Beijing’s Covert Fentanyl Campaign Against the United States
The CCP is complicit in illicit drug trafficking and money laundering that has killed over a half million Americans over the past decade.
Friends,
Hundreds of thousands of Americans have died over the past decade due to overdoses on synthetic opioids (mostly fentanyl) that is largely produced by chemical and pharmaceutical companies in the People’s Republic of China and exported to the United States or to Mexico for processing and smuggling into the United States.
Additionally, PRC money launderers, operating under the protection of the Chinese Communist Party and effectively bypassing formal banking systems with the assistance of the PRC Government, now underwrite much of the drug trafficking for all of the cartels in the Western Hemisphere (for more, see here, here, here, and here).
From USAFacts.org, Are fentanyl overdose deaths rising in the US?
In late 2019, Congress passed an amendment in the 2020 National Defense Authorization Act which established a “Commission on Combating Synthetic Opioid Trafficking” (Section 7221, see pages 1074-1076).
One of the main purposes of that Congressional Commission was to “report on efforts by actors in the People’s Republic of China to subvert United States laws and to supply illicit synthetic opioids to persons in the United States, including up-to-date estimates of the scale of illicit synthetic opioids flows from the People’s Republic of China.”
Its job was to determine the scope and scale of Beijing’s covert fentanyl campaign against the United States.
The Commission, which was largely filled with executive branch officials from the new Biden Administration during their first year in office, began its work only after January 20, 2021 and produced its report in February 2022. The report largely glossed over the PRC’s role, mostly focusing on traditional drug cartels in Mexico (what the DEA and the White House Office of National Drug Control Policy are must comfortable with) and the “demand side” of the crisis which in 2021 took more American lives than car crashes and gun-violence combined.
Last week, the House Select Committee (on the Strategic Competition between the United States and the Chinese Communist Party) released the report that the 2022 Congressional Commission (on Combating Synthetic Opioid Trafficking) should have produced.
Titled “The CCP’s Role in the Fentanyl Crisis,” the House Select Committee details how the PRC Government under the control of the Chinese Communist Party:
Directly subsidizes the manufacturing and export of illicit fentanyl materials and other synthetic narcotics through tax rebates. Many of these substances are illegal under the PRC’s own laws and have no known legal use worldwide. Like its export tax rebates for legitimate goods, the CCP’s subsidies of illegal drugs incentivizes international synthetic drug sales from the PRC. The CCP never disclosed this program.
Gave monetary grants and awards to companies openly trafficking illicit fentanyl materials and other synthetic narcotics. There are even examples of some of these companies enjoying site visits from provincial PRC government officials who complimented them for their impact on the provincial economy.
Holds ownership interest in several PRC companies tied to drug trafficking. This includes a PRC government prison connected to human rights abuses owning a drug trafficking chemical company and a publicly traded PRC company hosting thousands of instances of open drug trafficking on its sites.
Fails to prosecute fentanyl and precursor manufacturers. Rather than investigating drug traffickers, PRC security services have not cooperated with U.S. law enforcement, and have even notified targets of U.S. investigations when they received requests for assistance.
Allows the open sale of fentanyl precursors and other illicit materials on the extensively monitored and controlled PRC internet. A review of just seven e-commerce sites found over 31,000 instances of PRC companies selling illicit chemicals with obvious ties to drug trafficking. Undercover communications with PRC drug trafficking companies (whose identities were provided to U.S. law enforcement) revealed an eagerness to engage in clearly illicit drug sales with no fear of reprisal.
Censors content about domestic drug sales, but leaves export-focused narcotics content untouched. The PRC has censorship triggers for domestic drug sales (e.g., “fentanyl + cash on delivery”), but no such triggers exist to monitor or prevent the export of illicit narcotics out of the PRC.
Strategically and economically benefits from the fentanyl crisis. The fentanyl crisis has helped CCP-tied Chinese organized criminal groups become the world’s premier money launderers, enriched the PRC’s chemical industry, and has had a devastating impact on Americans.
Dueling reports on the fentanyl crisis
In 2019, I played a minor role in getting the legislation through Congress which created the Congressional Commission on Combating Synthetic Opioid Trafficking. Then after its passage, I had a few conversations with Representative David Trone (D-MD), the Commission Co-Chair, and his staff in the summer of 2020 before the Commission came together in the spring of 2021. I encouraged them to press hard on uncovering the Party’s fentanyl campaign.
All that is to say, I’ve been focused on this topic of CCP complicity in our fentanyl crisis for years.
From my perspective, what the Commission produced in February 2022 was a serious disappointment.
It failed to bring to light what was largely known at the time (and what former Attorney General Barr testified to this week): the Chinese Communist Party is complicit in America’s fentanyl crisis and that cooperation with the PRC on counternarcotics had largely failed to stop it.
Through acts of both commission and omission, the Party killed (and continues to kill) hundreds of thousands of Americans. Not only was the Party purposefully dragging its feet on implementing and enforcing laws against the production and export of these poisons, as we found out this week from the House Select Committee, the Party was actively promoting the production and export of them to cause further death and destruction in American communities.
Rather than take to Party’s role seriously, the 2021-2022 Congressional Commission seemed to purposefully downplay the PRC’s role in the crisis and essentially excused their actions as, “China is doing the best it can,” there are “unscrupulous vendors” in China, and our best bet it to “cooperate with China.”
See quotes like, “the growth in the private chemical and pharmaceutical sectors in the PRC has outpaced the government’s ability to regulate them. Serious oversight would require additional resources and personnel to enforce rules or initiate investigations” (page 8), “currently, the PRC’s regulatory environment lacks the flexibility to allow PRC law enforcement agencies to share information or devote large numbers of investigative resources to unscheduled chemicals” (page 8), and “supply-reduction efforts would require a focus on policing chemical manufacturers that might not be violating laws in their countries” (page 25).
All of that is ludicrous.
There is perhaps no government on earth, or in the history of humanity, that has more regulatory power and flexibility than the People’s Republic of China. As the economist Chenggang Xu, a Senior Research Scholar at Stanford recently argued, the PRC is a “regionally administered totalitarian state.”
Claiming that the Chinese Communist Party lacks the ability to regulate and enforce its directives is just absurd. Pretending that the PRC Security State can’t share information with themselves is hopelessly naïve.
This is a Party that can essentially erase a date (June 4, 1989) from the memory of 1.4 billion people and we are supposed to accept a shoulder shrug ¯\_(ツ)_/¯ that investigating this stuff is too hard?!?
Beijing aggressively and effectively censors content about “domestic” illicit drug sales and ruthlessly prosecutes “domestic” drug traffickers using all elements of their security state. Yet they fail to impose any reasonable restrictions on content for the “export” of fentanyl precursors and do not prosecute drug traffickers involved in the “export” of these drugs and their precursors. (think of Putin’s sponsorship of cyber hackers: hacking domestically is harshly punished… hacking Russia’s enemies is rewarded)
This isn’t an oversight or some sort of bureaucratic failing… these are purposeful policies that are meant to cause death and destruction in the United States.
There is a crucial question that the 2021-2022 Congressional Commission ignores in its report: Is it in the Chinese Communist Party’s interest to “solve” the problem of fentanyl trafficking to the United States? The members of the Commission seem to assume the answer is “yes,” therefore we must cooperate with the PRC, help them with better enforcement, and better information sharing, as if the PRC is a goodwill partner who simply lacks the law enforcement capability to handle domestic threats and criminals. (we hear this same lame response from harms Beijing does to global trading system: we need to help the PRC with capacity building and dialogue so they understand that what they are doing is “wrong”).
I, and many others, have long suspected that the answer to that question is “no.” The Chinese Communist Party is very much interested in the kind of destruction and chaos that the fentanyl crisis imposes on the United States and is not inclined to help stop it. The fentanyl crisis causes severe harm to the United States, Beijing’s principal adversary, and therefore Beijing will not willingly cease its support for this campaign… no amount of dialogue, engagement, or information sharing will change that dynamic.
The House Select Committee’s report this week does much to correct the record and finally offer bipartisan policy solutions which focus on imposing significant costs on the PRC chemical and pharmaceutical companies who produce these precursors and the Chinese banks that have operated with impunity in taking over the money laundering functions of drug trafficking in the Western Hemisphere.
This would mean abandoning long drawn out counternarcotics dialogues between the DEA and their PRC counterparts… (dialogues that have produced no appreciable results over the past decade).
It would involve the Treasury Department imposing significant sanctions on large and important elements of the Chinese economy because PRC officials and those businesses are knowingly complicit in the deaths of hundreds of thousands of Americans… they know exactly who their customers are in Mexico.
It would involve interdicting shipments of these chemicals between the PRC and Mexico.
Will Beijing retaliate? Of course. Will Beijing deny its involvement in these horrendous crimes? Of course. Will Beijing punish American businesses operating in the PRC? Yes, they will, with companies like Starbucks (with 6,804 shops in the PRC), Qualcomm, FedEx, and Apple being likely targets. Will the American pharmaceutical industry suffer due to its own unsustainable dependencies on the PRC precursor industrial base? Yes, undoubtably.
But is their “business as usual” more important than taking action to stop this? I don’t think so. Are the financial interests of Starbucks shareholders more important that the communities devastated by this scourge? Most definitely not.
So far neither the Trump, nor the Biden Administrations, have been willing to stomach that level of retaliation (or even make public what the House Select Committee has been able to do), but considering the vast number of Americans being killed by this and the economic and social costs (likely in excess of $1 trillion per year now, see “The Full Cost of the Opioid Crisis: $2.5 Trillion Over Four Years,” Council of Economic Advisers, October 28, 2019), we should take seriously real efforts to impose significant costs on Beijing to reduce the supply reaching our borders.
If not, we should expect the trend to continue and the damage, in lives, health, and prosperity, to increase.
Since writing these words and publishing them to you, another 300+ Americans have lost their lives to Beijing’s covert fentanyl campaign against the United States.
Just keep that in mind, the next time someone advocates the need for greater “cooperation” with the Chinese Communists.
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Buried below in the articles about German Chancellor Scholz’ state visit to the PRC last week is quite a bit of commentary… I’m getting more pessimistic about Berlin and the rest of Europe.
