Diplomacy
UK, China relaunch economic dialogue to boost trade
Seeking to capitalize on the growth of the world’s second-largest economy and the further opening of its financial markets, the UK has relaunched a platform for future “respectful and consistent” relations with China.
On Saturday, Chancellor of the Exchequer Rachel Reeves met with Chinese Vice Premier He Lifeng in Beijing for the renewal of the UK-China Economic and Financial Dialogue, which had previously been held annually and was last held in 2019. Both sides agreed to deepen cooperation in areas such as financial services, trade, investment, and climate to support secure growth.
A number of British financial services companies with extensive operations in China, including HSBC, Standard Chartered, Prudential, Schroders, Fidelity International, and London Stock Exchange Group, joined the Minister’s business delegation.
After the event, the delegation visited Shanghai, the financial center of the country.
The British government said in an online statement that through this “pragmatic cooperation,” the two countries had secured deals worth £600 million (US$732.3 million) for the UK over the next five years, which it estimated could eventually be worth up to £1 billion.
Chinese Foreign Ministry spokesman Guo Jiakun told a press conference on Monday that the dialogue was “conducive to development” for both sides. He added that both sides were “against divergence” and would “reduce barriers to investment,” describing the financial sector as “the crux” of the relationship.
Cooperation in financial services
“Financial services cooperation is probably the easiest method for bilateral engagement,” said Xu Tianchen, a senior economist at market research firm Economist Intelligence Unit.
Xu Tianchen, who heads the general office of the Central Finance Commission, has an important role in Beijing’s financial policymaking, he told the South China Morning Post.
“Chinese enterprises’ demand for financial services is growing rapidly as they expand globally, and the UK is a natural center for this,” Xu said.
In 2013, London became one of a handful of offshore centers allowed to process investments in China’s controlled yuan currency, bringing the UK closer to the fast-growing Chinese market than the rest of Europe. Chinese state-owned banks were also allowed to increase their activities in the UK at the time.
And in London this year, China announced plans to issue its first overseas sovereign green bond, which will finance environmentally friendly projects.
The British Chamber of Commerce in China said the engagement was related to the confidence of business people in the world’s second-largest economy.
In search of new investment
China is keen to find new sources of investment and trade after nearly seven years of friction with the US, its largest single trading partner, and ahead of new tariffs on Chinese imports after US President-elect Donald Trump took office on January 20.
Andrew Collier, China analyst at economic research firm GlobalSource Partners, said China needs Western countries to sustain trade with its own economy.
The British government announced at the weekend that the UK and China had agreed to remove trade barriers with a package “led by pork, wool, poultry, and pet food.”
China has also agreed to “continue to liberalize” sectors that “restrict foreign investment” such as education and culture.
Labor seeks more economic engagement with China
According to statistics from the UK Department for Business and Commerce, there was a 20.3 percent fall in the total trade volume between the two countries of £87.7 billion in the 12 months ending in June.
As of 2022, the stock of British direct investment in China was £11.2 billion, while China’s stock was £4.3 billion—less than 1 percent of the total for both sides.
But the Chatham House think tank said in a commentary published on Thursday that the current Labour government was seeking greater economic engagement with China than its predecessor.
Alicia Garcia-Herrero, chief Asia-Pacific economist at French investment bank Natixis in Hong Kong, said Britain also faces uncertainty about how Trump will behave while in office. Concerns are high about the possibility of the US extending tariffs to UK shores.
In addition to this concern, a large number of companies exited the London Stock Exchange last year in search of higher value or moved their main listings elsewhere, leading to the market’s worst outflow since the 2009 global financial crisis. Bond markets in the UK have been volatile amid concerns over the government’s spending plans.
“If your financial sector is hurting, [the visit to China] makes a difference,” Garcia-Herrero said.
Diplomacy
South Korea pulls part of embassy staff from Ukraine amid POW dispute
The South Korean government has decided to withdraw part of its embassy staff from Ukraine.
According to the Yonhap news agency, Foreign Ministry spokesman Park Doo-sun cited the Kyiv administration’s failure to take “positive steps” in the dispute that began with the leak of information concerning the handover of North Korean prisoners of war as the justification for the move.
