China Articles - April 24, 2022
Friends,
This week’s newsletter arrives as the U.S. Congress appears closer to passing their China tech competition bill (otherwise known as the Bipartisan Innovation Act) which includes $52 billion in funding for U.S. manufacturing of advanced semiconductors, as well as increased funding for R&D at the National Science Foundation, the National Labs, and manufacturing capacity to turn scientific innovations into commercially viable products.
This focus on the commercialization and manufacturing side of the U.S. economy is particularly important given the outsourcing of manufacturing to the PRC over the past two decades. So while the United States continues to maintain a technological lead over the PRC in most strategic sectors, the PRC has become the world’s factory which creates supply chain risks related to a single point of dependency, as well as national security vulnerabilities.
To put some context to the innovation competition between the United States and the PRC, see the below chart from a Congressional Research Service report from September 2021 titled, Global Research and Development Expenditures: Fact Sheet.
While passing the Bipartisan Innovation Act is critical for the United States, other democracies need to make similar investments in their own innovation capacity.
Loosely, this relates to Rana Foroohar’s OpEd in the Financial Times this week titled, It’s Time for a New Bretton Woods (#6). She writes about Treasury Secretary Yellen’s remarks last week on “friend-shoring” and the need for new institutions and systems to revitalize the liberal international order. The impetus for this revitalization is the disruption that has been caused by the PRC’s non-market economy and authoritarian political system.
Thanks for reading!
Matt
MUST READ
Senator Sherrod Brown (D-OH) and Representative Ro Khanna (D-CA), CNBC, April 20, 2022
Sen. Sherrod Brown, D-Ohio, and Rep. Ro Khanna, D-Calif., both sponsored legislation that promises to invest billions of dollars in technology, strengthen the U.S. supply chain and make America’s tech sector competitive with China. They both sit on the conference committee charged with combining different versions of the bill, which separately passed the U.S. House and Senate.
2. “Voting with their feet’: China’s wealthy look to leave after Shanghai lockdown
Sun Yu, Financial Times, April 18, 2022
Emigration inquires surge as harsh Covid restrictions cause food and medicine shortages.
3. The Age of Slow Growth in China
Daniel H. Rosen, Foreign Affairs, April 15, 2022
Dan Rosen argues that the PRC’s economic slowdown is inevitable and that it is happening now as a result of a number of reform failures by the Chinese Communist Party. He advocates abandoning the mindset that liberal democracy is in decline and embracing our relative strengths.
Tracy Wen Liu, Foreign Policy, April 14, 2022
How censorship, nationalism, and wealth have shaped young Chinese.
5. China signs security deal with Solomon Islands, alarming neighbors
Michael E. Miller and Frances Vinall, Washington Post, April 20, 2022
The leader of the Solomon Islands announced Wednesday that his country signed a security agreement with China, just days before a top American official was due to visit the Pacific nation in an attempt to scupper the controversial pact.
6. It’s time for a new Bretton Woods
Rana Foroohar, Financial Times, April 18, 2022
Yellen coined a new word for this post-neoliberal era: “friend-shoring”. The US would now favour “the friend-shoring of supply chains to a large number of trusted countries” that share “a set of norms and values about how to operate in the global economy”. It would also seek to create principles-based alliances in areas like digital services and technology regulation, similar to last year’s global tax deal (which she spearheaded).
This isn’t America Alone or even America First. But it does acknowledge the existence of a political economy in which free trade can only really be free if countries are operating with shared values, and an even playing field.
That’s both different — and, in some crucial ways, not — from the neoliberal era that is passing. The term “neoliberalism” was first used in 1938, at the Walter Lippmann Colloquium in Paris, a gathering of economists, sociologists, journalists and businesspeople who wanted to find a way to protect global capitalism from fascism and socialism.
It was a moment that chimed with our own in many ways. Europe had been pulled apart by the first world war. A decade of easy monetary policy up to 1929 had been unable to paper over major political and economic changes that had created huge rifts in societies. Labour markets and family structures were changing. A pandemic, inflation, then economic depression, deflation and trade wars had left the continent economically wrecked.