Three years of significant effort by the Biden Administration to align Washington and our European friends does not seem to be paying off (if Berlin refuses to budge with President Biden’s persuasion, it likely won’t make a difference for any other Administration). Berlin appears completely unwilling to think strategically about its relationship with Beijing and wider global affairs. Their political elite refuses to even question the corporate decision-making of their large companies.
I contrast this with what Tokyo has done over the past dozen years. Arguably Japanese companies were much more dependent on the PRC than German companies, but Japanese political leadership acted far more responsibly (it took three weeks for Tokyo to decide to block Huawei from their 5G networks in early 2019… Berlin still hasn’t done it). Japanese political leaders have undertaken significant efforts and legislative reforms to reduce Japanese dependency on the PRC, increase Japanese defense spending and modernization, and speak clearly to the Japanese public about the threats they face. The Japanese ruling party, the LDP, was under the exact same corporate pressures that CDU and SPD leaders face in Berlin… the difference is that Japanese elected leaders took a broader strategic view of what was best for their country, rather than outsourcing their thinking to a handful of boardrooms.
I agree with Martin Sandbu’s opinion piece in the Financial Times quoted below (Germany’s doomed China Strategy): the “corporatist spell must soon break” and there will be a reckoning. But I fear it will be far more harmful to Germany, to Europe, and to the transatlantic alliance, than if the centrist political parties in Germany had simply paid attention to what was happening in Moscow and Beijing and adjusted themselves.
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Jane Perlez, the former Beijing Bureau Chief for the New York Times, and Rana Mitter, Director of U.S.-Asia Relations at the Harvard Kennedy School, have a new podcast out called “Face Off: The U.S. vs China.” They have three episodes so far and are well worth listening to. Subscribe and enjoy.
Thanks for reading!
Matt
MUST READ
1. China Tells Iran Cooperation Will Last After Attack on Israel
Bloomberg, April 15, 2024
China’s top diplomat told Iran that the nations can work together across a range of areas in the future, signaling their ties remain solid following Tehran’s unprecedented attack on Israel.
“China is ready to steadily advance practical cooperation in various fields with Iran and promote greater development of China-Iran relations,” Foreign Minister Wang Yi told Iranian counterpart Hossein Amirabdollahian in a phone call on Monday.
2. Chinese Propaganda Arm Deletes Post Justifying Iran’s ‘Successful’ Attack
Jimmy Quinn, National Review, April 15, 2024
A Chinese Communist Party propaganda outlet deleted a post that described Iran’s unprecedented attack directly targeting Israel as a “successful” operation — but probably not because Beijing has any regrets about aligning itself with Iranian aggression.
On Saturday evening, the X account for the Global Times, which is one of Beijing’s English-language propaganda organs, posted about the Iranian attack. Earlier that evening, reports indicated that Iran had launched a swarm of Shahed attack drones that were primed to reach Israeli targets within hours.
In the since-deleted post, the Global Times said that Iran had no choice but to launch the attack. “Due to the intl organizations, failure, especially the UNSC, to condemn #Israel ‘s attacks on Iranian diplomatic facilities, #Iran retaliated with strategic intelligence, missiles and drones, successfully destroying key military targets in Israel,” the post stated.
The post was taken down sometime after Saturday evening. It was probably not deleted on account of a change of heart by Chinese officials, though. Beijing has long lent its support to Iran’s “axis of resistance” — the alignment of Tehran-backed terrorist groups that have attacked Israel, cargo vessels, and U.S. bases in the region.
…
It’s more likely that the Global Times spiked its post because it prematurely, and embarrassingly, cast the attack as successful. In fact, the day after the attack, the Israel Defense Forces said 99 percent of the drones and missiles that Iran launched had been intercepted, with some missiles getting through and causing “minor damage” to Israel’s Nevatim air force base. U.S. officials told the Wall Street Journal that about half of the 115 to 130 Iranian ballistic missiles crashed or failed to launch. Tellingly, the portion of the Global Times post leaning heavily in to Iran’s framing of events — and its characterization of the Islamic Revolutionary Guard Corps facility in Damascus as a diplomatic building — does not appear to have been the problem with the post.
While it’s embarrassing that Beijing voiced its support for an operation that Israel and its allies successfully defended against, what’s even more significant is its increasingly vocal diplomatic support of the Iranian axis.
3. China Has Helped Russia Boost Arms Production, U.S. Says
Michael R. Gordon, Warren P. Strobel, and Alan Cullison, Wall Street Journal, April 12, 2024
Beijing’s support is helping Moscow at critical stage in its war in Ukraine, officials say.
China has helped Russia revive its military production at a critical stage in its Ukraine war, providing Moscow with optics, microelectronics, drone engines and other dual-use material that have significantly strengthened Moscow’s battlefield capabilities, senior Biden administration officials said Friday.
4. Blinken says China is Russia's primary military complex supplier
Humeyra Pamuk, Reuters, April 19, 2024
U.S. Secretary of State Antony Blinken criticised on Friday Chinese support for Russia's defence industry, saying Beijing was currently the primary contributor to Moscow's war in Ukraine though its provision of critical components for weaponry.
He said this effort was fueling "the biggest threat to European security since the end of the Cold War."
Speaking at a news conference capping the end of a gathering of G7 foreign ministers on the Italian island of Capri, Blinken said Washington had made it very clear to Beijing and others that they should not be aiding Russia's war effort in Ukraine.
COMMENT – We’ve known these details for over a year… where are the sanctions?
Here’s the quote from Secretary Blinken on Friday:
“We’re also working to strengthen efforts to disrupt the transfer of weapons, and also inputs for Russia’s defense industrial base.
When it comes to weapons, what we’ve seen, of course, is North Korea and Iran primarily providing things to Russia.
But when it comes to Russia’s defense industrial base, the primary contributor in this moment to that is China. We see China sharing machine tools, semiconductors, other dual-use items that have helped Russia rebuild the defense industrial base that sanctions and export controls had done so much to degrade.
Now, if China purports on the one hand to want good relations with Europe and other countries, it can’t on the other hand be fueling what is the biggest threat to European security since the end of the Cold War. And you don’t have to just take that from me – this is what I heard around the table at the G7.”
It begs the question, why has the Administration delayed so long on imposing sanctions on the PRC?
We’ve been telegraphing our punch for 18 months and that has given Beijing time to prepare itself… these retaliatory measures would be much more effective if we implemented them quickly and without excessive warning.
5. China, Russia and Iran Are Reviving the Age of Empires
Hal Brands, Bloomberg, April 13, 2024
Western states that lost their overseas possessions have fared well in the Pax Americana. But Xi and Putin want to regain their nations’ long-lost imperial might.
The ghosts of empire are haunting Eurasia. President Xi Jinping’s China is seeking to reclaim the power and privileges of the great dynasties that once bestrode Asia. President Vladimir Putin is channeling the memory, and the methods, of famous conquerors from Russia’s imperial past. Iran is using proxies, missiles and other means to build a sphere of influence encompassing parts of the old Persian Empire. Not so long ago, much of the world was ruled by empires. If today’s revisionist states have their way, the future could resemble the past.
Empires take many forms, but the term generally refers to a multinational collection of peoples and territories, in which power flows outward from a dominant center. For centuries, global order and disorder were shaped by the clash of rival empires. The big story of 20th century geopolitics was the decline or destruction of the great, formal empires of Europe and Asia, and their replacement by a still-greater, informal empire led by the US. Yet dreams of empire die hard, and the story of 21st century geopolitics — so far — is the quest for imperial restoration by a host of ambitious autocracies that chafe at the liberal international order Washington runs.
That story is also an illustration of how powerful and pernicious historical legacies can be. The onetime empires that adjusted most successfully to the modern world were the ones that eventually got over the loss of greatness. Germany, Japan, the UK and others accepted, however reluctantly, that they were more likely to thrive as members of America’s empire than by trying to resuscitate their own. The ones that are causing the most trouble today, by contrast, are the ones determined to revive the glories — and settle the grievances — of the past.
6. Germany, China sign joint declaration on car data sharing
Reuters, April 17, 2024
Germany and China have signed a joint declaration to cooperate on autonomous and connected driving which Germany hopes will enable carmakers to transfer data from China to Germany, a contentious topic for foreign businesses in China.
The two countries will work together to develop shared standards and rules for how to manage the data generated as companies develop autonomous driving, a move which Germany's auto association VDA said would save resources in development and production.
The statement comes amid growing concern from the EU and U.S. over the possible security risk of Chinese technology entering their markets and collecting data locally, with Washington opening a probe in February on possible national security risks from Chinese vehicle imports.
Yet European business leaders - including Volkswagen's China chief - have expressed frustration over restrictions by China on data transfer from China back to Europe, which are significantly more limiting than European regulations on data transfer from Europe to China.
COMMENT – This provides a concrete example of just how little has been accomplished under the U.S.-EU Trade and Technology Council (TTC). The TTC was initiated by Brussels at the start of the Biden Administration and has sought to align the U.S. and EU on a whole range of technology and trade issues for the last three years with Cabinet Secretaries and Commissioners meeting every six months. One of the most pressing issues is what to do about Chinese electric vehicles and the TTC had been the venue for developing a common transatlantic approach to dealing with this problem.
The last meeting, which took place in early April, included multiple sessions on green technology standards, “Transatlantic E-Mobility Cooperation,” and efforts to address “non-market policies and practices.” See here for the very lengthy U.S.-EU Joint Statement released on April 5, 2024.
Less than two weeks after the ink dried on that Joint Statement, the EU’s largest and most important member state for these issues ignored Brussels’ agreements with Washington and struck its own side deal with Beijing in an effort to protect its own automobile companies at the expense of transatlantic and G7 cooperation.
All of this will further convince Euro-skeptics in the United States that Berlin has very little interest in substantial cooperation with the United States and that investing more effort in cooperation with Berlin is a fool’s errand. I’m certain this not Berlin’s intention, but it has completely undercut its best allies in Washington by making them look foolish for investing enormous time and energy in transatlantic cooperation.
Folks have often joked that Germany is an automobile company with a government… unfortunately that rings a bit too true.
7. House panel says China subsidizes fentanyl production to fuel crisis in the United States
Kevin Freking, Associated Press, April 16, 2024
China is fueling the fentanyl crisis in the U.S. by directly subsidizing the manufacturing of materials that are used by traffickers to make the drug outside the country, according to a report released Tuesday by a special House committee focused on countering the Chinese government.
