The Commerce Department takes the lead
Friends,
I’m on the road this week and next, so I’m cutting back on the commentary until I get back and have a chance to process what I learn from visiting with folks in Asia.
There is a lot to cover with the latest Artificial Intelligence Executive Order (AI EO) and the AI Safety Summit hosted by the UK. For those of you who want a breakdown of the 36-page AI EO, I recommend listening to Jordan Schneider’s China Talk episode this week (“Emergency Pod: AI Executive Order!”).
The one thought I would leave you with is this: the Biden Administration has placed enormous responsibility on the Commerce Department, much more so than in nearly any Administration (except for maybe the Harding Administration when Herbert Hoover was the Secretary of Commerce).
Here’s an incomplete list of some of the new things the Commerce Department is responsible for:
Develop Guidelines, Standards, and Best Practices for AI Safety and Security (in less than a year)
Implement the CHIPS and Science Act (tens of billions in subsidies to the semiconductor industry)
Prevent the PRC from gaining access to or producing their own advanced semiconductors
Prevent the Russian Federation from gaining access to advanced dual-use items that can be used in the defense industry
The Commerce Department is being pushed into a more prominent role in national security because the rivalries with the PRC and Russia are taking place, to a large degree, in the commercial domain. Private companies develop and build the technologies that determine military advantage. Business models and investment strategies determine where manufacturing takes place and how supply chains are built.
The commercial landscape is where the battles of this new cold war are playing out.
Understanding commercial geography and having a mastery over how to influence business and investor decisions will be the new ‘high ground’ of the commercial domain.
It is no accident that the Commerce Department is at the center of this change.
Thanks for reading!
Matt
MUST READ
1. EO 14110: Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence
Executive Office of the President, October 30, 2023
Purpose. Artificial intelligence (AI) holds extraordinary potential for both promise and peril. Responsible AI use has the potential to help solve urgent challenges while making our world more prosperous, productive, innovative, and secure. At the same time, irresponsible use could exacerbate societal harms such as fraud, discrimination, bias, and disinformation; displace and disempower workers; stifle competition; and pose risks to national security. Harnessing AI for good and realizing its myriad benefits requires mitigating its substantial risks. This endeavor demands a society-wide effort that includes government, the private sector, academia, and civil society.
COMMENT – For those who aren’t up for reading all 36 pages, here is the significantly shorter Fact Sheet on the AI EO.
2. The Great Reordering
Rana Foroohar, Washington Monthly, October 29, 2023
There can be no doubt now that an epochal shift is underway in how the economy—in America and across the globe—is governed. The mystery is how a moderate, conventional politician like Joe Biden engineered it.
Reading lists say lot about a person, or at least what they care to spend their time thinking about. Ben Harris, who served as chief economic adviser to President Joe Biden when Biden was still the VP, remembers prepping for his first day on the job in 2014. The vice president’s policy staff had sent Harris a large pile of documents designed to get him into Biden’s headspace. It was filled with esoteric papers on corporate governance, financial market short-termism, and labor policy. Still, Harris wanted to know more about the personality traits of his new boss. When he asked his predecessor, Sarah Bianchi, about Biden’s character, Bianchi said, “What can I tell you? This guy is the vice president of the United States, but he still gets up on a ladder and cleans his own gutters.”
He also stands in picket lines with UAW members. Biden is, of course, an excellent politician, and he’s long been a friend to labor. Still, few people would have expected, when he entered the White House, that his administration would herald the beginning of a sea change in America’s political economy, from trickle down to bottom up, or, as the president’s campaign slogan put it, to a core emphasis on “work, not wealth.”
The record on that score is unequivocal. His COVID-19 stimulus bailed out people, not banks. His domestic economic policy has been about curbing giant corporations and promoting income growth. His infrastructure bills invested in America in a way not seen since the Eisenhower administration. He has taken commerce back to an earlier era in which it was broadly understood that trade needed to serve domestic interests before those of international markets.
The contrast with the so-called neoliberal economics of recent decades, in which it was presumed that markets always know best, and particularly the Clintonian idea that “free” trade and globalization were inevitable, could not be starker. With a few notable exceptions (Joseph E. Stiglitz, Jared Bernstein), Bill Clinton’s administration, like Barack Obama’s, was filled with neoliberal technocrats who bought fully into the idea of the inherent efficiency of markets. Although they might have occasionally looked to tweak the system, many of the academic economists running policy basically believed that capital, goods, and people would ultimately end up where it was best and most productive for them to be without the sort of public-sector intervention you’ve seen during the Biden administration.
In this world, so long as stock prices were going up and consumer prices were going down, all was well. Monetary policy trumped fiscal stimulus. And if the latter had to be used, it should be, in the words of the economist Larry Summers, “timely, targeted, and temporary.” (The Biden stimulus, by contrast, is designed to be broad based and long term.) In this political economy, outsourcing wasn’t a bad thing. China would get freer as it got richer. Americans should aim to be bankers and software engineers, not manufacturers.
“The conventional wisdom was, ‘We don’t need to make T-shirts here,’” remembers Beth Baltzan, a career trade staffer who has served under several administrations and is now senior adviser to U.S. Trade Representative Katherine Tai, one of the numerous Biden appointees who are taking a fundamentally different economic tack than Democrats of the past. There was, of course, almost no air between this view and the Republican take that it doesn’t matter for national competitiveness whether a country makes “computer chips or potato chips,” as an economic adviser to George H. W. Bush once quipped.
The pandemic, the war in Ukraine, and the U.S.-China conflict have changed all that, of course. But so has Biden, who has led a kind of stealth revolution, the depth and profundity of which have yet to be fully understood by the media, the public, or, indeed, many elites in Washington, D.C. This is perhaps because we haven’t had a true economic paradigm shift in nearly half a century, since the era of Ronald Reagan and Margaret Thatcher overturned the New Deal/Keynesian paradigm that had reigned in the United States and much of the Western world for decades before. As Franklin Foer writes in his recent Biden biography, The Last Politician, “Where the past generation of Democratic presidents was deferential to markets, reluctant to challenge monopoly, indifferent to unions, and generally encouraging of globalization, Biden went in a different direction.” Rather than speaking to Goldman Sachs, Biden spoke to autoworkers.
