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Daily Archives: July 10, 2021

In Pictures: 1963 Jaguar XKE Series I Roadster

Source : Bring A Trailer

Canada Created 231 thousand Jobs in June, 2021

Source : Trading Economics

How China’s Digital Yuan Could Go Global

David Pan wrote . . . . . . . . .

China aims to be a global blockchain superpower, and its national digital currency is part of that plan. But if China really wants to achieve its global ambitions it will need help from other countries.

To that end, China has been quietly testing pilot digital currency trading platforms in different nations as well as setting up a legal framework for CBDCs with global financial regulators.

“You have central bank digital currencies (CBDC) developed on various platforms such as enterprise blockchain Corda or Hyperledger, and the digital yuan is technically not even on a blockchain,” Michael Sung, co-director of the Fintech Research Center at Fudan University, said. “That is a very balkanized ecosystem.”

For the digital yuan to achieve global adoption, China would thus need to work with trading partners or regional financial hubs to have a platform where the digital yuan is technically, legally and financially interoperable with other countries’ digital currencies.

One such platform is Inthanon-LionRock (Note), which is a central bank digital currency project for cross-border payments initiated by the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT).

Eight Thai banks and two Hong Kong banks, including HSBC, participated in the Note project and tested the feasibility of digital currency-based transactions between Thailand and Hong Kong, according to its white paper.

According to a Feb. 23 statement by HKMA, the digital currency arm of People’s Bank of China and the Central Bank of the United Arab Emirates (UAE) have joined the second phase of this project and it has been renamed as the Multiple Central Bank Digital Currency (m-CBDC) Bridge.

The project aims to help central banks with cross-border fund transfers, international trade settlement and capital market transactions. The idea is to alleviate regulatory, cost and inefficiency pain points in cross-border fund transfers, the statement said.

“The Note project is very emblematic of China’s approach to internationalize the digital yuan,” Tavni Ratna, CEO and founder of blockchain and digital currency think tank Policy 4.0, said. “China might want to negotiate with one central bank at a time and come up with a mechanism for everything ranging from a legal framework to exchange rate between the two currencies.”

The wholesale shift

Two elements have set the project apart from other digital yuan projects in China so far. While such projects are usually only between two countries through a bilateral collaboration, the Bridge appears to have a third country – the UAE – involved in the CBDC trading platform, Ratna said.

The other element is the project is wholesale-oriented, which is a shift from China’s focus on retail use cases. The project will continue to explore other potential business cases such as cross-border funds transfers between institutions such as companies, banks rather than individual users, according to the white paper. In October 2020, the Hong Kong Treasury Secretary Christopher Hui also said the city is interested in these transactions.

The project will act as a cross-border corridor network for big financial institutions. It would entice more central banks to join the network by offering a more competitive foreign exchange rate than the open market, where each country has to buy other local currencies from intermediaries at a premium. It would also allow countries to borrow more other currencies in the short term to increase their liquidity to settle transactions in real time.

Indonesia and China also signed a memorandum of understanding to promote local currencies in the two countries in September 2020. The partnership would allow the direct exchange rate quotations and interbank trading between the Chinese yuan and the Indonesian rupiah.This process, which could enable real-time transactions and avoid using the U.S. dollar as a reserve currency to settle and clear transactions, is crucial for a CBDC-trading platform to work.

As of January, China is Indonesia’s biggest trade partner and an important source of investment. The largest economy in Southeast Asia, like many other major countries in the region, has seen a fast growing deficit to China in recent years.

The hub

Some countries might be reluctant to trade central bank digital currencies on a platform designed by China due to privacy concerns, said Paul Triolo, head of the geo-technology practice at risk consultancy Eurasia Group.

To that end, China’s central bank could also join an inclusive digital currency platform, where it can trade the digital yuan with other digital currencies freely. As the largest offshore center for RMB deposits, Singapore’s blockchain project Ubin would be one possibility.

The Monetary Authority of Singapore (MAS) has worked with JPMorgan and state-backed conglomerate Tamasek to use CBDCs and other digital currencies, including the tokenized dollar JPM coin, on the Ubin platform. Founded in 2016 by MAS, ConsenSys and JPMorgan’s Quorum, which was acquired by ConsenSys in August 2020, the Ubin project aims to settle inter-bank transactions, cross-border remittances and tokenized securities through distributed ledger technology.

In contrast to a platform that is controlled by China, a more neutral and inclusive platform by MAS could be more acceptable for many other countries.

The Ubin project envisions having a common messaging platform to coordinate different settlement systems and establishing a common messaging standard to ease communications between the systems, according to the report, which cites the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as an example for such coordination.

