Friends,
I apologize this is arriving a day late, but I was recovering from jetlag.
No doubt you were as surprised as I was by the precision attacks this past week against Hezbollah leadership (and their foot soldiers who hide amongst civilians to launch thousands of rockets on Israel). The use of pagers and walkie-talkies, by exploiting electronic supply chains, was brilliant. Then on Saturday, just as Hezbollah was reeling from these embarrassing attacks, its senior military met face-to-face in a building in southern Beirut and was eliminated in a precision Israeli airstrike.
If you haven’t had a chance to read Eve Barlow’s latest post on her Substack Blacklisted, you should… she’s my new hero.
She reminds us, that there is no shame in picking sides.
The supply chain attack also reinforces why this is an appropriate action to take:
US to propose ban on Chinese software, hardware in connected vehicles, sources say – Reuters
The last thing we need to do is allow the PRC to target connected vehicles in ways that we saw unfold this week with pagers and walkie-talkies. Next step is shifting the broader electronic manufacturing sector away from the PRC as well.
Whether or not that will happen has a lot to do with the next topic.
***
The Battle over China policy in the Democratic Party
An article in Foreign Affairs this week highlights the debate going on in the foreign policy community over the direction of U.S. policy on China and in particular the divisions within the Democratic Party over the future of that policy. Jessica Chen Weiss, who just left Cornell to take a position at John Hopkins’ SAIS (School of Advanced International Studies) and is rumored to be in the running for a senior policy position in a Harris Administration, argues for relitigating U.S. China policy.
She certainly criticizes Republicans for provoking a “shooting war with China,” but she spends more time criticizes the Biden Administration for encouraging a “zero-sum” competition, thwarting efforts to “work toward common objectives,” and emphasizing “worst-case scenarios.”
In “The Case Against the China Consensus,” Weiss argues that the United States must return to the path of engagement and reassurance with the Chinese Communist Party.
Her article, along with a host of others and debates I’ve listened to for the past few months, got me thinking.
It seems clear that there are three groups within the Democratic Party competing over the future of U.S.-China relations, as well as the future of U.S. economic policy and our approach to the world. Jessica Chen Weiss represents one faction and its worth examining what those factions are, where they stand in the competition of ideas within Democratic Party circles, and who might win out for influence in a potential Harris Administration.
Group 1 – The Internationalist Competitors
This group, which I call the “Internationalist Competitors” holds sway within the Administration and was brought in by President Biden during the transition to implement his vision of “strategic competition.” The leaders of this group are folks like National Security Advisor Jake Sullivan, Secretary of State Antony Blinken, Deputy Secretary of State Kurt Campbell, former NSC China Senior Director Laura Rosenberger, former NSC China Director Rush Doshi, and Assistant Secretary of Defense Ely Ratner. In my judgment, much of the career bureaucracy within the State Department and Defense Department share this group’s diagnosis of the threat posed by China, as well as the approach advocated by this group, “managed competition.”
[FULL DISCLOSURE: While I have significant criticisms of this group’s approach… and they have heard me voice them… their position and approach most closely resemble my personal policy preferences compared to the other two groups]
Many of these individuals had been close to Hillary Clinton during her time as Secretary of State and played a critical role in developing the concepts behind the “Rebalance to Asia” (a foreign policy initiative that took shape during Obama’s first term but floundered in Obama’s second term under Secretary of State John Kerry and National Security Advisor Susan Rice). Had there been a Clinton Administration in 2017, these individuals would likely have held similar positions to the ones they hold today. While this is a counterfactual, I feel quite confident in asserting that U.S. policy towards China would have shifted to “strategic competition” in 2017 under a Clinton Presidency, just as it did under the Trump Administration.
The “Internationalist Competitors” are not only concerned about the threat posed by the PRC, but are also committed to shifting the U.S. economic model away from outsourcing manufacturing and financial engineering to something that looks like an industrial renaissance in the United States. Jake Sullivan organized the blueprint for this approach with the Carnegie report published in September 2020 titled, “Making U.S. Foreign Policy Work Better for the Middle Class.”
Today, the best spokesperson outside of government for this group within the Democratic Party is Rush Doshi, who left his position as the NSC China Director earlier this year to join the Council on Foreign Relations and create a new China Strategy center. Rush lays out this group’s approach to China in the piece he wrote for Foreign Affairs in May, “What Does America Want From China? Debating Washington’s Strategy—and the Endgame of Competition.”
Group 2 – The Pro-business Engagers
This group, which I call the “Pro-business Engagers,” represents a portion of the Democratic Party’s foreign policy team that once held sway, but was in many ways excluded from the Biden Administration. They see an opportunity in a potential Harris Administration to triumph in the policy battle over their principal rivals in the first group. Many in this group worked closely with the U.S. business community as it invested hundreds of billions into China to create a manufacturing powerhouse at the expense of American workers. The older generation of this group broke with the Democratic Party’s union supporters to push for PNTR (Permanent Normal Trade Relations) with China during the Clinton Administration.
The group believes deeply in the mutual benefits of a close and integrated Sino-American economic relationship. They see engagement and reassurance as the best way to cement this economic relationship and ensure peace and stability. Many have made their careers around furthering this goal and find it difficult to question their prior assumptions even as conditions have changed.
This group includes folks like former Deputy Secretary of State James Steinberg (who literally wrote a book on “strategic reassurance” in U.S.-China relations), former Secretary of State John Kerry, former National Security Advisor Susan Rice, and new faces like Jessica Chen Weiss. In the current Administration, I suspect that Treasury Secretary Janet Yellen falls within this group, as evidenced by the “alternative China policy” speech she gave at SAIS in April 2023 (“Remarks by Secretary of the Treasury Janet L. Yellen on the U.S. - China Economic Relationship at Johns Hopkins School of Advanced International Studies”).
This group pines for the good old-days of Sino-American economic integration when the prevailing assumption was that the economic relationship with China was overwhelmingly beneficial to the United States. China’s entry into the WTO and the extension of free trade benefits allowed U.S. companies to shed costly labor in the United States (and ignore environmental, human rights, and national security concerns) to build out a massive manufacturing enterprise in partnership with the Chinese Communist Party. Many comforted themselves with the narrative that closer economic ties would further the goal of economic liberalization in China, which would inevitably lead to political liberalization. Up until last year, Henry Kissinger served as the inspirational father figure of this group (despite his Republican pedigree).
In many ways, Weiss has become one of the new spokespersons for this group, as I think her latest piece shows. She rose to national prominence in the summer and fall of 2022 when she denounced the Biden Administration’s China policy after serving for 10 months as a CFR fellow on loan to the State Department’s Policy Planning Staff (“The China Trap: U.S. Foreign Policy and the Perilous Logic of Zero-Sum Competition,” Foreign Affairs, August 18, 2022 and “America and China Don’t Need to Knock Each Other Out to Win,” New York Times, October 19, 2022). I’ve heard that Biden Administration officials felt deeply betrayed by her, since she had been welcomed into the policy making process only to denounce them within weeks after finishing her fellowship… I suspect there will be much less willingness to grant that kind of access to outside academics in the future.
In her latest article, Weiss heaps praise on the benefits of economic and technological integration, complains at length about the harms caused by export controls, restrictions and tariffs, and like a true believer in the benefits of free trade with China, extolls the virtues of lower costs for American consumers (without mentioning the trade-offs). As if singing to the Wall Street choir, she acknowledges some benefits of diversification but stresses the “need to establish limits on decoupling and “de-risking”,” while continuously emphasizing the “strategic benefits from economic integration.” In her telling, “China’s entanglement in the global economy and its dependence on international technology, investment, and markets are important deterrents to aggression”… no doubt Norman Angell would have agreed.
Group 3 – The Progressive Isolationists
The last group I call the “Progressive Isolationists.” Members of this group share some traits with the emerging isolationist group within the Republican Party (though I’m certain they are loath to admit any resemblance). They share the view with their Republican counterparts that the United States is the cause of much of the world’s woes and advocate a form of retrenchment, so that America can focus on “fixing itself.” The two isolationist camps diverge when it comes to the problems they want to fix and find themselves as mortal enemies in domestic policy battles and culture wars that do so much to undermine the country.
Senator Bernie Sanders’ Foreign Affairs article from June 2021 serves as an exemplar of the arguments put forward by the “Progressive Isolationists” when it comes to China policy (“Washington’s Dangerous New Consensus on China: Don’t Start Another Cold War”).
Sanders shares Jake Sullivan’s skepticism of the neo-liberal economic policies that granted PNTR to the PRC and brought them into the WTO (more accurately, Sullivan now shares Sanders’ long-held views). Those who share Sanders’ views reject the bromides of the “Pro-business Engagers” like Weiss who extol the benefits in economic integration with the PRC.
For Sanders the problem with blindly following Wall Street and C-Suites in their embrace of Beijing was that it would result in a disaster for American workers, “[w]hat I knew then, and what many working people knew, was that allowing American companies to move to China and hire workers there at starvation wages would spur a race to the bottom, resulting in the loss of good-paying union jobs in the United States and lower wages for American workers.” (I find it fascinating that folks like Weiss completely ignore this aspect that so motivates the other two groups).
While the “Progressive Isolationists” may share some of the diagnosis with the “Internationalist Competitors,” they part ways over what to do about it.
