Welcome back to Axios World. We're flying around the world this evening in 1,588 words (~ 6 minutes).
A woman walks by security forces today in Indian-administered Kashmir. Photo: Rakesh Bakshi AFP/Getty Images
Residents of Indian-administered Kashmir were largely confined to their homes and cut off from the outside world today while the government in New Delhi unwound the constitutional provisions that defined their place within India for seven decades.
Why it matters: Before making its move, India’s government dispatched thousands of troops to Kashmir, evacuated tourists, detained at least two influential politicians and cut off internet access.
After rescinding Kashmir's special status in a choreographed series of steps, Modi's government plans to slice the state into two pieces over which Delhi will have greatly increased control.
The big picture: Kashmir has been a source of conflict between India and Pakistan since partition in 1947 and is now effectively split between the countries. Jammu and Kashmir is on the Indian side of the “line of control.”
On the ground: “By the time we woke up this morning, the internet was gone and we now have no mobile connectivity,” the BBC’s Aamir Peerzada writes from Kashmir’s capital.
Between the lines: Alyssa Ayres of the Council on Foreign Relations tells Axios this has been a longtime BJP priority, but the government still took the world by surprise in doing it so suddenly "under cloak of night."
What to watch: Modi was re-elected in May with a massive mandate after campaigning not on economic reform, as in 2014, but on whipping up nationalist sentiment. This could be a sign of what's to come in his second term.
Illustration: Rebecca Zisser/Axios
U.S. Treasury Secretary Steven Mnuchin on Monday night declared China to be a currency manipulator, just hours after the Chinese government allowed the yuan to slip below a 7-to-1 dollar ratio for the first time in over a decade.
Why it matters: This is a further ratcheting up of trade tensions between the two countries and also marks the first time any U.S. president has used the currency manipulator label since 1994.
How it works: Under a 2015 law, to be designated a currency manipulator, a country needs to spend 2% of GDP on currency manipulation over a 12-month period. China is not doing this, Axios' Dan Primack and Felix Salmon write.
Why now? Trump campaigned on labeling China a currency manipulator but was persuaded not to.
What’s next: The currency manipulator designation does not come with particularly harsh remedies.
Israeli Prime Minister Benjamin Netanyahu and Chinese President Xi Jinping. Photo: Xinhua/Rao Ainmin via Getty Images
The U.S.-China rivalry is manifesting itself around the world in surprising ways, including at a recent Israeli cabinet meeting.
Behind the scenes: Chinese investments in Israel have become the main source of tension with the Trump administration, Axios contributor Barak Ravid reports:
Flash forward to a classified meeting on July 24... Netanyahu’s national security adviser, Meir Ben Shabbat, presented to the Security Cabinet a draft resolution for monitoring Chinese investments.
What to watch: Netanyahu requested another round of interagency consultations, including with the Israeli ambassador to Washington.
Protesters gather in Hong Kong. Photo: Chris McGrath/Getty Images
2. North Korea has fired 2 "unidentified projectiles" into the East Sea for the 4th time in less than 2 weeks, according to the South Korean military.
3. Federal prosecutors in New York have accused Honduras President Juan Orlando Hernández of “conspiring with his brother and other top politicians to protect drug traffickers,” per the WSJ.
4. President Tayyip Erdogan said yesterday that Turkey would “carry out a military operation in a Kurdish-controlled area east of the Euphrates in northern Syria,” per Reuters.
Peruvian President Martín Vizcarra. Photo: Carlos García Granthon/Fotoholica Press/LightRocket via Getty Images
Peruvian President Martín Vizcarra’s call for early general elections could exacerbate the political disarray that has afflicted the country for years, Beatriz Ariza of Crumpton Group writes for Axios Expert Voices.
Why it matters: Peru's government has been wracked by dysfunction, with a series of elected officials resigning or being jailed on corruption charges.
What to watch: This all comes at a fragile time for the national economy, whose progress has been hailed as the “Peruvian miracle.”
The bottom line: Not only do early elections put meaningful anticorruption efforts on hold, in the absence of a clear presidential successor or dominant political party, they deepen the country's political uncertainty.
Schloss Cecilienhof. Photo: Ihlow/ullstein bild via Getty Images
Italy has a wealth of history and a revenue shortfall. If you’re looking for some Renaissance-era property, you could stand to benefit.
Meanwhile, the former owners of Potsdam’s Cecilienhof Palace — which hosted the 1945 conference where post-war Germany was divided up — would like it back.
Floating away a Saturday in Nanjing, China. Photo: Yang Bo/China News Service/VCG via Getty Images
“They’ve had riots for a long period of time. ... Somebody said that at some point they’re going to want to stop that. But that’s between Hong Kong and that’s between China because Hong Kong is a part of China.”— Trump on Hong Kong, in remarks some said could help Beijing justify a crackdown