In June 2020, Ravi Menon, the managing director of MAS, said Singapore welcomes collaboration with China’s central bank on digital currency in a speech about financial cooperation between Singapore and Shanghai.

“With Temasek and JPMorgan in the project, the whole point was this financial hub pushing for more efficient and less-costly cross-border settlements,” Sung said. “While Hong Kong is obviously the place for China to start internationalizing the digital rmb, Singapore is a nice cross-border settlement point.”

Team player

The world has shown wariness of overly ambitious digital currencies. Given the political pressure on the Facebook-led diem (formerly libra) project, Beijing might have a hard time positioning China’s digital yuan as the national digital currency to dominate the global financial system, Triolo said.

Perhaps learning from this, China has tried to be more proactive and collaborative in setting an international legal framework for CBDCs. Chinese President Xi Jinping said the country should proactively participate in creating the international regulatory framework on digital currency and digital tax, according to an Oct. 31 essay he published in Chinese state media.

HKMA also emphasized the m-CBDC project has been supported by the Bank for International Settlements Innovation Hub Centre in Hong Kong. PBOC subsidiaries, including its digital currency unit, have set up the second joint venture with SWIFT in Beijing in February but the new group’s mission remains unclear.

China’s motivations for internationalizing the digital yuan rang from curbing Chinese fintech giants, weakening SWIFT to countering the U.S. dollar dominance over the global financial system, Ratna said.

“But one thing is for sure, China does not want to antagonize anyone along the way,” she said.

Source : Coindesk

Long Read: The Law, the Rights and the Rules

Sergey Lavrov, Russian Minister of Foreign Affairs wrote . . . . . . . . .

The frank and generally constructive conversation that took place at the June 16, 2021 summit meeting between presidents Vladimir Putin and Joseph Biden in Geneva resulted in an agreement to launch a substantive dialogue on strategic stability, reaffirming the crucial premise that nuclear war is unacceptable. The two sides also reached an understanding on the advisability of engaging in consultations on cybersecurity, the operation of diplomatic missions, the fate of imprisoned Russian and US citizens and a number of regional conflicts.

The Russian leader made it clear, including in his public statements, that finding a mutually acceptable balance of interests strictly on a parity basis is the only way to deliver on any of these tracks. There were no objections during the talks. However, in their immediate aftermath, US officials, including those who participated in the Geneva meeting, started asserting what seemed to be foregone tenets, perorating that they had “made it clear” to Moscow, “warned it, and stated their demands.” Moreover, all these “warnings” went hand in hand with threats: if Moscow does not accept the “rules of the road” set forth in Geneva in a matter of several months, it would come under renewed pressure.

Of course, it has yet to be seen how the consultations to define specific ways for fulfilling the Geneva understandings as mentioned above will proceed. As Vladimir Putin said during his news conference following the talks, “we have a lot to work on.” That said, it is telling that Washington’s ineradicable position was voiced immediately following the talks, especially since European capitals immediately took heed of the Big Brother’s sentiment and picked up the tune with much gusto and relish. The gist of their statements is that they are ready to normalise their relations with Moscow, but only after it changes the way it behaves.

It is as if a choir has been pre-arranged to sing along with the lead vocalist. It seems that this was what the series of high-level Western events in the build-up to the Russia-US talks was all about: the Group of Seven Summit in Cornwall, UK, the NATO Summit in Brussels, as well as Joseph Biden’s meeting with President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen.

These meetings were carefully prepared in a way that leaves no doubt that the West wanted to send a clear message: it stands united like never before and will do what it believes to be right in international affairs, while forcing others, primarily Russia and China, to follow its lead. The documents adopted at the Cornwall and Brussels summits cemented the rules-based world order concept as a counterweight to the universal principles of international law with the UN Charter as its primary source.

In doing so, the West deliberately shies away from spelling out the rules it purports to follow, just as it refrains from explaining why they are needed. After all, there are already thousands of universal international legal instruments setting out clear national commitments and transparent verification mechanisms. The beauty of these Western “rules” lies precisely in the fact that they lack any specific content. When someone acts against the will of the West, it immediately responds with a groundless claim that “the rules have been broken” (without bothering to present any evidence) and declares its “right to hold the perpetrators accountable.” The less specific they get, the freer their hand to carry on with the arbitrary practice of employing dirty tactics as a way to pressure competitors. During the so-called “wild 1990s” in Russia, we used to refer to such practices as laying down the law.

