Oct 4, 2018

Axios World

By Dave Lawler
Dave Lawler

Welcome to Axios World, where two evenings a week we break down what you need to know about the big stories from around the globe. This is our 50th edition.

Thanks for joining me! Please tell your friends and colleagues to sign up here, and I'd love your tips and feedback: lawler@axios.com.

  • For your radar: Axios' new autonomous vehicles newsletter has an expert (human) reporter at the wheel now. Veteran auto reporter Joann Muller's first edition arrives tomorrow, and you can sign up here.
1 big thing: The battle to dominate the globe

The Trumps and the Xis during Trump's Nov. 2017 visit to Beijing. Photo: Jim Watson/AFP/Getty Images

Vice President Mike Pence today accused China of using its military, spies, economic power and propaganda prowess to undermine the U.S. around the world and influence its domestic politics. The U.S. had long turned a blind eye, Pence said, “but those days are over.”

Why it matters: Pence made headlines by declaring that China “wants a different American president” and by repeating the still-unsubstantiated claim that Beijing is meddling in the midterms. But his underlying message echoes a growing consensus among China watchers: We're entering a new era of U.S.-China relations, driven by competition and confrontation.

Axios China writer Bill Bishop emailed his thoughts on how Beijing will view the speech:

“I have no doubt this will just be seen as more evidence to support the belief that Xi and his team have that we are in a new era of U.S.-China relations where the U.S. is determined to keep China down. They did not fully believe this even a few months ago but now they seem to have fully bought into the idea that the trade war is just one dimension of a growing adversarial relationship and conflict across every dimension. The gloves on both sides are not yet off, but we should prepare for them to come off.”

Chris Johnson, a former CIA China analyst now at the Center for Strategic and International Studies, discussed what he describes as the “pronounced groundshift in Washington about how China is viewed” on this week’s Intelligence Matters podcast with Michael Morell. His key points:

  • Xi Jinping has exploded the flawed Washington consensus that “they’re going to become more like us … to make the system more open, more transparent.”
  • When tensions rose in the past, the “highly complementary” economic relationship balanced things out. Now, “the economic relationship is turning competitive. China needs to go exactly where we need to go for their future economic benefit and competitiveness” and wants to dominate the industries of the future.

His advice: Sort out the trade war and turn to the bigger challenge — long-term technological and economic competition — without obsessing over China’s influence operations.

“We have a limited amount of things we can focus on at any one time, and I worry that we’re going to squander those scarce resources chasing ghosts because we have a playbook for that from the Cold War. It’s familiar to us. This technology-economy challenge is new to us, we don’t have a playbook for that, it’s uncomfortable, and yet that’s where the challenge really lies.”

The bottom line: "The gears are starting to lock into place in both leadership’s minds that this is an implacable enemy, a global struggle for influence and maybe domination."

David Rennie, the Economist’s Beijing bureau chief, writes in his latest column that America's China policy "has long whiffed of hypocrisy,” but honesty poses dangers of its own.

  • “Politicians mumbled about welcoming China’s rise when they meant that they did not know how to stop it. ... The two countries’ relations are long overdue a bracing dose of honesty. But Trump’s preferred form of candor —an amoral, might-makes-right cynicism — may be the least help of all.”
Bonus: The view from Beijing

The hours before Pence's speech saw ...

  • A bombshell Bloomberg report that Amazon and Apple network servers may have been compromised by Chinese spy microchips
  • A Reuters report warning of attacks by a Beijing-linked hacking group
  • And a CNN story about the U.S. Navy proposing a show of force in the Pacific to counter China's aggression.

Bishop says that from China's perspective, that sudden gush of news and allegations "probably looks like a coordinated propaganda effort."

2. West to Russia: We know what you did

Russian President Vladimir Putin. Photo: Mikhail Svetlov/Getty Images

Axios' Jonathan Swan tells me that part of the strategy behind the administration's anti-China push is an attempt to change the narrative that Russia is America’s primary geopolitical foe.

  • There's some politics at play there. Trump has long downplayed Russia's election meddling by saying "other countries" likely did it too. But there's also the fact that, as Swan puts it, "Russia is an economic basket case, in decline. China poses a far bigger threat on multiple fronts."

Nonetheless, the Kremlin's aggression in the West has only ramped up, as a string of revelations just this morning make clear:

  • The Netherlands announced it had expelled four Russian military intelligence officers who attempted to hack the Organization for the Prohibition of Chemical Weapons, a global watchdog investigating the poisoning of former Russian spy Sergei Skripal in Salisbury, England.
  • The British government then accused Russian intelligence "of being behind four high-profile cyber-attacks, whose targets included firms in Russia and Ukraine; the U.S. Democratic Party; and a small TV network in the U.K.," per the BBC.
  • Then the U.S. Department of Justice announced indictments against seven Russian military intelligence officers for alleged malicious cyber activities against the U.S. and its allies, including retaliation against officials and organizations that exposed state-sponsored doping by Russian Olympic athletes and the hacking of a lab investigating Russia and Syria's use of chemical weapons.

The bigger picture: Trump's national security strategy describes "great power competition" with both Russia and China as the administration's primary focus, after nearly two decades defined by counterterrorism.

