China Articles - September 25, 2022
Friends,
I’m writing this on Saturday morning, as rumors swirl across the Twitter-verse about the mass cancelations of flights in the PRC, movement of the PLA, and some sort of coup. To date, I have yet to see anything I would characterize as reliable reporting (and I’m reluctant to even mention the rumors), but I think it just goes to show how little insight we have into the inter-workings of the Chinese Communist Party, particularly as the 20th Party Congress approaches.
A decade ago and just weeks before the start of the 18th Party Congress, Xi Jinping disappeared for two weeks and it caused quite a stir as folks speculated whether he had been pushed out right before he was to assume power (Louisa Lim’s NPR report from September 2012).
There is no doubt that Xi Jinping is under significant pressure and if a faction (or factions) were to move against him, the run-up to the Party Congress presents an opportunity.
But of course, it is really, really hard to organize and mobilize a sufficiently large faction within the Party given the ever-present surveillance and the paranoia that must exist for every Party Member: their lives, and the lives of their family members, hinge on the decisions they make about choosing to get involved or sit on the sidelines.
So, I will make no predictions and only encourage everyone to watch closely for what happens in Beijing (and Moscow).
A year ago, the PRC released Michael Spavor and Michael Kovrig after holding the two Canadians hostage for nearly three years. The Chinese Communist Party seized the pair in order to coerce the Canadian Government into releasing Meng Wanzhou, the Huawei Executive who was taken into custody because of a U.S. indictment for bank and wire fraud connected to Huawei’s efforts to violate sanctions against Iran.
When the U.S. Justice Department essentially dropped the case, allowing Meng to return to a hero’s welcome in Shanghai, the two Michaels were released the same day.
Thanks for reading!
Matt
MUST READ
1. China Hit Some Bumps on Its Road to Semiconductor Dominance
Rick Switzer and David Feith, Wall Street Journal, September 20, 2022
But the history of solar power and shipbuilding shows why the U.S. can’t afford to be complacent.
Don’t be lulled into thinking China is failing in its goal to become the world’s biggest semiconductor-chip producer. That’s the conclusion some are drawing from such troubles as the bankruptcy of national champion Tsinghua Unigroup and the high-profile arrests of several officials and executives. If China is failing, the argument goes, why is Washington launching an expensive industrial policy to subsidize domestic semiconductor manufacturing?
This analysis is emblematic of the Western habit to underestimate the strength and resilience of China’s economy, political system and industrial strategies. China’s statist approach suffers from endemic waste, misallocation of capital and corruption. China isn’t guaranteed to succeed simply because Beijing wants to. But the notion that these arrests and bankruptcy signal China’s failure lacks evidence.
Consider the solar and shipbuilding industries. Similar to semiconductors, solar technology was invented and first commercialized in the U.S., only to be targeted later by China’s state planners. In 2012, after years of massive subsidies and overinvestment, China’s largest solar firms began to suffer high-profile setbacks. Trina and others cut production to maintain profitability. LDK Solar and others were bailed out by local governments while defaulting on foreign bonds. Suntech, the Nasdaq-listed darling of China’s solar sector, went bankrupt in 2013.
Fast-forward to the present, however, and China’s solar industry is so dominant that U.S. and European green-energy goals depend on Chinese exports. China accounts for 80% of global solar production (across all segments of the supply chain) and nearly 95% of polysilicon crystal. To make matters worse, China’s solar sector exploits forced labor from Uyghur Muslims in Xinjiang and beyond, so importing more Chinese solar panels often means abetting slavery.
In shipbuilding, too, Beijing’s interests have been well-served by subsidies, market-bending policies, and a willingness to endure economic losses. In 2002 Premier Zhu Rongji gave a speech calling for China to be the world’s leading shipbuilder, and Beijing made 2015 the target year to achieve this goal. At the time, China accounted for only 5% of global shipbuilding output. In 2003 a national shipbuilding plan emerged, followed by massive subsidies and other accommodative industrial policies.
Between 2005 and 2009, China added 30 times as many new shipyards as global leaders Japan and South Korea. Reuters reported in 2011 that China’s shipyards were “in troubled waters as orders dry up.” But other countries’ shipyards suffered worse. By 2017 China’s immense increase in global capacity forced once-dominant firms such as South Korea’s Daewoo Shipbuilding and Japan’s Mitsubishi Heavy Industries to shrink significantly or seek government assistance to remain in business, while many other firms exited the industry.