To the participants in the G7, NATO and US-EU summits, this series of high-level events signalled the return by the United States into European affairs and the restored consolidation of the Old World under the wing of the new administration in Washington. Most NATO and EU members met this U-turn with enthusiastic comments rather than just a sigh of relief. The adherence to liberal values as the humanity’s guiding star provides an ideological underpinning for the reunification of the “Western family.” Without any false modesty, Washington and Brussels called themselves “an anchor for democracy, peace and security,” as opposed to “authoritarianism in all its forms.” In particular, they proclaimed their intent to use sanctions to “support democracy across the globe.” To this effect, they took on board the American idea of convening a Summit for Democracy. Make no mistake, the West will cherry pick the participants in this summit. It will also set an agenda that is unlikely to meet any opposition from the participants of its choosing. There has been talk of democracy-exporting countries undertaking “enhanced commitments” to ensure universal adherence to “democratic standards” and devising mechanisms for controlling these processes.

The revitalised Anglo-American Atlantic Charter approved by Joseph Biden and Boris Johnson on June 10, 2021 on the sidelines of the G7 Summit is also worth noting. It was cast as an updated version of the 1941 document signed by Franklin D. Roosevelt and Winston Churchill under the same title. At the time, it played an important role in shaping the contours of the post-war world order.

However, neither Washington, nor London mentioned an essential historical fact: eighty years ago, the USSR and a number of European governments in exile joined the 1941 charter, paving the way to making it one of the conceptual pillars of the Anti-Hitler Coalition and one of the legal blueprints of the UN Charter.

By the same token, the New Atlantic Charter has been designed as a starting point for building a new world order, but guided solely by Western “rules.” Its provisions are ideologically tainted. They seek to widen the gap between the so-called liberal democracies and all other nations, as well as legitimise the rules-based order. The new charter fails to mention the UN or the OSCE, while stating without any reservations the adherence by the Western nations to their commitments as NATO members, viewed de facto as the only legitimate decision-making centre (at least this is how former NATO Secretary-General Anders Fogh Rasmussen described NATO’s role). It is clear that the same philosophy will guide the preparations for the Summit for Democracy.

Labelled as “authoritarian powers,” Russia and China have been designated as the main obstacles to delivering on the agenda set out at the June summits. From a general perspective, they face two groups of grievances, loosely defined as external and internal. In terms of international affairs, Beijing is accused of being too assertive in pursuing its economic interests (the Belt and Road initiative), as well as expanding its military and, in general, technological might with a view to increasing its influence. Russia stands accused of adopting an “aggressive posture” in a number of regions. This is the way they treat Moscow’s policy aimed at countering ultra-radical and neo-Nazi aspirations in its immediate neighbourhood, where the rights of Russians, as well as other ethnic minorities, are being suppressed, and the Russian language, education and culture rooted out. They also dislike the fact than Moscow stands up for countries that became victims to Western gambles, were attacked by international terrorists and risked losing their statehood, as was the case with Syria.

Still, the West reserved its biggest words to the inner workings of the “non-democratic” countries and its commitment to reshape them to fit into the Western mould. This entails bringing society in compliance with the vision of democracy as preached by Washington and Brussels. This lies at the root of the demands that Moscow and Beijing, as well as all others, follow the Western prescriptions on human rights, civil society, opposition treatment, the media, governance and the interaction between the branches of power. While proclaiming the “right” to interfere in the domestic affairs of other countries for the sake of promoting democracy as it understands it, the West instantly loses all interest when we raise the prospect of making international relations more democratic, including renouncing arrogant behaviour and committing to abide by the universally recognised tenets of international law instead of “rules.” By expanding sanctions and other illegitimate coercive measures against sovereign states, the West promotes totalitarian rule in global affairs, assuming an imperial, neo-colonial stance in its relations with third countries. They are asked to adopt the democratic rule under the model of the Western choosing, and forget about democracy in international affairs, since someone will be deciding everything for them. All that is asked of these third countries is to keep quiet, or face reprisals.

Clearheaded politicians in Europe and America realise that this uncompromising policy leads nowhere, and are beginning to think pragmatically, albeit out of public view, recognising that the world has more than just one civilisation. They are beginning to recognise that Russia, China and other major powers have a history that dates back a thousand years, and have their own traditions, values and way of life. Attempts to decide whose values are better, and whose are worse, seem pointless. Instead, the West must simply recognise that there are other ways to govern that may be different from the Western approaches, and accept and respect this as a given. No country is immune to human rights issues, so why all this high-browed hubris? Why do the Western countries assume that they can deal with these issues on their own, since they are democracies, while others have yet to reach this level, and are in need of assistance that the West will generously provide.

