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North Korea vows to dismantle nuclear test site within weeks, invites world press to watch

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North Korea has scheduled the dismantlement of its nuclear test site for sometime between May 23 and 25 depending on weather conditions in order to uphold its pledge to discontinue nuclear tests, state media said on Saturday.

The country’s central news agency said the dismantlement of the nuclear test ground would involve collapsing all of its tunnels with explosions, blocking its entrances and removing all observation facilities, research buildings and security posts.

Journalists from other countries, including the United States and South Korea, will be invited to cover the event.

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Who will be Germany’s next leader after Merkel?

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German Chancellor Angela Merkel during a press conference following a meeting of the German government coronavirus cabinet task force during the second wave of the coronavirus pandemic on November 2, 2020 in Berlin, Germany.

Pool | Getty Images News | Getty Images

Germany moved another step closer to a post-Angela Merkel era at the weekend, with her ruling Christian Democratic Union electing a new chairman.

Armin Laschet beat off competition from conservative rival Friedrich Merz to win 521 votes to 466 in the party leadership election that took place online due to the coronavirus pandemic.

Laschet, who leads the North Rhine-Westphalia region, is seen as a centrist and able to unite the ruling CDU’s broad church of members, from conservatives and pro-business members of the party to environmentalists, and is seen as a continuity candidate following Merkel’s pragmatic approach.

Still, while winning the party leadership puts Laschet in the ring as a possible contender to become Germany’s next chancellor, it’s by no means a done deal.

What to watch for?

In the next few months, Laschet will need to decide with Markus Söder, the leader of the CDU’s Bavarian sister party called the Christian Social Union, who will be the CDU-CSU’s joint candidate for chancellor.

Whether the candidate will become chancellor will then depend on the outcome of the national election on September 26, which also marks the end of Merkel’s fourth and final term in office.

As well as Laschet, Söder is a key contender for the chancellery although he has not yet expressed whether he will run. Nonetheless, he remains a popular choice.

A poll published on Sunday by Civey for the Focus Online magazine showed that 43% of Germans would prefer Söder as the candidate to succeed Merkel, with only 12.1% backing Laschet. In third place, with the backing of 8.7% of those surveyed, was Health Minister Jens Spahn, an ally of Laschet.

Mujtaba Rahman and Nas Masraff, managing director and director of Europe research at Eurasia Group, said in a note Saturday that Laschet faces an “uphill battle to prove his strength and leadership over the coming weeks and months.”

“We still think he is the frontrunner in the race (a 55% probability) as he will play hard and won’t give in to Soeder easily. Laschet also has history on his side: The CSU has only put forward a chancellor candidate on two previous occasions to represent the Union parties and both times they were defeated in elections.” However, they added, “Soeder is extremely popular.”

“If this remains the case, the CDU base and the parliamentary group may calculate that they will be better off in September’s elections under Soeder’s leadership and put pressure on Laschet to give up the post.”

Eurasia Group sees a 30% chance that Söder will run for the chancellery candidacy and succeeds. Regardless, they noted that Laschet and Söder “get along pretty well” so any decision is likely to be a smooth rather than disruptive one.

Decisive regional elections

A final decision over who will run as the CDU-CSU candidate is expected to be made in spring, after several prominent regional elections in mid-March.

Jana Puglierin, head of the European Council on Foreign Relations (ECFR) in Berlin, told CNBC Monday that the regional elections in Rheinland-Pfalz (Rhineland-Palatinate) and Baden-Wurttemberg are crucial in determining which candidate is fielded.

“If the CDU does well in these elections, and if Laschet guarantees the backing of the party and brings the different camps (within it) together … then he will be the candidate for chancellor,” she said.

If regional elections did not go well for the CDU, then, Puglierin said, Söder might be the preferred candidacy for chancellor.

Holger Schmieding, chief economist at Berenberg, told CNBC Monday that what investors need to watch out for is not whether Laschet or Söder is the candidate to replace Merkel, but the “tail risk that the conservatives may not be in power at all once Merkel leaves office later this year and that Germany may get a green-red-red coalition instead.”

This would entail a coalition government formed of the Green Party, the Social Democratic Party (currently a junior coalition party with the CDU-CSU) and Die Linke, the Left Party.

“Such a government without the CDU/CSU may harm the economy through some reform reversals and more regulations. As most major fiscal decisions would need to be approved by the upper house of parliament in which the CDU/CSU would still have a veto, the size of any future stimulus and Germany’s support for its European partners would only be affected modestly,” Schmieding noted.

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Samsung related shares plunge after heir Jay Y Lee is sentenced to jail again

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Jay Y. Lee, co-vice chairman of Samsung Electronics, center, wears a protective mask as he is surrounded by members of the media while arriving at the Seoul Central District Court in Seoul, South Korea, on Monday, June 8, 2020.

SeongJoon Cho | Bloomberg via Getty Images

SINGAPORE — Shares of groups related to South Korean-conglomerate Samsung Group plunged on Monday after Samsung heir Jay. Y Lee was sentenced to two and a half years in jail by a South Korean court on Monday.

By Monday’s market close in South Korea, shares of industry heavyweight Samsung Electronics fell 3.41%. after dipping more than 4% earlier in the session.

Samsung C&T’s stock also saw heavy losses, and dropped 6.84%. Meanwhile, Samsung SDI declined 4.21% while Samsung Heavy Industries fell 2.74%. and Samsung Life Insurance slipped 4.96%.

Samsung related shares dragged down South Korea’s broader index, and the Kospi fell 2.33% by the close of the trading day.

Lee’s return to prison came after a retrial of a bribery case involving former President Park Geun-hye, according to local news agency Yonhap.

“In this case, a company’s freedom and right to wealth were violated due to the abuse of power by the former president,” Lee’s lead attorney said in a statement given by Samsung Electronics, according to a CNBC translation.

The 52-year-old Samsung scion was unexpectedly freed from jail in 2018 after a South Korean appeals court suspended his prior jail sentence. He was previously charged with giving 29.8 billion Korean won (around $27 million) worth of bribes and promising to give more, Yonhap reported.

Former president Park recently had her 20-year prison sentence on graft charges upheld, according to Reuters.

— CNBC’s Chery Kang contributed to this report.

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China says it will sanction U.S. officials for ‘nasty’ behavior on Taiwan

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A Chinese and U.S. flag at a booth during the first China International Import Expo in Shanghai, November 6, 2018.

Johannes Eisele | AFP | Getty Images

SINGAPORE — China will impose sanctions on U.S. officials who displayed “nasty” behavior over the issue of Taiwan, the Chinese foreign ministry said on Monday.

The decision was revealed by the foreign ministry’s spokewoman, Hua Chunying, in response to a reporter’s question on what China would do in response to the U.S. lifting restrictions on its relations with Taiwan.

U.S. Secretary of State Mike Pompeo had earlier this month announced that his country will no longer limit contact between its officials and their Taiwanese counterparts. China slammed the decision and vowed to fight back.

China claims Taiwan — a democratic and self-ruled island — as its territory that must one day be reunited with the mainland, and insists that the island has no right to participate in international diplomacy of its own. The Chinese Communist Party has never governed Taiwan.

Experts have warned that Taiwan will remain a contentious issue in the bilateral ties between the U.S. and China. Former Australian Kevin Rudd, a long-time China watcher, told CNBC last week that Pompeo’s move could upend a major foundation underpinning U.S.-China relations.

Rudd was referring to the “one China policy,” the principle in which the U.S. and the international community recognize that there’s only one central Chinese government — under the Communist Party of China in Beijing.

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