Despite losing tens of billions in wasteful overinvestment, Beijing accomplished its goals. By purposely creating global overcapacity, driving profits out of the industry, and bankrupting foreign competitors, China became the world’s leading shipbuilder. It now controls some 50% of global shipbuilding sales. (U.S. shipbuilding is in such short supply that as recently as 2016 U.S. defense contractors considered joining with Chinese firms for dry-dock capacity.)
A recent Stanford study showed that industries targeted by China’s five-year plans see a surge in new Chinese firms and significant declines in U.S. firm creation, output, employment and earnings.
These lessons of history apply to semiconductors too. By certain measures Beijing’s policy is finding success. China now produces more chips than the U.S., accounting for about 15% of global output. Its chip-manufacturing giant, SMIC, recently produced a 7-nanometer chip. That is behind the global cutting edge, which is 3 nanometers and smaller, but it may rival U.S. leaders such as Intel.
Beijing’s industrial policies reflect inconvenient realities. Building semiconductor foundries (known as fabs) is now so expensive, close to $20 billion each at the cutting edge, that firms all but demand state backing before building one. Between 2012 and 2020 (when U.S. lawmakers began working on the subsidy plan enacted this summer), most new high-volume, leading-node fabs in the world were built in China, South Korea and Taiwan, where firms enjoy government subsidies and implicit guarantees.
Hence the case for the recently passed Chips+ Act, through which Washington will subsidize U.S. semiconductor manufacturing, which has fallen to 12% of global production from 37% in 1990. Subsidies can create distortions and feed corruption, so we need deft administration, transparency and limits. But ceding semiconductor manufacturing to others who subsidize it for strategic advantage has exposed the U.S. to a dangerous dependency on exports from overseas markets that are subject to Chinese coercion.
Policy makers can recognize the challenges of America implementing its own industrial policy without mischaracterizing China’s mission as failed or doomed. Whatever embarrassing failures are hurting China’s semiconductor industry these days, history and strategic prudence show that the U.S. should take Beijing’s ambitions seriously and spend to counter them before it’s too late.
2. US bank chiefs warn of China exit if Taiwan is attacked
Joshua Franklin and Demetri Sevastopulo, Financial Times, September 21, 2022
The chief executives of the three largest US banks by assets made the commitments on Wednesday at a hearing of the committee on financial services at the House of Representatives. They spoke in response to a question by Blaine Luetkemeyer, a Republican congressman from Missouri, on whether they were prepared to pull their investments out of China in the event of a military assault on Taiwan.
“We’ll follow the government’s guidance, which has been for decades to work with China. If they change their position, we will immediately change it, just as we did in Russia,” said Brian Moynihan, BofA’s chief executive.
His comments were echoed by Jane Fraser and Jamie Dimon, the chief executives of Citi and JPMorgan, respectively.
Strider Technologies, September 21, 2022
A report on how the People’s Republic of China recruited leading scientists from Los Alamos National Laboratory (LANL) to advance its military programs. Between 1987 and 2021, at least 162 Chinese scientists who worked at LANL returned to the PRC, with some helping to develop bunker-busting warheads, hypersonic missiles, along with technology to silence submarines and improve military drones. Known as the “Los Alamos Club,” these individuals have done enormous damage to U.S. national security.
4. Xinjiang Has Produced Its James Joyce. And he’s now sitting in a prison camp.
Ed Park, The Atlantic, September 21, 2022
The book is The Backstreets.
In his introduction, Darren Byler, one of the novel’s translators, writes that Tursun was a victim of this alleged persecution, disappeared “at the height of his powers” by Chinese authorities in 2017, along with other Uyghur intellectuals (including Byler’s anonymous co-translator). That year, a high-ranking Xinjiang official made a push to “round up everyone who should be rounded up,” and it’s not hard to imagine that The Backstreets, with its depiction of anti-Uyghur racism, put Tursun on the authorities' radar. In 2020, Byler heard that, while in detention, Tursun, then 51, had received a 16-year prison sentence.
