China has expressed regret after what it called a civilian airship entered US airspace in the state of Montana. AP
China has expressed regret after what it called a civilian airship entered US airspace in the state of Montana. AP
China has expressed regret after what it called a civilian airship entered US airspace in the state of Montana. AP
China has expressed regret after what it called a civilian airship entered US airspace in the state of Montana. AP

Blinken delays trip to China after 'surveillance balloon' spotted over US


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Secretary of State Antony Blinken will delay his trip to Beijing after the military spotted a suspected spy balloon drifting over Montana, a US official has said.

Mr Blinken did not want to blow the situation out of proportion by cancelling his visit, but also did not want the balloon incident to dominate his meetings with Chinese officials, a high-ranking US official said in a call with reporters.

"I spoke this morning with Director of the CCP [Chinese Communist Party] Central Foreign Affairs Office Wang Yi to convey that, in light of China's unacceptable action, I am postponing my planned travel this weekend to China," Mr Blinken said.

He added that the US had been in repeated communications with Chinese officials over the issue.

The postponement of Mr Blinken's trip, agreed to in November, will be a blow to those on both sides who saw it as an overdue opportunity to stabilise an increasingly fractious relationship.

China on Friday said the high-altitude balloon that the Pentagon was tracking over US airspace is being used for weather research and had been inadvertently blown off course.

The claim came after the Pentagon on Thursday said it was monitoring the balloon as a potential spying vessel. The incident has heaped fresh strain on already tense relations between Beijing and Washington.

It was spotted on the Canadian border earlier in the week and the balloon later entered US airspace in the state of Montana.

Montana is one of the largest states in the US and also one of the least populated. Malmstrom Air Force Base in Cascade County is home to one of three active nuclear missile silos in the country.

The US “detected and is tracking a high-altitude surveillance balloon that is over the continental United States right now”, Pentagon spokesman Brig Gen Pat Ryder said on Thursday.

Malmstrom Air Force Base, Montana - in pictures

  • An aerial view of Malmstrom Air Force Base in Cascade County, Montana. Photo: Public Domain
    An aerial view of Malmstrom Air Force Base in Cascade County, Montana. Photo: Public Domain
  • Pilots fly their UH-1N Iroquois over a mountain range near Malmstrom Air Force Base. Photo: US Air Force
    Pilots fly their UH-1N Iroquois over a mountain range near Malmstrom Air Force Base. Photo: US Air Force
  • An airman at Malmstrom works on an intercontinental ballistic missile during a Simulated Electronic Launch-Minuteman test. AP
    An airman at Malmstrom works on an intercontinental ballistic missile during a Simulated Electronic Launch-Minuteman test. AP
  • Airmen inspect an intercontinental ballistic missile during a test at a launch facility. AP
    Airmen inspect an intercontinental ballistic missile during a test at a launch facility. AP
  • The internals of an intercontinental ballistic missile at a launch facility near Malmstrom Air Force Base. AP
    The internals of an intercontinental ballistic missile at a launch facility near Malmstrom Air Force Base. AP
  • Technicians work on an intercontinental ballistic missile at a launch facility near Malmstrom Air Force Base. AP
    Technicians work on an intercontinental ballistic missile at a launch facility near Malmstrom Air Force Base. AP
  • Technicians connect a re-entry system to a spacer on an intercontinental ballistic missile. AP
    Technicians connect a re-entry system to a spacer on an intercontinental ballistic missile. AP

The Pentagon on Friday confirmed that the balloon, which is currently flying at an altitude of more than 18,000 metres, is travelling “eastward” and presently over the “centre of the continental US".

Brig Gen Ryder would not go into any specifics a the balloon, but acknowledge it was fairly large.

The US decided not to shoot down the balloon, which was potentially flying over sensitive sites, because of concerns that falling debris could hurt people on the ground.

“Once the balloon was detected, the US government acted immediately to protect against the collection of sensitive information,” Brig Gen Ryder said. Similar balloon sightings have occurred in recent years, he added.

