Australia, NZ And The Oceanic Equation With China

Australia, NZ And The Oceanic Equation With China

China recently cancelled its economic dialogue with Australia amidst continuous conflict since the pandemic started. Meanwhile, New Zealand, Australia’s Oceanic neighbour, who normally has a different stance on China, recently recognized China’s Uighur rights violation though with a caveat. In that light, let’s look at the equation between the three and how they respond to China differently.

Crux of the Matter

What Happened Recently
China indefinitely halted ‘China-Australia Strategic Economic Dialogue’. It was done just after Australia cancelled Belt and Road Initiative (BRI) project between its state Victoria and China.

Across In New Zealand
NZ officially recognized human rights abuse of Uighurs in Xinjiang of China. However, it didn’t recongize it as ‘genocide’ on demand of PM Jacinda Ardern’s party. Still, the move alleviated widespread accusation of NZ ignoring China’s violations.

A Tale Of Two Countries
Oceanic nations Australia and New Zealand have widely differed in response to China. Generally, the former has more aggressive policy.

Australian Policy

  • Australia was among the 1st to ban Huawei and ZTE 5G of China in 2018 over ‘security issues’.
  • It was also among the nations not working with China’s Belt and Road Initiative and had in fact cancelled the one between its state Victoria and China.
  • The big ‘dent’ came in 2020, when Australia called for independent investigation into Coronavirus origin.
  • In turn, China, Australia’s biggest trade partner, imposed heavy sanctions on its exports like 80% on Barley, 200% on wine etc.
  • Chinese investment in Australia also decreased by 61%.

New Zealand

  • Analysts claim NZ is more pro-China in policies than Australia.
  • New Zeland was the 1st developed nation to sign ‘Free Trade Agreement’ with China in 2008.
  • Notably, NZ was the 1st ‘Five Eyes’ group country to join China’s BRI.
  • The country also refused joint condemnation of Uighur conditions with Five Eyes group.

Five Eyes is an intelligence sharing group formed in WW2. The countries members if this group are Australia, Canada, NZ, UK and US.


  • Australia and NZ have China as their biggest trade partner which leads to constraint on level of antagonism they can afford with China.
  • Both, although recognizing ‘rights violation’, refuse to recognize treatment of Uighurs as ‘genocide’.

  • The south China sea is an important trade route for transportation of crude oil. It creates the route from Arabian gulf to Thailand, Hong Kong, Taiwan, South Korea, and Japan.
  • The Nine-dash line is a self-defined demarcation line adopted by China. It is used by them for their claims of territorialization over major parts of south China sea.
  • Mineral deposits like titaniferous magnetite, zircon, monazite, tin, gold, and chromite are highly exploited in near shore regions in the South China sea.

How Is India Inc Helping The Nation Fight Covid?

How Is India Inc Helping The Nation Fight Covid?

While India is grappling with the second wave of Covid 19, Indian Corporate is stepping up and contributing to tackle it. In the past year, major aid came on social and humanitarian grounds. Whereas in 2021, funds are utilized to support the infrastructural demand. From big business houses to niche startups, each firm is donating its bit. Let’s look at some of them.

Crux of the Matter

In one of the most unprecedented times, the Corporate India is stepping up to support not only its employees but also other people. Let’s see how from conglomerates to startup, many companies are doing their bit to tackle Covid-19.

Startups To The Rescue

  • Paytm will continue to pay salary for the current fiscal to the families of its 8 employees who succumbed due to Covid.
  • Zomato will provide 100% of the income to the family of the deceased employees for 2 years.
  • Flipkart will give paid Covid Care Leave of 28 calendar days in case an employee is diagnosed with Covid.
  • Urban Company set up Mohit Agrawal relief fund of ₹1 crore in the memory of the company’s Director of Engineering who died due to Covid-19.
  • Byju’s formed a ₹20 crore fund to support Covid expenses of employees.
  • Unacademy raised $1million Covid Fund to avail free vaccinations to employees and educators.

Infrastructural Aid

  • JSW Steel is supplying 1000 MT of oxygen per day and plans to ramp it further.
  • Reliance Industries is supplying 700 MT of oxygen per day and plans to scale it up to 1000 MT/day.
  • Amazon India airlifted 8,000 oxygen concentrators and 500 bi-level positive airway pressure (BiPAP) machines from Singapore.
  • ITC Ltd airlifted 24 cryogenic ISO containers, 20 tonnes each from Asian countries. It is also setting up a 200 bed medical facility in Kolkata.
  • Adani Group imported 4 cryogenic tanks with 80 MT of liquid oxygen from Saudi Arabia.
  • ArcelorMittal Nippon Steel India is supplying 200 MT of liquid oxygen per day to Gujarat. They have also set up a 250-bed Covid hospital in Hazira in collaboration with the Gujarat government.