While paradigm shifts take years, indeed decades, to play out, there’s no question that one is underway: A massive boom in manufacturing engineered with federal dollars. Aggressive antitrust lawsuits brought against the biggest tech behemoths. (See “Winning the Anti-monopoly Game” by Will Norris.) International agreements on corporate tax evasion, and an even tougher stance on Chinese mercantilism than we saw during the Trump administration. Beyond this, the White House has begun laying out a powerful new post-neoliberal narrative. From Biden’s July 2021 address to Congress announcing the end of trickle-down economics, through to National Security Council Director Jake Sullivan’s April 2023 speech on building back better abroad and the call from USTR Tai last May for a “postcolonial” trade paradigm, a new political economy in America is taking shape. You can call it Bidenomics. You can call it a post-neoliberal world. You can call it “the new economics,” as some progressives who want to separate the changes that are afoot from a single president are inclined to do. But whatever you call it, it’s an epochal shift in how America—and possibly the world—works.
Whether this shift continues past 2024 is, of course, an unknown. What’s even more mysterious, and worth explaining, is how it is being engineered by perhaps the last national leader you’d expect: the “moderate” and “conventional” Joe Biden.
COMMENT – Over the past two years I’ve starting reading Rana Foroohar’s pieces more closely as I think she detects an economic and geopolitical shift happening in our world. We are quickly moving away from the neo-liberal consensus where “free trade” was unquestioned, and globalization was inevitable. This shift and the economic framework that emerges will determine a lot.
That era has come to an end, it was only possible under a very unique set of geopolitical circumstances, which no longer exist.
Though there are plenty of people in Washington, New York, Brussels, Berlin, and a handful of other cities, who think we can turn the clock back to the 1990s.
3. As China Looks to Broker Gaza Peace, Antisemitism Surges Online
Daisuke Wakabayashi, Tiffany May and Claire Fu, New York Times, October 28, 2023
China’s state-run media has blamed the United States for deepening the crisis, while perpetuating tropes of Jewish control of American politics.
As the Israel-Hamas conflict intensifies, raising the prospect of a wider war, China has stepped up efforts to pitch itself as a neutral broker for Mideast peace.
Beijing’s top diplomat called his Israeli and Palestinian counterparts on Monday, urging restraint. A Chinese envoy is traveling in the Middle East, pledging to help avert a wider war. At the United Nations on Wednesday, China vetoed a resolution on the war that did not call for a cease-fire.
But even as China seeks to turn down the temperature diplomatically, a surge of antisemitism and anti-Israeli sentiment is proliferating across the Chinese internet and state media, undermining Beijing’s efforts to convey impartiality. China has already come under pressure from the United States and Israel for its refusal to condemn Hamas for its Oct. 7 attack that started the war.
On China’s heavily censored internet, inflammatory speech critical of Israel is rampant, with commenters seemingly emboldened by that refusal. And China’s state-run media is seizing on the conflict to accuse the United States of turning a blind eye to Israeli aggression, while perpetuating tropes of Jewish control of American politics.
China Daily, a state-run newspaper, ran an editorial on Monday declaring that the United States was on the “wrong side of history in Gaza.” It said Washington was exacerbating the conflict by “blindly backing Israel.”
4. China touts global security vision at a defense forum in Beijing – with Russia by its side
Simone McCarthy, Steven Jiang and Wayne Chang, CNN, October 30, 2023
China is hosting defense officials from across the world for its flagship military diplomacy conference this week – a key opportunity for Beijing to promote its alternative vision for global security that has also underscored its increasing alignment with Moscow against the United States.
More than 30 defense ministers and military chiefs, as well as lower-level representatives from dozens more countries and organizations, including the US, gathered for the three-day Xiangshan Forum in the Chinese capital.
Russian Defense Minister Sergei Shoigu was given prominent billing as the first visiting official to address the forum Monday, where he and China’s keynote speaker both took aim at what they see as a failed US-led security system.
5. China suffers plunging foreign direct investment amid geopolitical tensions
Thomas Hale, Ryan McMorrow, and Andy Lin, Financial Times, October 29, 2023
Financial Times analysis shows FDI tumbled 34% in September after recording double-digit falls every month since May.
Foreign direct investment into China is falling across multiple measures, adding to pressure on Beijing and local governments as they seek to counter an economic slowdown.
Financial Times calculations based on Chinese commerce ministry data compiled by Wind show that FDI fell 34 per cent to Rmb72.8bn ($10bn) year on year in September, the biggest decline since monthly figures became available in 2014.
The weakness in FDI has been part of a steady march of disappointing economic readings since China lifted pandemic restrictions at the start of the year. While FDI leapt 15 per cent in January on the previous year, it has recorded double-digit percentage declines every month since May.
In renminbi terms, year-to-date inflows under China’s commerce ministry data remain just 8 per cent short of last year’s record pace.
But the country’s balance of payments data also reveals a deteriorating picture of foreign investment. Direct investment liabilities, a gauge of foreign capital flowing into the country, were $6.7bn in the second quarter, based on a September readjustment of earlier figures, the lowest of any quarter since 2000 and down from $21bn in the first three months of the year.
Recent falls contrast with the boom in foreign investment that China enjoyed during the pandemic even as the country was almost sealed off to the outside world. FDI reached an annual record of $189bn in 2022, according to commerce ministry data.
The most recent commerce ministry FDI data is only available in renminbi, after the government stopped releasing dollar-denominated monthly FDI figures in August. It also stopped publishing youth unemployment figures in July.
Brad Setser, a senior fellow at the Council on Foreign Relations, said the data suggested that “foreign companies are no longer reinvesting back in China”. Instead, he added, “they are getting [their] profits out of the country as fast as they can”.
COMMENT – A pretty stunning chart from the FT… clearly folks in the venture and private equity worlds are not confident in the PRC’s future.
6. University of California ‘Dear Colleagues’ Letter
Michael Drake, President of the University of California, August 28, 2023
In a just released “Dear Colleagues” letter, the President of the University of California System addressed the Chancellors of the individual campuses and the Director of the Lawrence Berkeley National Laboratory about the importance of “robust research security practices” and the need to adopt a proactive stance in protecting intellectual property. In the letter the President unveiled a new research security framework for affiliations and agreements involving emerging technology and countries of concern (Qatar, Saudi Arabia, UAE, the PRC (including Hong Kong and Macau), North Korea, and the Russian Federation).
7. U.S. Gave $30 Million to Top Chinese Scientist Leading China's AI 'Race'
Didi Kirsten Tatlow, Newsweek, November 1, 2023
The U.S. government gave at least $30 million in federal grants for research led by a scientist who is now at the forefront of China's race to develop the most advanced artificial intelligence—which he compared to the atomic bomb due to its military importance, a Newsweek investigation has revealed.
Pentagon funding for Song-Chun Zhu, the former director of a pioneering AI center at the University of California Los Angeles (UCLA), continued even as he set up a parallel institute near Wuhan, took a position at a Beijing university whose primary goal is to support Chinese military research, and joined a Chinese Communist Party "talent plan" whose members are tasked with transferring knowledge and technology to China.
