AFP

Taiwan blasted its “evil neighbour” on Friday after China encircled the island with a series of huge military drills that were condemned by the United States and other Western allies.

During military exercises on Thursday and Friday, China fired ballistic missiles and deployed fighter jets and warships around Taiwan.

The People’s Liberation Army declared multiple no-go danger zones around Taiwan, straddling major shipping lanes in the world and at some points coming within 20 kilometres (12 miles) of the island’s shores.

Beijing has said the exercises will continue until midday Sunday, and Taipei reported that Chinese fighter jets and ships crossed the “median line” that runs down the Taiwan Strait on Friday morning.

“As of 11 am, multiple batches of Chinese warplanes and warships conducted exercises around the Taiwan Strait and crossed the median line of the strait,” Taipei’s defence ministry said in a statement. 

The median line is an unofficial but once largely adhered-to border that runs down the middle of the Taiwan Strait, which separates Taiwan and China.

Chinese incursions have become more common since Beijing declared in 2020 that the unofficial border no longer existed.

AFP journalists on the Chinese island of Pingtan saw a fighter jet flying overhead, prompting tourists to snap photos as it flew along the coast.

A Chinese military vessel was also visible sailing through the Taiwan Strait, they added.

Beijing has insisted its war games are a “necessary” response to US House Speaker Nancy Pelosi’s visit to Taiwan, but Washington countered that China’s leaders had “chosen to overreact”.

Taiwan’s premier Su Tseng-chang, meanwhile, called for allies to push for de-escalation.

“(We) didn’t expect that the evil neighbour next door would show off its power at our door and arbitrarily jeopardise the busiest waterways in the world with its military exercises,” he told reporters.

Pelosi has defended her trip to the self-ruled, democratic island, saying Friday that Washington would “not allow” China to isolate Taiwan.

“We have said from the start that our representation here is not about changing the status quo here in Asia, changing the status quo in Taiwan,” she told reporters in Tokyo on the final leg of an Asia tour.

Later on Friday China hit back, announcing sanctions against Pelosi and her immediate family, without providing details on the punitive measures.

Beijing has in recent years sanctioned a number of US officials for what it views as acting against its core interests, and speaking out on human rights issues in Hong Kong and the northwestern region of Xinjiang.

– Missiles over Taiwan –

China’s drills involved a “conventional missile firepower assault” in waters to the east of Taiwan, the Chinese military said. 

The state-run Xinhua news agency said the Chinese military “flew more than 100 warplanes including fighters and bombers” during the exercises, as well as “over 10 destroyers and frigates”.

State broadcaster CCTV reported that Chinese missiles had flown directly over Taiwan.

Japan also claimed that of the nine missiles it had detected, four were “believed to have flown over Taiwan’s main island”.

Taipei’s military said it would not confirm missile flight paths, in a bid to protect its intelligence capabilities and not allow China “to intimidate us”.

– ‘Significant escalation’ –

China’s ruling Communist Party views Taiwan as part of its territory and has vowed to one day take it, by force if necessary.

But the scale and intensity of the drills have triggered outrage in the United States and other democracies.

“These provocative actions are a significant escalation,” Blinken said after talks with Southeast Asian foreign ministers in Phnom Penh.

“The fact is, the speaker’s visit was peaceful. There is no justification for this extreme, disproportionate and escalatory military response,” he added.

Japan lodged a formal diplomatic complaint against Beijing, with five of China’s missiles believed to have landed in its exclusive economic zone.

And Australia — which has a troubled relationship with China, its largest trading partner — condemned the drills as “disproportionate and destabilising”.

“Australia is deeply concerned about the launch of ballistic missiles by China into waters around Taiwan’s coastline,” foreign minister Penny Wong said.

The manoeuvres are taking place along some of the world’s busiest shipping routes, used to disseminate the global supply of vital semiconductors and electronic equipment produced in East Asia.

“The shutting down of these transport routes — even temporarily — has consequences not only for Taiwan, but also trade flows tied to Japan and South Korea,” Nick Marro, the Economist Intelligence Unit’s lead analyst for global trade, wrote in a note.

Taiwan said the drills would disrupt 18 international routes passing through its flight information region while several airlines told AFP they would divert flights.

But markets in Taipei appeared to shrug off the tensions, with the Taiwan Taiex Shipping and Transportation Index, which tracks major shipping and airline stocks, up 3.7 percent Friday.

And analysts broadly agree that despite all its aggressive posturing, Beijing does not want an active military conflict against the United States and its allies over Taiwan — just yet.

“The last thing Xi wants is an accidental war ignited,” Titus Chen, an associate professor of political science at the National Sun Yat-Sen University in Taiwan, told AFP.

Asian equities mostly rose Friday as a drop in oil prices to pre-Ukraine war levels stirred hopes of a slowdown in inflation and central bank interest rate hikes, while focus turns to key US jobs data later in the day.

However, while markets have enjoyed a broadly positive week, optimism remains at a premium as traders fret over issues including the conflict in Eastern Europe, China’s military drills around Taiwan and a possible global recession.

Crude edged up but expectations that economies will contract — dampening demand — have sent the commodity tumbling more than 10 percent this week, with US data indicating Americans were driving less now than in summer 2020 at the height of the pandemic.

And while analysts are beating the drum of recession, traders are taking heart from the possibility of a reprieve from central bank monetary tightening.

“The recent fall in oil prices, which are now trading below the levels immediately before Russia’s invasion of Ukraine, has contributed to the market’s perception that inflation is likely to peak soon, taking pressure off the Fed to raise rates as aggressively,” said National Australia Bank’s Rodrigo Catril. 

Traders will now be closely watching the release of a crucial US jobs report on Friday for a fresh snapshot of the world’s top economy.

