WSJ : Biden Trimming Forces Sent to Mideast to Help Saudi Arabia

Biden Trimming Forces Sent to Mideast to Help Saudi Arabia
Move comes as part of recalibration with Riyadh, but U.S. also seeking ways to shield Saudi Arabia from airborne attacks

WASHINGTON—President Biden has directed the Pentagon to begin removing some military capabilities and forces from the Gulf region in the first steps of an effort to realign the U.S. global military footprint away from the Mideast, changes that come as Saudi Arabia endures rocket and drone attacks from inside Yemen and Iraq.

In moves that haven’t been previously reported, the U.S. has removed at least three Patriot antimissile batteries from the Gulf region, including one from Prince Sultan Air Base in Saudi Arabia, that had been put in place in recent years to help protect American forces.

Some capabilities, including an aircraft carrier and surveillance systems, are being diverted from the Middle East to answer military needs elsewhere around the globe, according to U.S. officials. Other reductions are under consideration, officials said.

The removal of Patriot batteries, the permanent aircraft-carrier presence and other military capabilities means that several thousand troops may leave the region over time. As of late last year there were about 50,000 troops in the region, down from a high of about 90,000 at the height of tensions between the Trump administration and Iran about two years ago.

Defense officials declined to provide specifics about the reductions in military capabilities or forces. Saudi officials didn’t respond to a request for comment about the U.S. plans.

A missile defense system known as a Terminal High Altitude Area Defense, or THAAD, which protects against the kinds of ballistic missiles used frequently by Iranian allies, was also proposed to be removed, but officials said it would remain in the region for now.

The military withdrawals amount to the early stages of a Biden administration effort to further reduce the U.S. posture in the Mideast after several decades of military engagement there, officials said.

Some equipment, including surveillance drones and antimissile batteries, may be redeployed to focus on what officials consider to be leading global competitors, including China and Russia.

Aircraft carriers in recent years have been deployed as symbols of U.S. deterrence in the Middle East. Earlier this year, the USS Nimitz left the region, and the USS Eisenhower now is headed there. However, the Eisenhower isn’t expected to stay for the duration of a normal monthslong deployment, leaving what Navy officials refer to as a “carrier gap” in the area overseen by U.S. Central Command.

Amid the withdrawals, officials said, a Pentagon team is looking at what equipment and training it can share with Saudi Arabia as it continues to come under withering rocket and missile attacks from fighters believed allied with Iran. The idea is to shift more of the burden of defending Saudi territory from Washington to Riyadh.

Mr. Biden pledged after taking office that he would recalibrate the U.S.-Saudi relationship, taking several tough steps against the kingdom, including freezing the sale of offensive weapons that Riyadh has used in its six-year military intervention in Yemen. He also made public an intelligence report saying Crown Prince Mohammed bin Salman, the country’s de facto leader, approved the operation that led to the 2018 killing of journalist Jamal Khashoggi.

The removal of the American Patriots and other materiel happens at a difficult time for the kingdom.

Saudi Arabia has come under what U.S. officials say is an unacceptable level of violence from rocket and drone attacks from Iranian-backed Houthis in Yemen and pro-Iranian militias in Iraq. Since January, there have been more than 80 such attacks, some involving multiple, simultaneous drone assaults, that have U.S., Saudi and other allies in the region on high alert.

“By far that’s worse than any other period since before the beginning of the conflict,” a U.S. official said, referring to the war inside Yemen. Iran has denied it controls the Houthis or sponsors attacks through other groups.

As the U.S. moves toward reducing its own military capabilities there, the Pentagon in recent weeks assembled a “tiger team”—an ad hoc group of defense policy and military experts—to find ways to help the oil-rich kingdom protect its facilities and oil installations, U.S. officials said.

Options on the table include sales of specific, defensive weapons, such as missile interceptors; expanded intelligence-sharing; additional training; and military-to-military exchange programs, officials said.

The Pentagon effort to find additional ways to help the kingdom to defend itself hasn’t been previously disclosed.