International relations are going through fundamental shifts that affect everyone without exception. Trying to predict where it will take us is impossible. Still, there is a question: messianic aspirations apart, what is the most effective form of government for coping with and removing threats that transcend borders and affect all people, no matter where they live? Political scientists are beginning to compare the available toolboxes used by the so-called liberal democracies and by “autocratic regimes.” In this context, it is telling that the term “autocratic democracy” has been suggested, even if timidly.

These are useful considerations, and serious-minded politicians who are currently in power, among others, must take heed. Thinking and scrutinising what is going on around us has never hurt anyone. The multipolar world is becoming reality. Attempts to ignore this reality by asserting oneself as the only legitimate decision-making centre will hardly bring about solutions to real, rather than farfetched challenges. Instead, what is needed is mutually respectful dialogue involving the leading powers and with due regard for the interests of all other members of the international community. This implies an unconditional commitment to abide by the universally accepted norms and principles of international law, including respecting the sovereign equality of states, non-interference in their domestic affairs, peaceful resolution of conflict, and the right to self-determination.

Taken as a whole, the historical West dominated the world for five hundred years. However, there is no doubt that it now sees that this era is coming to a close, while clinging to the status it used to enjoy, and putting artificial brakes on the objective process consisting in the emergence of a polycentric world. This brought about an attempt to provide a conceptual underpinning to the new vision of multilateralism. For example, France and Germany tried to promote “effective multilateralism,” rooted in the EU ideals and actions, and serving as a model to everyone else, rather than promoting UN’s inclusive multilateralism.

By imposing the concept of a rules-based order, the West seeks to shift the conversation on key issues to the platforms of its liking, where no dissident voices can be heard. This is how like-minded groups and various “appeals” emerge. This is about coordinating prescriptions and then making everyone else follow them. Examples include an “appeal for trust and security in cyberspace”, “the humanitarian appeal for action”, and a “global partnership to protect media freedom.” Each of these platforms brings together only several dozen countries, which is far from a majority, as far as the international community is concerned. The UN system offers inclusive negotiations platforms on all of the abovementioned subjects. Understandably, this gives rise to alternative points of view that have to be taken into consideration in search of a compromise, but all the West wants is to impose its own rules.

At the same time, the EU develops dedicated horizontal sanctions regimes for each of its “like-minded groups,” of course, without looking back at the UN Charter. This is how it works: those who join these “appeals” or “partnerships” decide among themselves who violates their requirements in a given sphere, and the European Union imposes sanctions on those at fault. What a convenient method. They can indict and punish all by themselves without ever needing to turn to the UN Security Council. They even came up with a rationale to this effect: since we have an alliance of the most effective multilateralists, we can teach others to master these best practices. To those who believe this to be undemocratic or at odds with a vision of genuine multilateralism, President of France Emmanuel Macron offered an explanation in his remarks on May 11, 2021: multilateralism does not mean necessity to strike unanimity, and the position of those “who do not wish to continue moving forward must not be able to stop … an ambitious avant-garde” of the world community.

Make no mistake: there is nothing wrong with the rules per se. On the contrary, the UN Charter is a set of rules, but these rules were approved by all countries of the world, rather than by a closed group at a cosy get-together.

An interesting detail: in Russian, the words “law” and “rule” share a single root. To us, a rule that is genuine and just is inseparable from the law. This is not the case for Western languages. For instance, in English, the words “law” and “rule” do not share any resemblance. See the difference? “Rule” is not so much about the law, in the sense of generally accepted laws, as it is about the decisions taken by the one who rules or governs. It is also worth noting that “rule” shares a single root with “ruler,” with the latter’s meanings including the commonplace device for measuring and drawing straight lines. It can be inferred that through its concept of “rules” the West seeks to align everyone around its vision or apply the same yardstick to everybody, so that everyone falls into a single file.

While reflecting on linguistics, worldview, sentiment, and the way they vary from one nation or culture to another, it is worth recollecting how the West has been justifying NATO’s unreserved eastward expansion towards the Russian border. When we point to the assurances provided to the Soviet Union that this would not happen, we hear that these were merely spoken promises, and there were no documents signed to this effect. There is a centuries-old tradition in Russia of making handshake deals without signing anything and holding one’s word as sacrosanct, but it seems unlikely to ever take hold in the West.

Efforts to replace international law by Western “rules” include an immanently dangerous policy of revising the history and outcomes of the Second World War and the Nuremberg trials verdicts as the foundation of today’s world order. The West refuses to support a Russia-sponsored UN resolution proclaiming that glorifying Nazism is unacceptable, and rejects our proposals to discuss the demolition of monuments to those who liberated Europe. They also want to condemn to oblivion momentous post-war developments, such as the 1960 UN Declaration on the Granting of Independence to Colonial Countries and Peoples, initiated by our country. The former colonial powers seek to efface this memory by replacing it with hastily concocted rituals like taking a knee ahead of sports competitions, in order to divert attention from their historical responsibility for colonial-era crimes.