Newsweek's revelations underline how the United States, with its open academic environment, has not only been a source for China of advanced technology with military applications but has also actively collaborated with and funded scientists from its main rival. Only as tensions with China have grown over everything from global flashpoints to trade to technology has the research started coming under growing scrutiny.
Responding to Newsweek's questions over funding for Zhu, the Department of Defense said there were also advantages to international collaboration: not least being able to recruit top minds from around the globe, including China, to the United States.
The National Science Foundation, a federal agency that was among those which awarded millions of dollars in grants to Zhu, began to use new analytics tools to fully determine potential conflicts of interest in 2022.
"The foreign collaborations and affiliations of Song-Chun Zhu were identified and reported to the intelligence community and law enforcement," Rebecca Keiser, chief of Research Security Strategy and Policy at the foundation, told Newsweek. "The NSF became aware of these national security and research security risks near the end range of this scientist's funding," Keiser added.
Newsweek has seen no accusations that Zhu broke any U.S. law. He did not respond to several emailed requests for comment and nor did his research institute. China's embassy in Washington did not respond to requests for comment.
To build a picture of the funding and of Zhu's activities, Newsweek examined federal grants databases, scientific papers, reports from Chinese and U.S. universities and companies, and Chinese local government announcements.
Among key donors were the specialist military research agency DARPA, the Navy and the Army. The Department of Defense for years has highlighted the essential role that artificial intelligence is expected to play in the battlefields of the future.
Most of the federal grants awarded to Zhu, a professor of statistics and computing, were in the decade before 2020, the year he returned to China after 18 years at UCLA's Center for Vision, Cognition, Learning and Autonomy. But two grants included the year 2021: one was for $699,938 to develop "high-level robot autonomy" that was "important for DoD tasks, such as autonomous robots, search and rescue missions," according to the Department of Defense's grants website. Another, for $520,811, aimed to build "cognitive robot platforms" for "intelligence and surveillance systems via ground and aerial sensors." Zhu was named as principal investigator on both grants awarded by the Office of Naval Research.
"China has built a vast system to extract technology and know-how from US federally funded research," said Jeffrey Stoff, director of the Washington, D.C.-based Center for Research Security & Integrity, a non-profit set up to mitigate the risk to research from U.S. adversaries.
"Compounding this problem is double-dipping, where recipients of federal research dollars like Zhu also take Chinese government funding for the same research and divert efforts for China's benefit," Stoff said.
COMMENT – I wonder, has anyone in the Department of Defense been disciplined for these failures?
8. The Rise of the State-Connected Private Sector in China
Chong-En Bai, Chang-Tai Hsieh, Zheng Michael Song, and Xin Wang, Stanford Center on China’s Economy and Institutions, November 1, 2023
Analysis from SCCEI reveals that “a large share of China’s economy is neither completely state owned nor completely privately owned but rather in a gray zone of mixed ownership.” Out of the more than 37 million firms registered with SAMR (State Administration for Market Regulation) between 2013 and 2019, “78% of China’s largest 1,000 private owners have equity ties with a branch of the central or local government or a firm owned by a central or local government.” This suggests that the PRC state, or perhaps more accurately, the Chinese Communist Party exercises enormous influence, if not outright control, over a significant proportion of the country’s “private” sector.
Authoritarianism
9. Xi Faces ‘Delicate Political Moment’ in Handling Grief Over Li
Bloomberg, October 27, 2023
10. China's ex-premier leaves an unfinished reform legacy
Kevin Yao, Reuters, October 27, 2023
11. China's ex-premier Li Keqiang, sidelined by Xi Jinping, dies at 68
Laurie Chen and Yew Lun Tian, Reuters, October 27, 2023
12. Chinese Mourn the Death of a Premier, and the Loss of Economic Hope
Li Yuan, New York Times, October 27, 2023
13. Beijing’s top spy agency cracks down on illegal foreign weather stations amid push to stop data leaving China
Sylvia Zhuang, South China Morning Post, October 31, 2023
14. How China sees Gaza
The Economist, October 26, 2023
15. China denies censoring Israel on maps
Louise Matsakis and Diego Mendoza, Semafor, October 31, 2023
16. US urges Beijing to temper Iran’s response to Israel-Hamas war
Demetri Sevastopulo, Financial Times, October 28, 2023
17. Hong Kong court jails ex-student leaders for inciting violence against police
Jessie Pang, Reuters, October 30, 2023
18. Canadian scholar of Tiananmen massacre denied visa to continue working in Hong Kong
James Griffiths, The Globe and Mail, October 30, 2023
19. China signals tighter Communist party control of financial sector
Cheng Leng, Financial Times, October 31, 2023
20. China’s billionaires looking to move their cash, and themselves, out
Amy Hawkins, The Guardian, October 30, 2023
21. As economy falters, more Chinese migrants take a perilous journey to the US border to seek asylum
Elliot Spagat and Didi Tang, NBC, October 31, 2023
They are seeking to escape an increasingly repressive political climate and bleak economic prospects.
The young Chinese man looked lost and exhausted when Border Patrol agents left him at a transit station. Deng Guangsen, 28, had spent the last two months traveling to San Diego from the southern Chinese province of Guangdong, through seven countries on plane, bus and foot, including traversing Panama's dangerous Darién Gap jungle.
“I feel nothing,” Deng said in the San Diego parking lot, insisting on using the broken English he learned from the “Harry Potter” film series. “I have no brother, no sister. I have nobody.”
Deng is part of a major influx of Chinese migration to the United States on a relatively new and perilous route that has become increasingly popular with the help of social media. Chinese people were the fourth-highest nationality, after Venezuelans, Ecuadorians and Haitians, crossing the Darién Gap during the first nine months of this year, according to Panamanian immigration authorities.
Chinese asylum-seekers who spoke to The Associated Press, as well as observers, say they are seeking to escape an increasingly repressive political climate and bleak economic prospects.
They also reflect a broader presence of migrants at the U.S.-Mexico border — Asians, South Americans and Africans — who made September the second-highest month of illegal crossings and the U.S. government’s 2023 budget year the second-highest on record.
COMMENT – It would seem that this flight of Chinese citizens (whether its billionaires or migrants) could be a powerful psychological weapon against a regime that has sought to portray to the world that the United States is in perpetual decline.
It looks like plenty of Chinese citizens don’t agree.