First and foremost, Sanders categorically rejects the need for any increase in defense spending and asserts that “[t]he rush to confront China has a very recent precedent: the global “war on terror”,” suggesting that the United States should not replace one “forever war” with another. I think we can safely assume that the “Progressive Isolationists” would drastically cut U.S. defense spending, and while they likely wouldn’t admit it, the result would be the collapse of the U.S. alliance structure and further aggression by the world’s authoritarian powers.
The solution for Sanders and other “Progressive Isolationists” is that the United States must withdraw from the international arena and concentrate domestically because “[t]he primary conflict between democracy and authoritarianism, however, is taking place not between countries but within them—including in the United States.” In many ways it is the mirror image of the culture war arguments made by the isolationist wing of the Republican Party (see arguments that the U.S. must secure the Southern border before we help Ukraine).
In much the same way that Henry Wallace in 1948 argued against the cold war with the Soviet Union, so that the United States could focus on furthering the New Deal, Sanders and other “Progressive Isolationists” seek to push U.S. policy in a similar direction: turning away from fulfilling responsibilities to an international order and withdrawing inward to fixate on domestic inequalities. He pays lip-service to international cooperation. He offers some throw-away suggestions like achieving consensus on a “global minimum corporate tax,” a “global minimum wage,” or “building a more equitable global system that prioritizes human needs over corporate greed and militarism”… as if everyone would start singing Kumbaya if it weren’t for American corporate greed and militarism.
Understanding how these three groups are competing for influence within the Democratic Party is extremely important and I’ve been quite disappointed that journalists and commentators have done very little to cover these obvious Democratic Party divisions.
We should be exploring the different scenarios that would arise depending on which group gains an upper hand.
It is still uncertain where Vice President Harris falls within this policy debate and it is even less certain, who she would appoint to critical foreign policy and national security positions. Her current National Security Advisor, Philip Gordon, is a long-time Europeanist and likely falls in the “Pro-business Engager” group (in July 2019, Gordon was one of dozens in the “Pro-business Engager” group to sign the “China is Not an Enemy” open-letter in the Washington Post, along with folks like James Steinberg).
I think it is unlikely that Jake Sullivan would stay on in a Harris Administration (I could be wrong), which means that the thought leader for the “International Competitors” group would leave the stage. I suspect that Kurt Campbell would find himself a bit isolated at the State Department as a new team comes in even if he stays on for a limited time as Deputy Secretary of State.
Thanks for reading!
Matt
MUST READ
1. Exclusive: US keeps missile system in Philippines as China tensions rise
Karen Lema and Poppy Mcpherson, Reuters, September 19, 2024
The United States has no immediate plans to withdraw a mid-range missile system deployed in the Philippines, despite Chinese demands, and is testing the feasibility of its use in a regional conflict, sources with knowledge of the matter said.
The Typhon system, which can be equipped with cruise missiles capable of striking Chinese targets, was brought in for joint exercises earlier this year, both countries said at the time, but has remained there.
The Southeast Asian archipelago, Taiwan's neighbour to the South, is an important part of U.S. strategy in Asia and would be an indispensable staging point for the military to aid Taipei in the event of a Chinese attack.
China and Russia have condemned the first deployment of the system to the Indo-Pacific, accusing Washington of fuelling an arms race.
China's foreign ministry said on Thursday it was very concerned about the plan to keep the system in place.
COMMENT – The gift that keeps on giving.
You know I’m always going to highlight news about the Typhon!
2. VIDEO – China rams Philippine ship while 60 Minutes on board; South China Sea tensions could draw U.S. in
Cecilia Vega, Aliza Chasan, Andy Court, Jacqueline Williams, and Annabelle Hanflig, CBS News, September 15, 2024
An escalating series of clashes in the South China Sea between the Philippines and China could draw the U.S., which has a mutual defense treaty with the Philippines, into the conflict.
A 60 Minutes crew got a close look at the tense situation when traveling on a Philippine Coast Guard ship that was rammed by the Chinese Coast Guard.
China has repeatedly rammed Philippine ships and blasted them with water cannons over the last two years. There are ongoing conversations between Washington and Manila about which scenarios would trigger U.S. involvement, Philippine Secretary of National Defense Gilberto Teodoro said in an interview.
"I really don't know the end state," Teodoro said. "All I know is that we cannot let them get away with what they're doing."
China as "the proverbial schoolyard bully"
China claims sovereignty over almost all of the South China Sea, through which more than $3 trillion in goods flow annually. But in 2016, an international tribunal at the Hague ruled the Philippines has exclusive economic rights in a 200-mile zone that includes the area where the ship with the 60 Minutes team on board got rammed.
China does not recognize the international tribunal's ruling.
COMMENT – Watch the video.
“Over the last two years the Chinese have turned the South China Sea into a demolition derby. Repeatedly ramming Philippine ships and blasting them with water cannons. But what we saw aboard the Cape Engaño was a significant escalation.”
3. The South China Sea: Historical and legal background
Bill Hayton, Council on Geostrategy, September 11, 2024
In the South China Sea, the Chinese leadership is intent on controlling all the rocks, reefs, and resources in the waters encompassed by what has become known as the ‘nine-dash’ or ‘U-shaped’ line. This line, which first appeared on an official map published by the Republic of China (ROC) in 1948, has no legal or historical basis. It is the product of misunderstandings and mistranslations by officials and private individuals in China during the 1930s. Unfortunately, this line is the basis for ongoing confrontations and escalating geopolitical tension between the People’s Republic of China (PRC), its Southeast Asian neighbours and other countries.
The current leadership of the PRC, the Chinese Communist Party (CCP), believes that time is on its side. As the Chinese economy grows, and the country’s military power increases relative to its neighbours and rivals, Beijing assumes that resistance to its territorial and other claims in the South China Sea will wither. Furthermore, based on misreadings of history, Beijing believes that it has ‘right’ on its side and that its neighbours and rivals are either puppets controlled by the United States (US) or hostile powers intent on undermining the PRC’s rise. This stance is underpinned by a strong sense of Chinese nationalism and determination to restore China’s historical position as a major global power. These core assumptions lead the CCP to discount objections to its behaviour.
The PRC’s behaviour in the South China Sea oscillates between two modes: ‘rights protection’ (asserting claims against its neighbours through confrontation) and ‘stability maintenance’ (reconciliation with its neighbours after a confrontation). Overall, Chinese behaviour is like a ratchet – tightening things up and then sitting still. And, like a ratchet, the process only goes one way, towards ever tighter Chinese control.
4. China's carrot-and-stick with EU trading partners start to pay off
Mei Mei Chu, Joe Cash, and Ellen Zhang, Reuters, September 16, 2024
Beijing, as a vote on EU duties on China-made electric vehicles looms, employed a carrot-and-stick approach to deal with the 27-strong bloc, threatening trade retaliation while cajoling key EU states into one-on-one talks on deals and investments.
The potential blow of counter-tariffs on EU goods will fall mostly on states such as Spain, France and Italy that have voiced support for the EV duties, with pork, dairy and brandy exports to the world's second-biggest economy at stake.
European Union members such as Germany, Finland and Sweden that have not pushed for the tariffs would feel less impact, with little exposure to the export items singled out by China.
China's tactics appear to be working.
Spanish Prime Minister Pedro Sanchez wrapped up a China visit this week by sitting in a Chinese EV and saying it was an "honour". He then unexpectedly urged the EU to reconsider its position.
According to a Spanish government source, Sanchez's delegation came away feeling "Spain is more important now", and that an agreement over tariffs on its pork products was close.
As a sweetener, a Chinese company agreed to build a $1 billion plant in Spain to make machinery used for hydrogen production, in apparent backing for Spain's green ambitions.
With pork and dairy, China maximises the "domestic political cost" to the countries voting to impose EV tariffs, said Beijing-based economist Mei Xinyu, with the agricultural sector often playing a role in EU politics.
COMMENT – Really very frustrating that Brussels and EU Member States appear unable and unwilling to unify in the face of Chinese coercion.
The White House, September 21, 2024
Today, we—Prime Minister Anthony Albanese of Australia, Prime Minister Narendra Modi of India, Prime Minister Kishida Fumio of Japan, and President Joseph R. Biden, Jr. of the United States—met for the fourth in-person Quad Leaders Summit, hosted by President Biden in Wilmington, Delaware.
Four years since elevating the Quad to a leader-level format, the Quad is more strategically aligned than ever before and is a force for good that delivers real, positive, and enduring impact for the Indo-Pacific. We celebrate the fact that over just four years, Quad countries have built a vital and enduring regional grouping that will buttress the Indo-Pacific for decades to come.
Anchored by shared values, we seek to uphold the international order based on the rule of law. Together we represent nearly two billion people and over one-third of global gross domestic product. We reaffirm our steadfast commitment to a free and open Indo-Pacific that is inclusive and resilient. Through our cooperation, the Quad is harnessing all of our collective strengths and resources, from governments to the private sector to people-to-people relationships, to support the region’s sustainable development, stability, and prosperity by delivering tangible benefits to the people of the Indo-Pacific.
As four leading maritime democracies in the Indo-Pacific, we unequivocally stand for the maintenance of peace and stability across this dynamic region, as an indispensable element of global security and prosperity. We strongly oppose any destabilizing or unilateral actions that seek to change the status quo by force or coercion. We condemn recent illicit missile launches in the region that violate UN Security Council resolutions. We express serious concern over recent dangerous and aggressive actions in the maritime domain. We seek a region where no country dominates and no country is dominated—one where all countries are free from coercion, and can exercise their agency to determine their futures. We are united in our commitment to upholding a stable and open international system, with its strong support for human rights, the principle of freedom, rule of law, democratic values, sovereignty and territorial integrity, and peaceful settlement of disputes and prohibition on the threat or use of force in accordance with international law, including the UN Charter.