The rules-based order is the embodiment of double standards. The right to self-determination is recognised as an absolute “rule” whenever it can be used to an advantage. This applies to the Malvinas Islands, or the Falklands, some 12,000 kilometres from Great Britain, to the remote former colonial territories Paris and London retain despite multiple UN resolutions and rulings by the International Court of Justice, as well as Kosovo, which obtained its “independence” in violation of a UN Security Council resolution. However, if self-determination runs counter to the Western geopolitical interests, as it happened when the people of Crimea voted for reunification with Russia, this principle is cast aside, while condemning the free choice made by the people and punishing them with sanctions.

Apart from encroaching on international law, the “rules” concept also manifests itself in attempts to encroach on the very human nature. In a number of Western countries, students learn at school that Jesus Christ was bisexual. Attempts by reasonable politicians to shield the younger generation from aggressive LGBT propaganda are met with bellicose protests from the “enlightened Europe.” All world religions, the genetic code of the planet’s key civilisations, are under attack. The United States is at the forefront of state interference in church affairs, openly seeking to drive a wedge into the Orthodox world, whose values are viewed as a powerful spiritual obstacle for the liberal concept of boundless permissiveness.

The insistence and even stubbornness demonstrated by the West in imposing its “rules” are striking. Of course, domestic politics is a factor, with the need to show voters how tough your foreign policy can get when dealing with “autocratic foes” during every electoral cycle, which happen every two years in the United States.

Still, it was also the West that coined the “liberty, equality, fraternity” motto. I do not know whether the term “fraternity” is politically correct in today’s Europe from a “gender perspective,” but there were no attempts to encroach on equality so far. As mentioned above, while preaching equality and democracy in their countries and demanding that other follow its lead, the West refuses to discuss ways to ensure equality and democracy in international affairs.

This approach is clearly at odds with the ideals of freedom. The veil of its superiority conceals weakness and the fear of engaging in a frank conversation not only with yes-men and those eager to fall in line, but also with opponents with different beliefs and values, not neo-liberal or neo-conservative ones, but those learned at mother’s knee, inherited from many past generations, traditions and beliefs.

It is much harder to accept the diversity and competition of ideas in the development of the world than to invent prescriptions for all of humanity within a narrow circle of the like-minded, free from any disputes on matters of principle, which makes the emergence of truth all but impossible. However, universal platforms can produce agreements that are much more solid, sustainable, and can be subject to objective verification.

This immutable truth struggles to make it through to the Western elites, consumed as they are with the exceptionalism complex. As I mentioned earlier in this article, right after the talks between Vladimir Putin and Joseph Biden, EU and NATO officials rushed to announce that nothing has changed in the way they treat Russia. Moreover, they are ready to see their relations with Moscow deteriorate further, they claimed.

Moreover, it is an aggressive Russophobic minority that increasingly sets the EU’s policy, as confirmed by the EU Summit in Brussels on June 24 and 25, 2021, where the future of relations with Russia was on the agenda. The idea voiced by Angela Merkel and Emmanuel Macron to hold a meeting with Vladimir Putin was killed before it saw the light of day. Observers noted that the Russia-US Summit in Geneva was tantamount to a go-ahead by the United States to have this meeting, but the Baltic states, siding with Poland, cut short this “uncoordinated” attempt by Berlin and Paris, while the Ukrainian Foreign Ministry summoned the German and French ambassadors to explain their governments’ actions. What came out of the debates at the Brussels summit was an instruction to the European Commission and the European Union External Action Service to devise new sanctions against Moscow without referring to any specific “sins,” just in case. No doubt they will come up with something, should the need arise.

Neither NATO, nor the EU intend to divert from their policy of subjugating other regions of the world, proclaiming a self-designated global messianic mission. The North-Atlantic Treaty Organisation is seeking to proactively contribute to America’s strategy for the Indo-Pacific Region, clearly targeted at containing China, and undermining ASEAN’s role in its decades-long efforts to build an inclusive cooperation architecture for Asia-Pacific. In turn, the European Union drafts programmes to “embrace” geopolitical spaces in its neighbourhood and beyond, without coordinating these initiatives even with the invited countries. This is what the Eastern Partnership, as well as a recent programme approved by Brussels for Central Asia, are all about. There is a fundamental difference between these approaches and the ones guiding integration processes with Russia’s involvement: the CIS, the CSTO, EurAsEC and the SCO, which seek to develop relations with external partners exclusively on the basis of parity and mutual agreement.

