What’s the vibe going into Beidaihe?
Some think it is pessimistic, here is an argument for why the Party might be confident
Friends,
The Beidaihe retreat is just around the corner. This is the annual summer retreat by the Chinese Communist Party leadership to the seaside resort town of Beidaihe. Mao began the tradition during the Great Leap Forward, as he starved and executed millions of his own citizens with his disastrous forced industrialization plans.
Subsequent leaders continued the tradition.
Mao at Beidaihe in 1960.
If the weather in Beijing is anything like it was in Tokyo last week (and looking at the weather app, it certainly is), then I see why they are fleeing the heat dome of a megalopolis for the relative relief of the shore.
This gives us a chance to speculate what Xi and his cadres are thinking as they head to the beach after an unusually busy July.
There is some risk at doing this sort of speculation. If we turn back the clock a year, there were rumors going into and coming out of Beidaihe that Xi Jinping had been severely reprimanded by Party elders at the retreat (or so Nikkei Asia reported a month afterwards). That rumor seemed logical at the time and fit with wider speculation that Xi faced a domestic political revolt. Xi’s hand-picked foreign minister and defense minister had just disappeared over corruption accusations, the economy was in the dumps, and public opinion was deeply pessimistic about the future. Many felt the legacy of Deng Xiaoping had been squandered by Xi.
But within a few weeks it became clear to China watchers that there was little to the rumors that Party elders had reprimanded Xi or that he faced a domestic political revolt.
So, with that helping of humility, let’s do some speculation for this year.
What has Xi and his cadres learned since the last Beidaihe and what might they expect for the next year?
#1 – While the Chinese economy certainly faces serious headwinds, Beijing’s rivals are divided, politically weak (or weakened), and overwhelmed. From Beijing’s perspective, their hierarchy of rivals are not strong, and their coalition is brittle.
Rival #1 (the United States) may have an economy that is performing well right now, but it is concentrated in sectors that Xi believes are fake… America is good at financial engineering and some other soft service sectors, but its manufacturing is dwarfed by the PRC’s (shipbuilding in the PRC is orders of magnitude larger than the United States) and America’s technology sectors are still deeply intertwined with PRC manufacturing. The visit by American business leaders last week following the Third Plenum simply reinforced for the Party that the PRC still has the upper hand (see #49 below).
When they turn their gaze to America’s domestic political situation, they feel even more optimistic. President Biden is a lame duck, and it is hard to imagine that the election in November will result with a President that has a clear mandate. The two main political parties view each other as greater threats to the country than any foreign rivals. Beijing has likely convinced itself that there is an opportunity to soften the U.S. approach to China no matter who enters office on January 20, 2025. Isolationism and retrenchment are on the rise in both parties, trends that both Beijing and Moscow believe can be manipulated and amplified.
When it comes to Washington’s renewed commitment to alliances that Biden pursued after coming into office, the Party likely concludes that there is very little to show for all that effort. I suspect that the Party also believe that Biden’s successor, whoever that may be, will be even less successful.
Lastly, the Party probably believes that America is overwhelmed dealing with foreign crises and its own domestic dysfunction. This belief stems from an ingrained assumption by the Party that democracies are inherently less efficient and effective than regimes like theirs AND based upon the evidence they see from Washington on a near daily basis. I suspect that they are also heartened to see that two of their most effective critics (Congressman Mike Gallagher and Senator Marco Rubio) have been sidelined (for now).
Rival #2 (Japan) is slowly coming out of its economic malaise and beginning to build military power, but the assassination of former Prime Minister Abe Shinzo two years ago has fractured the ruling LDP party in ways that make them weak and divided. With Abe out of the picture and with no one to fill his shoes, the most worrying geopolitical scenario for Beijing has passed. When Abe was assassinated, he was a year younger than Xi and arguably played a more important role than Xi of putting forward a vision for Asians. Abe’s concept of a “Free and Open Indo-Pacific” was a direct rebuke to the Sino-centric Asia Pacific that Xi and his cadres envisioned. Under Abe’s leadership, Japan stitched together the G7 and the Quad (Japan, India, Australia, and the United States) to focus on countering the CCP (this is often attributed to Washington, but having watched it up close, Abe and Tokyo played the most important role).
Abe’s successors, Prime Ministers Suga and Kishida, tried to continue these efforts, but they aren’t Abe. Prime Minister Kishida will likely be driven from power in the next two months by his own party as they search for a leader to rescue them in the eyes of the Japanese public. Perhaps a new, strong leader will emerge in Tokyo to pick up the mantle of Abe, but Beijing likely feels confident that won’t happen.