Financial Aid

Tata’s No Limit Covid Care
Tata Trust’s Chairman, Ratan Tata and Tata Group’s Chairman N Chandrasekaran directed to have no limit in Covid funding. The group and trust have collectively pledged ₹2000 crore to date for Covid Care.

Major initiatives include:

  • Converting 1500 hotel rooms in Indian hotels to hospital beds.
  • Tata Projects setting up labour camps with food and stay facilities for migrant workers.
  • Tata Steel supplying up to 800 MT of medical liquid oxygen a day.
  • Tata Trusts organising medical training programmes for volunteers.
  • Collaborating with Linde to airlift oxygen containers from Singapore, China and Dubai to India.

  • Shah Rukh Khan is the current brand Ambassador of Byju’s. Former co-founder of Facebook, Eduardo Saverin Invested $1 billion in Byju’s in April, 2021. The current evaluation of Byju’s is around $15 billion.
  • Originally Zomato was known by the name of “FoodieBay”. The name of Zomato is a wordplay around the word Tomato.
  • Flipkart was founded by former Amazon employees Sachin and Binny Bansal in October 2007. In 2018, Walmart bought 77% stake in Flipkart for $16 Billion.

The Case Of Covid-19 Vaccine Patents Waiver

The Case Of Covid-19 Vaccine Patents Waiver

Amidst rising Covid-19 cases and a growing dearth of vaccines, discussions around removing intellectual property rights over vaccine have started again. With US making an official statement that it will waive off the patents for Covid-19 vaccines and treatments, many nations have shown support to the matter raised prominently last year by India and South Africa. There also have been arguments for and against patent waiver. Let’s understand what is happening.

Crux of the Matter

Back Story
In May 2020, the World Health Organization (WHO) in order to share knowledge for rapidly scaling up the vaccine production proposed a Covid–Technology Access Pool. However, the initiative largely failed as vaccine companies refused to participate.

The Proposal
In October 2020, India along with South Africa, at World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPs) council meet, proposed to temporarily suspend the protection of Intellectual Property (IP) rights pertaining to the Covid-19 vaccine and drugs.

Proponents To Relinquish IP Rights
The India-South Africa proposal was roughly backed by over 100 nations.

Fundamental Argument:

  • The patent holders have the exclusive right to manufacture, sell, and use the vaccine/drug for the entire term of 20 years from the date of its filing.
  • IP rights could restrict the supply of vaccines and drugs. Thus, only by suspending the TRIPS agreement a ‘fair, equitable and affordable access’ to Covid-19 products can be ensured.

At present, the annual global vaccine production capacity is 3.5 billion doses. While to vaccinate 70% of the world’s population,11 billion doses are required. A significant increase in production is the need of hour to control Covid 19.

As Reported In WSJ:
Pharmaceutical firms in developing nations like Bangladesh, India, South Africa, and Senegal say that they have the capacity to produce vaccines within a few months if Western manufacturers license or share their technology.

Opposition To Waiver

  • Vaccine makers which are already ramping up production believe that squashing IP will not work to overcome supply shortage in the short term.
  • Reason? Contract producers are not well versed with the new technology.
  • Ugur Sahin, CEO of BioNTech said that it would take a year to master the RNA technology and ensure quality control, with others saying that it would take away resources from existing vaccine production.

What About Bharat Biotech’s Covaxin?

  • Covaxin is indigenously developed by Bharat Biotech in collaboration with Indian Council of Medical Research (ICMR) and National Institute of Virology.
  • Covaxin is an Indian Intellectual Property and hence the scope of TRIPs is not applicable if India want to license it to other Indian firms.
  • So far, Indian government has granted the license to Haffkine Bio-Pharmaceutical Corp.
  • However, the firm will take at least a year to get the first Covaxin jab out of its factory owing to the mandatory ‘Biosafety level-3’ production facility required.

In News
On 6th May, 2021 the US finally agreed to temporarily suspend the IP rights. However, the statement released said that US will participate in ‘text based negotiations’ and ‘the entire process might take time’. Experts believe that the process will go on for so long that the emergency is over and there’s no longer a need to share IP.

  • Jonas Salk was the creator of one of the world’s first successful Polio Vaccines. In order to increase distribution globally, he did not patent or make a profit out of the vaccine.
  • Edward Jenner created the smallpox vaccine, the first ever vaccine. He is often regarded as the Father of Immunology.
  • The term vaccine and vaccination from the words ‘Variolae vaccinae’. It mean ‘smallpox of the cow’.

Where Can We Expect India’s First Lithium Refinery?

Where Can We Expect India’s First Lithium Refinery?

For its lithium battery needs, India was relying on imports from China, Hong Kong, and Vietnam over the years. So India’s discovery of local lithium deposits in Karnataka has stirred considerable interest this year. Let’s see the progress on the plans of India for the very first lithium refinery, and how it will help us level up in the EV game.