  • Chinese President Xi Jinping hosted US President Joe Biden in Beijing in 2011 when both men were vice presidents. Getty
    Chinese President Xi Jinping hosted US President Joe Biden in Beijing in 2011 when both men were vice presidents. Getty
  • In 2021, the two leaders met for more than three hours and discussed trade, climate change, Taiwan and other issues. Getty
    In 2021, the two leaders met for more than three hours and discussed trade, climate change, Taiwan and other issues. Getty
  • The Pentagon said on February 2 it was tracking a suspected Chinese spy balloon flying high over the US, reviving tension between the two countries. AFP
    The Pentagon said on February 2 it was tracking a suspected Chinese spy balloon flying high over the US, reviving tension between the two countries. AFP
  • Mr Biden speaks virtually with Mr Jinping from the White House in Washington in November 2021. Reuters
    Mr Biden speaks virtually with Mr Jinping from the White House in Washington in November 2021. Reuters
  • US Secretary of State Antony Blinken, centre right, and Chinese Foreign Minister Wang Yi, centre left, attend a meeting in Nusa Dua, Bali, Indonesia, in 2022. Reuters
    US Secretary of State Antony Blinken, centre right, and Chinese Foreign Minister Wang Yi, centre left, attend a meeting in Nusa Dua, Bali, Indonesia, in 2022. Reuters
  • Mr Blinken and Mr Yi in 2022 in Bali. AFP
    Mr Blinken and Mr Yi in 2022 in Bali. AFP
  • Mr Blinken scrapped a long-planned Beijing trip due to a suspected Chinese spy balloon hovering over Montana. AFP
    Mr Blinken scrapped a long-planned Beijing trip due to a suspected Chinese spy balloon hovering over Montana. AFP
  • Chinese Ministry of Foreign Affairs spokesman Wang Wenbin criticised a speech made by Mr Blinken in May last year focused on countering China economically and militarily, saying the US was seeking to smear Beijing's reputation. AP
    Chinese Ministry of Foreign Affairs spokesman Wang Wenbin criticised a speech made by Mr Blinken in May last year focused on countering China economically and militarily, saying the US was seeking to smear Beijing's reputation. AP

In a statement on Friday, China's Ministry of Foreign Affairs said the balloon was civilian airship used mainly for meteorological research.

The ministry said the airship has limited “self-steering” capabilities and had “deviated far from its planned course” because of winds.

“The Chinese side regrets the unintended entry of the airship into US airspace due to force majeure,” the statement said, according to The Associated Press, citing a legal term used to refer to events beyond one’s control.

In response, a US official on Friday said China's statement of regret was "noted", but the presence of the balloon in US airspace is "a clear violation of our sovereignty as well as international law, and it is unacceptable that this has occurred".

“We have concluded that the conditions are not right at this moment for Secretary Blinken to travel to China," the official said.

The official added that there had been hopes for a "broad, substantive agenda" and "constructive engagement" on issues pertaining to the US-China bilateral relationship.

"There is a Chinese high altitude surveillance balloon currently over the United States is a clear and unacceptable violation of US sovereignty and we have made that crystal clear," the official continued.

Secretary of State Antony Blinken's visit to Beijing, now postponed, was announced after US President Joe Biden and Chinese President Xi Jinping met on the sidelines of the G20 summit in Indonesia last year. AP
Secretary of State Antony Blinken's visit to Beijing, now postponed, was announced after US President Joe Biden and Chinese President Xi Jinping met on the sidelines of the G20 summit in Indonesia last year. AP

The official added, however, that: "I'm confident that our channels of communication will remain as important as ever and those channels do remain open."

The sighting comes at a time of high US-China tension over military build-up in Asia as well as intensifying economic and technology competition, though Washington and Beijing have begun to warm up to economic talks.

The US “continues to track and monitor it closely”, Brig Gen Ryder said.

“The balloon is currently travelling at an altitude well above commercial air traffic and does not present a military or physical threat to people on the ground,” he added.

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Company%C2%A0profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ELeap%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EMarch%202021%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Ziad%20Toqan%20and%20Jamil%20Khammu%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%3A%3C%2Fstrong%3E%20Undisclosed%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3ESeven%3C%2Fp%3E%0A

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: February 04, 2023, 5:26 AM