The irony is that Tursun, a secular Muslim steeped in 20th-century Western literature and philosophy, was himself the target of death threats from conservative Uyghur Muslims outraged by his 1999 novel, The Art of Suicide. (The journalist Bethany Allen-Ebrahimian, who wrote that 2015 profile, dubbed him “China’s Salman Rushdie.”) Persecuted by the religious right and its foe, the Chinese Communist Party, Tursun would be a heroic figure regardless of the quality of his output. It’s bittersweet for us Anglophones, then, that the slim evidence we have—136 pages, distilled over a quarter century—is close to a perfect work of art.
5. BOOK REVIEW – China After Mao by Frank Dikötter — the grand deception
Jonathan Fenby, Financial Times, September 21, 2022
A detailed unpicking of the illusion China’s rulers perpetuate that the country’s economic growth has been driven by reform.
Have China’s “reform and opening up” policies, proclaimed from the late 1970s onwards, been the key to the country’s spectacular growth? Or are they little more than a smokescreen for retrograde statist control to bolster the last major communist regime on Earth?
These may seem odd questions about a country that has, over four decades, risen from its basket-case condition of the late Maoist era to become a potent global rival to the US — perhaps the dominant superpower of the 21st century. But it is one prompted by China After Mao, historian Frank Dikötter’s latest examination of the recent history of the People’s Republic. Especially so, given the current travails of the Chinese economy, as it grapples with falling growth, escalating debt, a yawning property crisis and huge misallocation of capital, not to mention the impact of its zero-Covid policy.
After three revelatory books about China under Mao Zedong, Dikötter, chair of humanities at the University of Hong Kong, moves on to the years after the death of the Great Helmsman in 1976, drawing on an array of primary sources. These include some 600 documents from provincial and municipal archives and the secret diaries of Mao’s one-time secretary, Li Rui, who subsequently became vice-director of the party organisation department. Dikötter thus offers a blow-by-blow account of the uneven, reactive and sometimes chaotic course of economic policies with a wealth of detail about their impact as the leadership veered between hectic growth and retrenchment.
As in his previous works, Dikötter is bracingly direct in his account of the policy contortions of a regime he characterises as being marked by “bitter back-stabbing and fighting for power among endlessly changing factions”, intrinsic corruption and a leadership most of whose members “do not understand even basic economics”.
Dikötter is bracingly direct on the policy contortions of a leadership most of whose members ‘do not understand even basic economics’
Blind production regardless of demand was tolerated in the name of growth, as decreed by Mao’s successor, Deng Xiaoping, in the late 1970s, as China abandoned the collectivisation of the Mao years, private enterprise was tolerated and trade and foreign investment encouraged. Local authorities were often allowed to go their own way, creating baronies in their regions that fanned inefficiencies by going after the same targets and the same self-enrichment. Speculation ran amok, with the result, as one Chinese academic noted, that “everything is overleveraged”. The build-up of credit and debt by local governments, officials and state companies was there from the start, with state banks acting as the feeding trough. A bank inspector in the 1980s is quoted as remarking that “some cadres walk into a bank to get cash because it is more convenient for them to do so than to go back home and fetch their wallets”.
Some elements of the book are open to debate, such as Dikötter’s downplaying of the private sector, which has provided most of the growth and job creation, even if it is kept on a tight rein and often depends on state contacts. But China After Mao provides an important corrective to the conventional view of China’s rise through reform.
It also shows how the difficulties China now faces in its debt burden, its imbalances and its reliance on fixed asset investment can be tracked back to the early stages of the surge launched by Deng, both in his early reforms and again with the southern tour he undertook in 1992 to reignite expansion and turn back conservative policies after the crushing of the protests in Beijing and other cities in 1989.
The basic lesson to be drawn, from the days of Deng to the present under Xi Jinping, is that Chinese economic policy is a function of politics whose core concern is to maintain Communist rule. If necessary, this is by force, as in the 1989 crackdown and the continuing repressive machinery, but also in implementing policies seen to buttress the regime, however ineffective or inefficient.
Dikötter repeatedly cites statements by leaders in Beijing, many of whom appeared to the world as reformers, that they would never deviate from Marxist socialism. As he argues, “without political reform market reform cannot exist”. Given their resistance to political change, leaders from Deng to Xi have never even considered opening up the economy to real market competition. Rather, they have indulged only in “tinkering with a planned economy”, he writes. As for openness, “what the regime has built over the past four decades is a fairly insulated system capable of fencing off the country from the rest of the world”.
