Blinken, Harris Host Luncheon For Australian PM Anthony Albanese At State Department
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China’s top diplomat is meeting high-level U.S. officials, possibly including President Joe Biden, on a highly watched visit to Washington that could help stabilize U.S.-China ties by facilitating a summit between Biden and Chinese President Xi Jinping.
Wang Yi, the Chinese foreign minister, met Secretary of State Antony Blinken on Thursday afternoon, shortly after he landed for the three-day visit and quickly raised hopes that the relationship can be steadied.
Before going into their closed-door meeting, Wang said China would seek consensus and cooperation to “push the relationship as soon as possible back to the track of healthy, stable and sustainable development.”
Before the meeting, U.S. officials said they would press Wang on the importance of China stepping up its role on the world stage if it wants to be considered a responsible major international player. The U.S. has been disappointed with China over its support for Russia in the war against Ukraine and its relative silence on the Israel-Hamas war.
China should use whatever ability it has as an influential power to urge calm” in the Middle East, said State Department spokesman Matthew Miller. “We know China has relationships with a number of countries in the region, and we would urge them to use those relationships, the lines of communication they have, to urge calm and stability.”
U.S. officials believe the Chinese have considerable leverage with Iran, which is a major backer of Hamas.
In a readout after the meeting, the State Department said the two men addressed “areas of difference” and “areas of cooperation,” while Blinken “reiterated that the United States will continue to stand up for our interests and values and those of our allies and partners.”
China’s Foreign Ministry said, “The two sides had an in-depth exchange of views on China-U.S. relations and issues of common concern in a constructive atmosphere.”
Wang is scheduled to meet again Friday with Blinken as well as national security adviser Jake Sullivan. They are expected to urge China to play a constructive role in both the Israel-Hamas and Russia-Ukraine wars.
The U.S.-China relationship began to sour in 2018 when the Trump administration slapped hefty tariffs on $50 billion worth of Chinese goods.
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- Hot growth summer: How the sure-bet recession was foiled
This time a year ago, the Federal Reserve was raising interest rates three-quarters of a point at a time, big-name companies were announcing layoffs, and a 2023 recession appeared, to many analysts (and, we confess, economics writers) to be baked into the cake.
Why it matters: There is more underlying strength in the U.S. economy, and especially consumer demand, than nearly anybody thought. That has helped boost growth and the job market, but makes future progress in bringing down inflation less certain.
Driving the news: Last quarter saw 4.9% annual rate of GDP growth, the strongest since late 2021. That followed solid 2-ish% growth readings in Q1 and Q2.
- As Treasury Department officials Eric Van Nostrand and Tara Sinclair write in a new post, the United States is the closest among major advanced economies to returning to its pre-pandemic growth trend.
- "Even today, most advanced economies are below the trend growth path that they were on before the pandemic – except the United States, which is on track this year to return to reach the level that would have been predicted by the pre-pandemic trend," they write.
By the numbers: The sizzling GDP number was boosted by a surge in business inventories, which contributed 1.3 percentage points to overall growth but tends not to be a good signal about the underlying trend.
- But final sales to private domestic purchasers, which captures the underlying demand trend, were up at a 3.3% annual rate, comfortably above the long-term trend.
Yes, but: There are signs the job market is softening and that Americans' spending has been fueled by falling savings rates. That could bode poorly for a consumer-driven expansion in the quarters ahead.
- Meanwhile, high interest rates seem to be exerting a meaningful drag on business investment spending. Nonresidential fixed investment was actually down slightly, off an annualized 0.1%, in Q3.
What they're saying: EY-Parthenon chief economist Gregory Daco called it the "summer of 'LOL.'"
- "While these signs of economic strength will fuel speculations that the economy is reaccelerating, we do not expect such strong momentum will be sustained," he wrote in a note. "[W]e believe cooler days are on the horizon."
- "Cost fatigue, rising debt servicing costs and slowing job growth are about to be felt more widely by consumers and businesses. In that regard, the broad-based pullback in business equipment investment is a cautionary tale."
The bottom line: There is remarkable underlying strength in the economy that has prevented the much-predicted recession of 2023 from occurring — but no assurance that good fortune will continue in 2024.
Why a stellar economic report may spell peak 'Bidenomics'
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- Biden's post-war plan: New talks on Israel-Palestine two-state solution
President Biden is signaling for the first time what his plan would be for the day after the war in Gaza — a new generation of peace talks in the Middle East on a "two-state solution" in which Israel would co-exist with a Palestinian state.
Why it matters: Biden's call for a "concentrated effort" to begin talking about a two-state solution represents a pivot for the president.
- So far he's focused largely on trying to avoid conflict between Israelis and Palestinians in Gaza and the West Bank — and securing a big peace deal between Israel and Saudi Arabia.
- But after Hamas' Oct. 7 attack on Israel, there's no going back to the "status quo" between Israel and the Palestinian Authority as it stood on Oct. 6, Biden said Wednesday during a news conference with Australian Prime Minister Anthony Albanese.
