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China continues nuclear buildup, has strengthened ties to Russia, Defense Dept report says
China is continuing its nuclear expansion, is strengthening its ties with Russia, and has increased military pressure against Taiwan over the past year, according to a new Defense Department report that examines actions accelerating key areas of conflict with the U.S.
The report, released Wednesday, also noted that the recent rash of corruption allegations within China’s powerful Central Military Commission, which oversees the People’s Liberation Army, is hurting Beijing’s military growth and could slow its modernization campaign.
A senior defense official said China has made progress in some of its programs but slid back in others.
The official, who spoke on condition of anonymity to describe the U.S. assessment, warned that Beijing is working toward developing a more diverse and technologically sophisticated nuclear force. While the expected number of nuclear warheads has maintained consistent growth, China is broadening its targeting abilities.
Beijing is going to be able to go after more and different types of targets, do greater damage and have more options for multiple rounds of counterstrikes, the official said. The U.S. is urging China to be more transparent about its nuclear program, while also warning that America will defend its allies and take appropriate steps in response.
According to the report, which provides the annual U.S. assessment of China’s military power and is required by Congress, By mid-2024, China had over 600 operational nuclear warheads, and the Pentagon expects it will have more than 1,000 by 2030. The Pentagon’s estimate of China’s current stock of nuclear warheads is about 100 higher than disclosed in last year’s report, but that is a reflection in the change in the estimate, not the pace of production.
The Biden administration has worked to maintain a balance with China, building up the U.S. military presence in the Asia-Pacific region to be ready to counter Beijing while also encouraging increased communications between the two countries at the diplomatic and military levels.
That uptick in talks has coincided with a decrease in coercive and risky intercepts of U.S. aircraft since late 2023, compared with the previous two years. China still, however, does what the U.S. military considers “unsafe” flights near American and allied forces in the region.
The Pentagon’s national defense strategy is built around the assessment that China poses the greatest security challenge for the U.S., and the threat from Beijing influences how the U.S. military is equipped and organized for the future.
Corruption within the PLA has resulted in the ouster of at least 15 high-ranking officials in a major shakeup of China’s defense establishment.
“This wave of corruption touches every service in the PLA, and it may have shaken Beijing’s confidence,” the report said.
In June, China announced that former Defense Minister Li Shangfu and his predecessor, Wei Fenghe, were expelled from the ruling Communist Party and accused of corruption. Last month, another senior official, Miao Hua, was suspended and put under investigation, according to China’s Defense Ministry.
The U.S. report points to a persistent increased military presence by China around Taiwan, the self-governing island that China claims as its own. It said China’s navy has been in the region more and that there have been increased crossings into the island’s air defense identification zone and major military exercises in the area.
Just last week, a large deployment of Chinese navy and coast guard vessels in the waters around Taiwan triggered alarm as Taiwanese officials said it looked like China was simulating a blockade. Officials have said there were as many as 90 ships involved in what Taiwan described as two walls designed to demonstrate that the waters belong to China.
Taiwan split from communist China in 1949 and has rejected Beijing’s demands that it accept unification. China says it will do so by force if necessary, and leaders have said they want to be ready to do so by 2027.
The United States is obligated under domestic law to help defend Taiwan and give it weapons and technology to deter invasion.
The island democracy has been the chief source of tension between Washington and Beijing for decades and is widely seen as the most likely trigger for a potentially catastrophic U.S.-China war.
More broadly, the report concluded that the PLA continued its drive to develop greater military capabilities but “made uneven progress toward its 2027” milestone for modernization.
One area of expansion, the report said, is with unmanned aerial systems, which officials said are “quickly approaching U.S. standards.”
Regarding Russia, the report said China has supported Russia’s war against Ukraine and sold Russia dual-use items that Moscow’s military industry relies on. Dual use items can be used for both civilian and military purposes.
contributed to this report.
A person in Louisiana has the first severe illness caused by bird flu in the U.S., the Centers for Disease Control and Prevention announced Wednesday.
Officials determined the patient had exposure to sick and dead birds in backyard flocks, though an investigation into the source of the infection in the state is ongoing. This is also the first case of H5N1 bird flu in the U.S. that has been linked to exposure to a backyard flock, a news release noted. Officials have not shared details on the patient’s symptoms.
The case was first confirmed by health officials Friday, adding to the total of 61 reported human cases of H5 bird flu reported in the United States. Another severe case of H5N1 has been reported in a teen in British Columbia.
A release from the Louisiana Department of Health Wednesday added the patient, a resident of southwestern Louisiana, is currently hospitalized. Until now, the H5N1 cases in the U.S. have been mild, including conjunctivitis and upper respiratory symptoms.