3. Africa: Mobile money flows in unlikely places

Vendors use a street shack that accepts EcoCash in the Mbare neighborhood of Harare, Zimbabwe, on July 27, 2018. Photo: Dan Kitwood via Getty Images

Of the 690 million registered mobile-money accounts worldwide, 50% are in Africa, Aubrey Hruby of the Atlantic Council writes for Axios Expert Voices:

  • In Africa, a continent all too often mislabeled as relatively undeveloped, major innovations are taking root and scaling quickly. McKinsey estimates that 1 in 10 African adults actively use mobile money, compared to roughly 1 in 40 South Asians.
  • While Apple Pay and other mobile-money platforms have been slow to grow in the U.S., a cashless economy has taken hold in unexpected places. In Zimbabwe and Somalia, for example, mobile money is ubiquitous and central to economic activity.
4. Trade: WTO and Trump not on speaking terms

The director-general of the World Trade Organization, Roberto Azevêdo, said during an episode of Freakonomics Radio that while he has had conversations with the leaders of nearly every major economy, he has never spoken directly with President Trump, Axios Zach Basu reports.

Why it matters: Trump has repeatedly threatened to withdraw from the WTO, a move that would send global markets into a spiral and cast trillions of dollars of trade into doubt, per Axios' Jonathan Swan. The U.S. has also blocked the reappointment of one of the WTO's four remaining appellate judges, claiming the panel oversteps its authorities and protects unfair trade practices by other countries.

The big picture: Azevêdo said he can see why Trump and others may have concerns about the way global trade operates, but claimed those frustrations stem from a lack of understanding about the WTO's history:

"These tariffs are there because they were negotiated over 80 years ... those situations are not there by accident. They are there because there is a history behind them and this is why we got to these tariffs and these commitments negotiated in the WTO."

He called for "a deeper conversation" with the U.S. and others in order to resolve ongoing trade tensions, and said he is "always available" if Trump is interested in reaching out.

5. Africa: Congo's security risk raises global Ebola alarm

Recent violence in the areas where the deadly Ebola virus is centered in the Democratic Republic of the Congo has triggered stronger moves by the U.S. and international organizations to prevent the virus from spreading to other countries, Axios' Eileen Drage O'Reilly writes.

Expand chart
Data: Ministry of Health DRC; Chart: Andrew Witherspoon/Axios

Why it matters: Violence has pushed public health measures against Ebola into sporadic stoppages — effectively allowing the infectious disease to take foothold again. Fighting against Ebola requires constant tracking of every person who's been in contact with an infected person, as well as a vaccination and treatment regime and education on hygiene.

What we're hearing ...

"To say it's fragile would be an understatement. We've never had such an explosive combination of rebel activity and spread of the virus, particularly in some populations that don't believe in traditional public health measures."
— Michael Osterholm, director, University of Minnesota's Center for Infectious Disease Research and Policy

What to watch ...

Worth noting: The situation could become more unstable still. After two years of delay, the DRC is set to hold national elections in December.

6. What I'm reading: A turncoat spy and a Russian lie

Into the deluge of espionage-related news over the last 24 hours dropped a Buzzfeed News investigation that found the U.S. went along with a Kremlin lie about the demise of a Russian double agent.

The tantalizing lede: "At 10:30 a.m. on Oct. 9, 2016, a 64-year-old master spy and known scourge of the Kremlin ambled into a Walmart in Florida and acquired a recreational fishing license."

The backstory:

  • "In 2000, [Alexander] Poteyev earned a coveted position with the Russian Foreign Intelligence Service, according to Russian media reports: deputy head of the ultra-secretive department known as Directorate S. His department oversaw a network of spies inside the United States who were playing a very long game."
  • "Working in pairs and posing as married couples, their aim was to blend into their surroundings perfectly. They bought homes in leafy suburbs, took vanilla day jobs — travel agent, financial planner, college professor — and even raised families."

The big reveal:

  • "Moscow had outed Poteyev as a traitor who exposed a network of undercover agents, including the glamorous Anna Chapman, before he defected to the U.S. in 2010. A few years later, according to news accounts and U.S. intelligence sources, a suspected Kremlin hit man approached his home. Then, in July 2016, Russian state TV declared that Poteyev had died. But, in fact, he was very much alive."

The bigger picture:

  • "Each year, the US government takes in up to 100 defectors, many of them Russian. ... They typically get new names and passports to protect their identities, as well as assistance encrypting their communications, finding jobs and schools, arranging psychiatric support if needed. In some cases, the U.S. government may even offer them plastic surgery to make them less recognizable."

And if this all sounds familiar: "... the Directorate S program has inspired the award-winning television series The Americans."

7. Stories we're watching

Melania Trump waves to children in Malawi. She's on her first visit to Africa. Photo: Saul Loeb/AFP/Getty Images

  1. Pompeo, Kim Jong-un meeting scheduled for Sunday
  2. France says Iran was behind foiled bomb attack
  3. With Syria strike, Iran continues ramping up ballistic missile use
  4. White House briefs senators on Middle East peace push
  5. Theresa May says U.K. is not afraid to leave the EU without a deal
  6. U.S. begins denying diplomatic visas to unmarried same-sex partners
  7. In photos: Staggering destruction from Indonesia quake, tsunami


"I see that some of your colleagues are pushing the theory that Mr. Skripal is almost some kind of human rights activist. He is just a spy. A traitor to the motherland. There is such a thing — a traitor to the motherland. Here he is — one of them."
— Vladimir Putin on Sergei Skripal, the former double agent poisoned in the U.K.
Dave Lawler