Rival #3 (Europe) is a mess in Beijing’s estimation. Europe has adopted a political system that Beijing believes is perhaps the weakest form of government ever devised by man, a form of government that seems to invite foreign manipulation and exclude common action a center of power that for the preceding three centuries had been a geopolitical juggernaut. The division of powers between Brussels and Member States strikes the Party as almost criminally negligent and it likely reminds them of Napoleon’s adage, “never interrupt your enemy when he is making a mistake.”
While Brussels has become increasingly skeptical of the PRC (coining the term de-risking) and its harshest critic, Von der Leyen has just gotten a second term as President, Europe’s most influential powers are weak domestically and Beijing has in-roads to stymie any serious efforts to counter the PRC or work with the United States. All the effort by the Biden Administration over the past three and a half years to convince Europe to adopt a harder line on the PRC and join with Washington in a common approach has born little fruit. As the Party looks to the future, it likely assumes that if President Biden couldn’t shift Europe on China, then none of his potential successors will have better luck.
The collapse of Macron’s domestic political power and the unpopularity of the Scholz’s coalition, likely makes Xi and his assistants comfortable that they face no serious challenges from Europe. From their perspective, there doesn’t appear to be any potential scenario in Europe where Europeans work more closely with Americans on China (regardless of the outcome of the U.S. Presidential Election in November).
One final note on Europe, the announcement from Berlin two weeks ago that it would cut in half its contributions to Ukraine must have come as very welcome news in both Moscow and Beijing. It likely suggests to the Party that their bet on assisting Moscow worked and that they will not suffer significant consequences (despite all the huffing and puffing in various European capitals).
Rival #4 (India) gets little respect from Beijing and after Modi’s BJP party did relatively poorly in the last elections (compared to what folks expected from the election), the CCP likely respects Delhi even less (for my Indian readers, please don’t take offense or believe that I don’t respect India… the truth is Beijing has always dismissed and underestimated India, largely due to cultural and racial chauvinism. I believe all of that has been reinforced under Xi Jinping).
All of this together leads Beijing to believe that it can effectively divide and conquer these rivals because the Party has a much stronger domestic political foundation then any of them. The Party likely believes that it can employ its own “magical weapons” of United Front Work to undermine ‘anti-China’ forces within each of these rivals AND prevent the rivals from working effectively together, while simultaneously preventing these rivals from weakening the Party’s domestic political base.
#2 – Using military force will not necessarily unite our rivals. Over the past two years, Beijing’s rivals have been challenged with two enormous wars initiated by partners of the PRC. The first in Europe with Putin’s full-scale invasion of Ukraine and the second a hideous attack by Hamas (Iran’s proxy) on Israeli civilians which has started a wide-ranging Middle East War from Lebanon to the Red Sea.
Had you asked Chinese leaders at the end of 2021 what these two events might have produced, they likely would have thought that one potential side-effect would have been the uniting of its rivals under U.S. leadership. While this has happened somewhat (Sweden and Finland joined NATO and a few NATO members have increased defense spending), the worst-case scenario from Beijing’s perspective has NOT happened. From Beijing’s perspective and after two years, it appears that their rivals have reverted to a ‘business-as-usual’ approach to the geopolitical situation (and the domestic political strength of each of their rivals has diminished significantly). None of its rivals will openly talk about the Second Cold War that has emerged, none are willing to ask their citizens to sacrifice (as Beijing and Moscow are doing), none are willing to impose serious costs on Beijing, and none of them are willing to grasp the full scale of what they face from an increasingly allied Sino-Russian bloc that is joined by Pyongyang and Tehran.
Perhaps most surprisingly, U.S. military spending as a percentage of GDP has actually fallen over the past two years, even as the operational requirements of supporting allies and partners in all these theaters have massively increased… this is breathtakingly remarkable and must make Beijing feel giddy.
It is entirely possible that Beijing concludes that if military aggression in Europe and the Middle East can’t convince the U.S. and its allies to take their alliance more seriously and invest significant sums in rearmament, then the use of force by Beijing in the Western Pacific won’t do it either.
#3 – Western sanctions and technology restrictions can be mitigated and overcome. For all the pride that Washington, Brussels and Tokyo have taken in putting together impressive economic sanctions and technology restrictions on Moscow, Beijing likely concludes that they can mitigate the effects of these efforts, exploit work-arounds, and prevent similar coordination against themselves. The Party likely also concludes that as long as Beijing and Moscow hang together and can keep the developing world on the fence, these sanctions and restrictions won’t work.