22. Biden Hosts China’s Top Diplomat Ahead of Expected Xi Meeting
Michael Crowley, New York Times, October 27, 2023
23. U.S., China Agree in Principle to Biden-Xi Summit
Charles Hutzler, Wall Street Journal, October 28, 2023
24. Broadcom-VMware merger held up as China delays $69bn deal
Tim Bradshaw, Arash Massoudi, Maxine Kelly, Cheng Leng, Qianer Liu, and Ryan McMorrow, Financial Times, October 30, 2023
US chipmaker and cloud software companies insist transaction will complete ‘soon’ despite missing Monday’s scheduled close.
US chipmaker Broadcom and cloud software company VMware have delayed the completion of their $69bn merger, which had been scheduled to close on Monday, as they await approval from China.
The companies said in a joint statement that they maintained their “expectation that Broadcom’s acquisition of VMware will close soon, but in any event prior to the expiration of their merger agreement”, which set a final deadline of November 26.
The Financial Times reported this month that Chinese regulators were considering holding up the deal, which was first announced in May 2022, after Washington toughened rules to block Chinese access to high-performance semiconductors.
Broadcom and VMware’s statement did not mention China directly but said they expected to “close [the] transaction promptly following satisfaction of [a] remaining condition”. China was not listed among the territories that have approved the deal, which include the EU, Japan, South Korea and the UK.
People close to the situation in China have said geopolitical friction between Washington and Beijing hung over the deal’s approval.
The companies said that there was “no legal impediment to closing under US merger regulations”.
The statement indicates that US antitrust authorities had not lodged objections before the deadline expired for intervention under the Hart-Scott-Rodino Act, which requires large deals to be notified to the US Federal Trade Commission and Department of Justice.
COMMENT – Perhaps Congress and the Executive branch should examine how respond to this coercion. See below for more on how Beijing has the power to block these business deals.
25. Broadcom CEO met with Chinese officials over weekend amid VMware deal – report
Joshua Finemen, Seeking Alpha, November 2, 2023
Broadcom CEO Hock Tan met with Chinese officials over the past weekend as the company tries to win approval for its planned $69 billion acquisition of VMware (NYSE:VMW). VMware ticked down 0.7%, while Broadcom rose 2.1%.
The meeting occurred in the U.S. as China's Foreign Minister Wang Yi was in Washington, DC to meet White House officials and members of the U.S. business community, according to a Dealreporter item on Thursday, which cited people familiar with the matter. It wasn't known if Tan and Yi met privately.
Broadcom's Tan is said to have "hammered out" a deal regarding the proposed acquisition of VMware (VMW) during the meeting, according to the report, which cited one source.
Final approval for the VMware (VMW) acquisition still rests with China's State Administration for Market Regulation. The deal needs to go through the "chain of command" in China before it's cleared by SAMR, Dealreporter said, citing one source.
COMMENT – Given that Broadcom is an American semiconductor company headquartered in San Jose, CA, it would be really interesting to know what kind of pressure PRC officials are applying to the Broadcom CEO. I would be very surprised if the Broadcom CEO was forthcoming to the U.S. Government about the commitments he might be making.
Both of these companies are deeply grounded in the kinds of technology that the U.S. Government is trying to prevent Beijing from gaining access to.
This happened before to American companies, in August the PRC blocked Intel’s acquisition of Tower Semiconductor and the PRC blocked Qualcomm’s acquisition of NXP in 2018… those are just two in the semiconductor sector I can think of off the top of my head.
For more on how Beijing can block the merger or acquisition of two foreign companies see this analysis by the law firm Skadden, “Demystifying China’s Merger Review Process,” December 13, 2022. In essence, the PRC has a law (Anti-Monopoly Law) that requires any two companies seeking to merger that have a combined revenue of $55 million or more in the PRC must submit the merger, acquisition, or some Joint Venture agreements to SAMR (State Administration for Market Regulation) for review.
26. China tech IPOs decline as regulators turn tough on start-ups
Sun Yu, Financial Times, October 29, 2023
Environmental Harms
27. China’s Richest Person Made Billions Bottling Pristine Water
Bloomberg, October 31, 2023
Foreign Interference and Coercion
28. G7 calls for immediate repeal of bans on Japanese food, pressing China
Nikkei Asia, October 29, 2023
29. US military bulk buys Japanese seafood to counter China ban
John Geddie and Yukiko Toyoda, Reuters, October 30, 2023
30. China nudges Mongolia to join Eurasian security bloc
Reuters, October 27, 2023
31. US vows to support ‘free media’ in Pacific as concern over China influence grows
Virginia Harrison, The Guardian, October 30, 2023
32. What China wants from Israel-Hamas war
Tessa Wong, BBC, November 1, 2023
33. China's panda business: How zoos from U.S. to Japan fund Beijing soft power
Nikkei Asia, November 1, 2023
34. O'Toole says CSIS warned him he'd still be targeted by Beijing after leaving politics
Catharine Tunney, CBC, October 26, 2023
35. O'Toole says Canada’s been a 'frog in ... boiling water' on Chinese interference
Ryan Tumilty, National Post, October 26, 2023
36. Secret files show CSIS worried Canada has ‘no consequences’ for foreign state interference
Alex Ballingall, Toronto Star, October 24, 2023
Human Rights and Religious Persecution
37. House Requests Probe into Chinese Firm Linked to Uyghur Forced-Labor Program
Jimmy Quinn, National Review, October 26, 2023
38. Yang Hengjun’s family urges Albanese to negotiate with China for jailed Australian writer’s release
Ben Doherty, The Guardian, October 31, 2023
39. China turning US-sanctioned Xinjiang into a free-trade hub, strengthening geopolitical edge in region
Kinling Lo, South China Morning Post, November 1, 2023
Industrial Policies and Economic Espionage
40. Asia's factories squeezed as China's nascent recovery teeters
Leika Kihara, Reuters, November 1, 2023
41. ‘War of money’: can China drag rivals into bankruptcy in a new arms race with drones?
