 kilometers (311 miles) of Hamas tunnels across the Gaza Strip will take months, causing a scale of urban destruction that may prove impossible to reverse.

The devastating outcome of a drawn-out campaign against the militant group — with air strikes and ground battles continuing alongside the tunnel attacks — is likely to leave many of about 2.2 million Palestinians homeless and a question mark over where they can be re-housed.

In Beit Hanoun, a town of more than 50,000 people in the northern Gaza Strip, a 41 kilometer-long Mediterranean enclave run by Hamas, the Israeli military has set about blowing up almost 100 shafts and several dozen tunnels, said Lieutenant Colonel Amit, who is overseeing their destruction and withheld his surname in line with army rules.

Israeli soldiers show the media an underground tunnel underneath Shifa Hospital in Gaza City, on Nov. 22.Photographer: Victor R. Caivano/AP Photos

Beit Hanoun was among the places from which Hamas launched its surprise attack on Israel that killed about 1,200 people on Oct. 7, triggering the ongoing counter-invasion. Hamas is designated a terrorist organization by the US and European Union.

“The way it is now it’s not livable,” Amit said of the town in a briefing near Gaza at the Tze’elim military base, where his 252nd Reserve Division is based. “This is not beautiful what we’re doing. There is nothing nice about wars but this is necessary.”

Last day of the 4-day humanitarian pause in Gaza
Destroyed buildings following Israeli strikes in Beit Hanoun, Gaza, on Nov. 27.Photographer: Fadi Alwhidi/Anadolu/Getty Images

The destruction of tunnels is advancing Israel’s stated aim of dismantling Hamas infrastructure so the group can’t repeat its deadly Oct. 7 assault. At the same time, reducing much of Gaza to rubble — which Hamas-run authorities say has killed at least 16,000 people to date, mostly civilians — is raising international concerns, including in the US.

The inhabitants of Gaza have been driven south by the fighting, but Israel’s campaign has started to move in the same direction. The United Nations has warned that civilians have run out of safe harbors and may need to be displaced into neighboring countries.

The situation is “fast deteriorating into a catastrophe,” UN chief Antonio Guterres said Wednesday, dramatically escalating his call for a cease-fire.

The tunnels, which are used by Hamas to move its militants from one place to another and to store weapons, are mostly located in densely populated areas, Amit said, using a map to illustrate.

Many are booby trapped, as are houses and roads, meaning that heavy de-mining equipment such as bulldozers are needed, increasing the extent of the damage. In a presentation, the military showed photographs and videos of rockets, grenades and Kalashnikov automatic rifles it said were found stashed in homes, schools and hospitals.

10-Story Building

“Our goal is to hurt Hamas and destroy Hamas as a political and military organization but you can see that these shafts are under normal people’s homes,” Amit said, with his talk occasionally punctuated by the roar of fighter jets heading toward Gaza.

The military has so far discovered 800 tunnels across Gaza and destroyed 500 of them, with Beit Hanoun an area of particular focus. Now virtually all the inhabitants have fled the town, of which little is left. Amit is a reservist whose civilian work is in urban renewal, though he says he’s now doing the opposite.

Some of the shafts are 30 meters (98 feet) deep, equivalent to the height of a 10-story building. Destroying them is a painstaking process with a considerable amount of explosives required to break down the concrete walls and blast-resistant doors.

Hamas has been building the tunnels since 2008 and “it will take months,” he said. “We will be able to destroy Hamas as a functioning organization and then the infrastructure will take time.”

Read More About the Israel-Hamas War:

Israel has yet to show it has a plan for Gaza after the war. Key allies such as the US have expressed concern about the absence of a long-term strategy, as have key Arab nations.

Yet for now, the military isn’t letting up on pursuing its goals for the territory — regardless of the damage caused.

“For Gaza to be demilitarized, there is only one force that can see to this demilitarization — and that force is the Israel Defense Forces,” Benjamin Netanyahu, the country’s prime minister, said on Dec. 5. “I am not prepared to close my eyes and accept any other arrangement.”

— With assistance from Gwen Ackerman and Gina Turner

Antony Sguazzin is a reporter for Bloomberg News based in Johannesburg, South Africa.
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Xi Tells EU Leaders China Wants to Be ‘Key Partner’ on Trade

    China's Xi Welcomes EU's Von Der Leyen, Michel in Beijing
    WATH: China’s Xi greets European Union’s von der Leyen and Michel ahead of their summit in Beijing.Source: EBS
    By Bloomberg News
    Updated on


    Chinese President Xi Jinping told European Union leaders that he wants the two sides to be key trade partners capable of building trust over supply chains, as they met in Beijing to hash out a litany of economic concerns and frustrations.