Therefore, the “thing” that the Biden Administration was banking on to deter Beijing (“integrated deterrence”) has lost its persuasive/deterrent power.
From Beijing’s perspective, its #1 Rival (the United States) appears obsessed with relying on an element of power (the threat of economic punishment) to deter the PRC from using military force, that Beijing believes isn’t effective. Since the United States refuses to make significant military investments and undertake a major military mobilization (relying instead on allies (who aren’t prepared either) and the threat of economic punishment), the Party feels relatively confident in its ability to use military force effectively to achieve its objectives.
Given all these dynamics, Party leaders may have convinced themselves that they can effectively deter the United States and its allies from intervening should the PRC use military force against its neighbors.
#4 – Time is on China’s side. I suspect that PRC leaders think that time is on their side and that the international order, the same order that its #1 rival championed after the First Cold War, is fracturing under the combined efforts of Beijing and Moscow. Yes, things aren’t going so well economically for the PRC, but once that international system completely fractures, then everything will improve because it is America’s abuse of that system that is holding the PRC down through “containment,” NOT the poor decision-making of the CCP.
Counterintuitively, the Chinese economic situation may be accelerating, not discouraging, the Party to undertake more aggressive moves. This is a different from the “tail wagging the dog” argument that some put forward. In that argument, the Party will use a military campaign to “distract” the Chinese public from their economic woes. The argument I’m making is that the Party may believe that the conditions holding China back and depressing its growth come not from their own failure to make market-based economic reforms, but from a deliberate containment strategy by the United States. Since the United States uses its so-called “liberal international order” (which preaches economic liberalization like a dogma) to achieve its goals of hegemony, it stands to reason that overthrowing that order will defeat the United States and remove the constraints on the CCP from achieving the “great rejuvenation of the Chinese nation.”
***
From the outside, we may believe that the Party’s leadership will arrive at Beidaihe with long faces and kicking the dirt. The measure that we (and they) have traditionally used to gage the Party’s performance (economic prosperity for Chinese citizens) is not looking good at all and does not appear to be turning around (watch #7 below, a panel discussion by CSIS China scholars on the Third Plenum… I think those folks are correct about the headwinds facing the Party).
But I suspect the Party’s leaders are feeling pretty damn confident, largely because Xi has, over the last dozen years, changed the way the Party defines success for itself. Sure, economic performance is still important (hence the reason for holding a Third Plenum meeting two weeks ago), but it is no longer the sole measure of success it once was. Xi has inserted a metric that is now more important: “national security.”
What does this metric of “national security” mean? Essentially, how prepared is the Party and the Chinese nation to “win” the long-term struggle with the United States. Under that metric, the Party is likely very confident.
Now let me stop here and make one point.
The above assessment is how I suspect that the leadership of the Chinese Communist Party looks at the world and its own situation. They could be wrong about these things. Perhaps their rivals aren’t so divided or weak politically. Perhaps economic sanctions and technology restrictions will have a much stronger effect than Beijing thinks (I strongly suspect that folks within the Chinese system understand how vulnerable they are to technology restrictions… and therefore we should continue and increase those restrictions, not do away with them as some have unwisely recommended… see #92 below). Perhaps the economy really does matter more than national security.
My point is that PRC leaders will make their own rational decisions based on their assessment of the situation not ours.
I’ve heard many folks dismiss the likelihood of a military attack on Taiwan or the Philippines because the PRC’s economy is doing so poorly or because Beijing can see how difficult military operations have been for Russia in Ukraine. But to believe those things means that Beijing is making the same assessments we are about the geopolitical situation.
I don’t think that is true, which means that our version of “rational decision-making” will not match theirs.
What would change the minds of Chinese Communist Party leaders?
Again, this is speculation, but to persuade Beijing to see the geopolitical situation differently and to change course on what I think they plan to do (an increasing probability that they will use military force to achieve their political ends), would require some significant changes on the part of Washington, Tokyo, Brussels, and Delhi. These changes would have to be carried out over a long period of time, as the Party would be apt to dismiss any immediate changes as being “too little, too late” or open for reversal.
There is one thing I am pretty certain of: business-as-usual and “managing the competition” to avoid escalation will not change their minds.