Stephen Chen, South China Morning Post, October 30, 2023
42. The Race to Regulate
Rachel Cheung, The Wire China, October 29, 2023
43. Winning The Laser Battle
Aaron Mc Nicholas, The Wire China, October 29, 2023
44. Xi Seen Tightening Grip on Finance at Twice-a-Decade Conference
Bloomberg, October 29, 2023
45. What a third world war would mean for investors
The Economist, October 30, 2023
46. Warning Signs Grow Apple Is Losing China Consumers to Huawei
Jinshan Hong and Vlad Savov, Bloomberg, October 30, 2023
47. Hong Kong, Facing an Exodus, Offers Money for Babies
Selina Cheng, Wall Street Journal, October 28, 2023
48. U.S. Trade Loophole Fuels Rise of China’s New E-Commerce Firms
Yuka Hayashi, Shen Lu, and Richard Vanderford, Wall Street Journal, October 26, 2023
49. ‘Like it was with Jack Ma’: China puts world’s biggest Apple supplier in its crosshairs
Kathrin Hille, Financial Times, October 26, 2023
50. For China, Bullying Apple Suppliers Could Backfire Badly
Jacky Wong and Nathaniel Taplin, Wall Street Journal, October 30, 2023
51. HSBC chief says worst is over for China real estate
Kaye Wiggins, Hudson Lockett, and Stephen Morris, Financial Times, October 30, 2023
52. Beware a Chinese Fall Stall
Nathaniel Taplin, Wall Street Journal, November 1, 2023
53. China’s Property Developers Cut Prices—and Homeowners Are Resisting
Cao Li, Wall Street Journal, November 1, 2023
54. They Propelled China’s Rise. Now They Have Nothing to Fall Back On.
Li Yuan, New York Times, November 1, 2023
55. For China’s Jobless Young People, Hostels Are the Place to Be
Vivian Wang, New York Times, November 1, 2023
Cyber & Information Technology
56. Advanced chip in Huawei smartphone produced on ASML machines: sources
Bloomberg, South China Morning Post, October 26, 2023
China’s SMIC used ASML’s less-advanced DUV machines together with tools from other companies to make Huawei’s 5G-capable chip, sources say. ASML will be restricted from January to ship some of its most advanced DUV lithography machines to China.
China’s Semiconductor Manufacturing International Corp (SMIC) used equipment from ASML Holding to manufacture an advanced processor for Huawei Technologies' new 5G smartphones that alarmed the US, according to people familiar with the matter.
In a suggestion that export restrictions on Europe’s most valuable tech company may have come too late to stem China’s advances in chip making, ASML’s so-called immersion deep ultraviolet (DUV) machines were used in combination with tools from other companies to make the chip for Huawei, the people said, asking not to be identified discussing information that is not public.
ASML declined to comment. There is no suggestion that their sales violated export restrictions.
COMMENT – ASML has been deeply disingenuous.
The company has been pushing its tools to the PRC as fast as it possibly can and the Biden Administration has been too slow to put controls on the company and use the significant U.S. content inside their machines to block their export. In the 3rd Quarter of 2023, the PRC accounted for 46% of ASML’s total sales
For more on this, listen to Jordan Schneider’s October 18 episode of China Talk, “EMERGENCY POD: Export Controls Dropped!”
Same issue with Lam Research below.
57. Lam Research’s China Revenues Show that U.S. Export Controls Aren’t Working; Blanket Policy Denials Are Needed
Steve Coonen, China Tech Threat, October 26, 2023
A top U.S. semiconductor manufacturing equipment manufacturer, Lam Research, released its most recent quarterly results last week, and the numbers clearly indicate that U.S. export controls are not working. As Nikkei Asia reports:
Despite the semiconductor-related export curbs first announced in October 2022 that barred American companies from shipping advanced chip equipment to China without a license, the country remains Lam’s largest revenue contributor, contributing 48% of the total in the three-month period, up from 30% a year ago and 26% in the previous quarter.
That’s right, Lam’s China revenues are rising as a percentage of company revenue, not falling.
Lam’s leadership doesn’t foresee its China business dropping off, either. Referring to new export controls released last week, CEO Tim Archer said on the earnings call, “We’ve reviewed the regulations and our early assessment is we don’t see any materially impactful forecasts in business.” Additionally, Archer said, “I see a level of sustainability in China as we go into next year and frankly beyond. They have long-term objectives.”
What are those “long-term objectives” Archer seems eager to accommodate? To put it bluntly: It is China’s unabashed quest to globally dominate the semiconductor market. Xi’s statement three years ago clearly reveals his intentions: “We must tighten international production chains’ dependence on China, forming powerful countermeasures and deterrent capabilities based on artificially cutting off supply to foreigners.” Just as China has done with electric vehicle batteries, 5G equipment, and solar panels, Xi has an explicit plan to subsidize China’s legacy semiconductor industry, make foreign users dependent upon it, and then use leverage over global supplies to gain political, economic, or military concessions.
China is running the score board on us. As the U.S. sets an export control agenda focused on keeping China from advances with advanced chips, China focuses on the legacy segment. And by the way, China is having breakthroughs with advanced chips at the same time. What is the United States Government doing? More of the same.
58. China rushes to swap Western tech with domestic options as U.S. cracks down
Reuters, October 26, 2023
China has stepped up spending to replace Western-made technology with domestic alternatives as Washington tightens curbson high-tech exports to its rival, according to government tenders, research documents and four people familiar with the matter.
Reuters is reporting for the first time details of tenders from the government, military and state-linked entities, which show an acceleration in domestic substitution since last year.
China has spent heavily on replacing computer equipment, and the telecom and financial sectors are probably the next target, said two people familiar with the industries. State-backed researchers also identified digital payments as particularly vulnerable to possible Western hacking, according to a review of their work, making a push to indigenize such technology likely.
The number of tenders from state-owned enterprises (SOEs), government and military bodies to nationalize equipment doubled to 235 from 119 in the 12 months after September 2022, according to a finance ministry database seen by Reuters.
59. Xiaomi launches home-grown cross-device system with HyperOS, as US-sanctioned Huawei moves further from Google’s Android
Ben Jiang, South China Morning Post, October 30, 2023
The new HyperOS forms Xiaomi’s effort to create a single system that works across smartphones, vehicles and IoT home products.
Meanwhile, Huawei is aiming to stop supporting Android apps on its HarmonyOS devices with next year’s launch of the Next system.
Smartphone and gadget giant Xiaomi Corp has become the latest Chinese industry player to unveil a unified operating system for its mobile devices, cars and internet-connected home products, as US-sanctioned Huawei Technologies works towards liberating its own integrated OS completely from Google’s Android.
Xiaomi described HyperOS, its recently introduced OS, as a combination of a highly customised Android system and the company’s proprietary Internet of Things (IoT) platform Vela, launched three years ago to support a range of smart devices from wristbands and smartwatches to speakers, home appliances and sensors.
The Beijing-based firm touted HyperOS as a “human-centric” OS that is a culmination of efforts to bring its vast and expanding product portfolio under the roof of one single OS for centralised and easier management.
HyperOS will come pre-installed on the latest Xiaomi 14 smartphone series, as well as devices launched in the mainland Chinese market, such as smartwatches and televisions, the company said.
COMMENT – This form of decoupling is likely inevitable.