Reflecting the Vision Statement issued by Leaders at the 2023 Quad Summit, we are and will continue to be transparent in what we do. Respect for the leadership of regional institutions, including the Association of Southeast Asian Nations (ASEAN), the Pacific Islands Forum (PIF), and the Indian Ocean Rim Association (IORA), is and will remain at the center of the Quad’s efforts.
…
Plus 5200 more words… far too many for me to post here.
COMMENT – I’m glad President Biden hosted this Quad Leaders Meeting… but as my friend Justin Bassi pointed out, this Joint Statement is some pretty weak sauce.
The Joint Statement clocks in at nearly 5700 words (13 pages by my count) and there is not one mention of “China” (the “South China Sea” is mentioned three times and “Climate” is mentioned 12 times).
The statement dances around the topic that has brought these leaders together since 2017 (i.e. the imperative to maintain “peace and security across this dynamic region” or how the leaders “strongly oppose any destabilizing or unilateral actions that seek to change the status quo by force or coercion”) but fails to speak clearly and forcefully about who threatens “peace and security” and who they oppose.
My advice to the folks organizing these events and writing the statements, instead of an obnoxiously long laundry list of bromides and election year achievements, try issuing a statement that is short and to the point.
Here is my version of what a Joint Statement should be… short and sweet, about 200 words:
Aside from focusing on what’s important (China’s threat to peace and stability in the region), I’ve tried to make two other points:
1 – The published Joint Statement starts with a disingenuous and partisan clause (“Four years since elevating the Quad to a leader-level format…”), which seeks to portray the Biden Administration as the architects of the Quadrilateral Security Dialogue. The first meeting of the Quadrilateral Security Dialogue was in 2007, but it folded in 2008 when Australia pulled out over concerns that it was too focused on standing up to China’s aggression in the region.
The Quadrilateral Security Dialogue was re-established in November 2017 during the ASEAN Summit in Manila when Japanese Prime Minister Abe, Australian Prime Minister Turnbull, Indian Prime Minister Modi, and U.S. President Trump agreed to restart the forum to counter the PRC both diplomatically and militarily across the region.
The architect of the Quad was Japanese Prime Minister Abe and Japanese diplomats who worked for years behind the scenes to make the Quad a reality.
By fixating on the 2021 leader-level meeting at the start of the Biden presidency as the event that made the Quad “more strategically aligned than ever before and is a force for good that delivers real, positive, and enduring impact for the Indo-Pacific,” the authors of this joint statement in the Biden Administration plagiarize off the leadership and hard work of Tokyo.
2 – Setting up regional security blocs and international security forums to uphold peace and security is authorized and encouraged by the United Nations Charter.
Beijing, and Moscow, have spent decades trying to delegitimize “collective security” and those regional security blocs that democracies have used to defend themselves from authoritarian aggression… we should reject those efforts and feel confident that forums, like the Quad, are reasonable and appropriate responses to aggression and coercion.
6. U.S. Shrugs as World War III Approaches
Walter Russell Mead, Wall Street Journal, September 16, 2024
The news from abroad is chilling. Washington Post columnist David Ignatius reports from Kyiv that Ukraine is “bleeding out” as its weary soldiers struggle against a numerically superior Russia. The New York Times reports that China is expanding the geographical reach and escalating violence in its campaign to drive Philippine forces from islands and shoals that Beijing illegitimately claims. And Bloomberg reports that Washington officials are fearful that Russia will help Iran cross the finish line in its race for nuclear weapons.
These stories, all from liberal news outlets generally favorable to the Biden administration, tell a tragic and terrifying tale of global failure on the part of the U.S. and its allies. China, Russia and Iran are stepping up their attacks on what remains of the Pax Americana and continue to make gains at the expense of Washington and its allies around the world.
What none of these stories do is connect the dots by analyzing the consequences of repeated American failure on the widely separated fronts of the international contest now taking place. To see what this all means and where it is leading, we must turn to the recently released report of the Commission on the National Defense Strategy. This panel of eight experts, named by the senior Republicans and Democrats on the House and Senate Armed Services committees, consulted widely across government, reviewing both public and classified information, and issued a unanimous report that, in a healthy political climate, would be the central topic in national conversation.
The bipartisan report details a devastating picture of political failure, strategic inadequacy and growing American weakness in a time of rapidly increasing danger. The U.S. faces the “most serious and most challenging” threats since 1945, including the real risk of “near-term major war.” The report warns: “The nation was last prepared for such a fight during the Cold War, which ended 35 years ago. It is not prepared today.”
Worse, “China and Russia’s ‘no-limits’ partnership, formed in February 2022 just days before Russia’s invasion of Ukraine, has only deepened and broadened to include a military and economic partnership with Iran and North Korea. . . . This new alignment of nations opposed to U.S. interests creates a real risk, if not likelihood, that conflict anywhere could become a multitheater or global war.”
Should such a conflict break out, “the Commission finds that the U.S. military lacks both the capabilities and the capacity required to be confident it can deter and prevail in combat.”
To summarize, World War III is becoming more likely in the near term, and the U.S. is too weak either to prevent it or, should war come, to be confident of victory.
A more devastating indictment of a failed generation of national leadership could scarcely be penned.
This is not, or should not be, a partisan issue. No recent president and no party escapes responsibility for our current plight. Red and blue America will suffer equally if the global slide toward war continues unchecked.
Even more appalling than the report is the general indifference with which it has been received. Aside from a few honorable exceptions (including a Wall Street Journal opinion piece by Shay Khatiri and Senate Minority Leader Mitch McConnell’s clear-sighted advocacy), the commission’s report sank like a stone. There has been no uproar in the press, no speechifying by presidential candidates, no storm on social media, no sign that the American political class takes the slightest interest in the increasing fragility of the peace on which everything we cherish depends.
That isn’t new. Congress, much of the media and public opinion at large have ignored alerts from respected defense leaders at least since Robert Gates warned almost 12 years ago of the dangerous consequences of defense cutbacks. The commission’s report is now warning that the long-deferred bill is coming due.
If history teaches anything, it is that decadence this deep, carried on this long, entails enormous costs. Our adversaries’ conviction that the inattention of a flabby political class is bringing the Pax Americana to an inglorious end is a key reason why nations as suspicious of one another as China, Russia, Iran and North Korea have chosen this moment to make common cause against us.
The prophet Ezekiel spoke about the duty of the watchman on the city wall to sound the trumpet when enemies approach. The Commission on the National Defense Strategy has fulfilled its mission. But judging from the indifference with which its report has been greeted, more and louder trumpets need to sound. Not since the 1930s have Americans been this profoundly indifferent as a great war assembles in the world outside, and not since Paul Revere traversed the dark country lanes of Massachusetts have Americans more urgently needed to rouse themselves from sleep.
Authoritarianism
7. Remember Tibet?
Nithin Coca, The Wire China, September 15, 2024
8. China to train thousands of overseas law enforcement officers to create ‘more fair’ world order
Helen Davidson, The Guardian, September 11, 2024
China will train thousands of foreign law enforcement officers so as to see the world order “develop in a more fair, reasonable and efficient direction”, its minister for public security has said.
“We will [also] send police consultants to countries in need to conduct training to help them quickly and effectively improve their law enforcement capabilities,” minister Wang Xiaohong told an annual global security forum.
Wang Xiaohong made the announcement in the eastern city of Lianyungang on Monday in front of law enforcement representatives from 122 countries, regions and international organisations such as Interpol.
The forum is part of ongoing efforts by China’s ruling Communist party to position itself as a global security leader. In 2022 China’s leader, Xi Jinping, launched the Global Security Initiative (GSI), which centres China as a facilitator to “improve global security governance … and promote durable peace”.
Some human rights groups have raised concerns that recent training programs for African police officers introduce Communist party-style authoritarian tactics, and are heavily focused on protecting Chinese commercial interests in those countries – often connected to China’s state-run foreign investment program, the belt and road initiative.
Public reports of Monday’s speech did not provide details on the officers or countries to receive the training, or where the training would occur.
Beijing has linked the GSI to its brokering of agreements between Iran and Saudi Arabia, and the development of its peace proposal for the Ukraine war. It is seen by analysts as a vehicle to reshape the current US-dominated world order.
The GSI concept appears to include a run of bilateral security and policing agreements made with developing nations in recent years, particularly in Africa and the Indo-Pacific.
Last year, Beijing said the GSI sought to encourage greater cooperation between tertiary-level military and police academies, and was “willing to provide other developing countries with 5,000 training opportunities in the next five years to train professionals for addressing global security issues”.
Monday’s announcement suggests that number is increasing, with Wang noting that China has already trained 2,700 foreign law enforcement officers in the past year.
Last week after a China-Africa forum, Beijing announced it will train 1,000 more police enforcement officers for the African continent “and jointly ensure the safety of cooperation projects and personnel”. It was not immediately clear if those 1,000 officers are included in the 3,000 cited by Wang on Monday.
9. Japanese-Uyghur lawmaker calls for harder line on China
Sophie Mak, Nikkei Asia, September 15, 2024
Japan's first lawmaker of Uyghur heritage is urging her country to take a stronger position on China's human rights record, while also calling for a heightened defense posture in response to Beijing's increasing military assertiveness in the Indo-Pacific region.