As he prepares to be granted an unprecedented third term as supreme leader, Xi continues the tradition, putting economic policy under politburo control and proclaiming repeatedly that “government, military, civilian and academic; east, west, south, north and centre, the party leads everything”. All the while, however, Xi urges China to pursue “self-reliance” and reject foreign ideas such as competitive democracy, the rule of law and the separation of powers.
Ending his account in 2012, when Xi became party leader and Li Rui closed his diary, though adding an epilogue on the subsequent period, Dikötter conjures up a comparison of China with “a tanker that looks impressively shipshape from a distance with the captain and his lieutenants standing proudly on the bridge while below deck sailors are desperately pumping water and plugging holes to keep the vessel afloat”.
As for the task Xi faces, the easy options in the form of a huge, cheap labour force, access to foreign technology and investment plus a benign international climate have been contracting or are proving self-destructive. So the challenge for the leadership is, as the book concludes, “how to address structural issues of its own making without giving up its monopoly on power and its control of the means of production”. That may seem “very much like a dead end”, but it looks like shaping Chinese policy for the years ahead, with major consequences for the world at large.
China After Mao: The Rise of a Superpower by Frank Dikötter, Bloomsbury £25/$30, 416 pages
AUTHORITARIANISM
6. ‘We’re on That Bus, Too’: In China, a Deadly Crash Triggers Covid Trauma
Li Yuan, New York Times, September 21, 2022
A bus heading to a quarantine facility crashed, killing 27. The Chinese public saw itself in the victims: a country being held hostage by the government’s harsh policy.
7. Stuck in China’s covid lockdown, people plead for food, medical care
Eva Dou and Vic Chiang, Washington Post, September 12, 2022
Frantic appeals for food and medical care are spreading across China in a grim deja vu, as tens of millions of people are put under weeks-long coronavirus lockdowns ahead of a key meeting of the ruling Communist Party.
While much of the world is moving past the pandemic, China remains stuck, with leader Xi Jinping continuing orders to maintain “zero covid.” These lockdowns are keeping localized outbreaks from spreading but are taking an enormous economic and psychological toll on the population.
Xi is set to begin a third five-year term next month, breaking the precedent of stepping down after two terms. Lockdowns are expected to continue at least through that meeting, the 20th National Chinese Communist Party Congress.
Bethany Allen-Ebrahimian, Axios, September 20, 2022
Once skeptical of America's increasingly hostile stance toward China, the EU and its member states are adopting a cascade of new measures that bring their policies closer in line with those of the United States.
Why it matters: Beijing's push for Europe to adopt "strategic autonomy" from the United States — in the hope the EU would maintain warmer ties with China — now looks like a moot point.
Stella Chen, South China Morning Post, September 18, 2022
10. The Truss Administration – What Can We Expect on…Russia and China
David Landsman, Evie Aspinall and Eliza Keogh, British Foreign Policy Group, September 21, 2022
On China too, the new administration is expected to take a tough stance. As Foreign Secretary, Liz Truss took a much harder line than her predecessors on China. If she persists with this approach as Prime Minister, the UK’s relations with China are likely to undergo a chill unprecedented in recent years.
As Foreign Secretary, Truss consistently and confidently diverged from David Cameron’s pursuit of a “golden era” with Chinese President Xi Jinping, using both her opening pitch as Foreign Secretary in 2021 and her Mansion House Speech in April 2022 to characterise China as a strategic threat. As Foreign Secretary, she has taken a hard approach to the Chinese treatment of the Uighur population as well as on the use of Huawei technology in the UK 5G network and has also strongly supported the generous visa offer to Hong Kong citizens. Even as a senior Minister in Johnson’s Government, she often appeared to be keen to move even further in the direction of a tough approach to China.
The team around her, including Cleverly, Wallace and China hawk Tugendhat – all of whom have openly supported a firm stance on China’s influence – would be expected to deliver a particularly muscular policy on China. Tugendhat particularly has done his best to harden British policy toward the Chinese state through his role in establishing the Parliamentary China Research Group (CRG), calling for the UK to lead the way in uniting the free world against the threat posed by China by focusing on defence, and encouraging other nations to shore up their own defence spending. It will be particularly interesting to see how Tugendhat’s presence in the Government influences policy: does it move even closer to that of the CRG or if not how does he react?