- "Hamas can't continue to terrorize Israeli citizens .... When this crisis is over there has to be a vision of what comes next, and in our view it has to be a two-state solution," Biden said.
- "It means a concentrated effort to put us on a path towards peace."
During a phone call with Israeli Prime Minister Benjamin Netanyahu on Wednesday, Biden noted the importance of a permanent pathway to peace for Israelis and Palestinians after this crisis, the White House said.
- Biden emphasized to Netanyahu that Hamas does not represent the Palestinian people or their legitimate aspirations for a state of their own.
Reality check: A two-state solution has been an elusive goal for many Middle East diplomats for decades, and it's unclear whether the post-war political situations for Israel, the Palestinian Authority and neighboring Arab nations will allow any renewed peace process — particularly such an ambitious one.
- The animosity in the region already seems to be its worst since the Palestinian uprising known as the second Intifada, two decades ago.
- The feeling of insecurity of the Israeli side and the rising number of casualties on the Palestinian side could undermine the parties' appetites for compromise.
- More than 6,400 people have been killed in Gaza, the Palestinian Health Ministry claims, though Biden disputed that figure Wednesday.
Another factor: Israel's current government is the most far right in the nation's history, and most of its officials oppose a two-state solution or any diplomatic engagement with the Palestinians.
- Any new Israeli government formed after the war is likely to be pressured by Israeli citizens not to agree to any plan they believe could jeopardize the security of the Jewish state.
The big picture: Biden is the first U.S. president in three decades to begin his term without trying to push for some type of two-state solution. He said initially that the political conditions weren't right.
- Instead, he mostly has tried to contain the Israeli-Palestinian conflict — and tried to preserve the prospect of a two-state solution for the future.
- During the past year, Biden has sought to ease tension in the Middle East by pushing for a mega deal with Saudi Arabia that would include a historic peace agreement between the kingdom and Israel.
- U.S. officials said they'd been making progress in the weeks before the war — and had begun discussing with Saudi Arabia, Israel and the Palestinian Authority about what a Palestinian component of such an agreement might look like.
In a meeting in New York several weeks before the war, Biden and Netanyahu agreed that the Palestinian component of the mega deal should preserve the possibility of a two-state solution.
- That meant Israel would commit to avoid making a two-state solution harder to achieve in the future — but not actually work toward achieving it.
Biden said Wednesday that although he doesn't have proof, his "instinct" tells him Hamas attacked Israel to bust up the Israel-Saudi deal, which would include other Arab nations.
- "We need to work toward greater integration (in the region) for Israel — while insisting that the aspirations of the Palestinian people will be part of this future as well," Biden said.
State of play: On Tuesday Biden spoke by phone with Saudi Crown Prince Mohammed Bin Salman (MBS). It was their first call since the Hamas attack.
- The White House said both leaders "affirmed the importance of working towards a sustainable peace between Israelis and Palestinians as soon as the crisis subsides."
- The Saudi royal court said MBS told Biden of the need to "restore the peace track to ensure that the Palestinian people obtain their legitimate rights and in order to achieve fair and comprehensive peace".
What to watch: Secretary of State Tony Blinken told a group of American-Jewish leaders on Monday that the State Department had begun working on a post-war strategy for Gaza and the West Bank, two people who attended the meeting told Axios.
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The Biden administration is ramping up efforts to harden defenses around the U.S. health care infrastructure, releasing an updated cyber "toolkit" to help the sector better defend against hackers.
Why it matters: Health care is a high-value, target-rich industry facing increasing attacks, and the problem is increasingly being recognized as a threat to patient safety when providers are forced to divert or shut down care.
Driving the news: Top officials from the Health and Human Services Department and the Cybersecurity and Infrastructure Security Agency (CISA) said Wednesday they have been working to better coordinate and clarify industry guidance.
- They jointly released the toolkit that includes ways for the health sector to mitigate risk, such as vulnerability scanning, best practices, and a framework for accessing and improving cyber resiliency.
- It's part of a broader set of tools HHS has been releasing over the last year to help improve cyber hygiene across the sector, said HHS Deputy Secretary Andrea Palm.
- "In cyber, it's hospitals that are on the front lines," said Nick Leiserson of the White House's Office of the National Cyber Director during a roundtable with industry leaders on Wednesday.
Between the lines: This year alone, CISA said it provided pre-ransomware notifications to roughly 65 U.S. health care organizations to stop ransomware encryption and warn entities of early-stage ransomware activity.
- Industry cybersecurity experts have raised alarm over health care's cyber defenses, noting how often health systems had to pay ransoms or sustain massive losses after their computer systems were crippled.
- Smaller health systems are often outgunned compared to larger ones, experts say. But even IT experts at large health systems find themselves confounded by a patchwork of regulations and guidance from state and federal agencies.
The intrigue: Palm mentioned an interesting tactic HHS has also employed in aiding health systems under an attack: It's played matchmaker with peer organizations that have been attacked before.
- The idea, she said, is "that they're not learning all of this from scratch in this fire drill, but that they've got sort of a peer partner that they can talk to about how they've navigated through it," Palm said.