The Federal Reserve has said its rate decision will be guided by data, with signs of economic weakness seen as likely to mean any increases will be light.

Officials have said the economy remains healthy despite four-decade high inflation and a sharp lift in borrowing costs, while several have suggested they are open to more big increases to get on top of prices.

And SPI Asset Management’s Stephen Innes said: “Though some high-frequency data suggest employment and inflation have softened in some parts of the economy, markets may wonder if they are soft enough to change the course for the Fed.”

In a sign of the long road ahead, the Bank of England hiked rates by the most since it was made independent in 1997, and warned inflation will likely go higher than 13 percent while Britain will suffer an extended recession.

India on Friday lifted costs for the third time in four months to the highest level since summer 2019.

Wall Street provided a soft lead after recent gains, but Asia was largely higher.

Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Jakarta, Mumbai and Singapore rose, though Bangkok, Wellington and Manila dipped.

London dipped, Paris was flat and Frankfurt edged up.

Taipei surged more than two percent on easing concerns over a conflict with Beijing, even as China conducts its largest-ever military exercises around Taiwan in response to US House Speaker Nancy Pelosi’s visit this week.

China launched a series of exercises in multiple zones Thursday, straddling some of the busiest shipping lanes in the world.

While Taipei did not say where the missiles landed or whether they flew over the island, Japan said that of the nine missiles it had detected, four were “believed to have flown over Taiwan’s main island”.

Geir Lode, of Federated Hermes, said: “For a world facing a whole raft of major challenges, there sure is a lot of optimism across equities right now.

“Inflation is challenging corporate earnings and weighing on consumer sentiment. Global recession appears probable as growth becomes ever more scarce. Geopolitical tensions and the growth in populism accelerate the trend towards localisation (and increase the risk of even darker futures). Climate change looms over us all.

“And yet equities this week have continued July’s strong rally.”

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.9 percent at 28,175.87 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 20,201.94 (close)

Shanghai – Composite: UP 1.2 percent at 3,227.03 (close)

London – FTSE 100: DOWN 0.1 percent at 7,439.88

Euro/dollar: DOWN at $1.0227 from $1.0248 Thursday

Pound/dollar: DOWN at $1.2148 from $1.2166

Euro/pound: DOWN at 84.18 pence from 84.21 pence

Dollar/yen: UP at 133.30 yen from 132.95 yen

West Texas Intermediate: UP 0.6 percent at $89.05 per barrel

Brent North Sea crude: UP 0.6 percent at $94.71 per barrel

New York – Dow: DOWN 0.3 percent at 32,726.82 (close)

South Korea’s first lunar orbiter successfully launched on a year-long mission to observe the Moon, Seoul said Friday, with the payload including a new disruption-tolerant network for sending data from space.

Danuri — a portmanteau of the Korean words for “Moon” and “enjoy” — was on a Falcon 9 rocket launched from Cape Canaveral in Florida by Elon Musk’s aerospace company SpaceX. It aims to reach the Moon by mid-December.

“South Korea’s first lunar orbiter ‘Danuri’ left for space at 8:08 am on August 5, 2022,” Seoul’s science ministry said in a tweet, sharing a video of the rocket blasting off trailing a huge column of smoke and flames.

Danuri “successfully entered orbit towards the moon”, Seoul’s vice science minister Oh Tae-seok told reporters later Friday, saying that researchers were already communicating with Danuri through NASA’s deep-space antenna in Canberra, Australia.

“Analysis of the received satellite information confirmed that Danuri’s solar panel was properly unfolded to start power generation,” he said, adding everything appeared to be going smoothly.

Danuri will use six different instruments, including a highly sensitive camera provided by NASA, to conduct research, including investigating the lunar surface to identify potential landing sites.

One of the instruments will evaluate disruption-tolerant, network-based space communications, which, according to South Korea’s science ministry, is a world first.

– BTS in space –

Danuri will also try to develop a wireless Internet environment to link satellites or exploration spacecraft, Seoul has said.

The lunar orbiter will stream K-pop sensation BTS’ song “Dynamite” to test this wireless network.

Scientists also hope Danuri will find hidden sources of water and ice in areas of the Moon, including the permanently dark and cold regions near the poles.

“This is a very significant milestone in the history of Korean space exploration,” said Lee Sang-ryool, head of the Korea Aerospace Research Institute, in a video shown before the launch.

“Danuri is just the beginning, and if we are more determined and committed to technology development for space travel, we will be able to reach Mars, asteroids, and so on in the near future.”

South Korean scientists say Danuri — which took seven years to build — will pave the way for the nation’s more ambitious goal of landing on the Moon in the next decade. 

“South Korea will become the seventh country in the world to have launched an unmanned probe to the Moon,” an official at the Korea Aerospace Research Institute told AFP.

“We hope to continue contributing to the global understanding of the Moon with what Danuri is set to find out.”

– Lunar ambitions –

Danuri was launched by a private company — SpaceX — but South Korea recently became one of a handful of countries to successfully launch a one-tonne payload using their own rockets.

In June, the country’s homegrown three-stage rocket nicknamed Nuri — a decade in development at a cost of 2 trillion won ($1.5 billion) — launched successfully and put a satellite into orbit, on its second attempt after a failure last October.

That launch — coupled with Danuri’s launch Friday — helps bring South Korea ever closer to achieving its space ambitions.

In Asia, China, Japan and India all have advanced space programmes — and the South’s nuclear-armed neighbour North Korea has also demonstrated satellite launch capability.

Ballistic missiles and space rockets use similar technology and Pyongyang put a 300-kilogram (660-pound) satellite into orbit in 2012 in what Washington condemned as a disguised missile test.