11. China’s biggest property developer Country Garden sees profits plunge 96%
Martin Farrer, The Guardian, August 30, 2022
12. China's 2022 property sector outlook worsens, home prices seen falling
Liangping Gao, Shuyan Wang, and Ryan Woo, Reuters, September 6, 2022
13. China’s Vast 14,000-Bed Covid Isolation Center Revealed in Drone Footage
Linda Lew, Bloomberg, September 21, 2022
15. Frank Tang, South China Morning post, September 21, 2022
16. China’s Public Puts on a Show of Zero Covid for an Audience of One
Li Yuan, New York Times, September 9, 2022
Because of Xi Jinping’s unrelenting policy, the Chinese people put up with a precarious existence filled with lockdowns, quarantines and mass testing.
As fire was raging in the mountains surrounding the southwestern Chinese metropolis of Chongqing, 10 million residents stood in 100-plus-degree heat to get Covid tests. Two cases were detected that day in August.
A week earlier in Xiamen, in the country’s southeast, pandemic workers swabbed the throats of fishermen before they tested their catch of fish and crab. Cars got swabbed, too, at an auto show last week in Chengdu, in the southwest.
When a strong earthquake struck Chengdu on Monday, the first instinct of many residents was not to run for safety but to ask for permission to leave their homes under lockdown. “Don’t come downstairs! @all,” a property manager warned in a group chat. In Luding County, the epicenter of the earthquake, which killed at least 86 people, the local government told residents to make sure they got tested every day.
As much of the world tries to move on from the pandemic, the Chinese Communist Party clings to it, turning its zero-Covid policy into a political campaign that mandates the participation of 1.4 billion people.
In their precarious existence filled with lockdowns, quarantines and mass testing, the Chinese public puts up a show, 24/7, for an audience of one: the country’s top leader, Xi Jinping, who is expected to secure a third term at an important Communist Party congress next month.
Some people play their roles with enthusiasm, others with indifference or resentment. No matter what, the Kafkaesque show must go on until Mr. Xi says, “Stop.”
The zero-Covid campaign is probably the clearest testament to the power of Mr. Xi, who proved that he is as capable of mobilizing the masses as Mao Zedong, the founder of the People’s Republic of China, who launched the Great Leap Forward and the Cultural Revolution.
17. Expats Shun China Over Covid Policies, Forcing Foreign Firms to Scale Back
Yoko Kubota, Wall Street Journal, September 21, 2022
18. Hong Kong police arrest man who played harmonica at Queen’s vigil on suspicion of sedition
Jessie Yeung and Lauren Lau, CNN, September 21, 2022
ENVIRONMENTAL HARMS
19. Switcheroo: Europe is replacing energy dependence on Russia with solar reliance on China
Mary Hui, Quartz, September 22, 2022
Europe relied on cheap Russian energy for decades. And Russia was happy to supply low-cost oil and gas to gain political influence over the European Union.
That relationship has now imploded. The EU has finally woken up to the national security risks of relying on an authoritarian neighbor for energy.
But as Europe scrambles to cut its dependence on Russia, it risks further entrenching its reliance on another authoritarian country—China—for solar panels, in its push to tap alternative energy sources.
20. China lost its Yangtze River dolphin. Climate change is coming for other species next
Heather Chen, CNN, September 18, 2022
They called it the “Goddess of the Yangtze” – a creature so rare that it was believed to bring fortune and protection to local fishermen and all those lucky enough to spot it.
But overfishing and human activity drove it to the brink of extinction and it hasn’t been seen in decades.
“The baiji, or Yangtze River dolphin, was this unique and beautiful creature – there was nothing quite like it,” said Samuel Turvey, a British zoologist and conservationist who spent more than two decades in China trying to track the animal down.
“It was around for tens of millions of years and was in its own mammal family. There are other river dolphins in the world but this one was very different, so unrelated to anything else,” Turvey said. “Its demise was more than just another species tragedy – it was a huge loss of river diversity in terms of how unique it was and left huge holes in the ecosystem.”
FOREIGN INTERFERENCE AND COERCION
21. Chinese Cargo-Data Network Poses Growing Risks, U.S. Analysis Says
Daniel Michaels, Wall Street Journal, September 20, 2022
22. LOGINK: Risks from China’s Promotion of a Global Logistics Management Platform
U.S.-China Economic and Security Review Commission, September 20, 2022
23. How China Hijacks the Global Media
Marco Respinti, Bitter Winter, September 22, 2022
A new report analyzes 30 major countries of the world, concluding that, under Xi Jinping, the campaign to influence the media is constantly accelerating with devastating effects.