Arfiya Eri, born in Japan to ethnic Uyghur and Uzbek parents, was elected to the lower house of the Japanese Diet in 2023 representing a district just outside Tokyo. Before that, she was educated partly abroad, including in China and the U.S., and worked for the Bank of Japan and the United Nations.
10. UK report warns focus on national security ‘undermining’ Hong Kong’s reputation as city slams ‘hypocrisy’
Mercedes Hutton, Hong Kong Free Press, September 13, 2024
11. Hong Kong: first person convicted under security law for wearing protest T-shirt
Reuters, The Guardian, September 16, 2024
Chu Kai-pong, 27, pleaded guilty to ‘act with seditious intent’ for displaying slogan: ‘Liberate Hong Kong, revolution of our times’.
A man in Hong Kong has pleaded guilty to sedition for wearing a T-shirt with a protest slogan, becoming the first person to be convicted under the city’s controversial national security law known as Article 23, passed in March.
Chu Kai-pong, 27, pleaded guilty to one count of “doing acts with seditious intent”.
Under the new security law, the maximum sentence for the offence has been increased from two years to seven years in prison and could even go up to 10 years if “collusion with foreign forces” is found to be involved.
Chu was arrested on 12 June at an MTR station for wearing a T-shirt with the slogan: “Liberate Hong Kong, revolution of our times” and a yellow mask printed with “FDNOL” – the shorthand of another slogan “five demands, not one less”.
Both slogans were frequently chanted in the huge pro-democracy protests of 2019.
Chu, who has been held in prison for three months, told police that he wore the T-shirt to remind people of the protests, the court heard.
12. Harassment Campaign Targets Hong Kong Journalists
Arthur Kaufman, China Digital Times, September 13, 2024
The work environment for journalists in Hong Kong continues to deteriorate. Last month, Stand News editors were convicted of sedition. This week, the Hong Kong Journalists Association (HKJA) revealed a widespread harassment campaign against the city’s journalists, as announced in a press conference by HKJA Chairperson Selina Cheng. The Hong Kong Free Press reported on this “systematic and organized attack” against reporters from at least 13 media outlets in Hong Kong:
Selina Cheng, chair of the Hong Kong Journalists Association (HKJA), said during a press conference on Friday that since June, dozens of journalists have received emails and letters with defamatory content to their home addresses, workplaces and other venues. The journalists targeted included those from Hong Kong Free Press, InMedia, HK Feature, and those who are members of the HKJA’s executive committee.
Fifteen journalists saw complaints sent to family members, landlords, employers and organisations they are associated with, Cheng said. Some of the complaints threatened recipients that if they continued to associate with the journalists, they could be breaching national security laws.
[…] The harassment also involved death threats, Cheng said. Online, photos were posted of journalists and members of the HKJA pictured alongside knives and shooting targets. Screenshots of these photos were then sent to journalists and their parents in a “clear effort to scare and intimidate them,” Cheng said.
COMMENT – This is the same Selina Cheng that the Wall Street Journal fired for taking the position as Chair of the Hong Kong Journalists Association (HKJA)… pretty shameful WSJ.
13. Accused Tiananmen Informant's Silence Reveals Enduring "Public Secrecy" Around 1989
Alexander Boyd, China Digital Times, September 9, 2024
14. ‘Keep Your Mouth Shut’: TikTok Whistleblower Claims Chinese Police Kidnapped and Threatened His Father
Emily Baker-White, Forbes, September 17, 2024
A former ByteDance employee, in a sworn statement filed in U.S. federal court, alleges Chinese police kidnapped and intimidated his father as retribution for an interview that he gave to Western press about censorship at TikTok.
A former employee of TikTok’s Chinese parent company, ByteDance, claims Chinese national police detained his father and took him to “a remote secret facility” to interrogate and intimidate him after the former employee spoke to Western press about ByteDance’s censorship of content on TikTok.
The allegations appear in a redacted federal court filing in the case of another alleged TikTok whistleblower, Yintao Yu. In a sworn declaration, the former employee says he worked at TikTok’s headquarters in Beijing in 2019 and 2020, and that “one of the main functions” of the platform he worked on “was to censor content on TikTok.” According to the declaration, he moved to the United States for graduate school and spoke about ByteDance’s censorship of TikTok in an interview with the Agence France-Presse in 2022, which was later translated and republished by the BBC.
Under penalty of perjury, the former employee wrote that his father relayed the officers’ orders: “The Chinese national police demanded, ‘keep your mouth shut.’ They also demanded that I contact the BBC and retract that BBC article, which I did under coercion and fear.” He said the BBC refused to retract its story.
“Chinese national police continued harassing my family on other occasions, demanding me to delete my social media posts on Twitter, which I eventually obeyed, after my family had been threatened."
The former employee did not claim that ByteDance had knowledge of, or was complicit in, the Chinese police’s alleged intimidation of his father.
Forbes was not able to independently corroborate the former employee’s claims. ByteDance said in a court filing that it “unequivocally denies any involvement” in the alleged events.
The former employees’ allegations, if true, suggest a direct Chinese government interest in quashing public discussion of censorship on TikTok. They come to light at a critical moment for TikTok and ByteDance. In April, Congress passed and President Biden signed a law that requires ByteDance to sell TikTok — a sale that the Chinese government has said would violate Chinese law — or see the app banned in the United States. The law is based upon national security concerns that the Chinese government could force ByteDance to use TikTok to collect private information about Americans or use its powerful recommendations algorithm to influence the messages people see. TikTok says it has never provided private information about American users to the Chinese government.
TikTok and ByteDance, along with creators who use the TikTok app, have challenged the law’s constitutionality in court, arguing that it violates their First Amendment rights. The law’s fate currently sits with a three-judge panel on the DC Circuit, which will likely rule on the First Amendment questions before the end of this year.
Last year, the Criminal Division of the Department of Justice opened an investigation into ByteDance after Forbes reported that the company had used TikTok to surveil journalists — a report that ByteDance later confirmed. The company also came under fire from lawmakers after Forbes revealed that it monitors the use of hundreds of “sensitive words” on its platforms, and made thousands of creators’ and advertisers’ financial data widely accessible to staff in China. ByteDance said it did not use many of its sensitive word lists on TikTok. It acknowledged that some TikTok creator data was accessible in China, and declined to comment about advertiser data.
The BBC did not immediately respond to requests for comment.
The anonymous former employee is not a party to the case where his declaration was filed. That case concerns another alleged whistleblower, Yintao Yu, who claimed in a 2023 interview with the New York Times that ByteDance used TikTok to promote anti-Japanese rhetoric and condemnation of protests in and about Hong Kong.
The declaration was filed in support of a motion for reconsideration filed by Yu’s attorneys. Yu had asked that a witness in his case be kept anonymous, but the judge ruled against him on that point. In an unsuccessful attempt to change the judge’s mind, his lawyers relied in part on the redacted former employee’s story, to demonstrate the real world harm that people in China may face when speaking out about TikTok and ByteDance.
ByteDance spokesperson Mike Hughes provided the following statement: "We previously addressed these claims in court and the court has since denied Mr. Yu's motion for reconsideration. As we said in our filing, 'To be clear, BDI unequivocally denies any involvement' in these alleged events. We also note in our filing that Mr. Yu has engaged in perjury in this case and others."
In the Yu case, ByteDance has zealously argued that Yu is a biased and non-credible witness who has made contradictory statements in court. But the lawyers have not directly contested the account of the former employee, beyond saying their client had no involvement in it.
Charles Jung, an attorney for Mr. Yu, said in a statement: “ByteDance's artfully worded statement speaks volumes. They make denials on behalf of ‘BDI’ (ByteDance Inc., the US subsidiary of ByteDance) only, and not the broader global ByteDance.”
In one filing, ByteDance’s lawyers appear to dismiss the former employee’s declaration as “third-party hearsay accounts criticizing the Chinese government’s alleged detention of political dissidents.” It is unclear whether the lawyers were referring to the former employee or his father as a “political dissident” because of his speech about the company.
The former employee’s sworn statement, as filed on the public docket, is available here.
COMMENT – This is the same former ByteDance head of engineering who testified in Federal Court last year that ByteDance maintained a “superuser” credential for a committee of Chinese Communist Party members.
15. Understanding Xi Jinping’s ‘reform and opening up’
Charles Parton, Council on Geostrategy, September 17, 2024
16. China’s security chief calls for ‘resolute crackdown’ on separatists in Tibetan areas
William Zheng, South China Morning Post, September 16, 2024
17. Hong Kong diaspora spirit of resistance against democracy crackdown remains strong
Benedict Rogers, Radio Free Asia, September 13, 2024
18. China wants academic exchange but historians say increased censorship makes research hard
Laurie Chen, Reuters, September 13, 2024
19. China Detains Investment Bankers, Takes Passports in Corruption Sweep
Bloomberg, September 12, 2024
COMMENT – I’m sure this will inspire a vibrant private sector.
20. The Missing Girls: How China’s One-Child Policy Tore Families Apart
Liyan Qi, New York Times, September 18, 2024
Environmental Harms
21. China's climate policies, goals still 'highly insufficient': analysis
Quantum Commodity Intelligence, September 17, 2024
22. China’s emissions of two potent greenhouse gases rise 78% in decade
Ellen McNally, The Guardian, July 15, 2024
Figure represents 64-66% of global output of tetrafluoromethane and hexafluoroethane, MIT study finds
23. What Happens if China Stops Trying to Save the World?
David Wallace-Wells, New York Times, September 15, 2024
24. Quad plans joint patrols in Indo-Pacific to counter illegal fishing
Bangkok Post, September 15, 2024
25. Escalating arsenic contamination throughout Chinese soils
Shuyou Zhang, Jiangjiang Zhang, et al, Nature, May 14, 2024
China faces widespread soil arsenic pollution caused by intensified industrial and agricultural activities, the impacts of which, however, have never been evaluated at the national scale. In this study, we developed a machine-learning model built on 3,524 surveys, representing over one million soil samples, to generate annual maps of arsenic concentration in China’s surface soils for the period 2000–2040.