Committee investigators said they accessed a government website that revealed tax rebates for the production of specific fentanyl precursors as well as other synthetic drugs as long as those companies sell them outside of China.
“Through its actions, as our report has revealed, the Chinese Communist Party is telling us that it wants more fentanyl entering our country,” said Rep. Mike Gallagher, the Republican chairman of the special House committee. “It wants the chaos and devastation that has resulted from the epidemic.”
COMMENT – Here is the report and video from the House Select Committee.
Office of the U.S. Trade Representative, April 17, 2024
The United States Trade Representative announced today that after review of a petition filed with the Office of the U.S. Trade Representative (USTR) by five national labor unions, USTR is initiating an investigation of acts, policies, and practices of the People’s Republic of China (PRC) targeting the maritime, logistics, and shipbuilding sectors for dominance.
“The petition presents serious and concerning allegations of the PRC’s longstanding efforts to dominate the maritime, logistics, and shipbuilding sectors, cataloguing the PRC’s use of unfair, non-market policies and practices to achieve those goals. The allegations reflect what we have already seen across other sectors, where the PRC utilizes a wide range of non-market policies and practices to undermine fair competition and dominate the market, both in China and globally,” said Ambassador Katherine Tai. “I pledge to undertake a full and thorough investigation into the unions’ concerns.”
COMMENT – The Unions submitted their petition just about a month ago, so I’m glad to see that Ambassador Tai wasted very little time in announcing a formal investigation.
It took Ambassador Lighthizer and the Trump Administration seven months to complete its Section 301 investigation. Let’s see if Ambassador Tai can beat that and have it released before the election… seven months would put us at mid-November 2024.
9. US airlines ask Biden administration to block additional flights to China
Diksha Madhok, CNN, April 12, 2024
The US aviation industry has asked the Biden administration to pause approval of additional flights to and from China, saying Beijing’s “existing harmful anti-competitive policies” hurt American airlines and workers.
“The competitive disadvantage is harmful to the approximately 315,000 workers employed by US passenger airlines that serve China,” according to a letter published Thursday addressing Secretary of State Antony Blinken and Transportation Secretary Pete Buttigieg.
The letter was signed by industry lobby group Airlines for America — whose members include American Airlines, Delta and United — and other unions representing aviation workers, including the Air Line Pilots Association.
“If the growth of the Chinese aviation market is allowed to continue unchecked and without concern for equality of access in the market, flights will continue to be relinquished to Chinese carriers at the expense of US workers and businesses,” it added.
In February, Washington said it will allow Chinese airlines to further increase their direct passenger flights to the United States, in an effort to gradually restore aviation services that had been affected by the Covid-19 pandemic.
Chinese carriers were given approval by US officials to make 50 weekly round trips to and from the United States, up from 35, from March 31.
But the increased number is still only a fraction of the more than 150 weekly round trips allowed by each side before curbs were imposed in early 2020.
In the letter, American carriers said China implemented strict limits to market access during the pandemic and imposed challenging rules affecting operations, customers and the treatment of US airline crew.
The “anti-competitive disadvantage” with China worsened in 2022, the letter said, when the Asian country’s airlines continued to access Russian airspace, while US carriers stopped using it as a result of Moscow’s invasion of Ukraine in February of that year.
10. Spiraling violence in Balochistan
Amit Bhandari and Aditya Shunde, Gateway House, April 18, 2024
Long treated by Pakistan as a colony, Balochistan has seen several high-profile attacks by locals against Chinese interests. The growing unrest in the region reflects Islamabad’s failure to address key development issues. With less than 10% of this year’s federal budget earmarked for development, it appears that the only means of quelling the violence is more repression.
11. Did Three African Runners Let a Chinese Runner Win a Race in Beijing?
Yan Zhuang, New York Times, April 16, 2024
The Beijing Half Marathon finish, where He Jie of China won after African runners appeared to gesture him ahead, is under investigation. Footage raised questions whether the Kenyan and Ethiopian runners deliberately slowed. Cheating scandals have previously hit Chinese distance running, with 2018 and 2019 incidents involving fake bibs, imposters, and shortcuts.
COMMENT - He and all the runners helping him were disqualified.
Authoritarianism
12. China's clampdown on data spreads to real-time stock information
Echo Wong, Nikkei Asia, April 16, 2024
Three major exchanges in China plan to stop disclosing real-time trading volume data starting in mid-May, claiming the move is aimed at taming market volatility, but it has also raised concerns among investors on data transparency.
Real-time data on the buying, selling and total turnover of A-shares in Shenzhen and Shanghai by foreign investors will no longer be available to the public market during trading hours. The new rules will apply to a key trading link between Hong Kong and the mainland that has been in place since 2014.
COMMENT – This invites further abuse and manipulation of PRC economic data. Investing in the Chinese economy at this point is a terrible idea.
13. China’s Rising Youth Unemployment Needs Attention, Official Says
Bloomberg, April 15, 2024
14. China Vows More Support for Hong Kong as It Touts New Security Law
Siuming Ho, Bloomberg, April 15, 2024
Sophie Chew, South China Morning Post, April 18, 2024
Hong Kong, once the world’s busiest port, failed for the first time to rank among the world’s top 10 ports in 2023, reflecting the city’s struggles to reverse a long-term decline in shipping volumes.
It was knocked to 11th place by Dubai’s Jebel Ali port, according to data from shipping data provider Alphaliner on the world’s 30 busiest container terminals.
COMMENT – The CCP’s destruction of Hong Kong continues.
16. ‘The old days are no more’: Hong Kong goes quiet as security laws tighten their grip
Amy Hawkins and Helen Davidson, The Guardian, April 11, 2024
NGOs and bookshops are closing, media organisations are leaving and democracy activists are on trial
“Ideas are bulletproof”. Three words, stamped out in multicolour tiles above a doorway, represented one of the last vestiges of Hong Kong’s once vibrant literary spaces. On 31 March, Mount Zero, a beloved independent bookstore in Hong Kong, closed its doors for the final time. Hundreds of Hongkongers came to say goodbye.
The bookshop, which opened in 2018, took its slogan from the 2005 film V for Vendetta; the eponymous antihero’s Guy Fawkes mask occasionally appeared during Hong Kong’s pro-democracy protests.
Mount Zero’s closure, which was announced after what the owner said was repeated inspections from the authorities, came as Hongkongers are coming to terms with a new reality of life with not one but two national security laws, which critics say are being used to crush dissent.
“People are quickly adjusting to the idea that the old days of public expression are no more,” says Bao Pu, the founder of New Century Press, a publishing house.
The pro-democracy protests that rocked Hong Kong in 2019 and 2020 feel like an increasingly distant memory. Where 2 million people once flooded the streets to oppose the government’s plans to establish closer links with mainland China, an individual can now be jailed for wearing a “seditious” T-shirt.
17. It helped China enforce zero-Covid. Now the community ‘grid’ network is going ‘professional’
Phoebe Zhang, South China Morning Post, April 11, 2024
18. AUDIO – Japan's Economic Security Renaissance
Kazuto Suzuki and Jordan Schneider, China Talk, April 10, 2024
19. Chinese police arrest over 1,500 for online rumours in campaign targeting influencers, bloggers and live-streamers
Xinlu Liang, South China Morning Post, April 16, 2024
20. China shuts down influencer's accounts over fake story
Fan Wang, BBC, April 15, 2024
21. Far fewer young Americans now want to study in China. Both countries are trying to fix that
Didi Tang and Dake Kang, Associated Press, April 13, 2024
22. China Feels Boxed in by the U.S. but Has Few Ways to Push Back
David Pierson and Olivia Wang, New York Times, April 12, 2024
23. State Dept. Is Sending Its Top Diplomat for East Asia to China
Aishvarya Kavi, New York Times, April 13, 2024
24. Germany’s Leader Walks a Fine Line in China
Alexandra Stevenson and Melissa Eddy, New York Times, April 16, 2024
Chancellor Olaf Scholz tried to promote German business interests while delivering warnings from Europe about trade and geopolitical tensions.
Chancellor Olaf Scholz of Germany tried to strike a delicate balance on a trip to China this week, promoting business ties with his country’s biggest trading partner while raising concerns over its surge of exports to Europe and its support for Russia.
Mr. Scholz met with China’s top leader, Xi Jinping, at the Diaoyutai State Guesthouse in Beijing on Tuesday, the culmination of a three-day visit with a delegation of German officials and business leaders. He also met with Premier Li Qiang as the two countries navigate relations strained by Russia’s war in Ukraine and China’s rivalry with the United States, Germany’s most important ally.
Throughout his trip, Mr. Scholz promoted the interests of German companies that are finding it increasingly hard to compete in China. And he conveyed growing concern in the European Union that the region’s market is becoming a dumping ground for Chinese goods produced at a loss.
But Mr. Scholz chose a conciliatory tone over a combative one in his opening remarks before sitting down with Mr. Xi on Tuesday morning, in a meeting that stretched over three hours and turned into a walk and lunch.
COMMENT – German leaders always chose a “conciliatory tone over a combative one” in dealing with the PRC. I can’t think of a single instance in which Scholz or any of his predecessors has ever adopted a truly combative approach with Beijing.
Perhaps if a German leader actually tried being “combative” with his/her PRC counterpart, they might achieve something. It can’t be worse than the pickle Berlin finds itself in now.
25. Xi Rebuffs Scholz Pressure to Rein in Chinese Manufacturing
Michael Nienaber, Bloomberg, April 15, 2024
Chinese leader Xi Jinping told the German chancellor that a surge in clean-technology exports from the Asian nation has helped the world tackle inflation, pushing back against European and US pressure to rein in the country’s powerhouse industries.
Xi’s comments to Olaf Scholz during talks Tuesday in Beijing suggest China may not be swayed in any meaningful way by the German leader’s push for a reduction in what Western officials see as excess manufacturing capacity.
COMMENT – Of course Xi rebuffed Scholz.
Scholz went to Beijing (surrounded by his “board of directors”… aka German CEOs) without any leverage. Xi Jinping does not take him seriously and will not take any German Chancellor seriously until Berlin acts like a real strategic power.
I would have thought that Putin’s invasion of Ukraine would have engendered that kind of awakening in Berlin, but that was two years ago and it clearly has not made any appreciable difference in the worldview of Germany’s current political elite.