24. Beijing's Global Media Influence 2022
Sarah Cook, Angeli Datt, Ellie Young and BC Han, Freedom House, September 22, 2022
Key Findings:
- The Chinese government has expanded its global media footprint.
- The Chinese Communist Party (CCP) and its proxies are using more sophisticated and coercive tactics to shape media narratives and suppress critical reporting.
- The success of Beijing’s efforts is often curtailed by independent media, civil society activity, and local laws protecting press freedom.
- Inadequate government responses leave countries vulnerable or exacerbate the problem.
- Democracies’ ability to counter CCP media influence is alarmingly uneven.
- Long-term democratic resilience will require a coordinated response.
Ken Dilanian, NBC News, September 21, 2022
At least 154 Chinese scientists who worked on government-sponsored research at the U.S.’s foremost national security laboratory over the last two decades have been recruited to do scientific work in China — some of which helped advance military technology that threatens American national security — according to a new private intelligence report obtained by NBC News.
The report, by Strider Technologies, describes what it calls a systemic effort by the government of China to place Chinese scientists at Los Alamos National Laboratory, where nuclear weapons were first developed.
Many of the scientists were later lured back to China to help make advances in such technologies as deep-earth-penetrating warheads, hypersonic missiles, quiet submarines and drones, according to the report.
Scientists were paid as much as $1 million through participation in Chinese government “talent programs,” which are designed to recruit Chinese scientists to return to China. Such talent programs have long been identified as a source of concern, but U.S. officials said they had not previously seen an unclassified report that described the phenomenon in such detail, naming specific scientists and the projects they have worked on.
The talent transfer “poses a direct threat to U.S. national security,” said Greg Levesque, a co-founder of Strider and the lead author of the report. “China is playing a game that we are not prepared for, and we need to really begin to mobilize.”
HUMAN RIGHTS AND RELIGIOUS PERSECUTION
26. 5 things to know about EU plan to ban imports made with forced labor
Sarah Anne Aarup, Stuart Lau, and Samuel Stolton, Politico, September 12, 2022
The European Commission on Wednesday unveiled its long-awaited plan to ban products made with forced labor from entering the EU market — a measure sure to tick off Beijing but leave China hawks wanting more.
The announcement comes about a year after the idea was first promised by Commission President Ursula von der Leyen in her State of the European Union address, and on the same day as this year's speech laying out policy priorities.
"With this proposal, we are fulfilling President von der Leyen’s announcement in last year’s State of the Union speech that we will ban products made with forced labour from our market,” EU trade chief Valdis Dombrovskis said, calling it “a significant step forward."
27. Proposal for a regulation on prohibiting products made with forced labour on the Union market
European Commission, September 14, 2022
28. Chinese labour practices in six southern African countries
Sergio Carciotto and Ringisai Chikohomero, Institute for Security Studies, August 2022
Since the beginning of the new millennium, political and economic relations between China and Africa have intensified, leading in October 2000 to the establishment of the Forum on China–Africa Cooperation to promote industrialisation, infrastructure connectivity and facilitate trade. Between 2001 and 2007, trade between China and Africa increased by 681% and, by the end of 2009, China had overtaken the United States, becoming Africa’s largest trading partner. In 2020, according to Johns Hopkins University, the value of China–Africa trade totalled USD176 billion.
The rapid growth of Chinese-owned companies operating in Africa has been a cause for concern for academics, practitioners and activists. Issues of lack of transparency, as well as the environmental and labour conditions and practices of Chinese companies, have been at the centre of these concerns. For example, research has highlighted the unsafe working conditions in Chinese-run copper mining companies in Zambia and the abusive labour practices among Chinese companies in several other African countries. Other comparative research has highlighted differences and similarities between Chinese and non-Chinese companies’ labour practices.
This monograph analyses Chinese companies’ labour practices, including employment patterns, wage agreements and working conditions. It also reflects on the relationships between Chinese companies and trade unions, as well as on the effectiveness of mechanisms to prevent and settle labour disputes in selected countries. The study focuses on specific sectors, including construction, mining, textiles and fisheries in six southern African countries: Angola, the Democratic Republic of Congo (DRC), South Africa, Lesotho, Zambia and Zimbabwe.