The model has uncovered a worrying trend of increasing arsenic concentrations, rising from a mean of 11.9 mg kg−1 in 2000 to 12.6 mg kg−1 in 2020, with an anticipated further increase to 13.6 mg kg−1 by 2040. The primary anthropogenic causes have been identified as non-ferrous mining activities (68.0%), followed by energy consumption (15.8%), smelting (13.2%) and farming practices (3.0%).
Furthermore, in 2000, 2020 and 2040, the model predicts that 13.0%, 17.1% and 18.3% of rice production and 10.0%, 13.9% and 15.9% of the population, respectively, would be located on soils with arsenic concentrations over 20 mg kg.
Despite the establishment of initiatives such as the Soil Pollution Prevention and Control Action Plan by the Chinese government to restrain this burgeoning arsenic pollution, our findings underscore the urgent need for more vigorous measures to stall or reverse this disturbing trend.
Foreign Interference and Coercion
26. How Pro-Russian Narratives Spread in Malaysian Chinese-language Facebook Circles
Samuel Wade, China Digital Times, September 17, 2024
Prague-based Sinopsis has published a new investigation by Kuek Ser Kuang Keng, Chan Wei See, and Wong Kai Hui into the propagation of pro-Russian narratives about the invasion of Ukraine through Chinese state media and other official channels and into Chinese-language Malaysian communities on Facebook:
Since the start of the Russia-Ukraine war, we have observed a flurry of pro-Russia disinformation presented in Chinese language circulating among the online communities of Chinese-speaking Malaysians. This disinformation aims to shape the audience’s views towards the war and its various stakeholders.
Most of this disinformation was carefully crafted to fit the established cognitive frameworks of “US vs. China” prevalent among Chinese-speaking Malaysians. It often tapped into the popular pro-Beijing sentiment among the Chinese diaspora in Southeast Asia. Consequently, the messages and narratives were unique and different from the pro-Russia disinformation spreading in Europe and other languages. This phenomenon warrants a more detailed and systematic investigation to better understand the nature and structure of such influence operations.
To investigate this influence operation, we went beyond disinformation. In our dataset, we included propaganda that might be factual but was presented in a biased and misleading way to promote a particular point of view. We are aware that pro-Ukraine/US/West narratives in the Chinese language were also promoted and spread simultaneously, but it was less pervasive compared to the opposite, hence we did not include them in this investigation.
27. Wall Street wins in GOP stalemate on China
Jasper Goodman and Eleanor Mueller, Politico, September 13, 2024
Corporate America is facing growing pressure from the right to cut ties with China, but a Capitol Hill stalemate between GOP China hawks and Wall Street-friendly Republicans is sparing industry from feeling more pain.
The conflict over how to rein in U.S. capital from flowing to China is one of the great unresolved policy disputes of this Congress. It was a glaring omission this week as House Republicans passed a raft of other bills targeting the U.S.'s biggest geopolitical adversary, in a pre-election messaging push designed to project the GOP’s tough rhetoric toward the country.
Behind the scenes, top Republicans have failed to reach a compromise on restricting U.S. investment in China despite pledging to do so late last year. Key GOP players in the clash include House Foreign Affairs Chair Michael McCaul of Texas, a leading China hawk who wants to curtail U.S. financial support from going to whole sectors of the Chinese economy, and House Financial Services Chair Patrick McHenry of North Carolina, who has pushed for a narrower approach aimed at sanctioned firms.
With the legislative window closing for this Congress, Republicans who prefer a more aggressive policy are weighing an end-run around McHenry and others who stand in their way.
“It makes such eminent sense, I can’t imagine anyone really opposing it, but obviously it’s not been easy to do,” said Sen. John Cornyn, who has led Senate efforts to crack down on U.S. investment in China and is vying to succeed Sen. Mitch McConnell as GOP leader.
The conflict illustrates the influence that business-friendly, establishment Republicans retain over party policy, even as former President Donald Trump and Sen. JD Vance push the GOP toward populism that is more hostile to corporate power.
“Time and time again, we see this play out wherein we have [China] legislation that is ultimately fought just because of dollar-and-cent issues,” said Heritage Foundation policy adviser Bryan Burack, who supports sectoral prohibitions like what McCaul is proposing. “It is the ever-present and constant battle between the Wall Street- and financial services industry-friendly entities and the national security entities.”
A House GOP working group established late last year to iron out the differences between the two sides has failed to strike a deal, according to Hill aides granted anonymity to discuss the talks. McCaul has legislation that would target investment in areas such as artificial intelligence and quantum computing. McHenry has instead pushed for sanctions that would be applied to specific companies.
The group ramped up its efforts at the end of August in hopes of reaching consensus in time for inclusion in this week’s package, according to a House Foreign Affairs GOP aide. Lawmakers are now reviewing updated legislation drafted over the congressional recess, according to two other people familiar with the working group’s efforts who were granted anonymity to discuss closed-door negotiations.
28. China’s Risky Power Play in the South China Sea
Agnes Chang, Camille Elemia, and Muyi Xiao, New York Times, September 15, 2024
29. China accuses US of shielding Israel, blocking Gaza ceasefire efforts
Cyril Ip, South China Morning Post, September 18, 2024
30. Germany’s Habeck Says Trade Conflict with China Must Be Averted
Kamil Kowalcze and Michael Nienaber, Bloomberg, September 17, 2024
31. TikTok Is Becoming a Popular News Source for American Adults
Alicia Clanton, Bloomberg, September 17, 2024
Human Rights and Religious Persecution
32. China Releases American Pastor After Nearly Two Decades
James T. Areddy, Wall Street Journal, September 16, 2024
33. A Frailer Dalai Lama Greets Devotees While Succession Question Remains
Krishna Pokharel, Austin Ramzy, and Tripti Lahiri, Wall Street Journal, September 15, 2024
34. Prominent Tibetan Buddhist monk sentenced to 3 years in prison
Radio Free Asia, September 13, 2024
Lobsang Thabkhey was arrested in June 2023 for publishing books from Tibetans in exile.
A Tibetan Buddhist monk who worked as a monastery librarian was sentenced to three years in prison during a “secret” trial, two sources from inside Tibet told Radio Free Asia.
Police arrested Lobsang Thabkhey, 55, in June 2023 for allegedly engaging in “separatist activities.”
They accused him of possessing and republishing books from the exiled Tibetan community and for having contact with people outside the region when he was in charge of the library at Kirti Monastery in Ngaba county in southwest China’s Sichuan province.
Chinese authorities consider it illegal for Tibetans inside Tibet to contact people outside the region and engage with the exiled Tibetan community or the Tibetan spiritual leader, the Dalai Lama, who China considers a “separatist.”
While the specific charges leveled against Thabkey are unknown, sources said they were likely related to previous charges of publishing “banned books” in Tibet and having contact with “external forces.”
Thabkhey’s family recently learned about the sentence, but authorities did not provide information about the date of the trial or the nature of the charges, said the sources.
According to China’s Criminal Procedure Law, family members of those in custody must be notified within 24 hours of their arrest, except in crimes or cases deemed to be endangering national security where notification may obstruct the investigation.
35. Chinese court rejects feminist journalist Sophia Huang's appeal
He Ping, Radio Free Asia, September 16, 2024
36. UK should outlaw imports of goods made by Xinjiang forced labour, says senior lawmaker
Reuters, September 16, 2024
37. US officials call for release of detained retired Uyghur doctor
Radio Free Asia, September 12, 2024
38. 10-Year-Old Student Is Stabbed Near Japanese School in China
Vivian Wang and Kiuko Notoya, New York Times, September 18, 2024
Industrial Policies and Economic Espionage
39. U.S. firms say confidence in China has hit an all-time low
Dylan Butts, CNBC, September 13, 2024
American companies in China are experiencing historically low business confidence and poor profits amid U.S.-China tensions and a slowing Chinese economy.
In an annual report released Thursday, the American Chamber of Commerce in Shanghai found that out of the 306 of its member companies surveyed, only 66% were profitable in 2023, the lowest level on record.
The survey also showed that key confidence metrics were at their poorest ever point. Only 47% of respondents reported optimism about their five-year business outlook in China, while a record high of 25% cut investment in the country last year.
China’s slowing economy was listed as the top reason for members’ decreased investment. Meanwhile, the strained relationship between Washington and Beijing as well as geopolitical tensions were seen as the biggest challenges to both their business operations and the Chinese economy at large.
“Increasing geopolitical pressures, particularly in the run-up to the U.S. election amid escalating trade tensions, and China’s economic slowdown are leading firms to ramp up risk management and adjust their investment strategies,” the chamber said in a statement.
The report comes amid a number of signs that the world’s second-largest economy is losing luster amongst Western businesses.
While geopolitical tensions, tough regulations and censorship have long been risk factors for these firms, the country’s struggling economy has increasingly emerged as a major concern.
According to a member survey released by the U.S.-China Business Council, China’s macroeconomic woes ranked as the second highest concern among American companies this summer, behind only U.S.-China relations.