    “China is promoting high-quality development and high-level opening up, and is willing to regard the EU as a key partner in economic and trade cooperation,” Xi said in a meeting Thursday in Beijing with European Commission President Ursula von der Leyen and European Council President Charles Michel. He said China wants to consider Europe a “trusted partner in industrial and supply chain cooperation to pursue mutual benefit and win-win results,” state broadcaster China Central Television reported.

    The talks marked the first in-person summit between China and the EU officials in four years, and was expected to cover long-standing issues ranging from data flows to market access. Tensions between Brussels and Beijing have flared over efforts by Europe to “de-risk” its supply chains, along with the bloc’s recent anti-subsidies investigation into electric vehicles made in China.

    Von der Leyen said the two sides had “intense” conversations on key issues related to the worsening trade imbalance, including the medical device and cosmetics sectors.

    “We agreed that we have now a list of different elements where we want to deep dive in together in the high-level dialog,” she said during a news conference in Beijing. “This is important. First of all, on our side to show the evidence. But secondly, then also to see concrete results on the ground.”

    China criticized that probe on Thursday at a separate briefing in Beijing, where Ministry of Commerce spokesperson He Yadong urged the EU to stop using that investigation for “trade protectionism.”

    During the meeting, Xi called on Beijing and the bloc to “eliminate all kinds of interference,” according to CCTV. That remark is likely aimed at the US, which has taken actions including enlisting the Netherlands in its effort to stop China from from developing the ability to make high-end semiconductors.

    Von der Leyen described her conversation with Xi as “good and candid” in a post on X, the platform formerly known as Twitter. They discussed the “main challenges in a world with increasing geopolitical frictions,” she said, adding that they pledged to increase people-to-people exchanges and agreed to a shared interest in “balanced trade relations.”

    Ahead of Thursday’s meeting in Beijing, Italy formally told China it would exit the nation’s Belt and Road Initiative. While Italy had for months been preparing to end its involvement in Xi’s signature investment program, the timing of the announcement underscored continued strains between the world’s second-largest economy and members of the bloc.

    Xi and the EU leaders discussed Belt and Road during their meeting, according to CCTV, which said the Chinese leader told officials that his nation was willing to connect his initiative with the EU’s Global Gateway. The European program is a €300 billion infrastructure plan aimed at competing with China’s clout in strategic regions.

    Headed into Thursday’s summit, EU officials intended to ask for more effort cracking down on Moscow’s ability to circumvent sanctions, according to people familiar with its plans. China has emerged as Russia’s primary route to secure banned technologies and so-called battleground goods. But the bloc is realistic about the outcomes, with no specific deliverable expected, the people said.

    “Deep issues” stand in the way of good relations between Beijing and Brussels, Jens Eskelund, president of the European Union Chamber of Commerce in China, told Bloomberg TV. He cited Russia’s war in Ukraine, the trade deficit and Chinese overcapacity that gets exported to Europe.

    “That will need to be addressed before things go wrong between the two sides,” he said, adding that a partnership with China needs to create “equal or close to equal value” for both parties.

    The EU is concerned that Beijing’s flagging economic recovery including weak domestic demand will result in China pushing to export even more, threatening critical industries in Europe and their workers. The EU’s trade deficit with China grew to more than $400 billion last year and the bloc is eager to continue its strategic approach that views Beijing as a partner, competitor and a rival.

    — With assistance from Colum Murphy, Zibang Xiao, Lucille Liu, James Mayger, Tom Hancock, and John Follain

    (Updates with remarks from EU news conference starting in fifth paragraph.)


    China Made a Chip Breakthrough That Shocked The World

    Despite being cut off, China is making great strides in semiconductors.



    Both the Trump administration and the Biden administration made moves to constrain China's ability to build out an advanced homegrown technology industry. But the country is still investing billions in its chip sector and there are signs that it's really starting to pay off. Huawei recently released the Mate 60 Pro smartphone, with capabilities that shocked the world in terms of its performance. So how is the country making such strides in face of technological trade restrictions? We spoke with Dylan Patel of SemiAnalysis and Doug O'Loughlin of Fabricated Knowledge about how much progress China is making, and the policies that are accelerating these gains.