Thursday’s opinion piece by Martin Sandbu in the Financial Times sums up the opinion I share, “Germany’s doomed China strategy: The corporatist spell must soon break”:
Much of the debate in Germany, and other countries’ debate about Germany’s China strategy, tends to start from the premise that the interests of German industry dominate the political strategy — and this leads to a strong bias to keep bilateral trade and investment flowing even at the cost of greater dependence.
Along with this tweet he highlighted from Brad Setser at CFR:
I certainly hope that Sandbu is right about the Mittelstand of small and midsize companies, but we’ve seen this movie before and I fear how it ends.
Back in January 2019, I was extremely optimistic to see BDI (the German Federation of Industries, which represents 100,000 companies of the Mittelstand) push for the adoption of the term “systemic rival” in reference to the PRC with their China policy paper, which made it into the March 2019 “EU-China – a strategic outlook”.
All looked well and I certainly expressed my optimism to counterparts across the U.S. Government: Germany understands the threats posed by the PRC and it is shifting its policy.
But then it all floundered as the German political system could not extricate itself from its obsession with “Change through Trade.” Merkel’s obstructionism became Scholz’s obstructionism. Cataclysmic events like the full scale invasion of Ukraine and the obvious support by Beijing for Moscow has not jolted Berlin, it has simply reinforced their risk-averse tendencies.
Sandbu points out something a number of us thought would happen a few years ago:
With exports stagnant (and that’s in nominal terms), the scope for greater rewards for those who make the exported goods back in Germany is limited. Yet for shareholders, it scarcely matters whether the profit margin feeding dividends is harnessed in a German or Chinese plant. It is no surprise, then, if much of the lobbying related to Scholz’s trip was for building more German-owned productive capacity “in China for China”. Or even in China for imports back to the EU, which would presumably put German workers’ interests even more at odds with those of their owners’. Claims that profits in China help fund productivity enhancements back in Germany don’t sit easily with the fact that the bulk of German companies’ China profits are reinvested there.
In time, this must surely crack the monolith of German industry’s political influence. Until now, that influence has been based precisely on a view that what is good for German corporates is good for other parts of the German economy too. But that is no longer true, if there is, for example, a trade-off between promoting exports to China and encouraging investment into local production there or if production in China cannibalises export markets for domestic German production.
For now, German big business is still able to convince politicians that what is good for them is good for other segments of the German economy. But soon enough, the corporatist spell will surely break under the pressure of conflicting claims from labour and smaller businesses. That will shake the foundations of German politics, for Scholz’s own Social Democrats more than anyone.
I was pretty certain that this crack in the “monolith of German industry’s political influence” would have manifest by now. I put a lot of faith in the German Green Party to push this change, but the centrists of the CDU-SPD have been more obstinate than I expected. We now see a growing surge on the far-right as German voters intuitively “feel” these economic harms and abandon centrist politics with a lean towards extremism and populism.
There is something seriously wrong with the German political system… and that is a serious problem for the rest of Europe and the United States. I really hope my German counterparts can fix these problems but I’m becoming more and more pessimistic.
26. Germany in New Push to Get China Behind Ukraine Peace Efforts
Bojan Pancevski, Wall Street Journal, April 15, 2024
27. Jay Shambaugh on Getting China to Change Course
Bob Davis, The Wire China, April 14, 2024
Q [Bob Davis]: You just came back from the fourth meeting between Treasury Secretary Yellen and her Chinese counterpart account. What was your big takeaway?
A [Under Secretary of the Treasury Jay Shambaugh]: This latest trip, we were really able to dig into substance and have substantial conversations. Especially if you compare the three previous meetings with Vice Premier He Lifeng, I would say there was less reading of talking points. In the first one, there was some back and forth, but by San Francisco [when Yellen and He met in November 2023, around the meeting of the Asia Pacific Economic Cooperation forum] there was a lot less. And by their meeting in Guangzhou in April they were able to just talk more, especially in one-on-one type settings, or even in a smaller group.
There was a lot more going back and forth over issues — not really fighting over them, but actually engaging with each other’s opinions as opposed to stating your own opinions. I think that’s important. When we have a different perspective, it’s really helpful to be able to state what we think and have them actually respond to what we’re saying.
COMMENT – I’m really glad Bob Davis did this interview… Under Secretary Shambaugh’s answer to the first question above was illuminating of the exact points I made in the opening of last week’s newsletter (if you didn’t read it, feel free to do so now).
After three plus years in office, the Under Secretary seems really quite proud that they are having “substantial conversations” with their PRC counterparts.
Have they solved any of the myriad problems that have plagued the U.S.-PRC economic relationship for nearly 40 years? Nope.
But they are having “substantial conversations.” That’s swell.
To be honest, I’d be much happier if Senior U.S. Officials were not satisfied with just having “substantial conversations”… but that’s just me.
28. Western Governments Press Beijing to Use Its Influence with Russia, Iran
Sha Hua, Wall Street Journal, April 16, 2024
29. US Sanctions Office Probes Companies Over Chips in Russia’s War
Viktoria Dendrinou and Alberto Nardelli, Bloomberg, April 12, 2024
30. In China, Germany’s Olaf Scholz calls for ‘open and fair’ competition as differences weigh on trade
Kandy Wong and Ralph Jennings, South China Morning Post, April 15, 2024
31. Russia and China trade new copper disguised as scrap to skirt taxes, sanctions
Reuters, April 15, 2024
Simone McCarthy, CNN, April 11, 2024
China’s highest-level visit to North Korea in nearly five years is set to get underway Thursday, as Pyongyang seeks to strengthen relations with both Beijing and Moscow amid growing coordination between its neighbors and the United States.
Zhao Leji, China’s third-highest ranked official, will lead a delegation for a “goodwill visit” to the country to kickstart a “friendship year” marking 75 years of diplomatic ties, Beijing announced Tuesday.
The three-day visit, at North Korea’s invitation, shows the “great importance” China attaches to those relations, a Chinese Foreign Ministry spokesperson said. North Korea’s state media agency KCNA also announced the visit.
Kawala Xie, South China Morning Post, April 12, 2024
Environmental Harms
34. How China’s demand for donkey hide is devastating African communities
Adolfo Arranz, Han Huang, and Farah Master, Reuters, April 15, 2024
35. Uzbekistan chases chemical hub dream with Chinese polymer tech
Naubet Bisenov, Nikkei Asia, April 13, 2024
36. China's CNOOC stockpiles Russian oil at new reserve base
Chen Aizhu and Florence Tan, Reuters, April 15, 2024
37. VIDEO – How New Mines Could Break U.S. Reliance on China’s Batteries
Wall Street Journal, April 15, 2024
Foreign Interference and Coercion
38. Some ex-TikTok employees say the social media service worked closely with its China-based parent despite claims of independence
Alexandra Sternlicht, Fortune, April 15, 2024
39. The $2bn dirty-money case that rocked Singapore
Kelly Ng, BBC, April 12, 2024
A Singaporean court has begun handing out sentences in a sensational case, which saw 10 Chinese nationals charged for laundering $2.2bn (£1.8bn) earned from criminal activities abroad.
The scandal embroiled multiple banks, property agents, precious metal traders and a top golf club. It led to extensive raids in some of the most affluent neighbourhoods, where police seized billions in cash and assets. The lurid details have gripped Singaporeans - among the seized assets were 152 properties, 62 vehicles, shelves of luxury bags and watches, hundreds of pieces of jewellery and thousands of bottles of alcohol.
Earlier this month, Su Wenqiang and Su Haijin became the first to be jailed in the case. Su Haijin, police said, jumped off the second-floor balcony of a house trying to flee arrest. Both men will serve a little over a year in prison, after which they will be deported and barred from returning to Singapore. Eight others are still awaiting the court's decision.
Even as it draws to a close, the case - the biggest of its kind in Singapore - has raised inevitable questions. The money that paid for their plush lives in the country, prosecutors said, came from illegal sources overseas, such as scams and online gambling.
How did these men, some of whom had multiple passports from Cambodia, Vanuatu, Cyprus and Dominica, live and bank in Singapore for years without drawing scrutiny? It has sparked a review of policies, with banks tightening rules, especially around clients who hold multiple passports.
COMMENT - I often hear the trope that Singapore’s security interests lay with the United States, but its economic interests lay with the PRC and therefore no one should ask Singapore to choose between the two… the chart above would suggest that Singapore’s security AND economic interests lay with the United States (and Japan) and therefore the choice isn’t all that hard to make.
Terry Glavin, The Real Story, April 16, 2024
41. Chinese hackers are using AI to inflame social tensions in US, Microsoft says
Jonathan Greig, The Record, April 7, 2024
Beijing-linked influence operations have begun to use generative artificial intelligence to amplify controversial domestic issues in places like the U.S. and Taiwan, according to new research.
The campaigns mainly used the technology to create visual content designed to spark conflict ahead of elections, a report published by Microsoft on Thursday found.
AI-generated audio clips featuring a prominent Taiwanese presidential candidate, for example, were posted across social media in an attempt to sway voters to the candidate preferred by Beijing. Although YouTube quickly removed the content before it could reach large numbers of users, the posts illustrated the ability of governments to spin up fake content about practically anything.
“This was the first time that Microsoft Threat Intelligence has witnessed a nation state actor using AI content in attempts to influence a foreign election,” the researchers said.
The same Chinese group has also created a slate of new content featuring AI-generated news anchors and used other AI-created videos to harass Canadian politicians last year.
The fake content is promoted through a network of 175 websites in more than 58 languages and often covers high-profile geopolitical events — especially ones that paint the United States in a negative light.
Some examples include outlandish claims that a U.S. government weapon caused the Hawaii wildfires and others implicating Japan in a scheme to dispose of nuclear wastewater in the Pacific Ocean. Another campaign sought to promote conspiracy theories around a train derailment in Kentucky over Thanksgiving.
Microsoft also found multiple Chinese Communist Party affiliated social media accounts impersonating U.S. voters and responding to news stories attempting to cause dissension.
The “sockpuppet” accounts posted AI-made videos, members and infographics promoting issues like American drug use, immigration and racial tension.