Similar to the AmCham Shanghai survey, the council found that more companies than ever are pessimistic about their medium-term business outlook in China, with factors like “weak domestic demand” and “overcapacity” constraining profitability.
Firms have also lost market share to Chinese competitors which have received more government support, the U.S.-China Business Council added.
Their struggles in China have also been felt by EU businesses, according to an EU Chamber of Commerce in China report released on Wednesday.
The group said that its companies were at a “tipping point” on whether to invest more in China amid low-profit margins and a poor outlook, and urged Beijing to act if it wants the companies to invest further.
40. Alternative investors prefer India, infrastructure to China, real estate
Mitsuru Obe, Nikkei Asia, September 18, 2024
41. China’s Economic Indicators Point to Slowdown
Wall Street Journal, September 13, 2024
China’s economic momentum slowed across the board in August, according to official data released Saturday, underscoring the need for further stimulus measures in order to hit officials’ growth target in the world’s second-largest economy.
Industrial production rose 4.5% from a year earlier in August, down from 5.1% growth in July, said the National Bureau of Statistics. The result also undershot the 4.7% growth projected by economists in a Wall Street Journal survey.
Retail sales, a key indicator of domestic consumption, rose 2.1% on year in August, slowing sharply from a 2.7% increase in July and lower than the 2.5% growth expected by surveyed economists.
Fixed-asset investment increased 3.4% in the January-to-August period, compared with a 3.6% year-over-year rise over the first seven months and the 3.5% growth expected by economists.
China’s urban surveyed jobless rate rose to 5.3% in August, compared with July’s 5.2%.
COMMENT – And these are the “official” statistics that the Chinese Communist Party permitted to be released… imagine how bad the real figures are.
42. Start-up funding in China remains weak, but may see a recovery this year
Coco Feng, South China Morning Post, September 17, 2024
43. How China has ‘throttled’ its private sector
Eleanor Olcott and Wang Xueqiao, Financial Times, September 11, 2024
Venture capital finance has dried up amid political and economic pressures, prompting a dramatic fall in new company formation.
For a place devoted to advancing knowledge of the human body, there are few signs of actual life in BioBay, a science park in Suzhou west of Shanghai.
In a five-storey tower that houses biotech and pharmaceutical start-ups, the only sound is a generator whirring away in the depths of the building.
Scores of its tenants have either moved out or closed down, and a funding crunch that has hit the sector means many offices have been left vacant. Opportunistic dealers emerged to snap up cheap computers and lab equipment to sell on in Malaysia or Indonesia, leaving their business cards scattered around. Many offices are caked in dust.
BioBay said it was “hoping to sublease” the empty spaces to new companies, but the lifelessness of the state-run park, once celebrated as a shining example of China’s strides in cutting-edge science and technology, speaks to a broader trend in the country’s venture capital industry.
“China used to be the best VC destination in the world after the US,” says one Beijing-based executive, referring to the business of private investment in high-risk start-up companies.
Founders and investors harbour few hopes of a return to the glory years before the Covid-19 pandemic, when the likes of Alibaba and Tencent took advantage of rapid economic growth and the rise of the mobile internet to become globally significant technology companies.
“The whole industry has just died before our eyes,” the executive continues. “The entrepreneurial spirit is dead. It is very sad to see.”
The downbeat mood is reflected in the statistics. In 2018, at the height of VC investment, 51,302 start-ups were founded in China, according to data provider IT Juzi. By 2023, that figure had collapsed to 1,202 and is on track to be even lower this year.
Keyu Jin, associate professor at the London School of Economics, says the industry “has been critical to spur China’s entrepreneurial dynamism”.
“The outflow of global investment and the massive drop in the valuation of Chinese companies will impinge on the nation’s innovation drive,” she warns.
The crisis in the sector partly reflects the slowdown in the Chinese economy, which has been buffeted by the protracted Covid-19 lockdowns, the bursting of its property bubble and the stagnation of its equity markets. As bilateral tensions have risen, US-based investors have also largely pulled out.
But it is also the direct result of political decisions taken by President Xi Jinping that have dramatically changed the environment for private business in China — including a crackdown on technology companies regarded as monopolistic or not attuned to Communist party values, and an anti-corruption crusade that continues to ripple through the business community.
Desmond Shum, author of Red Roulette and a former real estate mogul, says the party “has throttled the private sector”.
“Successful entrepreneurs . . . can expect to be closely monitored, unable to transfer money offshore and their transactions and public statements scrutinised,” he adds. “Their money is the country’s money.”
The FT spoke to 11 executives at VC firms, including from state-run and private funds, as well as industry experts, academics and entrepreneurs. Most did not wish to be identified, as they are not authorised to speak on behalf of their investors, but all painted a bleak picture of what, at its peak, was the world’s most dynamic and cut-throat market for founders.
“Five years ago, the venture capital and private equity guys were masters of the universe. They were the most optimistic people in China,” says one industry insider.
“Now they’re depressed. You don’t see them any more.”
COMMENT – IMO here is the stand-out quote from a serial entrepreneur in Shanghai: “There is no good reason to start a company. Why should we take the risk? We have had five years of lost start-ups.”
The Chinese Communist Party will not be able to turn this around.
Xi and his cadres will continue to double down on a state-directed economy and privileging national security over economic prosperity. That will push the country into a deeper downward spiral, making the conditions even worse.
For anyone interested in the well-being of the Chinese people and their prosperity, this is a disaster.
My advice to political leaders, investors, and business executives: run away!
44. China’s Zijin Vows to Keep Investing in Canadian Mining Despite Crackdown
Jacob Lorinc, Bloomberg, September 17, 2024
45. US Allies Struggle to Break China’s Dominance of Rare Earths
Bloomberg, September 16, 2024
46. Plugging The Sanctions Gaps
Eliot Chen, The Wire China, September 15, 2024
47. Chinese deal activity shifts toward emerging markets and into greenfields
Pak Yiu, Nikkei Asia, September 16, 2024
48. Chinese EVs still cheaper than Teslas in U.S. after tariff hike
Ryohei Yasoshima and Azusa Kawakami, Nikkei Asia, September 15, 2024
49. The big loophole allowing Russia to access US chips? China
Patrick Tucker, Defense One, September 11, 2024
50. Married Out
Dalia Parete, China Media Project, September 12, 2024
51. Biden Administration Ratchets Up Tariffs on Chinese Goods
Ana Swanson and Jordyn Holman, New York Times, September 13, 2024
52. Biden Takes Aim at China’s Temu and Shein with Trade Crackdown
Richard Vanderford, Wall Street Journal, September 13, 2024
A move by the Biden administration will block many imports from using a trade provision critics say is being unfairly abused.
The Biden administration will restrict the use of a trade provision that lets China-founded e-commerce giants such as Temu and Shein more easily ship to the U.S., a move that comes amid a groundswell of bipartisan pressure to close what critics regard as a loophole.
The administration said Friday it will take executive action to try to stop a surge in trade under what is known as the de minimis exemption.
The administration said under a new rule it intends to propose, parcels containing merchandise that would be subject to tariffs under various sections of trade law won’t be eligible for de minimis treatment. About 70% of Chinese textile and apparel shipments are covered by those tariffs and now will have to go in through a more formal entry method, administration officials said.
COMMENT – Better late than never…
53. China's Censors Are Letting Ye Perform There. His Fans Are Amazed.
Vivian Wang, New York Times, September 15, 2024
54. China safeguards rare earth reserves with discovery of 5 million tonnes of key metals
Sylvia Ma, South China Morning Post, September 16, 2024
55. China warns carmakers of risks in building plants overseas, sources say
Reuters, September 12, 2024
56. U.S. Officials Jet to Beijing Amid Flood of Cheap Chinese Exports
Lingling Wei, Wall Street Journal, September 17, 2024
57. US and Japan near deal to curb chip technology exports to China
Demetri Sevastopulo and Leo Lewis, Financial Times, September 17, 2024
58. US probes uranium imports from China to prevent circumventing Russian ban
Timothy Gardner, Reuters, September 17, 2024
Cyber & Information Technology
59. China Claims Chipmaking Gear Advance Despite Tightening US Curbs
Yuan Gao, Bloomberg, September 16, 2024
60. Lenovo Makes AI Servers in India as Local Tech Push Expands
Saritha Rai, Bloomberg, September 17, 2024
61. New data reveals exactly when the Chinese government blocked ChatGPT and other AI sites
Joanna Chiu, Rest of World, September 18, 2024
62. Court Appears Skeptical of TikTok’s Challenge to U.S. Ban
Jacob Gershman, Wall Street Journal, September 16, 2024
A federal appeals court on Monday signaled skepticism with TikTok’s legal effort to prevent the U.S. government from forcing the popular social-media app to sever ties with China to keep operating in this country.
During morning oral arguments, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit repeatedly questioned TikTok’s challenge to legislation that requires its parent company, Beijing-based ByteDance, to sell the platform by Jan. 19. If there is no sale, TikTok would be effectively banned from mobile app stores in the U.S.
The U.S. government says China’s potential ability to use TikTok to wage information warfare and spy on Americans represents a national-security threat. And it argues that divestiture from Chinese ownership is the only assurance of defusing the danger.
Judge Douglas Ginsburg said there was precedent for that approach.
“Why is this any different, from a constitutional point of view, than the statute precluding foreign ownership of a broadcasting license?” Ginsburg asked.