29. Wang Xinmin: Veteran Falun Gong Prisoner Sentenced Again
Yang Feng, Bitter Winter, September 15, 2022
INDUSTRIAL POLICIES AND ECONOMIC ESPIONAGE
30. U.S.-China Auditing Agreement and Issues for Congress
Karen Sutter, Michael D. Sutherland, and Raj Gnanarajah, September 13, 2022
31. Proceed with Caution: Israeli Research Collaboration with China
Casey Babb, Institute for National Security Studies, September 20, 2022
32. China moves to shut out foreign medical equipment makers
Shunsuke Tabeta and Tomoko Wakasugi, Nikkei Asia, September 14, 2022
China's move to ban overseas-made medical equipment is forcing multinational corporations to choose between leaving the market or handing over their core technologies.
Local governments in Hubei, Anhui, Shanxi provinces and the Ningxia Hui autonomous region issued notices in April to local hospitals to limit their use of medical and testing equipment to those produced domestically.
33. European Interest in China Investments Wanes
Keith Bradsher, New York Times, September 202, 2022
Spending by European companies on new factories and other “greenfield” investments, long a key source of capital and technology for the Chinese economy, is falling steeply.
CYBER AND INFORMATION TECHNOLOGY
34. TikTok won’t commit to stopping US data flows to China
Brian Fung, CNN, September 14, 2022
TikTok repeatedly declined to commit to US lawmakers on Wednesday that the short-form video app will cut off flows of US user data to China, instead promising that the outcome of its negotiations with the US government “will satisfy all national security concerns.”
35. U.S. agency adds China Unicom, Pacific Networks to national security threat list
David Shepardson, Reuters, September 20, 2022
MILITARY AND SECURITY THREATS
36. The Taiwanese chip billionaire squaring up to China
Kathrin Hille, Financial Times, September 20, 2022
Robert Tsao pours $100mn into defence to make sure ‘we are all ready to resist’ a Communist invasion.
Robert Tsao loves a good fight. In his 50-year-long career, the Taiwanese tech tycoon has duelled with industry rivals, challenged the Taipei government, struggled with prosecutors and clashed with politicians.
Now, Tsao is wading into the greatest battle of his life: taking on China. After Beijing intensified its intimidation of Taiwan with unprecedented military exercises last month, the 75-year-old Tsao pledged a $100mn donation to strengthen the country’s defences, switched his citizenship back to Taiwan from Singapore and vowed to fight for his land until his death.
“What I want to do is ensure quickly, within two or three years, that nobody is afraid, and that we are all ready to resist,” Tsao said in an interview with the Financial Times.
He argued Taiwan could survive even extended bombing and missile strikes as long as it kept Chinese soldiers off its territory. “You have to train everyone to be mentally very strong. Look at the German bombing raids on British cities in the second world war — morale remained high.”
Tsao has earmarked the first $30mn of his pledge for training hundreds of thousands of civilian fighters. The tycoon also wants to finance the development of military-use drones.
He said he was in talks with Taiwanese drone makers to form an industry alliance for quickly producing 1mn attack drones at low cost. “If the Chinese Communists want to bring their troops ashore and a fleet of ships comes over the Strait, we can assault them,” he said.
But he rejects the argument that such efforts might be too little, too late. “Although it is very urgent, we still have a little time,” Tsao said. “It is like global warming. You have to remain optimistic.”
37. U.S. Spy Agencies Haven’t Kept Pace with Threats, Senate Report Says
Warren P. Strobel, Wall Street Journal, September 20, 2022
38. Rings of Fire: A Conventional Missile Strategy for a Post-INF Treaty World
Eric Edelman, Chris Bassler, Toshi Yoshihara, Tyler Hacker, CSBA, August 24, 2022
39. Chinese Drones: The Latest Irritant Buzzing Taiwan’s Defenses
Jane Perlez and Amy Chang Chien, New York Times, September 10, 2022
ONE BELT, ONE ROAD STRATEGY
40. As African countries pivot, China seizes chance to become a major military player
Jevans Nyabiage, South China Morning Post, September 20, 2022
41. Look to Africa to see China’s ambitions in the Pacific
Eryk Bagshaw, Sydney Morning Herald, August 27, 2022
42. China has waived the debt of some African countries. But it’s not about refinancing
Harry Verhoeven, The Conversation, August 31, 2022
OPINION PIECES
43. Putin, Xi and the limits of friendship
Gideon Rachman, Financial Times, September 19, 2022
Russia’s losing war in Ukraine is also a major strategic setback for China
On February 4 this year — three weeks before Russia’s invasion of Ukraine — Vladimir Putin met Xi Jinping in Beijing. A joint statement by the two leaders announced that friendship between Russia and China “has no limits”.