42. Research for Sale: How Chinese Money Flows to American Universities
James T. Areddy, Wall Street Journal, April 15, 2024
43. The limits of renewed US-China counternarcotics cooperation
Vanda Felbab-Brown, Brookings Institution, April 16, 2024
44. Japan’s China Reckoning
Tomohiko Taniguchi, Foreign Affairs, April 16, 2024
45. As a Trump Victory Becomes Likelier, Europe Re-Engages with China
Bertrand Benoit and Sha Hua, Wall Street Journal, April 13, 2024
46. China Had a 'Special Place' in Modi's Heart. Now It's a Thorn in His Side.
Mujib Mashal and Sameer Yasir, New York Times, April 13, 2024
Human Rights and Religious Persecution
47. What Ramadan is like in Xinjiang: Our columnist visits a harshly controlled region
The Economist, April 11, 2024
China’s communist party has a message for Muslim citizens. It holds their religious freedoms dear—with a special emphasis on the freedom not to believe. The right to be secular runs like a thread through religious regulations enacted this year in Xinjiang, the far-western region that is home to 12m Uyghurs and other Muslim minorities. The revised rules impose new controls on everything from religious teaching to mosque architecture, which should reflect Chinese style. The regulations talk of extremists warping minds and promoting terrorism. To prevent this, the rules state, no organisations or individual shall induce or coerce locals to believe or not believe in any religion.
This is in part a euphemism for enhanced controls on religion—in a region that at the peak of a security campaign in 2018 and 2019 saw perhaps a million of its Muslim residents locked in re-education camps. In part, an old argument is being revived. The right to believe or not believe is in China’s constitution. But a propaganda line is also taking shape: namely, that harsh rule in Xinjiang protects its residents’ free will.
48. Authorities In Xinjiang Continue to Stifle Ramadan, Secularize Islam
Arthur Kaufman, China Digital Times, April 12, 2024
Muslims around the world celebrated Eid-al-Fitr this week, marking the end of the holy month of Ramadan. The month is normally observed through daily fasting, prayer, and community service, but in Xinjiang, many of these traditions were stifled by authorities, as was the case in previous years. Accounts from various parts of the region reveal the CCP’s increasingly successful efforts to secularize Islam while rendering Uyghur Muslims into caricatures for external propaganda.
David Rennie, author of The Economist’s Chaguan column, spent the final days of Ramadan in Xinjiang, where he observed, “Several times ordinary Uyghurs signalled that this has been a distressing Ramadan, during which it was risky to be caught fasting.” In Urumqi, he described several tense encounters with locals who indicated that practices related to fasting had been banned:
Over several hours one evening, your columnist watched hundreds of worshippers enter the Baida Si, or Great White Mosque, in the capital, Urumqi, for sunset and late-night prayers. After the session at sunset, those worshippers filed silently out, with no sign of the iftar supper that the mosque formerly served to believers, ending that day’s fast. As recently as 2015 those suppers were praised by official media. Newspapers photographed mosque workers preparing platters of lamb, flatbread and watermelon. Not this year, locals said. The iftar suppers are “no more”.
Many mosques have simply closed. Such limits to piety are called expressions of choice. Chaguan asked mosque guards, staff and men who appeared to wield authority, though they declined to identify themselves, to explain why he could see many Uyghurs eating during Ramadan. They can choose to fast or not, came the unvarying reply, because “our government guarantees religious freedom.” The very question annoyed a security guard in a former mosque. When people’s bellies are empty they will eat, he scoffed.
[…] To be clear, for all the boasts about choice, options for the pious are narrowing. Independent reporting in Xinjiang carries constant risks of harming Uyghurs. Plain-clothes agents followed Chaguan on foot and by car during his visit. Still, on four occasions it was possible to ask Uyghurs (including a police officer) whether Ramadan fasts were allowed this year, without being overheard. Their replies were almost identical. “Bu hao shuo,” they said, or “Bu gan shuo,” meaning that it is difficult to say or they dared not say. Asked if fasting is banned, one silently nodded.
On Sunday, CDT Chinese editors documented that various phrases related to fasting have been censored on the Chinese internet. These include search terms such as: “Muslim + extermination; Islam + terror; China restricts Muslims; restricts Muslims + fasting.” Such censorship may be connected to government measures to restrict religious practices in areas with relatively high concentrations of Muslims. As Ke Lin reported for VOA last week, authorities issued emergency measures targeting youth in Henan and Yunnan in order to prevent them from engaging in traditional religious practices:
A day after the religious holiday began, the Yuxi Municipal Government in southwestern Yunnan Province issued an emergency notice. According to the notice, party committees, governments and education departments at all levels were required to comprehensively investigate and strictly prohibit Muslim members of the Communist Party of China (CCP) and minors from participating in religious activities such as fasting.
Although the document states that fasting is one of the religious practices of Islam, it adds that to maintain political discipline, CCP members should be firm Marxist atheists and are not allowed to participate in religious activities.
The document emphasizes the principle of separation of education and religion, noting that schools and training institutions are strictly prohibited from providing services for minors to participate in religious activities. It also says individuals or organizations that violate the restrictions will be severely punished.
[…] Yuxi’s public primary schools also conducted a questionnaire for lower-grade students, asking whether anyone in the family fasted or prayed.
[…] The Yuxi government’s move is not an isolated incident. Zhoukou, Luoyang, Zhumadian, Jiaozuo and other places in Henan Province have all received notices that minors are prohibited from entering mosques. Some mosques have posted signs prohibiting minors from entering at the door.
These restrictions were also enforced in Xinjiang. A police officer in Ghulja told RFA: “It is prohibited to do iftar together and prayer together. We tell them fasting is not allowed. We also pay attention [to see] if they are visiting their relatives during iftar.” Shohret Hoshur at RFA described the evolution of Chinese government restrictions on religious practice during Ramadan over the past decade:
Chinese authorities began banning Muslims in Xinjiang from fasting during Ramadan in 2017, when they began arbitrarily detaining an estimated 1.7 million Uyghurs in “re-education” camps amid larger efforts to diminish their culture, language and religion.
The restriction was partially relaxed in 2021 and 2022, allowing people over 65 to fast, and police reduced the number of home searches and street patrol activities. But in 2023, authorities ordered all Muslims in Xinjiang to not fast and even used spies to report on those who did.
Uyghur leaders in the diaspora brought attention to the abuses that their Muslim communities were suffering around the world, particularly in Xinjiang. In her Ramadan statement this week, Rushan Abbas, the executive director of Campaign for Uyghurs, said: “Today, we must internalize that our Uyghur Muslim brothers and sisters are fighting for survival, stripped of their faith and livelihood. The essence of our religion is being distorted in the CCP’s brutal genocidal campaign. China must be held accountable for its crimes on the world stage.” Kawsar Yasin, a Uyghur student at Harvard University, wrote an op-ed at The Crimson last week titled “Ramadan Mubarak: A Call for Collective Liberation,” in which he drew parallels between restrictions on religious practice and freedom faced by Uyghurs in Xinjiang and Palestinians in Gaza:
As an Uyghur, my father too remains exiled from his homeland — for him, the landscapes of East Turkistan exist solely in memory. As an homage to their shared displacement, the Palestinian man gave my father a keffiyeh on one of the final nights of I’tikaf [“the practice of living in a mosque for an extended period of time”]; my family continues to wrap our copies of the Holy Quran in that very keffiyeh to this day.
[… M]ore important than religious identity is the solidarity felt across all oppressed groups, exemplified by the bond forged between my father and the Palestinian man so many years ago in a remote Texas mosque. The two found comfort in their parallel hopes of homecoming, of a return to their lands, freed from occupation.
[…] This Ramadan, I can’t help but think of Muslims across the world experiencing some of the most difficult days of their lives.
Uyghurs in occupied East Turkistan can’t fast for risk of being detained for religious extremism — some have even been forced to eat pork in direct violation of their faith. Amid a landscape of starvation, sickness, and death, Palestinians in Gaza have no choice but to break their fast with blades of grass picked from the rubble of their homes.
For these reasons, I will always shout “free East Turkistan” and “free Palestine” in the same breath.
Meanwhile, the Chinese government and state media worked to instrumentalize Ramadan for propaganda purposes. CGTN highlighted Eid-al-Fitr by showing videos of dancing Uyghurs in Xinjiang and describing Muslim traditions without any mention of fasting or breaking the fast. The day after Ramadan ended, Chinese government officials held an event in Beijing where “foreign ambassadors shared their personal experiences traveling in Xinjiang, praising the beautiful landscape, friendly people, and regional development,” as CGTN reported.
49. Europe Should Be Pushed to Take on Chinese Forced Labor, U.S. Lawmakers Say
Richard Vanderford, Wall Street Journal, April 17, 2024
50. China finds foreign support for Xinjiang policies as region seeks to boost economic ties
Yuanyue Dang, South China Morning Post, April 11, 2024
51. Hong Kong jails Portuguese national for overseas social media posts
Edward Li, Radio Free Asia, April 12, 2024
Court hands down 5-year sentence 'incitement to secession' for posts to Facebook, X, Instagram and Telegram.
A court in Hong Kong has handed a five-year jail term to a dual Portuguese national for "incitement to secession" after he headed a political party to campaign for independence that was registered in the United Kingdom.
Joseph John, also known as Wong Kin-chung, was the first European dual national to be convicted under Hong Kong's 2020 National Security Law, which applies to anyone of any nationality, anywhere in the world.
John, a Portuguese citizen who also holds a Hong Kong permanent identity card and is a resident of the United Kingdom, was jailed for 60 months by Judge Ernest Lin after being found guilty of "incitement to secession" for managing the Hong Kong Independence Party's social media accounts between July 2020 and November 2022.
Rights groups said John's sentence underlines the fact that anyone can be arrested, prosecuted and jailed under Hong Kong's security laws, regardless of their nationality or place of residence, on the basis of words and actions carried out overseas.
The prosecution accused John of "publishing, making available and/or continuing to make available statements and photos on Facebook, Twitter, Instagram and Telegram."
Judge Lin told the court that, regardless of whether the 42 posts were written by the defendant personally, they included elements of "resistance to the Hong Kong and Chinese governments," and had continued over a period of 28 months, which suggests they were planned rather than a form of emotional "venting."
"The defendant did not hesitate to distort history, demonize the Chinese government, and encourage the destruction of the Hong Kong Special Administrative Region and Chinese governments through political and even military means," Lin said.