Neoliberals wanted to fix these issues by connecting global markets. They believed that if capital and trade were connected via a series of institutions that could float over individual nation states, the world would be less likely to descend into anarchy.
For a long time, this idea worked, in part because the balance between national interests and the global economy didn’t get too far out of whack. Even during the Reagan-Thatcher era in the 1980s, there was still a sense that global trade in particular needed to serve the national interest. As US president, Ronald Reagan may have been a free-trader but he used tariffs against Japan and also supported industrial policy (as did, and do, most other Asian and many European nations).
In the US, that began to shift during the Clinton administration, which orchestrated a series of free-trade deals culminating in the entry of China into the World Trade Organization in 2001, in the hope that the country would become freer as it got richer. That, of course, didn’t happen. And now, finally, leaders everywhere are acknowledging the reality of the “one world, two systems” problem.
Yellen says she hopes that “we don’t end up with a bipolar system”, particularly given how much China itself has benefited from the neoliberal system. “But real problems have emerged,” she acknowledges. “China relies in many ways on state-owned enterprises and engages in practices that I think unfairly damage our national security interests.” Multinational supply chains, “while having become very efficient and excellent at reducing business costs, have not been resilient”. Both issues, she says, must be addressed.
Today’s crossroads is not unlike the one that faced the neoliberal thinkers who crafted the original Bretton Woods system. They started not with an idea of laissez-faire markets operating for their own sake, but rather with a very human problem — how to patch together a war-torn world to make a safer, more cohesive society, one in which freedom, liberty and prosperity would be guaranteed. Markets couldn’t do it alone. New rules were needed.
That’s just where we are now. One may argue, as I would, that a pendulum shift is overdue. Global capitalism has, over the past 20 years in particular, simply run a bit too far ahead of the domestic concerns in some individual nation states. Countries with wildly different political, economic and even moral frameworks have not all played by the same global rules. Under those circumstances, fair and free markets begin to break down.
The process of crafting a new Bretton Woods has only just begun. But starting with the values that liberal democracies want to uphold is a good place.
AUTHORITARIANISM
7. Chinese diplomats head to eastern Europe as suspicions grow over Russia ties
Laura Zhou, South China Morning Post, April 19, 2022
8. China is tracking me, says Hong Kong dissident Simon Cheng
Ben Ellery and Sam Dunning, Times of London, April 16, 2022
9. How Chinese State Media’s ‘America is Bad’ Hashtags Are Backfiring on Weibo
Manya Koetse, What’s on Weibo, April 16, 2022
By Friday, April 15, a Weibo hashtag page about the U.S. being the worst country in the world when it comes to human rights (#美国就是全球最大的人权赤字国#) had received over 580 million views on Chinese social media platform Weibo.
The hashtag, initiated by Chinese media outlet CCTV, was posted in the context of a video report issued by the state broadcaster on April 14 regarding the U.S. Department of State’s 2021 Country Report on Human Rights Practices, which was published on April 12.
CCTV argued that the U.S. report, like previous years, attacks and slanders China without properly shining a light on the human rights situation in the U.S., claiming that America is failing when it comes to respecting and protecting human rights.
The Sichuan Communist Youth League added: “In the name of ‘anti-terrorism,’ nearly a million lives were taken; in the name of ‘sanctions,’ human rights are violated. Who is actually hindering world peace?”
Why this particular hashtag attracted so much attention online was recently explained on Twitter by Wen Hao (文灏), a reporter at Voice of America. Wen Hao suggested that this hashtag, along with the phrase ‘Call Me By Your Name,’ was used by Chinese netizens to express their anger about Chinese official channels often using the United States as a bad example to distract people’s attention from what is going on within mainland China.
Wen Hao reported how on April 14, in a time frame of some four to five hours, a flood of angry comments started criticizing the Chinese government for their handling of the Covid crisis and other issues under this hashtag, instead of actually attacking the U.S. according to the state media’s narrative.
Not long after, at around 4am, the only posts left using the hashtags were by verified and official accounts and the ‘Call Me by Your Name’ phrase no longer returned any results on the Weibo search function.