Another judge on the panel, Neomi Rao, likened the case to a 1988 ruling by the D.C. Circuit upholding the Reagan administration’s shutdown of a U.S.-based group affiliated with the Palestine Liberation Organization. In that case, the restriction on the speech rights of the U.S.-based entity was deemed incidental and outweighed by the government’s interest in combating terrorism.
“Why is that not analogous to what’s happening here?” Rao asked.
TikTok has argued that the government could have taken less drastic measures, such as making TikTok’s algorithm subject to disclosure rules. Rao said she doubted the effectiveness of getting more access to source code billions of lines long that would take years to review.
Judge Sri Srinivasan asked a series of questions about how the First Amendment should apply to foreign-owned companies whose governments have varying levels of hostility with the U.S.
TikTok and several of its star content creators have claimed in lawsuits that the TikTok crackdown is based on speculative and secret security concerns in violation of the First Amendment.
“The law before this court is unprecedented, and its effect would be staggering,” Andrew Pincus, a lawyer representing TikTok, told the panel. “For the first time in history, Congress has expressly targeted a specific U.S. speaker, banning its speech and the speech of 170 million Americans.”
The Justice Department said TikTok creators can post what they want, just not on a major platform controlled by a foreign adversary.
“What is being targeted is a foreign company that controls this recommendation engine and many aspects of the algorithm that’s used to determine what content is shown to Americans on the app,” said department lawyer Daniel Tenny.
The litigants have asked the D.C. Circuit to rule by Dec. 6 so there is enough time for the Supreme Court to potentially review the case before the law takes effect.
The law doesn’t make it a crime to use TikTok, but it does prohibit mobile app stores from letting users download or update it.
The sell-or-ban law gained bipartisan support after lawmakers received warnings from the intelligence community about China’s ability to exploit the app used by some 170 million Americans, roughly half of the population. ByteDance has said it can’t and won’t sell its U.S. operations by the deadline. The Chinese government has also signaled that it won’t allow a forced sale of TikTok to go through.
Much of the government’s evidence is classified and shielded not just from the public but from TikTok’s lawyers. They said in court papers that the U.S. government hasn’t shown them any evidence that China has manipulated the content that Americans see on TikTok or that China has accessed U.S. user data.
The U.S. government has shown the judges statements from senior intelligence officials about the dangers posed by TikTok and a transcript of a classified House committee hearing from March that fueled the legislation’s passage. Publicly viewable portions of the filings intimate that the government’s national-security concerns are more than hypothetical.
Casey Blackburn, a senior U.S. intelligence official, wrote in a heavily redacted filing that TikTok’s parent company has a “demonstrated history of manipulating the content on their platforms, including at the direction of the PRC [People’s Republic of China].”
TikTok says it has spent $2 billion walling off U.S. user data on Oracle-owned U.S.-based servers—measures that the U.S. government says fail to adequately insulate TikTok from Chinese influence or prevent user data from being accessed by ByteDance employees located in China.
COMMENT – ByteDance (TikTok’s parent company) has staked its future on a First Amendment argument that looks pretty flimsy.
The law passed by Congress and signed by the President doesn’t restrict anyone from posting what they want online or speaking publicly, it restricts foreign ownership of a social media platform.
I agree with the journalists for this piece, it appears that the Chinese Government won’t allow ByteDance to sell TikTok (further revealing that ByteDance is in fact controlled by a hostile foreign government which can direct its commercial activities).
If the DC Circuit upholds the law, I doubt the U.S. Supreme Court will decide to hear ByteDance’s appeal, which means the platform will likely be blocked early next year.
63. The Chinese Chipmaker at the Heart of the U.S.-China Tech War
Ana Swanson, John Liu, and Paul Mozur, New York Times, September 16, 2024
64. ByteDance Steps Up AI Chip Efforts
Wayne Ma and Qianer Liu, Information, September 16, 2024
Military and Security Threats
65. Arunachal: Chinese troops allegedly enters inside Indian territory in Anjaw
Arunachal24, September 7, 2024
Chinese troops of the People’s Liberation Army (PLA) of China, reportedly entered at least 60 kilometers inside Indian territory in Anjaw district of Arunachal Pradesh, and they camping in the Kapapu area of the district for some time, a media report said.
Pictures of bonfires, spray-painted rocks and Chinese food materials found at the site are sharing in social media, shows that the recently incursion takes place in this area.
66. New Chinese heliport along LAC fuels tension with India
Shivani Sharma and Bidisha Saha, India Today, September 19, 2024
The latest addition to China's great wall of defence infrastructure is a heliport lying in the fishtail zone, one of the most sensitive areas along the disputed India-China border.
It is no secret that China has built hundreds of model villages along the border, many of them in areas claimed by other countries. These civilian outposts act as the ‘eyes and ears’ of Beijing in defending its territory while projecting its power abroad and securing its rule at home.
67. Countermeasures against China’s Maritime Militia Operations in the South China Sea
Gilang Kembara, RSIS, September 20, 2024
China has actively employed its maritime militia to support the Chinese coast guard, as well as navy, in asserting the country’s claims in disputed waters, particularly in the South China Sea. Countering China’s maritime militia requires a combination of political, operational and legal countermeasures.
In 2012, a group of Chinese fishing vessels anchored at Scarborough Shoal in the South China Sea. Philippine attempts to arrest the fishermen led to a standoff that culminated in a complete seizure of the shoal by China and a blockade against Filipino fishing communities attempting to exercise their right to fish in their country’s own exclusive economic zone. The control of the shoal, and many other disputed features in the South China Sea, has been chiefly conducted by China’s maritime militia.
Although Beijing has always denied any responsibility for the actions of its maritime militia, these forces are recognised by the state as a component of the People’s Liberation Army (PLA). The militia is mentioned in Article 55 of the People’s Republic of China Constitution, Article 4 of the Military Service Law and Article 22 of the National Defence Law.
China’s maritime militia policy has seemingly evolved into a strategy that moves the status quo in favour of China without crossing the threshold into a full-scale military conflict. To advance China’s interests, there are three operations that the maritime militia commonly conducts in disputed waters. First, it cements China’s claimed rights through fishing. Beijing encourages its fishermen to protect, contest, and occupy its contested maritime space as much as possible. Chinese fishermen and their activities thus serve as a tool of Beijing’s policy to protect its fishing rights.
Second, maritime militia groups are often stationed in and around China’s offshore outposts in the South China Sea to collect intelligence. Indeed, the maritime militia groups spend far more time anchored or in transit than fishing.
Third, the maritime militia advances China’s interests through intimidation. The maritime militia is deemed to be an effective paramilitary force to deter outside forces from undermining the sovereignty and sovereign rights of China. The militia obscures the core principles of international humanitarian law calling for a distinction to be maintained between civilian and military elements.
COMMENT – Great work out of Singapore’s Nanyang Technological University. Raising awareness of China’s “little green men” (the maritime militia) is critical in understanding PRC aggression and coercion of its neighbors.
68. Chinese aircraft carrier enters southern Japan contiguous zone
Nikkei Asia, September 18, 2024
69. China, Russia coast guards to start joint North Pacific exercises
Yukio Tajima, Nikkei Asia, September 16, 2024
70. China-Pakistan defense ties threatened by new U.S. sanctions
Adnan Aamir, Nikkei Asia, September 17, 2024
71. VIDEO – Is Xi Jinping’s China on a path to war?
Aljazeera, August 9, 2024
72. Could the South China Sea bubble over into conflict?
Charles Parton, Council on Geostrategy, September 12, 2024
73. Philippines sends replacement ship to Sabina Shoal, vows continued presence
Reuters, September 15, 2024
74. China’s GJ-11 stealth drone sightings hint at future role as fighter jet ‘wingmen’
Seong Hyeon Choi, South China Morning Post, September 15, 2024
75. US strategy for anti-ship weapons to counter China: plentiful, mobile, deadly
Gerry Doyle and Mike Stone, Reuters, September 17, 2024
One Belt, One Road Strategy
76. EXPLAINED: Why Thais are wary of China’s rising influence
Radio Free Asia, September 16, 2024
77. Malaysia's king to visit China, eyes infrastructure support
Joe Cash, Reuters, September 18, 2024
Opinion Pieces
78. Why Beijing Is Keeping Its Wallet Closed
Lizzi C. Lee, The Wire China, September 15, 2024
79. Don’t Let Fed Noise Drown Out the Signal from China
John Authers, Bloomberg, September 18, 2024
Japanification is looming ever larger.
80. Even With $1 Trillion a Year the US Military Is Falling Behind
Hal Brands, Bloomberg, September 16, 2024
81. The Case Against the China Consensus
Jessica Chen Weiss, Foreign Affairs, September 16, 2024
Why the Next American President Must Steer Toward a Better Future.
Washington faces growing criticism for pursuing open-ended competition with China without defining what success would look like. Even as China’s coercive capabilities and threatening behavior have rightly focused U.S. attention on the risks to American interests, the absence of clear metrics for success leaves the door open for partisan aspersions of the Biden administration’s approach. The administration’s defenders, meanwhile, rebuff these attacks by pointing out that its policies align with a broad consensus about the challenge China poses and the steps necessary to counter it.
To be sure, both Democratic and Republican politicians have engaged in the typical campaign ploy of sounding tough on China. During their recent debate, U.S. Vice President Kamala Harris accused former President Donald Trump of selling out American interests and praising Chinese leader Xi Jinping, and Trump erroneously claimed that “China was paying us hundreds of billions of dollars” under his administration’s tariffs (which the Biden administration has expanded). Meanwhile, the drumbeat of hyperbolic rhetoric and congressional hearings on the threat posed by the Chinese Communist Party has blurred the line between legitimate commercial, scientific, and educational pursuits involving Chinese entities and those that pose unacceptable security risks or invite other vulnerabilities. Fearing that what might have been welcome yesterday could be deemed disloyal today, companies, researchers, and students have pulled back from many of the activities that have underpinned U.S. economic and scientific leadership.