COMMENT – Do not travel to the PRC, Hong Kong, or Macau…
52. Xi Jinping and Collective Punishment of Human Rights Defenders’ Families
Renee Xia and Sophie Richardson, The Diplomat, April 15, 2024
Chinese authorities regularly inflict collective punishment against families of activists and dissidents – penalizing them by proxy by harming their children, spouses, or parents.
53. Canada asylum-seeker recalls 'all kinds of torture' in Chinese jail
Liu Fei, Radio Free Asia, April 11, 2024
Industrial Policies and Economic Espionage
54. Why China is defeating Tesla: And how we can stop this from happening again and again.
Noah Smith, Noahpinion, April 17, 2024
China has been ramping up EV production enormously. That ramp-up includes Tesla itself, of course, which makes a bunch of cars in China. But it’s China’s own automakers that have been booming the most. BYD, the country’s leading car company, briefly overtook Tesla in EV sales last year. And plenty of other companies are entering the race, including Xiaomi, a mobile phone maker who recently started to make affordably priced, stylish, high-performance electric cars.
Chinese companies are beginning to squeeze Tesla out of the Chinese market, and providing stiff competition in Europe, the Middle East, Southeast Asia, and elsewhere (Chinese EVs aren’t sold in the U.S. yet). BYD and the rest make good-quality products, but more importantly, they’re able to offer them at unbeatable prices. A BYD Atto 3 sells for around $39k to $48k in Australia, while a Tesla Model 3 sells for $62k to $72k.
Tesla’s answer to this was supposed to be to go even cheaper. The company had promised to create a $25,000 electric car — a true mass-market vehicle that would bring EVs to the masses at last. But Elon Musk recently nixed the plan, choosing to focus on driverless taxis instead. When the $25,000 EV arrives, it will be a Chinese company who makes it.
Not everyone is upset about this, of course. Elon Musk’s detractors are prone to schadenfreude, viewing Tesla’s decline as karmic punishment for letting the antisemites and Russian propagandists back onto Twitter. But I think this reaction is shortsighted. To see a champion of U.S. industry and innovation go down to fast-following Chinese rivals shouldn’t make any American happy. And the same techniques that China is using to defeat Tesla will be used to defeat any other American competitor.
So we should be thinking very hard about how China did this, and what the U.S. and allied countries can do to prevent it from happening again, and again, and again.
The China Cycle: How Western innovations end up benefitting Chinese companies
There’s a fairly predictable cycle with regards to multinational companies and China. It goes like this:
#1 - A multinational company puts its factories in China, lured by some combination of cheap production, big contracts, and the dream of huge market opportunities.
#2 - China appropriates the multinational company’s technology, through some combination of joint ventures, acquisitions, reverse engineering, and espionage.
#3 - The appropriated technology makes its way into the hands of Chinese domestic companies.
#4 - The Chinese companies squeeze the multinational company out of the Chinese market.
#5 - The Chinese companies go overseas and outcompete the multinational company in world markets.
COMMENT – This is a well-known and well-documented cycle.
Until the U.S., EU, Japan, and Korea get their acts together and impose significant trade restrictions on the PRC (i.e. ending normal trade relations and removing the PRC from the WTO), this will keep happening over and over.
55. China’s exports tumble 7.5% in March and imports also fall as demand slows
Zen Soo, Associated Press, April 12, 2024
China’s exports contracted in March after growing in the first two months of the year, underscoring the uneven nature of the country’s recovery from the pandemic.
Customs data released Friday show exports declined 7.5% in March from a year earlier, while imports slipped 1.9%. Both figures fell short of estimates.
56. US sanctions on key Nvidia distributor in China could push more customers towards domestic replacements
Che Pan, South China Morning Post, April 13, 2024
57. China’s Overcapacity Is Already Backfiring
Nathaniel Taplin, Wall Street Journal, April 16, 2024
58. Flood of Cheap Chinese Steel Fuels Global Backlash
Jason Douglas, Wall Street Journal, April 19, 2024
59. EU Goes on China Trade Offensive After Being ‘Played’ for Years
John Ainger and Alberto Nardelli, Bloomberg, April 15, 2024
60. Morgan Stanley Is Planning Biggest China Job Cuts in Years
Cathy Chan, Bloomberg, April 16, 2024
61. SEPTA cancels $185 million Chinese contract for double-decker Regional Rail cars
Thomas Fitzgerald, Philadelphia Inquirer, April 12, 2024
62. How Innovative Is China in the Chemicals Industry?
Robert D. Atkinson, ITIF, April 15, 2024
63. China’s capital markets activity falls to multi-decade lows
Thomas Hale, Financial Times, April 14, 2024
64. Fitch Ratings Downgrades Outlook for Chinese State-Owned Banks
Sherry Qin, Wall Street Journal, April 16, 2024
65. China's cycle of dollar hoarding and weakening yuan gets vicious
Reuters, April 17, 2024
66. US trade chief Tai says taking 'serious look' at tools to deal with China
David Lawder, Reuters, April 16, 2024
67. Biden Calls for Steep Hike to Tariff on Chinese Steel
Andrew Duehren and Bob Tita, Wall Street Journal, April 17, 2024
68. IMF moves to blunt Chinese debt deal delays with lending policy change
Marc Jones, Reuters, April 17, 2024
69. China warns west of ‘survival of the fittest’ as manufacturing boosts economy
Joe Leahy and Thomas Hale, Financial Times, April 17, 2024
70. Do Government Subsidies Promote Productivity Growth in China?
Lee G. Branstetter, Guangwei Li, and Mangjia Ren, Stanford Center on China’s Economy and Institutions, April 15, 2024
INSIGHTS
Many indirect government subsidies (e.g., tax or in-kind subsidies) in China are hard to track. But since 2007, China has required listed firms to publicly report direct government subsidies. Between 2008 and 2018, these subsidies increased from $4 billion to $29 billion.
The most significant determinant of receiving direct subsidies is larger firm size, not productivity.
Receipt of subsidies is linked with lower firm productivity growth and only modest growth in R&D spending in subsequent years.
Receipt of subsidies is associated with higher employment levels that later decline, possibly due to manipulation of employment numbers to garner subsidies.
The researchers conclude that political and social considerations may outweigh efficiency considerations in the allocation of subsidies in China.
COMMENT – SCCEI does a great job of finding and highlighting empirical research on the PRC economy, its institutions, and the effects these have on Chinese society. I think it is critical that we have organizations like SCCEI supporting this work.
This particular report from SCCEI is adapted from an academic journal article published in December 2023 in the Journal of Comparative Economics, titled, “Picking winners? Government subsidies and firm productivity in China.”
While I try to keep my eye on what’s coming out of the peer-reviewed journal space, it is so vast and of such specialization, I’ve come to rely on the team at SCCEI to do much of the legwork.
Cyber & Information Technology
71. Sanctioned Chinese security camera maker Dahua divests from U.S.
Kenji Kawase, Nikkei Asia, April 17, 2024
72. ASML Orders Miss as Demand for Most-Advanced Machines Slips
Cagan Koc, Bloomberg, April 16, 2024
73. G42 Made Secret Pact with US to Divest from China Before Microsoft Deal
Ben Bartenstein, Mackenzie Hawkins, Nick Wadhams, and Dina Bass, Bloomberg, April 15, 2024
74. How Chinese scientists rigged a low-cost AI computer chip to power a hypersonic weapon
Stephen Chen, South China Morning Post, April 16, 2024
75. Chinese walkie-talkie maker Hytera resumes sales of two-way radio products after US court suspends global ban
Iris Deng, South China Morning Post, April 17, 2024
76. Huawei says it will start selling PCs powered by Intel's AI chip
Lauly Li and Cheng Ting-fang, Nikkei Asia, April 11, 2024
77. Samsung boosts Joe Biden’s chipmaking ambitions with Texas plant upgrade
Christian Davies, Financial Times, April 15, 2024
78. Apple iPhone Sales Slump Nearly 10% as China Rivals Rise
Jiahui Huang and Ben Otto, Wall Street Journal, April 15, 2024
79. Microsoft Ups Ante in AI Race with China Through Stake in Abu Dhabi Firm
Rory Jones and Tom Dotan, Wall Street Journal, April 16, 2024
80. Chinese diplomats are quietly meeting with Hill staffers about TikTok
Hailey Fuchs, Politico, April 17, 2024
Military and Security Threats
81. US navy flies aircraft through the Taiwan Strait, after US-China defense chiefs talk
Christopher Bodeen, ABC News, April 17, 2024
82. Philippines plans ambitious exercise with U.S. as concerns over China grow
Regine Cabato and Rebecca Tan, Washington Post, April 17, 2024
The Philippines and the United States are preparing to hold their most ambitious joint military exercise yet next week as tensions between the Philippines and China escalate in the South China Sea, according to more than a dozen officials.
For the first time since the annual exercise started in 1991, the Philippines and the United States will conduct joint naval drills beyond the 12 nautical miles of the Philippines’ territorial waters, in parts of open sea claimed by China, officials said. More than 16,000 soldiers from the two militaries will operate out of a joint command center to perform four major activities with a focus on countering maritime and air attacks.
Officials said in interviews that in one operation, troops will simultaneously secure two islands along the western and northern coasts of the Philippines before transporting High Mobility Artillery Rocket System (HIMARS) launchers onto the islands for live-firing exercises. In another operation, Philippine naval vessels will debut a newly procured ship-based missile system, working with U.S. Air Force squadrons to strike and sink a decommissioned ship, said officials.
COMMENT – Very glad to see this expansion of Exercise BALIKATAN.
83. Better broadband on the way for the Northern Marianas
Mark Rabago, RNZ, April 1, 2024
The Northern Marianas is set for better broadband, with Google announcing a USD$1 billion investment through two new subsea cables. These cables, named Proa and Taihei, are to improve digital connectivity between the United States and Japan.
Named after the Marianas traditional sailing canoe, the Proa, one of these subsea cable will be laid down from Japan to the Marianas. It's the first cable that is a direct connection, as all other prior fibre lines came from Guam. Governor Arnold Palacios said the cable paves the way for economic growth and enhances disaster resilience.
COMMENT – The Northern Marianas will become increasingly important from a strategic perspective and these cables will aid with communications redundancy.