Chinese netizens then later jumped moved on to other hashtags, including one by state media outlet China Daily about how “Covid-19 is suspected of being related ot American bio companies” (#新冠病毒疑似与美国生物公司相关#), or one by Beijing Evening News about how “America’s murder rates are increasing at an astonishing speed” (#美国的谋杀率正以惊人速度增长#).
10. Global Investors Flee China Fearing That Risks Eclipse Rewards
Sofia Horta e Costa, Tania Chen, Bloomberg, April 17, 2022
11. COVID-shaming pits neighbour against neighbour in locked-down Shanghai
Reuters, April 18, 2022
12. China tries to cover lockdown strains on Shanghai’s front-line workers
Christian Shepherd, Vic Chiang, Washington Post, April 18, 2022
13. China’s Surprisingly Strong Growth Invites Analysts’ Skepticism
Bloomberg News, April 18, 2022
14. Janet Yellen’s message to the world: There can be no ‘sitting on the fence’ on Russia
Nick Fouriezos, Atlantic Council, April 13, 2022
15. VIDEO – Guarding Dictatorship: The Organization, Tactics, And Scale Of China's Surveillance State
Hoover Institution, April 12, 2022
16. AUDIO – Weibo removes hashtag about food shortages in Shanghai as locked-down residents go hungry
Greg James, SupChina, April 12, 2022
“If we can’t solve the problem, we need to solve the person who raised the problem,” said one cynical social media user as Weibo censored a popular hashtag about the ongoing crisis of people stuck in their apartments without enough food.
17. Shanghai TV station blasted for planning star-studded anti-epidemic gala
Greg James, SupChina, April 13, 2022
The Economist, April 16, 2022
19. Who Burned Down the Sculpture of Xi Jinping at a California Park?
James Kirchick, Wall Street Journal, April 15, 2022
20. Two powerful accounts of Hong Kong’s protest movements
The Economist, April 16, 2022
21. Faced With a Changed Europe, China Sticks to an Old Script
Chris Buckley and Keith Bradsher, New York Times, April 15, 2022
Europe was viewed as lacking the power and the will to contest China’s rise. But now, a harder line toward Russia has implications for Beijing.
22. ‘Too smelly to sleep’: Thirteen days in a Shanghai isolation facility.
Alexandra Stevenson, New York Times, April 15, 2022
Adam Solomons, Daily Mail, April 15, 2022
Olivia Gazis, CBS News, April 14, 2022
Speaking to students and faculty at the Georgia Institute of Technology, Burns called China, led by President Xi Jinping, "a silent partner in Putin's aggression" and said it posed the "greatest challenge" confronting the U.S. and "the most profound test that CIA has ever faced."
25. TikTok created an alternate universe just for Russia
Will Oremus, Washington Post, April 13, 2022
26. China Will Be Deglobalization’s Big Loser
Minxin Pei, Project Syndicate, Apr 14, 2022
27. Analysis: Xi gives thumbs-down to Shanghai, distancing closest aide
Katsuji Nakazawa, Nikkei Asia, April 14, 2022
28. China’s economy pays a price as lockdowns restrict nearly a third of its population.
Alexandra Stevenson, New York Times, April 14, 2022
29. Is Shanghai’s Covid-19 Disaster China’s Future?
Nathaniel Taplin, Wall Street Journal, April 13, 2022
30. Yellen Challenges China in ‘Moment for Choosing’ on World Order
Christopher Condon and Eric Martin, Bloomberg, April 13, 2022
31. Exclusive: China's oil champion prepares Western retreat over sanctions fear
Christopher Condon and Eric Martin, Reuters, April 13, 2022
32. Shanghai’s Low Covid Death Toll Revives Questions About China’s Numbers
Vivian Wang, Joy Dong and Amy Chang Chien, New York Times, April 20, 2022
33. How China’s Sinovac compares with BioNTech’s mRNA vaccine
The Economist, April 19, 2022
34. Foreign investors ditch Chinese debt at record pace as US yields soar
Hudson Lockett and Thomas Hale, Financial Times, April 20, 2022
35. Lithuanian exporters still frozen out by Taiwan office row with Beijing
Finbarr Bermingham, South China Morning Post, April 20, 2022
36. Shanghai lockdown: Whole communities relocated in anti-Covid drive
Robin Brant, BBC News, April 20, 2022
37. China's Xi proposes 'global security initiative', without giving details
Kevin Yao, Yew Lun Tian, Reuters, April 21, 2022
38. China expected to skip global Covid-19 summit co-hosted by Joe Biden
Shi Jiangtao, South China Morning Post, April 21, 2022
39. China and India are saving Russia from economic collapse
Ben Winck, Insider, April 19, 2022
ENVIRONMENTAL HARMS
40. China doubles down on coal
Somini Sengupta, New York Times, April 19, 2022
Choices being made about energy in the country right now will have profound implications for the climate crisis.