With its contemptuous attitude towards other members of the international community, the West finds itself on the wrong side of history.

Serious, self-respecting countries will never tolerate attempts to talk to them through ultimatums and will discuss any issues only on an equal footing.

As for Russia, it is high time that everyone understands that we have drawn a definitive line under any attempts to play a one-way game with us. All the mantras we hear from the Western capitals on their readiness to put their relations with Moscow back on track, as long as it repents and changes its tack, are meaningless. Still, many persist, as if by inertia, in presenting us with unilateral demands, which does little, if any, credit to how realistic they are.

The policy of having the Russian Federation develop on its own, independently and protecting national interests, while remaining open to reaching agreements with foreign partners on an equal basis, has long been at the core of all its position papers on foreign policy, national security and defence. However, judging by the practical steps taken over the recent years by the West, they probably thought that Russia did not really mean what it preached, as if it did not intend to follow through on these principles. This includes the hysterical response to Moscow’s efforts to stand up for the rights of Russians in the aftermath of the bloody 2014 government coup in Ukraine, supported by the United States, NATO and the EU. They thought that if they applied some more pressure on the elites and targeted their interests, while expanding personal, financial and other sectoral sanctions, Moscow would come to its senses and realise that it would face mounting challenges on its development path, as long as it did not “change its behaviour,” which implies obeying the West. Even when Russia made it clear that we view this policy by the United States and Europe as a new reality and will proceed on economic and other matters from the premise that we cannot depend on unreliable partners, the West persisted in believing that, at the end of the day, Moscow “will come to its senses” and will make the required concessions for the sake of financial reward. Let me emphasise what President Vladimir Putin has said on multiple occasions: there have been no unilateral concessions since the late 1990s and there never will be. If you want to work with us, recover lost profits and business reputations, let us sit down and agree on ways we can meet each other half way in order to find fair solutions and compromises.

It is essential that the West understands that this is a firmly ingrained worldview among the people of Russia, reflecting the attitude of the overwhelming majority here. The “irreconcilable” opponents of the Russian government who have placed their stakes on the West and believe that all Russia’s woes come from its anti-Western stance advocate unilateral concessions for the sake of seeing the sanctions lifted and receiving hypothetical financial gains. But they are totally marginal in Russian society. During his June 16, 2021 news conference in Geneva, Vladimir Putin made it abundantly clear what the West is after when it supports these marginal forces.

These are disruptive efforts as far as history is concerned, while Russians have always demonstrated maturity, a sense of self-respect, dignity and national pride, and the ability to think independently, especially during hard times, while remaining open to the rest of the world, but only on an equal, mutually beneficial footing. Once we put the confusion and mayhem of the 1990s behind us, these values became the bedrock of Russia’s foreign policy concept in the 21st century. The people of Russia can decide on how they view the actions by their government without getting any prompts from abroad.

As to the question on how to proceed on the international stage, there is no doubt that leaders will always play an important role, but they have to reaffirm their authority, offer new ideas and lead by conviction, not ultimatums. The Group of Twenty, among others, is a natural platform for working out mutually acceptable agreements. It brings together the leading economies, young and old, including the G7, as well as the BRICS and its like-minded countries. Russia’s initiative to form a Greater Eurasian Partnership by coordinating the efforts of countries and organisations across the continent holds a powerful consolidating potential. Seeking to facilitate an honest conversation on the key global stability matters, President Vladimir Putin suggested convening a summit of the five permanent members of the UN Security Council that have special responsibility for maintaining international peace and stability on the planet.

Efforts to bring more democracy to international relations and affirm a polycentric world order include reforming the UN Security Council by strengthening it with Asian, African and Latin American countries, and ending the anomaly with the excessive representation of the West in the UN’s main body.

Regardless of any ambitions and threats, our country remains committed to a sovereign and independent foreign policy, while also ready to offer a unifying agenda in international affairs with due account for the cultural and civilisational diversity in today’s world. Confrontation is not our choice, no matter the rationale. On June 22, 2021, Vladimir Putin published an article “Being Open, Despite the Past,” in which he emphasised: “We simply cannot afford to carry the burden of past misunderstandings, hard feelings, conflicts, and mistakes.” He also discussed the need to ensure security without dividing lines, a common space for equitable cooperation and inclusive development. This approach hinges on Russia’s thousand-year history and is fully consistent with the current stage in its development. We will persist in promoting the emergence of an international relations culture based on the supreme values of justice and enabling all countries, large and small, to develop in peace and freedom. We will always remain open to honest dialogue with anyone who demonstrates a reciprocal readiness to find a balance of interests firmly rooted in international law. These are the rules we adhere to.