84. Malicious cyber activity spiking in Philippines, analysts say
Daryna Antoniuk, The Record, April 17, 2024
Cyberattacks and misinformation campaigns have increased dramatically in the Philippines as geopolitical tensions escalate in the region, according to a new report.
Researchers at the U.S. cybersecurity firm Resecurity reported a nearly 325% jump in malicious cyber activity targeting the Philippines during the first months of 2024, compared to levels at the end of 2023.
The report attributes much of the activity to hacktivist groups that are trying to undermine confidence in government institutions. The operations appear to be domestic in origin, but probably are tied to foreign entities, Resecurity said.
The increase comes as tensions continue to rise over territories in the South China Sea, where China contests the Spratly Islands despite a 2016 ruling in favor of the Philippines.
The malicious cyber activity is characterized by “the intersection of ideological hacktivist motivations and nation-state-sponsored propaganda,” Resecurity said. One example is the China-aligned hacker group Mustang Panda, which is “using cyberspace to stage sophisticated information warfare campaigns.”
Hiding behind the guise of hacktivism helps the groups “to avoid attribution while creating the perception of homegrown social conflict online,” researchers said.
85. US Warns China Is Providing Russia with Drone, Missile Components
Jennifer Jacobs, Bloomberg, April 12, 2024
86. How Would China Weaponize Disinformation Against Taiwan in a Cross-Strait Conflict?
Scott Harold, RAND, April 15, 2024
Last month, the Office of the Director of National Intelligence warned in its Annual Threat Assessment (PDF) that China is intensifying its “efforts to mold U.S. public discourse” and will also likely continue to “apply military and economic pressure as well as public messaging and influence activities while promoting long-term cross-Strait economic and social integration to induce Taiwan to move toward unification.”
Next month, Taiwan's President-elect William Lai Ching-te will assume office. Recognizing that its past uses of economic and diplomatic pressure have failed to compel Taiwan's submission, China's Xi Jinping may decide to use military force and information operations to achieve his aspirations.
People's Liberation Army (PLA) authors have written extensively about the role of “cognitive domain operations” in supporting military operations, which they see as helping to undermine an opposing society's will to defend itself and its leadership's resolve and effectiveness. Beijing has already employed disinformation against Taiwan for years, with one recent report concluding that Taiwan is the country most affected by disinformation worldwide.
What might China's future disinformation operations against Taiwan focus on and how can Taipei and its partners combat them? China would likely have at least five discrete audiences for disinformation operations in mind, with specific lines of effort and goals for each.
COMMENT – We should be inoculating ourselves to these disinformation campaigns now… it is also why it is absolutely critical that ByteDance be forced to divest of TikTok. Allowing Beijing to have media outlets under its control in a crisis is flirting with disaster.
87. 2 Years on, Ukraine’s Sinking of the Moskva Intrigues China’s Naval Strategists
Lyle Goldstein and Nathan Waechter, The Diplomat, April 15, 2024
88. Chinese Company Under Congressional Scrutiny Makes Key U.S. Drugs
Christina Jewett, New York Times, April 15, 2024
89. Australia to Boost Defense Spending Amid U.S.-China Tensions
Mike Cherney, Wall Street Journal, April 17, 2024
90. China's attacks on U.S. infrastructure aren't going anywhere
Sam Sabin, Axios, April 14, 2024
Nearly a year after the U.S. government first named and shamed an ongoing Chinese hacking campaign against American infrastructure, top cybersecurity leaders say the threat is still as palpable as ever.
Why it matters: China's Volt Typhoon group has displayed a persistence that's rare among nation-state hackers, experts say.
This has put insecure U.S. infrastructure, such as water systems and shipping ports, in the crosshairs of foreign adversaries.
What they're saying: "Am I alarmed and do I have heartburn over what Volt Typhoon and what other Chinese actors are capable of doing? Yes, absolutely," Kemba Walden, the former acting national cyber director, said at last week's Verify conference outside San Francisco.
"They're motivated, they're creative," she added. "It tells me that we need to continue to focus on the basics."
Catch up quick: Last May, Microsoft and the National Security Agency publicly outlined how Volt Typhoon was stealthily lurking inside American infrastructure — in some cases, maintaining access to those networks for at least five years.
Officials have seen evidence of the group targeting electric grid operators, shipping ports and water systems, according to reports.
Threat level: But Volt Typhoon hasn't changed its behavior — even after a series of U.S. congressional hearings, advisories and botnet takedowns, Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency (CISA), told Politico late last month.
Between the lines: Volt Typhoon doesn't rely on sophisticated tactics to break into systems. It's just the group's persistence — paired with many infrastructure operators' lack of resources — that makes this threat unique, experts say.
Many of the tactics that Volt Typhoon uses to obfuscate its activities, gain access to a network, and maintain that access are relatively easy for any skilled hacker to do, Ben Read, director of Mandiant's cyber espionage analysis team, told Axios.
But clamping down on the activity requires a level of coordination among critical infrastructure operators that doesn't really exist.
Zoom in: For example, the overall U.S. water system has at least 150,000 individual systems, each run by different entities and individuals.
To keep Volt Typhoon out, each system operator would need to be able to prioritize software upgrades, password resets and other CISA advice.
91. First Among Piers: Chinese Ships Settle in at Cambodia’s Ream
Asia Maritime Transparency Initiative, April 18, 2024
Two Chinese navy ships have now spent over four months at Cambodia’s Ream Naval Base, the first and only two ships to have docked at a new pier built at the base with Chinese funding. This extended and exclusive access to the new pier comes after years of concerns expressed by the United States and others over a rumored secret agreement between Beijing and Phnom Penh to establish a permanent Chinese military presence at Ream, raising the question of whether that presence has now, in fact, been established.
COMMENT – Just to remind everyone, both Cambodia and the PRC have been denying this would ever happen for years now: “Cambodia and China deny naval base scheme as Australian PM voices concern,” The Guardian, June 8, 2022.
One might ask: why shouldn’t Beijing just admit what everyone can see? The United States has military bases in the region, why shouldn’t the PRC have one as well? Because the Cambodian Constitution forbids foreign militaries from being based in the country and admitting the fact that the PLA Navy is based there would demonstrate to the world that Cambodia is simply a satellite of the PRC and that Cambodia cannot enforce its own laws.
One Belt, One Road Strategy
92. Chinese exodus leaves Cambodia boomtown with 500 'ghost buildings'
Yuji Nitta, Nikkei Asia, April 14, 2024
93. Officials promote China-led cyber governance to Belt and Road members during the Digital Silk Road forum in Xian
Ben Jiang, South China Morning Post, April 16, 2024
94. Chinese state firm agrees US$400 million loan for Niger junta in return for oil
Jevans Nyabiage, South China Morning Post, April 17, 2024
Opinion Pieces
95. Stop appeasing China at the World Bank and IMF
DJ Nordquist and Dan Katz, The Hill, April 18, 2024
As the World Bank and the International Monetary Fund gather this week, they will rightfully claim to be at the center of the international financial system, as central bank governors, finance ministers, private sector participants, and civil society organizations from around the world descend on Washington.
As with all international organizations, the World Bank and IMF prefer the involvement of all nations, not just those that hold the original values and aims of economic integration in the aftermath of World War II. Unfortunately, this is a mistake.
This all-inclusive approach may be appropriate for a diplomatic organization such as the United Nations. But the World Bank and the IMF are financial institutions, designed by the West to promote development and economic growth and stability. They were not designed for participation by non-market economies such as China, nor for promotion of their interests.
Predictably, the inclusion of China in the Bretton Woods institutions has only frustrated these institutions’ purpose. It is time to recognize this reality and ostracize China rather than keep trying in vain to co-opt it.
China does not share the West’s commitment to raising global standards of living by promoting sound macroeconomic policies that ultimately strengthen the capitalism-dominated international system. Instead, China seeks to promote its own economic, political, and military interests internationally.
In recent years, China has become the largest official creditor to the developing world. These loans are generally made without conditions that would encourage sound macroeconomic policies. These debt traps are designed to allow further expansion of Chinese influence, often by promoting corruption in the debtor nations. Chinese development efforts also generally come with both Chinese firms (typically state owned enterprises with connections to the Chinese Communist Party) and Chinese workers, undermining the potential economic benefits for local populations in the debtor nations.
China works at cross purposes with the World Bank and IMF outside of these organizations by building its own alternative development institutions. But its inclusion in these institutions also undermines their work from within. IMF efforts to resolve sovereign debt crises are often frustrated by China’s unwillingness to agree to reasonable concessions that are common for official creditors.
At the World Bank, China frequently undermines attempts to uphold standards related to human rights, including fighting attempts to verify the strong evidence that slave labor is being used in World Bank procurement from China.
China’s subsidized bids also continue to dominate World Bank procurement. Predictably, Chinese firms advance Chinese interests — for example, by helping governments spy on the opposition — subsidized by World Bank and U.S. taxpayer funds.
Unfortunately, the response from World Bank and IMF leaders has generally been one of appeasement rather than confrontation. World Bank President Ajay Banga, who was appointed by the Biden Administration, has stated he does not want to take sides between the United States and China. He has expanded World Bank cooperation with the Asian Infrastructure Investment Bank, which was established by China with the express purpose of promoting Chinese interests, as an alternative to the World Bank. IMF Managing Director Kristalina Georgieva is seeking to increase China’s IMF shareholding and voting rights, all without any associated commitment from China to support the stated mission of the IMF.
It is time for democratic and capitalist nations, led by the U.S., to stop believing the fiction that China can be a productive, responsible force in international organizations like the World Bank and IMF. Instead, the U.S. should seek to challenge and marginalize China.
The World Bank should immediately cease all lending to China and revise its procurement process to eliminate subsidized Chinese bids. The IMF should speak honestly about Chinese financial behavior and work with rating agencies to ensure that sovereign default on Chinese loans does not impair creditworthiness, given the predatory, opaque nature of the loans. The G7 and likeminded countries should also be willing to use bilateral economic tools to achieve these goals and support the Bretton Woods institutions.
This approach would result in tantrums by China and potential diplomatic blowback, but the willingness to take drastic action is necessary to change Chinese behavior. The U.S. must work from within to promote the Bretton Woods institutions’ original goals of helping the world’s poorest and promoting global economic growth and stability, rather than abandon them to China.