60. Tencent using Hunyuan AI model in 180 services amid competition with local rivals Baidu and Alibaba
Ben Jiang, South China Morning Post, October 27, 2023
61. US House panel seeks ban on federal purchases of China drones
David Shepardson, Reuters, November 1, 2023
62. Tesla Faces Automated Driving Rival in Geely and Baidu EV
Linda Lew, Bloomberg, October 27, 2023
63. China's Huawei reports modest revenue growth for first three quarters
David Kirton, Reuters, October 27, 2023
64. Think Tank Urges US to Get Even Stricter with China Over Chips
Mackenzie Hawkins, Jane Lee, and Debby Wu, Bloomberg, October 26, 2023
65. Chinese tech companies delve into robotics, eyeing link to AI
Takashi Kawakami, Nikkei Asia, November 1, 2023
66. Chinese AI start-up Baichuan claims to beat Anthropic, OpenAI with model that can process 350,000 Chinese characters
Ben Jiang, South China Morning Post, October 31, 2023
67. MPs want big tech held responsible for misinformation spread online by foreign actors
Mickey Djuric, The Canadian Press, October 24, 2023
68. TikTok Streamers Are Staging ‘Israel vs. Palestine’ Live Matches to Cash in on Virtual Gifts
David Gilbert, Wired, October 26, 2023
69. Biden releases AI executive order directing agencies to develop safety guidelines
Emilia David, The Verge, October 30, 2023
70. Some deaf children in China can hear after gene treatment
Antonio Regalado and Zeyi Yang, MIT Technology Review, October 27, 2023
71. White House backs up U.K. decision to invite China to AI summit
Cristiano Lima, Washington Post, October 26, 2023
72. Canada bans China’s WeChat from government devices citing security risks
Juliana Liu, CNN, October 31, 2023
Canada has banned Chinese super-app WeChat on official government devices citing cybersecurity risks, following similar action taken against short-form video app TikTok earlier this year.
The latest ban, announced on Monday and effective the same day, was also imposed on applications from Kaspersky Lab, a Russian maker of antivirus programs.
Canada’s chief information officer had determined that “WeChat and [the] Kaspersky suite of applications present an unacceptable level of risk to privacy and security,” the Treasury Board of Canada, which oversees public administration, said in a statement.
On a mobile device, the data collection methods of both applications provide “considerable access” to the device’s contents, according to the statement. It added there was no evidence that government information had been compromised.
Users of Canadian government cellphones will have the apps removed and will be blocked from downloading them in the future.
CNN has reached out to Tencent, the owner of Wechat, and Kaspersky Lab for comment.
COMMENT – So if it is too much of a threat to have on a government phone, should anyone be exposed to that risk?
Military and Security Threats
73. U.S. Space Force chief urges universal rules to keep China in check
Ryo Nakamura, Nikkei Asia, November 1, 2023
74. Preventing War in the Taiwan Strait
International Crisis Group, October 27, 2023
The danger of armed confrontation over Taiwan is growing, raising the spectre of a direct conflict between China and the U.S. that would have severe global repercussions. Managing this risk will require the parties to rebuild trust by shoring up decades-old understandings.
What’s new? Tensions are rising over Taiwan. The fabric of political understandings that contributed to cross-strait peace and security for decades has begun to unravel as China’s power and assertiveness grows, competition between the U.S. and China spreads, and the Taiwanese people develop a distinct identity increasingly disassociated from the mainland.
Why does it matter? A Chinese military offensive to take over Taiwan is unlikely in the near term, but conflict risks are rising. Taiwan remains the most likely flashpoint between the U.S. and China. A direct confrontation between the big powers could mean global conflagration, global economic shocks and the potential for nuclear escalation.
What should be done? The parties should assure one another that the political understandings hold. China should reduce its military, economic and political coercion of Taiwan; the U.S. should clarify and uphold its “one China” policy; Taiwan’s next president should seek to resume dialogue with the mainland and strengthen the island’s defence.
Executive Summary
Tensions over Taiwan are rising, raising the prospect of a direct conflict between the U.S. and China that could bring with it global economic shocks and the potential for nuclear escalation. Political understandings that preserved peace for decades are fraying under the pressure of U.S.-China competition, a stronger and more assertive China, and the growth of a Taiwanese identity that sees itself as separate from the mainland. A Chinese invasion of Taiwan is unlikely any time soon, but the risk of conflict is rising. Managing it requires the parties to reestablish a baseline level of trust by shoring up longstanding political understandings. Washington should credibly assure Beijing that it does not seek to keep Taiwan permanently separated from the mainland. Taipei should credibly assure Beijing that it does not seek formal independence. Beijing should credibly assure Washington and Taipei that it has not decided to unify with Taiwan through military force. At the same time, Taipei’s military vulnerability is also an issue: it should develop better defensive capabilities to give deterrence the best odds of success.
COMMENT – Pretty poor report from the International Crisis Group.
Equating the actions of an aggressor with the actions of the victim or third countries that offer collective security to the victim to maintain the peace, is not helpful. Beijing has no legitimate standing for threatening to use force to annex its neighbor.
The Tsai Administration in Taiwan has been open to dialogue with Beijing since entering office in 2016. The PRC has no interest in negotiating in good faith. [Just read the next article]
Deterring the Chinese Communist Party through collective security and greater international support for Taiwan is the only way to maintain the peace. Forcing Taiwan to capitulate to the Party’s demands or legitimizing Beijing’s fantasy of “one China” is not a recipe for peace and stability.
It would be much more helpful if the ICG unequivocally denounced Beijing’s coercion and threats to use force to resolve something that isn’t going their way through negotiations. The PRC has spent more than seven decades trying to convince the Taiwanese people to subsume their country to the Party’s rule, over and over again the people of Taiwan reject that offer.
They prefer to elect their own leaders and develop their own identity.
The people of Taiwan, just like people everywhere else, have the right to govern themselves and live without constant fear of invasion.
Perhaps it is time for countries that stand for peace to push Beijing to accept a ‘two-state solution.’
75. PLA will ‘show no mercy’ against Taiwan independence moves, top Chinese general says
Jack Lau, South China Morning Post, October 30, 2023
CMC vice-chairman Zhang Youxia tells Beijing Xiangshan Forum the military ‘will never agree’ to separate the island from China. He also takes a thinly veiled swipe at the US, saying a ‘certain country’ is interfering in the region and internal affairs of other nations.
The People’s Liberation Army will “show no mercy” against any moves for Taiwan independence, a top Chinese military official told a regional security forum on Monday.
“No matter who wishes to separate Taiwan from China in any way, the Chinese military will never agree to it,” General Zhang Youxia, vice-chairman of the Central Military Commission, said in a speech at the Beijing Xiangshan Forum.
He said Taiwan was the “core of China’s core interests”.