Source : The Ministry of Foreign Affairs of the Russian Federation

Three Months, 700 Steps: Why It Takes So Long to Produce a Computer Chip

Jeanne Whalen wrote . . . . . . . . .

Christopher Belfi was waiting tables in a lakeside resort near this Upstate New York town a decade ago when he got the career break he’d been waiting for — an invitation to work at a semiconductor factory.

Belfi, who’d recently graduated from the State University of New York at Albany with a technology degree, started chatting with two customers who turned out to be managers at the nearby semiconductor factory. “I used to coach robotics teams in college. And so we were just talking about that. They left their business cards in my checkbook, and I applied and never turned back,” Belfi says.

He started out as a technician, repairing the automated equipment that carries silicon wafers from machine to machine. In time, he rose to oversee the automated system that propels thousands of pods along tracks on the ceiling, each carrying 25 shiny discs that will someday power a mobile phone, an airplane or an automotive air bag.

Lately there are more pods than ever crowding those tracks, as the GlobalFoundries plant — one of a handful of similar factories in the United States — races to keep up with soaring demand for computer chips.

The tiny components are the brains behind an ever-growing array of electronics, from toothbrushes and refrigerators to vacuum cleaners and cars. Global chip sales are forecast to grow by 20 percent this year and by 9 percent next year as smartphones and laptops use more of the components. Even the most mundane products — tires, doorbells and lightbulbs — now require chips to make them work.

Yet the huge expense of building a semiconductor factory — and the months-long process needed to make a chip — means global demand is far outstripping supply. That has forced automakers and other chip users to idle production and prompted lawmakers to endorse federal subsidies to try to boost U.S. chip manufacturing.

Countries lavish subsidies and perks on semiconductor manufacturers as a global chip war heats up

There are hundreds of companies that design computer chips but fewer than two dozen globally that manufacture them in large quantities, leaving those factories under huge pressure.

Many of the biggest facilities are in Taiwan, which now produces 20 percent of the world’s semiconductors and over 90 percent of the highest-tech chips, according to a report commissioned by the Semiconductor Industry Association, which calls itself the “voice of semiconductor industry.”

Asia as a whole produces about three-quarters of global semiconductors, while the United States manufactures about 13 percent. To boost U.S. production, the Senate authorized $52 billion in subsidies last month for new factories and chip research. The measure, supported by President Biden, still must clear the House, where it has yet to be added to pending legislation.

GlobalFoundries, which is wholly owned by the government of Abu Dhabi and has its headquarters in Malta, 30 minutes north of Albany, is one of the main sources of U.S. production. The Malta plant runs 24 hours a day, pumping out 500,000 intricate silicon wafers a year that are then cut into individual chips.

Hundreds of employees don elaborate protective gear known as bunny suits at the start of each shift, to prevent stray lint or hair from marring the wafers. Even a speck of dust can ruin the painstaking process for producing the chips.

Before giving The Washington Post a tour on a recent morning, Belfi suited up: two layers of booties, two pairs of gloves, a hairnet, a hood and a jumpsuit. Protective goggles and face masks are also standard, so adapting to covid-19 protocols “really wasn’t any different,” Belfi said.

He manages 95 people and has learned to identify them in their suits. “You recognize people by the stride they walk at,” he said.

The factory is filled with the static hum of $10 billion worth of machinery and the warm glow of yellow light, which protects the light-sensitive wafers from damage.

The 12-inch silicon discs look like shiny, smooth mirrors when they arrive at the factory. Three months later they are covered with intricate etchings forming billions of transistors, the microscopic switches that control electric currents and allow the chip to perform tasks.

There are about 700 processing steps along the way, through which dozens of layers of patterns are printed and etched on top of each other, following designs provided by each chip customer.

“Think about making a cake,” Belfi said over the noise of the machinery. “In this case it’s going to be a 60- to 75-layer cake, and that cake is built over approximately two and a half, three months.”

To create each layer, the wafer is coated with a light-sensitive chemical. Then a high-tech printer known as a lithography machine projects the same tiny pattern over and over across the wafer, as if it were stamping the same pattern on every square of a checkerboard, with each square representing a future chip.

Afterward, an etching machine engraves those patterns into the wafer, and more chemicals are deposited and baked onto the surface. This process repeats over and over as different patterns are laid on top of each other to create dozens of layers of transistors. Then the layers are connected to each other via copper wires to allow signals and power to travel throughout the chip.

The pods carrying the wafers rarely rest through this three-month process, traveling from machine to machine according to a preprogrammed route.