The spokesman also listed the ongoing threat of air strikes, which complicates the safety of diplomats, among the reasons.
Following the withdrawal of part of the personnel, essential diplomatic contacts will continue under the leadership of the charge d’affaires ad interim to Ukraine. All consular staff tasked with protecting South Korean citizens will remain in Ukraine.
Prior to this move, the Seoul administration decided on 8 October to withdraw its ambassador. The Foreign Ministry stated at the time that it was ready to continue consultations with Kyiv to resolve the emerging issues constructively.
Tensions between the two countries began with a speech delivered by Ukrainian President Volodymyr Zelenskyy at the United Nations General Assembly in September.
Zelenskyy announced that two captured soldiers from the North Korean army had been handed over to South Korea.
South Korean President Lee Jae-myung, meanwhile, accused Kyiv of breaching a confidentiality agreement.
Lee said the disclosure of this information endangered the prisoners’ families and stability on the Korean Peninsula.
Seoul expects a public apology
Dmytro Lytvyn, an adviser to the Ukrainian president, denied the existence of a confidentiality agreement.
The South Korean Foreign Ministry summoned Ukrainian Charge d’Affaires Andriy Veshkin on 28 September and issued a note of protest against Lytvyn’s remarks.
President Lee Jae-myung warned in a statement on 2 October that they would take additional measures against Kyiv if Ukrainian authorities did not acknowledge the agreement and make a public apology. Lee stated that Ukraine itself had initially requested that the transfer of the prisoners be kept confidential.
Ukrainian Foreign Ministry spokesman Heorhii Tykhyi said the dispute stemmed from differing interpretations of the confidentiality regime.
Tykhyi noted that Seoul, based on its constitution which recognises the entire Korean Peninsula as its own territory, requested that the prisoners be handed over “like its own citizens”.
Describing the handover as a “gesture of goodwill”, Tykhyi stated that they were conducting closed-door negotiations to resolve differences of opinion.
Ambassador Park Ki-chang returned to Seoul on 10 October. According to a report by The Korea Times newspaper citing the ministry, recalling the ambassador served as a diplomatic protest against the leak of information regarding the prisoners.
The newspaper wrote that South Korea had last taken a similar step in 2008 by withdrawing its ambassador to Japan.
Moscow warned foreign diplomats
On 3 October, the Russian Foreign Ministry reiterated its warning to foreign nationals, including diplomatic mission staff, against remaining in Ukraine.
The ministry recalled its advice to leave Kyiv, citing ongoing strikes against military targets.
The ministry noted that those who failed to heed the warnings would bear responsibility for the potential consequences.
Kremlin spokesman Dmitry Peskov said in a statement on 24 September that they had no information regarding Kyiv handing over two North Korean prisoners of war to Seoul.
Peskov, noting that prisoner matters fall under the authority of the Defence Ministry and intelligence services, said, “Contacts through the special services are continuing.”
Diplomacy
Ex-BND head Hanning tied to former Mossad chief amid spy inquiry
August Hanning, who led Germany’s Federal Intelligence Service (BND) between 1998 and 2005, was arrested on 6 October on allegations that he obtained roughly 2,000 classified agency documents and used them during contacts with intelligence officers from a foreign state.
Accused of high treason and espionage on behalf of a foreign intelligence agency, the former spy chief is alleged to have procured the documents from former BND employee Manfred D.
Prosecutors stated that the leaked records included internal briefing notes presented to senior German officials, though the Berlin government has not yet publicly disclosed which country received the classified data.
According to an exclusive report by Jake Green for The Cradle, seized email exchanges revealed extensive ties between the arrested Hanning and former Mossad director Danny Yatom.
The correspondence shows that the two former intelligence directors built an ongoing network of contacts following their public service, combining commercial ventures, efforts to secure political influence, and intelligence links.
This dynamic has triggered debate that using personal connections and official access for private gain has left Germany’s intelligence apparatus vulnerable.
