China reopens

• Travelers rushed into China as the country ended its quarantine requirement on Sunday. In many cities, the COVID tsunamis are weakening as most people have recovered from the disease. However, the infections could remain high for weeks as the virus spread into city outskirts and rural areas. Countries are still cautious about the expected wave of inbound travelers from China, with Portugal imposing restrictions on passengers from China after the EU issued its recommendation and Thailand resuming COVID requirements for arrivals by airplane.

• Global markets welcome the significant step exiting zero-COVID, with stocks rising on Friday. Back in late last year, the reopening expectation had boosted the outlook of China’s economy in 2023. OECD forecasted a 4.6% of real GDP growth in China next year. Nikkei Asia and Economic Intelligence Unit (EIU) said the growth would be 4.7% and 5.2%. Morgan Stanley foresaw an even more sanguine 2023 with a 5.4% of economic expansion, while J.P. Morgan’s prediction was 4.3% and Goldman Sachs’s 4.5%. Economists also see Hong Kong’s economic growth as likely to outperform Singapore in 2023.

U.S. reduces Taiwan Strait transits

• The number of U.S. naval transits through the Taiwan Strait last year was the lowest since 2018, Bloomberg found. U.S. warships only sailed through the strait nine times in 2022, compared with 12 in 2021, 13 in 2020, and 10 in 2019. Meanwhile, the Chinese military sent around 1,700 warplanes into the “air-defense identification zone” (ADIZ) claimed by Taipei last year. The so-called ADIZ was drawn according to the “Taiwan Strait median line.” Beijing sees the “ADIZ” as illegal and does not acknowledge the “median line.”

U.S., Japan launch task force on labor standards

• The U.S. and Japan agreed to launch a Task Force on the Promotion of Human Rights and International Labor Standards in Supply Chains. United States Trade Representative (USTR) Katherine Tai and Japanese Minister for Economy, Trade, and Industry Nishimura Yasutoshi signed a Memorandum of Cooperation (MOC) on Friday. "We must address forced labor at each stage of our supply chains," the USTR said. "Whether it's the cotton in the clothes we wear or metals in the cars we drive, such abuses threaten to undermine the very foundations of our system." China, accused by some countries of alleged human rights abuses in Xinjiang, is seen as the primary target of the task force. Tai also said the two countries would invite others to join the effort.

McCarthy became Speaker

• Rep. Kevin McCarthy (R-CA) became U.S. House Speaker with 216 votes after six republicans gave up voting in the 15th ballot, reducing the number of votes cast to 428. McCarthy and his allies successfully flipped 10 Representatives on the last day of voting.

• Four of those who did not vote for McCarthy were among the five most outspoken lawmakers against McCarthy’s speakership. The remaining key McCarthy critic Rep. Ralph Norman (R-SC) changed his stance to support McCarthy after reaching a deal on a federal spending cut. The other two who did not vote in the last round were Rep. Lauren Boebert (R-CO) and Rep. Eli Crane (R-AZ). On Tuesday, Boebert told Fox News that McCarthy "smugly refused" her “common sense” proposals on border security and term limits. The 43-year-old Crane is a freshman in Congress.

• All these six Representatives are members of the Freedom Caucus, the most conservative bloc of House Republicans, and voted to change the result of the 2020 presidential election. Except for Andy Biggs (R-AZ), all of them were endorsed by Trump in last year’s mid-term elections.

Jan.6 déjà vu in Brazil

• The Brazilian government arrested at least 200 people and put down the riots in the country’s government office. Thousands of supporters of the far-right former President Jair Bolsonaro stormed Congress, the presidential palace, and the supreme court on Sunday to protest Bolsonaro’s loss in the election. The scenes were similar to the Jan.6 attack at Capitol Hill in 2021. Luiz Inácio Lula da Silva, a left-wing political veteran, defeated Bolsonaro and became president on January 1.