Seven months on, Xi may be regretting those words. Speaking before a meeting of the Shanghai Cooperation Council in Uzbekistan, Putin promised to address the “questions and concerns” that China has about the Ukraine war.
Neither Putin nor Xi chose to elaborate on those concerns in public. But it is not hard to guess. The war has weakened Russia, destabilised Eurasia and strengthened the western alliance. None of that looks good, viewed from Beijing.
The February 4 statement made it clear that the foundation of the Russian-Chinese friendship is shared hostility to American global leadership. A swift Russian victory in Ukraine — coming just a few months after America’s chaotic withdrawal from Afghanistan — would have been another serious blow to US prestige and power. That would have suited Beijing well; and might even have set the stage for a Chinese attack on Taiwan.
By contrast, a protracted conflict in Ukraine — and the prospect of Russian defeat — is a serious strategic setback for China. As Nigel Gould-Davies of the International Institute for Strategic Studies says: “There are abundant reasons for China to be very unhappy.”
The most obvious is that Russia is China’s most important international partner. The two countries are not formal treaty allies. But they back each other in international forums and stage joint military exercises. The first foreign visit that Xi made after becoming president was to Moscow. Xi has referred to Putin as his “best friend”. But now his pal looks like a loser. And China’s friendship with Russia looks like an embarrassment, not an asset.
As well as weakening China’s most important international partner, the war in Ukraine has engineered a revival of the western alliance. US leadership looks confident and effective once again. American weapons have helped to turn the course of the conflict. New countries are lining up to join the Nato alliance. The Chinese state media love to stress the inexorable decline of the west. But, suddenly, the western alliance is looking rather sprightly.
Beijing could at least take comfort from the fact that the “global south” appeared to be neutral — and sometimes even tacitly pro-Russian in this conflict. That matters because the struggle for the loyalties of countries in Africa, Asia and the Americas is an important part of China’s rivalry with the US.
But sentiment in the global south is shifting. At the Samarkand summit, Narendra Modi, the Indian prime minister, publicly chided Putin, telling him that “today’s era is not of war”. The Russian leader was reduced to promising that: “We will do our best to stop this as soon as possible.” At the UN General Assembly last week, India joined 100 other countries in voting to allow Volodymyr Zelenskyy, Ukraine’s president, to give a virtual address. Just six countries joined Russia in opposing the speech. China abstained.
At home and abroad, Xi likes to stress his desire for stability. But the war has stoked instability across Eurasia. Azerbaijan has just attacked Armenia, which is an ally of Russia. Fighting has also broken out between Kyrgyzstan and Tajikistan.
A seriously weakened and embarrassed Russia is already a much less useful partner for China. And the results of the war are still unfolding. The ultimate nightmare for Beijing would be if Putin were to fall and to be replaced by a pro-western government — which is improbable, but not impossible.
Of course, a weakened Russia also brings some benefits for China. Moscow is now increasingly economically dependent on Beijing. Putin recently made a grim reference to the hard bargain China drives in commercial negotiations.
Some Washington analysts go even further, arguing that the Ukraine war will drive Moscow permanently into the arms of Beijing, while distracting the US from focusing single-mindedly on facing down China.
This school of thought argues that a crucial turning point in the cold war was the Nixon-Kissinger opening to China of 1971. Now, they fear, the opposite is happening — and the China-Russia axis is being hardened.
But this argument treats great powers as values-free pieces on a strategic chess board.
The reality is that Russia and China have formed an informal alliance because their world views have a lot in common. It is implausible that one of them would peel off and decide to align with America. America is the problem that they are trying to solve.
The Russian-Chinese axis presented on February 4 was also, to a significant extent, a personal deal between two strongman leaders. Putin and Xi clearly liked each other’s style and saw themselves as the embodiments of their respective nations. They were, in the words of Alexander Gabuev of the Carnegie Moscow Centre, “the tsar and the emperor”.
But with Putin now looking more like Nicholas II than Peter the Great, Xi must regret embracing his Russian counterpart so wholeheartedly.
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