76. Dire Warnings of Russia and China Threats Challenge Aging U.S. Nuclear Arsenal
Robbie Gramer and Jack Detsch, Foreign Policy, November 1, 2023
77. The Return of Nuclear Escalation
Keir A. Lieber and Daryl G. Press, Foreign Affairs, October 24, 2023
78. Senior Chinese official meets Myanmar leader for security talks as fighting rages in frontier area
Grant Peck, Associated Press, October 31, 2023
79. China to tighten its state secrets law in biggest revision in a decade
Phoebe Zhang, South China Morning Post, October 27, 2023
80. Russia’s defence chief hails China ties as ‘exemplary’, warns NATO expansion risks clash between nuclear powers
Seong Hyeon Choi, South China Morning Post, October 30, 2023
81. China and Russia take aim at US at Chinese military forum
Yew Lun Tian, Reuters, October 30, 2023
82. China’s Military Diplomacy and its Quest for Bases Abroad
Bonnie S. Glaser and Kristen Gunness, GMF, October 25, 2023
83. Capitalising on crisis: Russia, China and Iran use X to exploit Israel-Hamas information chaos
Institute for Strategic Dialogue, October 25, 2023
Key Findings
Iranian state-affiliated accounts have been glorifying the Hamas attack on 7 October as a strategic blow against Israel and accusing the US of being responsible for Palestinian suffering. Iran and Ayatollah Khamenei have been portrayed as leading a ‘pan-Islamic resistance’ against ‘neo-colonial’ Western powers and Israel.
Iranian accounts have also glorified and excused war crimes against Israeli civilians and used dehumanising language which describes ‘the enemy’ as singularly evil.
Russian state-affiliated accounts have been instrumentalising the current conflict to corroborate their usual set of anti-Western and anti-Ukrainian narratives. Russian state-affiliated accounts accused the West of “double standards” and blamed Western nations for the escalation.
Russian state media spread false and unverified information, including claims that Ukraine had supplied weapons to Hamas, and that the Gaza City hospital destroyed on 17 October was hit by a bomb supplied to Israel by the US.
The response to the war from Chinese Communist Party (CCP)-affiliated networks varies considerably across accounts and platforms. While posts on Facebook tried to remain neutral, insisting on condemning all acts that harm civilians, responses on X were markedly more polarised, with vehement attacks against Western political figures and Western media.
On X, Chinese state media accounts denounced the US for supposedly seeking economic advantage from the escalation. These same accounts called out Western politicians and mainstream media for turning ‘a blind eye’ to the victims in Gaza.
84. Giving up Chagos Islands ‘would threaten Falklands’
Steven Swinford, Sunday Times, October 27, 2023
Rishi Sunak has been warned that surrendering the Chagos Islands to Mauritius will endanger Britain’s national security and put the Falklands and Gibraltar at risk.
In November last year the UK agreed to open negotiations with Mauritius over the future of the Chagos Islands, a British overseas territory in the Indian Ocean.
The decision represented a major reversal of the government’s policy and came after two significant legal defeats in international courts.
A paper by Policy Exchange warns that ceding control of the Chagos Islands would be a “major self-inflicted blow” and represent a significant strategic victory for China.
The archipelago includes Diego Garcia, which the UK has leased to the US for a military base since the 1960s. The strategic atoll, which is in striking distance of east Africa, the Middle East and southeast Asia, has become indispensable for America’s armed forces.
In a forward to the Policy Exchange report Lord West of Spithead, a former first sea lord, writes: “Diego Garcia is a strategic jewel, possession of which is crucial for security in the region and hence our national security. It is no exaggeration to say that Diego Garcia – the largest of the Chagos Islands – hosts the most strategically important US air and logistics base in the Indian Ocean and is vital to the defence of the UK and our allies.
“How on earth can the government explain a decision to negotiate with Chinese-aligned Mauritius to hand over sovereignty of the strategically vital island of Diego Garcia, an island which is located some 2152 kilometres from Mauritius itself? It would be a colossal mistake and one which opposition parties in parliament would also be complicit in, given they are supporting the government’s stance.”
85. China tests U.S. focus on Middle East, Ukraine wars
Jay Solomon, Semafor, October 27, 2023
86. Chinese Jet Flies Within 10 Feet of U.S. Bomber, Pentagon Says
Mike Ives, New York Times, October 27, 2023
87. China pledges to renew military dialogue with US while criticising meddling
Kathrin Hille, Financial Times, October 30, 2023
88. As Biden and China’s Xi Prepare to Meet, Their Militaries Are Butting Heads
Chun Han Wong, Wall Street Journal, October 31, 2023
One Belt, One Road Strategy
89. China vows closer Iran ties on multilateral forums in first meeting since latest Israel
Zhao Ziwen, South China Morning Post, October 27, 2023
Opinion Pieces
90. No, Xi Jinping Is Not About to Attack Taiwan
Bonnie S. Glaser, New York Times, October 29, 2023
To some observers, it may seem like Xi Jinping is itching to unify Taiwan with China.
The Chinese president has repeatedly asserted that doing so is vital to achieving his “China Dream” of national rejuvenation. He has instructed the Chinese military to be prepared by 2027 to take Taiwan by force, if necessary, and China increasingly uses its growing military might to intimidate Taiwan’s people into yielding to Chinese control. Last month, it staged large-scale naval drills involving an aircraft carrier in waters east of Taiwan and, days later, flew 103 warplanes toward the island — a single-day record.
But this bluster masks significant misgivings within China’s leadership about whether its largely unproven People’s Liberation Army forces can seize and control Taiwan at an acceptable cost, doubts that have very likely been accentuated by Russia’s military failures in Ukraine. In this light, a P.L.A. takeover of Taiwan is not inevitable nor, perhaps, even likely in the next few years, which gives the United States and Taiwan time to bolster their military capabilities and avert conflict.
Recent purges of senior Chinese generals, including the defense minister and two leaders overseeing the country’s nuclear and missile arsenal, hint at Mr. Xi’s lack of confidence in his military’s warfighting capability. While the reasons for these cabinet removals have not been made public, signs point to possible corruption and its impact on military preparedness. Officers who are lining their own pockets, if that is the case, are likely not taking seriously enough Mr. Xi’s instruction to be prepared to seize Taiwan by 2027. Mr. Xi has frequently admonished the P.L.A. to improve military training and strengthen combat readiness.
Russia’s debacle in Ukraine is a cautionary tale for Mr. Xi. Early in the war, the battle-hardened Russian military failed in the relatively straightforward task of crossing a land border to capture Kyiv. The P.L.A. would face even greater difficulty in crossing the Taiwan Strait. A large-scale amphibious invasion is among the most difficult military operations, requiring air and maritime superiority and the ability to sustain an invading force during a lengthy campaign.