    Putin’s Last Liberal Critic Says Deal to End War Is Inevitable

      Grigory Yavlinsky
      Grigory YavlinskyPhotographer: Yuri Kadobnov/Getty Images
      By Bloomberg News


      Veteran Russian pro-democracy politician Grigory Yavlinsky is mounting what may be his last political challenge to Vladimir Putin to try to campaign for peace with Ukraine.

      The three-time candidate is weighing another presidential election run against Putin. After receiving around 1% of the vote in the last election in 2018, he’s under no illusions about the outcome this time.

      “I can tell you the results today – 75% turnout. 78% vote for Putin,” Yavlinsky said in an online interview from Moscow.

      The upper house of Russia’s parliament on Thursday set March 17 as the date of the presidential election. Putin is widely expected to declare his candidacy for a fifth term, with officials determined to deliver a landslide victory that the Kremlin can portray as public endorsement of Russia’s war in Ukraine. With his opponents nearly all in jail or in exile, and public criticism of the war turned into a criminal offense, voices like Yavlinsky’s exist on the margins of political discussion.

      The founder of the democratic Yabloko party said he held “a very serious conversation” with Putin lasting one-and-a-half hours on Oct. 26, their first talks in more than two years. Yavlinsky, 71, said he raised the need for a cease-fire and peace talks with the president though “there were no conclusions.”

      Putin is suffering from “Versailles syndrome” over the expansion of the North Atlantic Treaty Organization toward Russia’s borders since the collapse of the Soviet Union, Yavlinsky said, a reference to German resentment at World War I reparations that paved the way for Adolf Hitler’s rise.

      Still, Yavlinsky directed his main message to the US and its allies, urging them to seek talks on ending Europe’s worst conflict since World War II, with Ukraine struggling to oust Russian forces from occupied territory after a stalemate that’s persisted for the past year. “This is about safeguarding 80% of Ukrainian territory” that Kyiv controls today, he said.

      Peace talks “may start within one month, a year or two years, but that moment will come — it’s inevitable,” he said. “We need to stop people dying. We’re paying a horrific price and Ukraine is being destroyed.”

      A destroyed Russian infantry fighting vehicle in Donetsk region, Ukraine.Photographer: Sameer Al-Doumy/AFP/Getty Images

      Putin has given no sign he’s ready to enter negotiations to end the war that he started with the February 2022 invasion of Ukraine. Amid doubts over the future of US and European military aid for Ukraine and the Israel-Hamas war diverting world attention to the Middle East, the Kremlin regards time as on Putin’s side.

      The government in Kyiv and its US and European allies say the war would end tomorrow if Putin withdrew Russian troops from occupied territory in eastern and southern Ukraine as well as Crimea, which he annexed in 2014. They reject any deal involving territorial concessions that would reward Putin’s aggression.

      Last month, NBC reported that US and European officials have spoken to the Ukrainian government about what potential peace negotiations might look like with Russia.

      Yavlinsky argued the longer Ukraine and the West wait to engage on a cease-fire and a potential settlement, the worse the terms and human losses and destruction will be. “What price will we pay by then?” he said. “Putin senses he’s got the upper hand.”

      While opinion polls show a majority of Russians would back peace talks, overwhelmingly they still support what Russian officials call a “special military operation” in Ukraine.

      Vladimir Putin has given no sign he’s ready to enter negotiations to end the war that he started.Photographer: Gavril Grigorov/AFP/Getty Images

      “If tomorrow Putin says he’s decided to stop, 80% of the population will say ‘Thank God’,” Yavlinsky said. “If he says he has to continue, the same 80% will say ‘Let’s go for it’.”

      He first ran for president in 1996, coming fourth with 7.4%. In 2000, he placed third with 5.85% behind Putin and Communist leader Gennady Zyuganov.

      Yavlinsky acknowledged “deep despair” among Russia’s dwindling liberal elements, saying they “don’t understand what the future holds” amid the harshest Kremlin crackdown on dissent in decades. “There is no society left in Russia,” he said.

      Seeking to counter accusations his participation in the elections would simply help the Kremlin legitimize Putin’s hold on power, Yavlinsky said he’s seeking endorsement from as many Russians as possible before deciding on his candidacy. He has already collected hundreds of thousands of signatures and is aiming for several million, he said.

      “It will be very painful when I take part in the elections and they give me 0.3% and they’ll tell the world that only 0.3% of voters support peace and a cease-fire,” he said. “I can take the risk, but only if I see citizens want this.”

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