Crux of the Matter

Lithium Deposits Found
The government announced this year that lithium deposits worth 1,600 tonnes were found in Mandya district, Karnataka.

What Does DAE Say?

Unless a proper technology/method is available to profitably extract lithium from its ore, the real benefit of exploration may not be there.

As per Department of Atomic Energy release

Who Is Working On A Local Refinery?
In May 2020, Manikaran Power Limited had announced the launch of a feasibility study, with the help of Australia’s Neometals Limited. To set up a lithium hydroxide refinery in India, they wanted a capacity of 20,000 tonnes per annum, lithium carbonate equivalent.

How Will It Benefit Us?
Manikaran’s director, Jasmeet Singh Kalsi, had said that the proposed lithium refinery would help develop domestic manufacturing capabilities for lithium-ion batteries. This will strengthen India’s push for electric-vehicle manufacturing.

Where Will The Plant Be Set Up?
Gujarat is the tentative location. The state offers advantages like the availability of chemical reagents, gas, good port and road connectivity, and availability of basic infrastructure for the project’s operation.

What’s Next?
The power trading company has reached out to Government agencies for specific support, like Capital Subsidies, Duty exemptions on imported materials, and Tax Breaks to be at par with other global lithium processors.

  • Akira Yoshino created a prototype of the Lithium-ion battery in 1985.  Eventually, Sony along with the Asahi Kasei team led by Yoshio Nishi developed the commercial Li-ion battery in 1991.
  • Lithium is the lightest metal. It is one of the most reactive elements due to its unstable state.
  • Lithium salts are commonly used for psychiatric medications. They are used to treat bipolar disorders and major depressive disorders.

An Algorithm Trader Who Single-Handedly Caused The ‘Flash Crash’

Flash Crash: An Algorithm Trader Who Single Handedly Crashed The US Market

11 years ago, on this day the US Market faced one of the most unprecedented events in its history of trading. Popularly known as Flash Crash, it is an event where market indices and stocks heavily plummet and then rebound quickly, all owing to ‘high-frequency trading’. It erased $1 trillion of market value in a single day! Read the story to find out how one guy did it all.

Crux of the Matter

What Is Flash Crash?
On May 6, 2010, major US Stock Indices including Dow Jones Industrial Average, S&P 500, and Nasdaq plummeted and recovered within an hour. Globally, it is regarded as the one of the most volatile trading days. Even though the indices rebounded the same day, the crash erased $1 trillion in market value.

Events As They Happened
The morning of May 6, 2010 was bearish due to the deteriorating financial situation of Greece and the upcoming elections in UK. Major equity and future indices were already down by 4% in the afternoon.

The Crash
Shortly after 2:30 PM EST, the markets became extremely turbulent. In mere 10 minutes, Dow Jones Industrial Average fell more than 1,000 points (pts), losing almost 9% of its value. Simultaneously, the equity market dropped by an additional 600 pts in 5 minutes, totaling the loss of 1000 pts. Post which, in just 20 minutes, the market regained most of the loss.

Driving Force Behind Such Volatility
In 2015, the Commodities Futures Trading Commission (CFTC) filed a civil complaint alleging that a man named Navinder Sarao manipulated the Chicago Mercantile Exchange’s (CME) e-mini futures contract by using spoofing tactics that led to the stock fall.

Let’s break it down!

  • CFTC: US’ derivatives markets regulator.
  • E-mini futures contracts: These are electronically traded, are listed on CME, and represent 1/5th of a standard S&P 500 futures contract.
  • Spoofing: A market manipulation technique to place and cancel hundreds of thousands of orders without executing any of them. A few market regulators also call it layering.

Filling an order book with sales order is not illegal. CFTC alleged that Sarao created a false supply to push the market down. He placed orders in a way they got cancelled as soon as the market came close to it. More than anything, it was the size of the order that effected. On May 6, Sarao put in orders worth $170-$200 million until afternoon – this amount included 20-29% of the sell-side order book. The orders were replaced/modified more than 19,000 times before being cancelled.

The Manipulation
Sarao sent large sell orders in the e-mini futures contract using layering algorithm to lower their prices. He repeatedly sold the e-mini contracts and bought them back at a lower price. He then turned the layering algorithm off, due to which prices rebounded and he sold the contracts at the higher price. He earned $6.4 million, or $530,000/day in 12 days.

  • Berkshire Hathaway is the most expensive stock in the World. Listed on NYSE, each share of the company costs 4,28,517.25 USD as of 6th May, 2021.
  • JP Morgan Chase is one of the largest investment Banks in the world. It is categorised as a Systemically Important Financial Institution (SIFI) which is also colloquially termed as “too big to fail”.
  • First published in 1949, The Intelligent Investor is a book written by Benjamin Graham. It is a widely acclaimed book on value investing.