Belfi and the other engineers are there to ensure the machines don’t break down, a task that has grown more urgent as demand soars. Machinery in a typical chip factory, known as a fab, runs about 90 percent of the time, with 10 percent downtime for scheduled or urgent maintenance.

The most crucial — and expensive — pieces of equipment in the factory are the lithography machines that print the intricate designs on the wafers. The Malta plant has 20 of those; each costs roughly $100 million.

“When that machine breaks, it’s important you fix it pretty quickly,” says Peter Benyon, the factory’s general manager, who previously ran a GlobalFoundries plant in Singapore.

Last summer, as chip demand was soaring, one of the Malta factory’s lithography machines malfunctioned. Normally the equipment’s manufacturer, the Dutch company ASML, would dispatch an engineer to help fix it, but because of the coronavirus crisis, that wasn’t possible. So instead, a factory technician wearing an augmented reality headset connected with ASML engineers in the Netherlands so they could view the inside of the machine and oversee the repairs, Benyon said.

Getting machinery back online quickly can help a factory squeeze out more chips. So can cutting down on the number of faulty chips per wafer, Benyon said.

But dramatically boosting output means building new factories. By next year, chip makers will have started construction on 29 new fabs worldwide, according to SEMI, an industry association.

China and Taiwan will build more than half of these — eight each — followed by six in the United States, three in Europe and the Middle East and two each in Japan and Korea.

The United States manufactured more than a third of the world’s chips in the early 1990s, but production shifted to Asia as chip companies sought cheaper labor, and as Taiwan, South Korea and China began heavily subsidizing chip manufacturing.

Investors also pressured U.S. chip firms to focus on semiconductor design and to outsource manufacturing to Asia because of the huge cost required to maintain chip factories, according to Glenn O’Donnell, a tech analyst at market-research firm Forrester.

“It’s the byproduct of the short-term Wall Street mentality everyone has to buy into because you have to satisfy Wall Street,” he said.

Worried that the pendulum has swung too far, U.S. officials and lawmakers are now eager to rebuild domestic chip production with the help of federal subsidies. As chips become more central to weapons systems and to the economy overall, relying too much on Asia undermines national security, they argue.

“Having America have a robust supply of semiconductors is important to our national defense and our economic security,” then-Senate Minority Leader Charles E. Schumer (D-N.Y.) said during a visit to the New York factory last year, as he was promoting the federal funding bill.

GlobalFoundries is planning to expand the Malta factory’s output by at least a quarter if it receives some of the federal subsidy endorsed by the Senate, chief executive Tom Caulfield said in a February interview. Some of the company’s customers also are ready to invest to expand production to secure steady supplies, Caulfield said.

The goal is to double production capacity in Malta in the coming years with funding from the company, its customers and the federal government, spokesman Michael Mullaney said.

GlobalFoundries is using a similar combination of investment to boost output at its factories overseas; its planned $4 billion expansion of its chip plant in Singapore includes funding from Singapore’s government.

California-based Intel, meanwhile, has pledged to spend $20 billion to build two factories in Arizona. Intel CEO Pat Gelsinger has said the United States should aim to boost its share of global chip production back above 30 percent.

For now, U.S. manufacturers will have a hard time matching the low cost and sophistication of their Asian rivals, according to Steven Vogel, chair of the political economy program at the University of California at Berkeley, who has studied the chip industry.

“Taiwan and the Koreans are the best in the world when it comes to price and quality,” he said. The U.S. should take steps to rebuild its semiconductor manufacturing, but “there are huge efficiency benefits to the global supply chain,” he said.

The most advanced manufacturers — Taiwan’s TSMC and South Korea’s Samsung — both have announced plans to build new factories in the United States and are expected to be eligible for the federal subsidies should they become law.

Chip companies have emphasized the need for better STEM education and worker training to prepare the semiconductor manufacturing workforce.

“For us, one of the hardships is actually getting great folks because a lot of what you’re seeing here, there aren’t a lot of colleges that offer curriculum surrounding semiconductor manufacturing,” Belfi said.

There are several former auto mechanics on Belfi’s team, and some former Air Force mechanics who used to repair planes. “A lot of their outside passions are right up the block at Saratoga Speedway,” he said, referring to a nearby stock-car racetrack. “We look for technical skills, mechanical backgrounds.”

Other groups at the factory look for employees with degrees in materials science, chemistry or engineering, he said. GlobalFoundries offers apprenticeships that provide two years of on-the-job training to employees without a degree, and works with community colleges to help design chip-related curriculums.

Belfi himself studied mostly software and computer science in college but preferred building things, which he did for fun while coaching schoolkids competing on robotics teams.

“I was much more equipment-driven and liked to work with my hands,” he said.

Source : The Washington Post