41. China Buys Cheap Russian Coking Coal as World Shuns Moscow
Bloomberg, April 19, 2022
FOREIGN INTERFERENCE AND COERCION
42. China's Tech-Enhanced Authoritarianism
Samantha Hoffman, Journal of Democracy, Johns Hopkins University, April 2022
This essay focuses on China to illustrate the full scope of challenges facing liberal democracies when emerging technologies are wielded by a powerful regime aiming to bend the world to accommodate its authoritarianism. While the national-security implications of China's technological rise have been well documented, and democratic governments have begun to take steps in response, the threat to democratic norms and institutions has yet to be fully examined. At the same time, liberal democracies must clearly explain to their citizens why China's tech-enhanced authoritarianism is a direct and major threat that, among other things, undermines individual autonomy and freedom of expression. Liberal democracies must also be clear about why the alternative they offer is better. They should define and promote liberal-democratic values, and invest heavily in protecting them.
43. Eight New Points on the Porcupine: More Ukrainian Lessons for Taiwan
Andrew Erickson and Gabriel Collins, War on the Rocks, April 18, 2022
44. Latest US congressional group lands in Taiwan, will meet President Tsai Ing-wen
Lawrence Chung, South China Morning Post, April 14, 2022
45. Cornell University, Chinese Students, and the Uyghur Genocide: It’s the Money, Stupid
Kok Bayraq, Bitter Winter, April 14, 2022
If the truth cannot be defended at a university, where can it be defended? Without defense of the truth, how do we learn about its existence? These questions emerged after Cornell University’s reaction to a mass walkout by Chinese students. Cornell University leaders stated, “… we must also respect that walkouts are a legitimate form of protest and an appropriate expression of disapproval.”
The legitimacy of an action must first be determined by its nature, followed by its form. An ignominious act, no matter the form, cannot be legitimate. The Chinese students who left the meeting at Cornell did so because a Uyghur Fulbright student from New Zealand, Rizwangul Nurmuhammad, mentioned the Uyghur genocide. Rizwangul’s brother, Mewlan, “disappeared” in 2017. Finally, Rizwangul managed to find out that he had been sentenced to nine years for “separatism.” The story was first publicized by Bitter Winter in 2020.
46. Tim Cook of Apple and financier Ray Dalio should register as agents for China, US panel hears
Robert Delaney and Joshua Cartwright, South China Morning Post, April 15, 2022
47. How Beijing Runs the Show in Hollywood
Aynne Kokas, Journal of Democracy, April 2022
48. YouTube Blocks Campaign Account of Hong Kong Leader-in-Waiting John Lee
Selina Cheng, Dan Strumpf, Wall Street Journal, April 20, 2022
HUMAN RIGHTS AND RELIGIOUS PERSECUTION
49. China: Credibility of UN Human Rights Chief’s Visit at Risk
Human Rights Watch, April 19, 2022
The planned visit to China by the United Nations high commissioner for human rights should meet minimum standards to be considered credible, Human Rights Watch and 59 other groups said today. The groups urged High Commissioner Michelle Bachelet to take several steps to prevent the Chinese government from manipulating the visit, announced for May 2022.
“The Chinese government has given no indication that the UN high commissioner will be allowed to see anything they don’t want her to see,” said Sophie Richardson, China director at Human Rights Watch. “She should not fail the victims of crimes against humanity and other grave abuses by enabling the Chinese authorities to manipulate her visit.”