Yet beneath this charged atmosphere, ample space for debate and discernment remains. The apparent hardening of a U.S. consensus on China is shallower and wobblier than it appears. In this fluid environment, there is an opportunity for the next presidential administration to develop a more affirmative, less reactive approach, one that dials down the heat and focuses on reducing the risks while preserving the benefits of the vast web of ties that connect the United States and China.
U.S. policymakers should seek a more durable basis for coexistence, striking a careful balance to ensure that efforts to address the real threats from China do not undermine the very values and interests they aim to protect. Deterrence, particularly in the Taiwan Strait, can be achieved only with the backing of strong diplomacy that combines credible threats and credible assurances. And both deterrence and prosperity require some degree of economic integration and technological interdependence. If policymakers overplay competition with Beijing, they risk more than raising the likelihood of war and jeopardizing efforts to address the many transnational challenges that threaten both the United States and China. They also risk setting the United States on a path to what could become a pyrrhic victory, in which the country undermines its own long-term interests and values in the name of thwarting its rival.
COMMENT – I don’t agree with Jessica’s arguments (as I covered in the commentary at the start of this issue), but I do think its important to read and understand the points she is making… as these perspectives might guide policy in a Harris Administration.
To sum up her argument: The United States should appease Chinese leaders and seek a less confrontational relationship with China to avoid a Sino-American military conflict.
I agree with the desire to avoid a military conflict, but my main objection (and we’ve debated this on panels in conferences a few times) is that I think her approach is more likely to lead to conflict.
To sum up my argument: Appeasing an authoritarian regime like the one in Beijing is more likely to lead to conflict than in confronting it directly.
82. America and the Philippines Should Call China’s Bluff
Marites Dañguilan Vitug, Foreign Affairs, September 18, 2024
83. Washington’s Warning on Hong Kong Is a Wakeup Call
Karishma Vaswani, Bloomberg, September 12, 2024
84. The Trump-Harris Debate Ignored Asia/China, and That’s Bad News
Joshua Kurlantzick, Council on Foreign Relations, September 11, 2024
85. The U.S. needs a few good allies. Does it still need Canada?
Murray Brewster, CBC, September 21, 2024
More than 80 years after the U.S. pulled Canada under its security umbrella, Washington is losing patience.
There's a brief, delicious little vignette at the beginning of military historian Tim Cook's latest book that neatly captures the essence of Canada's decades-long national security and defence relationship with the United States.
Speaking in Kingston, Ont. with Prime Minister William Lyon Mackenzie King at his side, President Franklin D. Roosevelt declared that "the people of the United States would not stand idly by if domination of Canadian soil is threatened by any other Empire."
King — who obviously didn't know what the president was going to say ahead of time — was apparently gobsmacked by the assurance, Cook wrote in The Good Allies: How Canada and the United States Fought Together to Defeat Fascism During the Second World War.
Roosevelt's promise, made on Aug. 8, 1938 in the face of rising fascism in Germany, Italy and Japan, has formed the political bedrock of Canada's national security ever since — much to the delight (and chagrin) of Canada's political establishment down the decades.
At the time, King apparently saw the remark for what it was — a historic declaration from a like-minded democracy. He also understood the unspoken aspect.
"It was also a threat of sorts; that the United States would trample Canadian sovereignty if it saw a foreign menace north of the border," Cook wrote.
In 2024, that aspect of Roosevelt's remarks has lost much of its menace. It has been replaced with what former top Canadian national security officials often describe as a deepening sense of exasperation and frustration in Washington with the shiftless attitude in Ottawa that the pledge seems to have created.
Cook documents in his book, often in vivid detail, the genesis of the Canada-U.S. security relationship — lately dominated by American grumbling over Canada's reluctance to hit NATO's military spending benchmark of two per cent of gross domestic product.
His analysis is particularly instructive when you consider the strains on that relationship today, and the persistent sniping of U.S. lawmakers from both sides of the aisle.
When the U.S. needed Canada
As the world once again watches the rise of authoritarian dictatorships, the United States appears to be once again searching for a few good allies. That may be why the exclusion of Canada from the high-tech submarine deal involving Australia, the United States and the United Kingdom still stings so much in Ottawa.
The Second World War was "one of the few times when the United States understood it needed Canada," Cook told CBC News. Canada's geography, mineral wealth and (at the time) untapped industrial potential made it a natural defence partner for the U.S.
Cook suggests that complacency set in on both sides of the border in the decades since, and particularly since the end of the Cold War. Canada's political and institutional establishments have benefited from the American security umbrella, allowing this country to invest generously in social development.
But on the flip side, the United States has had to think about security on its northern border the way it has in the southern region.
"One of the things I have found in reading hundreds of books and documents is that Canada barely registers in any of these discussions in the United States about security issues," Cook said.
"Canada was a very good ally to the United States [during the Second World War], acknowledged at the time, and perhaps we've been too good in that alliance."
If there has been a persistent policy failure (or perhaps a political character flaw) on Canada's part, it could be its apparent inability to tell its story in Washington.
"If we were to talk about today, perhaps we need to shout a little louder about our own accomplishments and to talk about security and defence," said Cook.
At last summer's NATO Summit in Washington, Canada's Ambassador to the United States Kirsten Hillman was careful to emphasize the lengths Canadian diplomats go to in order to get attention in the U.S. capital.
She insisted that the Canada-U.S. relationship is as strong as ever, particularly on security and defence.
"We are sophisticated countries with many policies that we're seeking to develop and many ways in which to contribute, not only our homeland security, but the security of our world," Hillman said in response to a reporter's questions in July.
"The conversations are not one-note. They're complicated. They're serious. And we are taken very seriously."
Vincent Rigby, a former national security and intelligence adviser to the prime minister, agreed with Cook that Canada is often under-appreciated in Washington and inconsistent in how it presents its message to the Americans.
Promises, promises
"The challenge, I think, especially currently, is that you don't want to go down to Washington if you don't have a good story to tell, or if you just have a series of niggling little asks," Rigby told CBC News.
In a recent policy paper, Rigby argued that Canada's reputation with the United States is at its lowest point since Roosevelt extended the security umbrella almost nine decades ago.
Much of it, he said, is related to successive Canadian governments making promises on defence and either not following through on them or taking a ponderously long time to deliver.
"It's difficult to engage the Americans," said Rigby, now a professor at the Max Bell School of Public Policy at McGill University. "We've lost their trust, I think, and we are not particularly credible allies."
It's not a question of the U.S. saying jump and Canada asking how high, Rigby added. It's not even merely a matter of fulfilling our obligations as members of NATO and NORAD. It's about understanding the lesson of 1938, he said — what the Americans were looking for then and now.
"The U.S. ... when it comes right down to it, looks through virtually everything in a bilateral relationship through a national security lens, or a defence lens, no matter what the issue is," Rigby said. "And if you are not stepping up in terms of national security and defence, it is going to impact other parts of the relationship."
Roosevelt was a Democrat, of course. Rigby said there's another lesson Canadians ought to learn from his example: Democrats are no more likely than Republicans to overlook it when Canada fails to meet its defence commitments.
"If we get into this world where we think this is all about [Donald] Trump, and that if Trump and the Republicans do not gain power in the next election that we're going to be okay and we're going to get a free pass, we are sorely, sorely mistaken," he said.
"The world is going to get worse before it gets better … So Canada, what can you do for us? I think it's going to come from a [Kamala] Harris administration, if she wins the election. And I think you're going to see it become a little bit blunter and a little bit more strident."
COMMENT – Solid commentary by Murray Brewster
I think Vincent Rigby (former Canadian national security advisor) is spot on, the U.S. views its bilateral relationship through a security lens “[a]nd if you are not stepping up in terms of national security and defence, it is going to impact other parts of the relationship."
Canada has neglected its alliance responsibilities for far too long and pursues policies which undermine the security interests of both countries. Whether it’s their underwhelming defense spending (which directly undermines the security of the U.S. and Canadian homelands given Canada’s air and missile defense responsibilities under NORAD), their failure to contribute their fair share to NATO, their efforts to play China off the United States to benefit narrow Canadian trade interests, or their blind-eye to CCP political interference on behalf of Justin Trudeau’s Liberal Party.
Here's an example from this week when the Quebec provincial government rejected a graphite mining project funded by the U.S. Defense Department (“Locals claim ‘victory’ after Quebec says it won’t fund graphite mine project tied to Pentagon,” Montreal Gazette, September 19, 2024), which of course makes both the United States and Canada MORE dependent on graphite from the PRC.
The reality is that there is very little the United States can do to convince Canadians to be more responsible… aside from public shaming… which I’m all for.
Until Ottawa takes its responsibilities more seriously, we really shouldn’t include them in international forums like AUKUS or efforts to expand innovation in emerging technologies.
Perhaps it is even time to swap Canada out for India in the G7… India is a vast and growing democracy with the fifth largest economy in the world ($3.94 trillion GDP) compared to Canada which is the 10th ($2.24 trillion GDP).
86. America first? Or the United States as the leader of the free world?
H.W. Brands, Washington Post, September 12, 2024
87. China, America and a global struggle for power and influence
Gideon Rachman, Financial Times, September 16, 2024