In the meantime, the Saudis’ efforts to bolster their own defenses, including their Patriot missile systems, long considered to be undermanned and overworked, are improving, U.S. officials said. For the past several years, the U.S. military has worked closely with the Saudis to improve the systems, officials said.

“The Saudis have been pretty effective at knocking this stuff down. They are doing better and better,” a senior U.S. official said, referring to incoming rockets and drones.

While officials said that most attacks against Saudi Arabia emanate from the Houthi militia inside Yemen, they couldn’t explain why the Houthis have escalated at this time. The militant group has claimed responsibility for many of the attacks.

“The bottom line is that the Houthis need to know that we are standing with the Saudis and we will continue to support their right to self-defense,” another U.S. official said.

The defensive help is intended to make good on Mr. Biden’s promise to lend the Saudis a defensive hand, after he took a series of steps signaling his administration would deal differently with Riyadh than did former President Donald Trump.

Mr. Biden in late January froze the sale to Riyadh of U.S. offensive weapons, specifically precision-guided munitions, that have caused widespread civilian casualties in Saudi-led air assaults in Yemen. U.S. officials are trying to define which defensive weapons they will permit Riyadh to buy.

In February, the Biden administration also publicly shamed Prince Mohammed by releasing the U.S. intelligence report on the death of Mr. Khashoggi in Turkey.

With those steps behind it, the Biden administration is moving to show it isn’t breaking the 76-year alliance with the Saudis.

“We’re going to continue to support and help Saudi Arabia defend its sovereignty and its territorial integrity and its people,” Mr. Biden said in a Feb. 4 speech announcing the offensive weapons freeze and a new U.S. initiative to end the Yemen war.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

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Other news:

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Analyst comments:

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Analyst comments:

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WSJ : China Approves Merger of Chemical Giants, Creating $150 Billion Company

China Approves Merger of Chemical Giants, Creating $150 Billion Company
Move paves the way for another supersize state-run enterprise that Beijing hopes will become a dominant global player

China approved a merger between the country’s top two chemical companies, paving the way for another supersize state-run enterprise that Beijing hopes will become a dominant global player.

Sinochem Group Co. and China National Chemical Corp., also known as ChemChina, will be placed under a new holding company funded and overseen by a government body that holds state enterprises, according to a Sinochem statement Wednesday, confirming a Wall Street Journal article in December. The Chinese body, called the State-Owned Assets Supervision and Administration Commission controls both enterprises.

The combination, which has been in the cards for years, would minimize competition between the two companies and create the world’s largest chemicals conglomerate with around 1 trillion yuan in annual revenue, equivalent to about $153 billion. The new holding-company structure was designed to avoid triggering a U.S. national-security review of Sinochem’s ownership of Swiss agro-giant Syngenta AG, the Journal reported.

Sinochem acquired Syngenta in 2017 for $43 billion. The deal for the seed company remains China’s biggest foreign acquisition and received regulatory clearance in more than 20 jurisdictions. The acquisition was approved in 2016 by the Committee on Foreign Investment in the U.S., a powerful interagency panel that reviews cross-border deals for national-security concerns.

Any change in ownership of Syngenta would trigger a review by the panel, Cfius, people familiar with the matter previously told the Journal. The panel has stepped up scrutiny of deals involving foreign investors in recent years amid heightened political concerns that China could acquire strategic U.S. technology through business acquisitions by Chinese companies.

Sinochem said Wednesday that the chemical industry is a pillar of China’s economy and that its merger with ChemChina would create economies of scale, optimize the allocation of corporate resources and “help forge a comprehensive, industry-leading chemicals group.” It also noted a trend among international chemical giants toward reorganizations that have improved their competitive positions.

The two Chinese state-owned enterprises have competed in fields such as refineries and specialty chemicals. They produce a variety of materials used in the production of a variety of goods and industries, including agriculture, construction, energy and auto production.

FT : China manoeuvres near Taiwan fuel concerns of potential attack

China manoeuvres near Taiwan fuel concerns of potential attack
Beijing has stepped up military posturing in recent days, raising worries it could invade

China has stepped up its military posturing around Taiwan over the past week, a trend that is set to fuel growing concerns that Beijing might move closer to attacking the island.