“While the current public health risk for the general public is low, people who work with birds, poultry or cows, or have recreational exposure to them, are at higher risk,” the state’s health department added.
Mild illnesses have been seen in dairy and poultry workers who had close contact with infected animals. In two cases, no known source of the illnesses have been identified, which has worried infectious disease experts about the possibility of human-to-human transmission, which could trigger a pandemic.
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Gold has long served as a safe-haven asset for investors during times of economic uncertainty and market volatility, which is a large part of why it has been so popular over the past year. Thanks to that uptick in gold interest, the price of gold has been climbing throughout much of 2024 — hitting multiple record highs and surpassing $2,700 per ounce at one point late in the year. That price trend has been shifting lately, though, and over the last few weeks, there have been significant fluctuations in gold prices, with the price of gold dropping over the last few days in particular.
With gold’s price currently sitting at under $2,650 per ounce, today’s lower price is prompting many investors to reassess their positions in gold-related investments — including gold exchange-traded funds (ETFs). These investment vehicles, which track the price of gold without requiring physical ownership of the precious metal, have become increasingly popular among retail and institutional investors alike. Much of the appeal of gold ETFs lies in their simplicity and accessibility. Unlike physical gold, these funds can be easily bought and sold through standard brokerage accounts, offering investors a convenient way to gain exposure to gold price movements.
But while the current price dip could present a good opportunity to buy into gold at a discount, it makes sense to remain cautious about any type of investment right now. So is investing in gold ETFs still a good strategy now that the price of gold is slipping?
Find out how to add gold to your portfolio today.
Are gold ETFs a good investment now that the price is dropping?
When gold prices drop, it can create opportunities for investors to buy at a lower cost, potentially increasing their returns if prices rebound. Gold ETFs provide an easy way to capitalize on this strategy. Unlike physical gold, ETFs can be traded on stock exchanges just like equities, offering liquidity and convenience. They also eliminate the need for storage and security concerns associated with owning physical gold.
There are also a few other reasons to consider investing in gold ETFs despite the current price drops. For starters, gold ETFs offer an efficient way to implement dollar-cost averaging during price dips. By regularly investing fixed amounts, investors can potentially lower their average purchase price over time. This strategy can be particularly effective during periods of price volatility, allowing investors to accumulate positions at various price points.
And while gold prices may be dipping now, it’s unlikely that today’s lower prices will remain the status quo over the longer term. Gold prices have historically rebounded and grown over longer time horizons, so while the current price may be lower than it was a few weeks ago, it could represent a good entry point for long-term investors. That’s particularly true if the fundamental factors supporting gold prices remain intact, such as inflation concerns, currency devaluation risks and global economic uncertainties.
However, investors should consider that there are risks to investing in gold ETFs. One issue is that gold ETFs are subject to market volatility and may not provide immediate returns — so it’s important to make any investing decision based on your unique investment goals and strategy. Gold also generates no income or dividends, making it a pure price appreciation play. The opportunity cost of holding gold ETFs also becomes more significant in high-rate environments where yield-generating investments become more attractive.
Diversify your investments by adding gold to your portfolio now.
Who should invest in gold ETFs now?
While investing in gold ETFs may not make sense for all investors right now, it could be particularly suitable for certain types. For example, investors who need to diversify their portfolios may find gold ETFs attractive, as gold has historically shown a low correlation with traditional asset classes like stocks and bonds. So, the current price drop could present an opportunity to achieve portfolio diversification at more favorable prices.
Risk-conscious investors who are looking to hedge against inflation, currency risks or geopolitical uncertainties might also want to consider adding gold ETF exposure. After all, with the uptick in inflation over the last few months, gold’s historical role as a store of value remains relevant right now, despite the potential for short-term price volatility. Long-term investors might also find current prices attractive in terms of building strategic positions.
However, short-term traders and income-focused investors may want to exercise caution when it comes to gold ETFs. Gold’s price volatility can make short-term trading challenging, while the lack of yield may not align with income-oriented investment objectives.
The bottom line
The current drop in gold prices presents an intriguing opportunity for investors who are interested in gold ETFs, but it’s essential to weigh the potential risks and rewards of this type of gold investing carefully. Gold ETFs offer a convenient and liquid way to gain exposure to gold, making them a viable option for many investors, but they are just one of several ways to invest in this precious metal. Whether or not gold ETFs are the right choice for you will ultimately depend on your investment objectives, risk tolerance and overall portfolio strategy, so before you buy in, do your homework to make sure your decision aligns with your long-term goals.