Intelligence notes for 10,000 euros and campaign proposals
According to the reviewed emails, Hanning told Yatom in a 2018 message that he could prepare an “overall assessment based on information obtained from senior German officials and intelligence agencies” concerning an unidentified candidate.
The former BND head committed to completing the report by 13 July in exchange for 10,000 euros.
Contacts between the two men subsequently expanded to cover domestic political processes in Germany. Ahead of the September 2021 federal election, Yatom asked Hanning to approach leading candidates.
Describing CIY Global as a “political campaign company”, the former Mossad chief noted that he aimed to introduce its capabilities to German politicians, and he mentioned his intention in the same exchange to transfer documents concerning a cybersecurity firm.
Cybersecurity partnership and surveillance operations across Europe
The partnership between Yatom and Hanning reached beyond political lobbying initiatives into the cybersecurity sector.
Hanning reportedly served as a consultant for World Health Energy Holdings, a cybersecurity company linked to Yatom.
Firms of this type, established or managed by former intelligence personnel, provide commercial platforms on the international market for Israeli-origin surveillance, cyber intelligence, and political influence capabilities.
The operational presence of private Israeli-based surveillance technologies across Europe has recently entered judicial records through scandals in Poland, Spain, and Greece.
Polish prosecutors announced on 12 October that data collected under the previous government via Pegasus spyware against political opponents had been transferred out of the country, adding that manufacturer NSO Group maintained access to the technical infrastructure.
In Spain, the 2022 CatalanGate investigation established that at least 65 people, including politicians, lawyers, and civil society representatives, were targeted using Pegasus or Candiru software, with Citizen Lab researchers publishing strong evidence linking the operation to Spanish authorities.
In Greece, the surveillance operation targeting journalist Thanasis Koukakis and Member of the European Parliament Nikos Androulakis was determined to have used Predator software, linked to Intellexa, a company founded by former Israeli intelligence officer Tal Dilian.
In the German espionage investigation, the traffic between Hanning and Yatom involving paid reporting, contacts with electoral candidates, and commercial partnerships does not yet provide conclusive legal evidence regarding the final destination of the roughly 2,000 classified documents.
Nevertheless, the disclosed correspondence gives German investigators a concrete line of inquiry to assess whether classified state secrets reached commercial networks tied to Israeli intelligence.
Diplomacy
Trump dismisses US envoy to Greece Kimberly Guilfoyle
US President Donald Trump has dismissed Kimberly Guilfoyle, the US ambassador in Athens, following serious press reports concerning her conduct.
White House Press Secretary Katie Zacharia told reporters during her first briefing that Guilfoyle had been asked to resign.
“She was doing a good job, but we didn’t like what we read in the press,” Trump said. “She was not a member of my family. I think she dated my son a long time ago.”
In a social media post, Guilfoyle stated: “These claims are unfounded, and I will resolutely defend my name, reputation, and integrity.” She added that she was particularly proud of the embassy’s work.
According to Kathimerini, her removal came as no surprise in Washington. Days of successive disclosures and vigorous exploitation of the matter by Democrats had been inflicting political damage on the White House ahead of the sensitive midterm elections.
The US State Department was instructed not to comment, with crisis management transferred entirely to the White House.
Reports indicate that most of the president’s team swiftly favoured Guilfoyle’s dismissal, while Secretary of State Marco Rubio was reportedly uneasy with the demonstratively warm public welcome she had staged for him.
Democrats on the House Foreign Affairs Committee have called for an investigation.
“Her resignation does not absolve her of responsibility,” the lawmakers wrote, adding: “While American families struggled to make ends meet, she used her position as a Trump administration official to enrich herself.”
Chargé d’Affaires Josh Huck will assume ambassadorial duties until a successor is chosen.
Meanwhile, Guilfoyle’s departure is expected to cause delays in agreements between Greece and the US.
These include the so-called “Rubio package”, comprising approximately $4 billion in arms deals finalised only days before the secretary of state’s arrival.
Several procedural steps still remain before the contracts can be signed.
In Athens, opposition parties are demanding answers. Dimitris Mantzos of PASOK called for a detailed briefing on the agreements reached during Rubio’s visit.
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