Taiwan and Japan on Monday both reported incursions into their respective air defence identification zones, the first simultaneous announcement from Taipei and Tokyo.

Taiwan said that ten Chinese military aircraft, including fighters and an anti-submarine warfare aircraft, had flown into its ADIZ, while Japan recorded an ASW plane inside its zone just east of Taiwan.

The parallel manoeuvres followed the largest-ever incursion into Taiwan’s air defence zone last Friday, when 20 Chinese aircraft, including bombers and fighters, entered the area.

The forays came as Washington has begun to ready for the growing risk of a war over Taiwan, which Beijing claims as part of its sovereign territory. Senior US officials fear that China is flirting with the idea of seizing control of Taiwan, a scenario that would almost certainly drag in Washington and some of its allies.

Monday’s incursions also followed the arrival in Taiwan of the US ambassador to Palau, alongside the Pacific island nation’s president. Palau is one of 15 countries that have diplomatic relations with Taipei rather than Beijing, and the visit was an unusually bold move compared with the restraint Washington has long practised with regard to sending its diplomats to Taiwan.

Friday’s manoeuvres came after the US and Taiwan announced an agreement under which their coast guards would co-operate.

Some experts interpreted the Chinese military’s moves as a gradual step-up but agreed that the manoeuvres also featured new patterns of behaviour.

The People’s Liberation Army has flown more regular sorties into the south-western corner of Taiwan’s air defence zone, where the Taiwan Strait meets the Bashi Channel, since last summer. This is a crucial corridor for the Chinese military into the open waters and airspace of the western Pacific.

The territory would be essential for submarine warfare in any conflict over Taiwan, which explains why anti-submarine warfare aircraft have been involved in most of the almost-daily incursions. But while the forays usually consisted of short, straight flights in and out of the ADIZ, ASW aircraft flew all the way past the southern tip of Taiwan into the western Pacific and back over the past week.

“These latest [incursions] are more about political messaging than about military operational significance,” said Admiral Lee Hsi-ming, former chief of the general staff of Taiwan’s armed forces. “Flying around Taiwan is not a breakthrough for them. They operated circular flights with H6 bombers when I was in office.”

“I believe that this time, they did not have enough time to prepare,” Lee added. “So in order to express their determination towards the US, they flew out into the western Pacific but did not do a full circle.”


Some analysts, however, saw the latest moves as an escalation.

“Y-8 and Y-9 aircraft have not done this before,” said Su Tzu-yun, an analyst at the Institute for National Defence and Security Research, a think-tank backed by Taiwan’s defence ministry, referring to the ASW flights. “We are going to see more of that as they start to expand the scope of their regular operations from the south-west of Taiwan to the south-east.”

The incursion reported by Japan also followed an unprecedented approach. A patrol aircraft and a surveillance plane flew in a northern direction off Taiwan’s east coast before turning back and leaving Japan’s ADIZ through the Miyako Strait, Tokyo said.

The Miyako Islands, a tiny archipelago between Okinawa and Taiwan, have been a hotspot for Chinese air force manoeuvres in recent years because the Strait — as with the Bashi Channel — is one of the PLA’s main air and sea corridors to the open Pacific. Four of the five Chinese air incursions reported by Japan over the past year have occurred in this area.

In previous manoeuvres, Chinese aircraft flew only relatively short sorties to the south-east of the Miyako Islands before turning back. Monday’s flights marked the first time they had flown so close to Taiwan’s east coast, where the largest hardened shelters for protecting military aircraft against missile and air attacks are located in a mountainside in the town of Hualien.

“With its regular operations in the south-western corner of Taiwan ADIZ, the PLA has already changed the status quo and asserted that ‘This is my backyard’. They have even included this area in their annual training plan,” said Lee.

People familiar with Taipei’s military strategy said if the PLA expanded a regular presence to the airspace east of Taiwan, it would undermine the island’s security in a much more drastic manner.

>>> Stoxx 600 Pre-Market Indications

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