For Mr. Xi, the political risks of anything less than a quick, low-cost and successful invasion are huge. A protracted stalemate could undermine his assertion that China is strong and powerful again, jeopardizing his goals of national rejuvenation and a powerful military. Even more worrying for Beijing is the possibility of defeat at the hands of a well-equipped, dug-in and defiant Taiwan, aided by the potential intervention of U.S. forces. It’s a nightmare scenario that could weaken Mr. Xi’s hold on power and even threaten Communist Party rule.
The Chinese leader can also not help but grasp the heavy price being paid by Russia in Ukraine: military casualties estimated at nearly 300,000 and counting; a severe weakening of the Russian economy because of international sanctions; incalculable harm to its global reputation; and an accelerated decline in Russia’s national power.
It’s a perilous time for Mr. Xi to court such danger.
China’s economy is facing long-term slower growth. This raises the specter of dissatisfaction or even social instability if the government continues to prioritize security and political control over economic well-being. Thousands of demonstrators across the country protested Mr. Xi’s obsession with control late last year, taking to the streets to denounce strict Covid policies, which were subsequently lifted. Some demonstrators voiced rare demands for political change, including Mr. Xi’s removal. Domestic support for a potential bloody war over Taiwan might not last long. Because of China’s now-lifted one-child policy, its armed forces are mostly composed of sons with no siblings. Their parents expect those soldiers to support them in old age and may take to the streets if casualties were to rise.
Yet another factor likely to restrain Mr. Xi is the prospect of the United States aiding Taiwan. Bipartisan support in the U.S. Congress for Taiwan’s security has never been stronger, and President Biden has repeatedly said the United States would support Taiwan militarily if China attacked. My conversations with Chinese experts suggest that Beijing firmly believes the United States values Taiwan as an important strategic bulwark in containing China and will intervene to prevent a Chinese takeover of the island.
Still, there are scenarios where Mr. Xi may feel compelled to take military action. If a future Taiwan government pushes for formal independence through a referendum or constitutional revision, Mr. Xi could conclude that the political risks of inaction — to him and the Communist Party — outweigh the risk of war. A move by an American president or Congress to restore diplomatic recognition to Taiwan — or return to the defense treaty that it had with Taipei before the United States switched diplomatic recognition to Communist China in 1979 — could similarly force Mr. Xi’s hand, even if he is not confident of battlefield success.
COMMENT – I hope Bonnie is right… but I fear she might be wrong.
91. Xi's global agenda will restrain improvement in Australian ties
Richard Maude and Genevieve Donnellon-May, Nikkei Asia, October 30, 2023
92. China cannot let the ambitions of young graduates be extinguished
Wei Li, Nikkei Asia, October 29, 2023
93. China's naval provocations are getting too blatant to ignore
Editorial Board, Washington Post, October 29, 2023
With the Biden administration rightly focused on the conflicts in Ukraine and the Middle East, there is always the danger of a new overseas crisis emerging in a different part of the world — say, a rival power taking advantage of the distractions to flex its muscles or cause mischief.
That seems to be what’s happening now in the Pacific, with China as the key trouble maker.
And this may be too gentle a description for China’s dangerous actions in the disputed South China Sea. Better to say that Beijing appears to be engaged in deliberate acts of provocation, testing the United States and one of its chief regional allies, the Philippines.
The South China Sea has long been seen as the likeliest potential flash point between the United States and China — which is why we have argued on these pages the importance of resuming military-to-military contacts as quickly as possible, including a crisis communications hotline, to avoid accidents or unintended mishaps from escalating into all-out conflict. There appeared to be some small hope for restoring those ties with the announcement that the Defense Department will be sending a representative to Beijing for an international three-day gathering, known as the Xiangshan Forum, hosted by the Chinese Defense Ministry, starting Sunday.
China’s conduct in recent days in the South China Sea seems neither accidental nor unintentional. On Oct. 22, Chinese vessels deliberately collided with a Philippine coast guard ship and a supply vessel sent to resupply a small Philippine marine detachment stationed on a rusting World War II-era transport ship being used to stake the Philippines’ claim to a contested outpost known as Second Thomas Shoal. China claims the shoal — and in fact, all of the South China Sea — as its own, and was trying to block what Beijing called the movement of “illegal construction materials” to the isolated reef.
The Philippines rightly condemned China’s “dangerous, irresponsible and illegal actions” in staging the collision. Beijing’s actions amount to a de facto blockade of the remote shoal and cannot be allowed to stand. The Philippine detachment guarding the shoal needs to be resupplied.
China has also stepped up its provocative maneuvers directly against U.S. aircraft flying in international airspace over the disputed South China Sea. Just two days after the incident with the Philippine ships, a Chinese J-11 jet attempted a reckless nighttime intercept of a U.S. B-52, flying above and below it and coming within just 10 feet of the bomber. The U.S. military released a grainy video of the near midair collision, accusing the Chinese pilot of flying in an unsafe and unprofessional manner.
Perhaps this is President Xi Jinping’s way of diverting his people’s attention from growing domestic problems — a faltering economy and a leadership crisis. He just officially sacked his defense minister, Li Shangfu, missing for weeks, and he formally stripped his ousted foreign minister, Qin Gang, of his last remaining official title, pointing to serious fissures within the ruling Communist Party. While these dismissals might be seen as Mr. Xi taking a firmer hand against corruption, the purging of such men, who he himself had promoted, raises the specter of an isolated autocrat unable to trust his own chosen subordinates — but eager to scapegoat them.
Mr. Xi might be assuming the United States is too focused on Israel’s war with Hamas and Russia’s invasion of Ukraine to pay attention to the Chinese military’s increasingly confrontational moves. Chinese officials, masters at gaslighting and projecting their government’s own actions onto others, of course accused the U.S. military of making a provocative move with a Navy warship. Beijing released its own video to back up its specious claim.
Whatever China’s precise rationale might be, it’s imperative that the administration send constant reminders to Beijing and to America’s allies in the region that the United States is a Pacific power and can deal with multiple crises at once. President Biden, speaking this week alongside Australia’s visiting prime minister, sent the right signal, emphasizing that the United States’ defense commitment to the Philippines “is ironclad.” He added that any attack on Philippine vessels, aircraft or troops would trigger the 1951 mutual defense treaty between the two countries, which commits the United States, in the event of such an attack, “to meet the common dangers in accordance with its constitutional processes.” Restating this deterrent commitment is the right way to reinforce it. And reinforcing it is the right way to make sure China is not tempted to test it.
94. China is getting away with cultural genocide in Tibet
Josh Rogin, Washington Post, November 1, 2023
95. Britain is ignoring the real Chinese AI threat
Iain Duncan Smith, Telegraph, October 27, 2023