COMMENT – To commemorate “Bank Week” here in Washington, I hope folks read this piece.
96. ASPI was targeted by Chinese hackers. Even if you dislike us, it's gravely concerning
Justin Bassi, Canberra Times, April 19, 2024
97. Republicans Are More United on Foreign Policy Than It Seems
Matthew Kroenig and Dan Negrea, Foreign Policy, April 17, 2024
98. Russia has no future and China will seize this opportunity: It may not look like it now, but the two powers are destined for future conflict
Ralph Schoellhammer, Brussels Signal, April 11, 2024
Despite the hyped Russia-China alliance, underlying tensions exist over territorial disputes and resource dependencies. China benefits from Russia's distraction in Ukraine, potentially exploiting Russia's vulnerabilities in Central Asia and Siberia.
99. Trudeau just doesn't think Chinese interference is anything to be angry about
Terry Glavin, National Post, April 11, 2024
There are two peculiar and paradoxical things about the disturbing revelations that have emerged over the past few days from Justice Marie-Josée Hogue’s public inquiry into foreign interference in the 2019 and 2021 federal elections.
The first is that the most disturbing evidence entered into the record isn’t even really news. Pretty well all the bombshell revelations coming out of Justice Hogue’s commission hearings have been the subject of headline stories, one after the other, over the past five years.
What’s genuinely newsworthy about the proceedings is that the Canadian Security Intelligence Service documents now on file with the commission confirm pretty well all the shocking news reports about Chinese election subterfuge that the Trudeau government, from the beginning, has variously disputed, denied, or dismissed as outbursts of anti-Asian racism or Conservative sour grapes.
The second paradox involves the pathology that the public inquiry has inadvertently allowed Canadians to witness, in real time. It’s the Liberal government’s cynical indifference to Beijing’s orchestration of interference operations across the country, a crippling pathology CSIS has been shouting about for years.
That same indifference fairly oozed from Prime Minister Trudeau and his officials this week at the inquiry — proceedings the Liberals fought tooth and nail, by obstruction and filibuster, in the effort to prevent the commission from even getting off the ground.
In just one of the 34 briefings about foreign interference that CSIS has provided the Prime Minister’s Office, various cabinet ministers and other senior officials in the years since 2018, a briefing note from last February, tabled with Hogue’s commission this week, contained this warning: “Until (foreign interference) is viewed as an existential threat to Canadian democracy and governments forcefully and actively respond, these threats will persist.”
100. Should the United States change its policies toward Taiwan?
Michael E. O’Hanlon, Ivan Kanapathy, Rorry Daniels, and Thomas Hanson, Brookings Institution, April 16, 2024
101. The U.S. Has Received a Rare Invitation from China. There Is Only One Right Answer.
W.J. Hennigan, New York Times, April 15, 2024
In the middle of the last century, as the United States and Russia rapidly amassed thousands of nuclear weapons, China stayed out of the arms race, focusing its energy on growing its economy and broadening its regional influence.
Beijing did build hundreds of nuclear weapons during those years, but the nation’s leaders insisted their modest arsenal was merely for self-defense. Since China’s first nuclear weapons test, in 1964, the country has pledged loudly to never go first in a nuclear conflict — no matter what. That stance, coupled with a stated strategy of “minimum” deterrence, didn’t demand the level of American fear, loathing and attention that the Russian threat did.
Now there is increasing unease in Washington about China’s nuclear ambitions. The Pentagon says Beijing is on track to double the number of its nuclear warheads by the decade’s end, to 1,000 from 500 — a development that senior U.S. officials have publicly called “unprecedented” and “breathtaking.” China has drastically expanded its nuclear testing facility and continued work on three new missile fields in the country’s north, where more than 300 intercontinental ballistic missile silos have recently been constructed.
China’s transformation from a small nuclear power into an far larger one is a historic shift, upending the delicate two-peer balance of the world’s nuclear weapons for the entirety of the atomic age. The Russian and American arsenals — their growth, reduction and containment — have defined this era; maintaining an uneasy peace between the two countries hinged on open communication channels, agreement on nuclear norms and diplomacy.
Little of that nuclear scaffolding exists with China. In Washington, how exactly to interpret Beijing’s sharp nuclear buildup is still a matter of debate. At best, American officials say, their Chinese counterparts are trying to catch up with the United States and Russia, which still each have roughly a 10-to-1 nuclear advantage over China with their stockpiles. At worst, they say, this is Beijing’s boldfaced attempt to deter the United States from defending Taiwan against a Chinese invasion, the most likely flashpoint for an armed conflict between the competing superpowers.
In truth, no one knows what China is planning. President Xi Jinping’s government, as with much of its domestic policy, releases vanishingly little information about its nuclear intentions, strategies or goals, and it has been equally unwilling to engage on arms control.
That is, until now.
In February, in a rare offer for nuclear diplomacy, China openly invited the United States and other nuclear powers to negotiate a treaty in which all sides would pledge never to use nuclear weapons first against one another. “The policy is highly stable, consistent and predictable,” said Sun Xiaobo, director general of the Chinese Foreign Ministry’s department of arms control, in Geneva on Feb. 26. “It is, in itself, an important contribution to the international disarmament process.”
The invitation came as a surprise. While Beijing has long claimed moral superiority over other nuclear powers on this issue — China and India are the only nuclear-armed nations to declare a no-first-use policy — opening the possibility for talks in such a public way is something China hasn’t done in years.
It may seem like a no-brainer to take China up on the offer — wouldn’t it be better if everyone agreed not to be the first to use their nuclear weapons? — but it has been met with public silence from Washington. For American policymakers, committing to no-first-use is deeply divisive. The United States, the only nation to ever use nuclear weapons in conflict, when it dropped two atomic bombs on Japan in 1945, has never ruled out being first to use them again, nor has it detailed the circumstances under which it would consider doing so. This approach of calculated ambiguity is intended to prevent adversaries from taking military action against the United States — and the more than 30 allies it is bound by treaties to defend — out of fear for what could come their way in response.
It’s also a personal issue for President Biden. He supported a no-first-use policy as vice president amid deliberations inside the Obama administration, and as a presidential candidate on the campaign trail he said the “sole purpose” of the U.S. nuclear arsenal should be aimed at deterring or retaliating against an adversary’s nuclear attack. But when it came time for his own administration to adopt a declaratory nuclear policy, he decided not to break with America’s longstanding nuclear dogma and retained the first-use option.
Mr. Biden’s about-face was a sign of the times, a result of both internal deliberations and consultations with allies in Europe and Asia. According to current and former administration officials, these nations’ leaders feared a U.S. policy reversal would undermine confidence in America’s commitment to come to their defense and would potentially embolden China, Russia and North Korea.
The uneasiness surrounding a potential change to America’s first-use policy almost certainly played a role in China’s unusually public invitation to negotiate. China may simply be trying to stoke anxieties among American allies and partners — and particularly Taiwan, South Korea and Japan — by floating a public offer outside of private diplomatic channels.
It’s not the first time it has gone down this road. During the Cold War, China made offers for a mutual no-first-use pledge at the United Nations in 1971 and 1982, and presented a draft treaty in 1994 to the other nuclear weapons states. Four years later, China tried to persuade President Bill Clinton to change American nuclear policy when he visited Beijing, but Mr. Clinton decided against it, choosing instead to share a pledge to stop targeting each other with their nuclear weapons.
Such overtures have all but halted under the leadership of Mr. Xi, who has pursued a far more aggressive foreign policy. He has overseen a sweeping modernization of China’s military, including developing and fielding new nuclear-capable missiles, submarines and bombers. Meanwhile, the stockpile of warheads steadily climbs.
COMMENT – This is a silly article… “no first use” is a policy declaration… arms control agreements are based on physical components and hardware, things that can be inspected, counted, and verified. Building an arms control agreement around something as fickle as a declarative policy is ridiculous [maybe we should just re-adopt the Kellogg-Briand Pact of 1928 and outlaw war altogether… that will solve the problem].
This is a proposal coming from the same country whose leader still claims falsely that the PRC has never attacked another country.
Additionally, agreeing to “no first use” would gut U.S. collective security commitments with our “nuclear umbrella.” The effect of agreeing to this policy would be to accelerate nuclear proliferation as partners of the United States realize that the U.S. nuclear guarantee has evaporated. South Korea, Japan, and Taiwan would all conclude that their security could only be guaranteed from aggressive and expansionist powers like the PRC and Russia through their own nuclear arsenals.
Is the world safer with empty promises not to use nuclear weapons first or with few countries that have nuclear weapons… I pick the latter.
102. China’s National People’s Congress and the economy: Short change
George Magnus, Council on Geostrategy, March 11, 2024
103. Chinese politics in 2024: Indications from the ‘Two Sessions’
Charles Parton, Council on Geostrategy, April 16, 2024
104. China’s Hands Are Tied Against Tangle of US Alliances
Minxin Pei, Bloomberg, April 16, 2024
105. Beijing intentionally funding fentanyl trafficking globally: U.S. Congress hearing
Sam Cooper, The Bureau, April 16, 2024
"They are knee deep in actively sponsoring and encouraging and facilitating the production and export of fentanyl for distribution in the United States": Former Attorney General
A U.S. Congress committee investigation has presented compelling evidence that Beijing is paying organized crime to traffic fentanyl globally while elite Chinese Communist Party officials are directly implicated in related drug money laundering networks, former U.S. Attorney General William Barr said Tuesday.
Barr was testifying for the U.S. House Select Committee on the Chinese Communist Party, and said he believes Beijing is backing Chinese fentanyl syndicates with the overarching objective of weakening the United States.
The bipartisan group of legislators tabled a report that alleges since “at least 2018” President Xi Jinping’s regime has provided nationwide government subsidies to PRC companies that manufacture fentanyl and its precursors, “so long as these companies sell [it] outside China.”
106. Beijing's social engineers will always be obsessed with production
Donald Low, Nikkei Asia, April 17, 2024
107. Private capital is the G7’s best tool to compete with China
Douglas A. Rediker, Brookings Institution, April 15, 2024
108. Gold is back — and it has a message for us
Rana Foroohar, Financial Times, April 14, 2024
109. One way to get China to clean up faster: build a 'climate club'
Washington Post, April 13, 2024