50. China goes on the offensive over human rights
The Economist, April 16, 2022
51. Hong Kong Jails Activist for 40 Months in First Sedition Case
Kari Soo Lindberg, Linda Lew, Bloomberg, April 19, 2022
52. ‘The Exiles’: Chinese democracy activists reflect on their banishment
Catherine Zauhar, SupChina, April 15, 2022
INDUSTRIAL POLICIES AND ECONOMIC ESPIONAGE
53. The Security, Privacy and Supply Chain Problems of The Chinese Military In Your iPhone
Roslyn Layton, Forbes, April 15, 2022
54. China’s Economy: Current Trends and Issues
Congressional Research Service, April 6, 2022
55. Taiwan says COVID vaccine talks held up on China sales deal
Reuters, April 18, 2022
Iris Deng, South China Morning Post, April 20, 2022
57. US firms say China’s ‘ambiguous’ data laws are creating a ‘uniquely restrictive’ environment
Kandy Wong, South China Morning Post, April 21, 2022
58. US politicians press Biden on sale of Newport Wafer Fab to Chinese
Louisa Clarence-Smith, Times of London, April 21, 2022
CYBER AND INFORMATION TECHNOLOGY
59. China’s ‘Whole Nation’ Effort to Advance the Tech Industry
Xiao Tan, Yao Song, The Diplomat, April 21, 2022
60. China’s Makes Its Opening Move in the Global Competition Over Data; We Hardly Noticed
Digital China Wins the Future, April 18, 2022
61. China May Have Just Taken the Lead in the Quantum Computing Race
Thomas Corbett, Peter W. Singer, Defense One, April 14, 2022
MILITARY AND SECURITY THREATS
62. Solomon Islands becomes unlikely epicenter of U.S.-China competition
Dave Lawler, Bethany Allen-Ebrahimian and Zachary Basu, Axios, April 19, 2022
63. China holds military drills around Taiwan as U.S. delegation visits
Nikkei Asia, April 15, 2022
64. Strategies Behind China and the Asia-Pacific’s Military Base Construction
Felix K. Chang, Foreign Policy Research Institute, April 14, 2022
65. Ukraine War Stokes Concerns in Taiwan Over Its Fragile Internet Links
Alastair Gale, Wall Street Journal, April 18, 2022
66. Why a Chinese Security Deal in the Pacific Could Ripple Through the World
Damien Cave, New York Times, April 2022
67. White House finally awakens to PRC capture of Solomon Islands
Cleo Paskal, Sunday Guardian Live, April 16, 2022
68. Jacinda Ardern questions motive for China-Solomons security pact
Eva Corlett, Daniel Hurst, The Guardian, April 21, 2022
69. US aircraft carriers at risk from Chinese hypersonic missile
Michael Evans, Times of London, April 21, 2022
70. Chinese navy shows off hypersonic anti-ship missiles in public
Minnie Chan, South China Morning Post, April 20, 2022
71. Explainer: China UnionPay, Russia's potential payments backstop
Selena Li, Reuters, April 21, 2022
72. Remote island ramps up defenses as tensions rise between Japan and China
Blake Essig, Junko Ogura, Daniel Campisi and Emiko Jozuka, CNN, April 19, 2022
ONE BELT, ONE ROAD STRATEGY
73. The Struggle for The Soul Of The Latin American Left
R. Evan Ellis, Secure Free Society, April 19, 2022
Bill Bostock, Insider, Apr 20, 2022
OPINION PIECE
75. China’s ‘Zero Covid’ Has Become Xi’s Nemesis
Niall Ferguson, Bloomberg, April 16, 2022
Melinda Liu, Foreign Policy, April 15, 2022
77. How to deter China from attacking Taiwan
The Economist, April 23, 2022
78. Arha: US and Europe should articulate their objectives: Ukrainian victory and Russian disability
Kaush Arha, Casper Star Tribune, April 16, 2022
79. Opinion: The pandemic statistics from China are too good to be true
Editorial Board, Washington Post, April 16, 2022
80. A View of Past and Future Wars on Taiwan
Michael Meyer, The Wall Street Journal, April 18, 2022
81. Opinion: Can China’s choice for leader of Hong Kong succeed where others failed?
Keith B. Richburg, Washington Post, April 21, 2022