Washington – Now that Biden has announced his withdrawal, this can’t happened until the next Administration, but four things would need to change for the United States: 1) the next American President would need to have a significant domestic political mandate… in the range of sustained 60-70% support with a similar level in Congress (Biden’s unpopularity has done much to convince Beijing that the United States can’t maintain a competitive strategy against them); 2) that new Administration would have to openly acknowledge the existing Second Cold War, define it as a rivalry in which the United States and its allies face a much stronger and more aggressive Sino-Russian bloc than the one the world faced with the Soviet Union and the PRC, and commit to an economic decoupling; 3) the United States would need to commit to a crash military mobilization and re-industrialization around hard elements of power, not a climate strategy which fundamentally benefits the PRC’s investments and industrial base in clean energy (something in the range of 8-9% of GDP on defense, nearly three times the current levels); and 4) the United States would need to recommit to defending its allies AND effectively demand that they commit to the same approach to Beijing and Moscow, along with equally impressive military mobilizations.
Tokyo – This likely can’t happen until after Prime Minister Kishida is replaced, but three things would need to happen: 1) a new Japanese leader from the LDP party would need to emerge that can build and sustain Japanese public support and mobilize political action (no more scandals and corruption); 2) the Japanese economy would need to stabilize; and 3) Japan would need to re-commit to a doubling, if not tripling, of its defense spending.
Brussels – Perhaps the relative weakness of leaders in Paris and Berlin provide an opportunity, but the current situation makes it difficult to see how Europe could carry out the three things it would have to do: 1) move beyond the rhetoric of European unity and adopt a political, economic, military and foreign policy approach that does not invite manipulation by Beijing and Moscow; 2) adopt a consensus that Moscow AND Beijing are working together to undermine European security and prosperity… and that Washington is NOT a threat to Europe (for the last decade the most impressive European unity has been around countering the United States, its treaty ally); and 3) become a serious defense power that is more than capable of deterring Russian aggression on its own and projecting power in defense of an international order that it shares with its allies. As long as Europeans view themselves primarily as Germans, Hungarians, Frenchmen, or Swedes, it is difficult to see how Beijing or Moscow will take them seriously as a Union.
Delhi – Prime Minister Modi is well-positioned to make these changes even though it would be difficult and incur significant pushback from his domestic political opponents. But just as “Nixon is the only one who could go to China,” perhaps Modi, the Indian nationalist, is the only one who can make these changes: 1) make a clean break from the Sino-Russian bloc and pursue much closer alignment with Washington, Tokyo and Brussels (Modi’s refusal to attend the SCO Summit provides an opening); 2) maintain impressive economic growth and embrace becoming the world’s replacement to the PRC as the global hub of manufacturing; 3) find a way to settle with Pakistan (Beijing will do everything in its power to sabotage this, but that makes it all the more important to achieve); and 4) pull the developing world behind Delhi’s leadership and demonstrate that the PRC has no interest in furthering their interests.
In my opinion, India has the most to gain from this approach by the four capitals above, as it would vault India into the position of remaking the international order along its own vision. The relative power of the other three is already declining and India’ power has the most room for growth. The danger lies in being manipulated by Beijing and Moscow into avoiding these changes for fear of being portrayed as the puppets of former imperialists (both Beijing and Moscow have long employed this type of manipulation to keep India neutralized on the international stage). Delhi should seize these opportunities, not as a favor to Washington or anyone else, but because it serves India’s interests and stands the best bet for creating an international order which furthers India’s interests.
Staying within the Sino-Russian bloc or distancing itself from all players, simply aids Beijing in consolidating an international system which will ultimately undermine Indian development and interests.
That’s enough for this week.
Thanks for reading!
Matt
MUST READ
1. Beneath the Harbor: Hong Kong’s Leading Role in Sanctions Evasion
Samuel Bickett, CFHK Foundation, July 21, 2024
Hong Kong until recently was considered a top-tier global financial center, its influence rivalled only by New York and London. Governed by rule of law, its compliance with international standards made it a trusted partner to the world. But all that has changed. With China’s assertion of overall political control, Hong Kong now serves Beijing’s priorities, even at the cost of global security. Hong Kong’s financial and trade strengths have been co-opted by autocrats; they are now used not to connect the globe for good, but to undermine stability and subvert international laws and norms.
This report examines a critical aspect of this phenomenon: Hong Kong’s central role in facilitating the transfer of money and restricted technology to Russia, Iran, and North Korea, three countries that the international community has sanctioned for their destabilizing actions. In the growing alliance between these three countries and China, our investigation shows that in many ways, Hong Kong is the hub and these countries are the spokes. Through detailed analysis and investigation using publicly available data collected by C4ADS, a Washington, D.C.-based global security nonprofit, as well as corporate records and other open-source data, we highlight the indispensable role Hong Kong plays in undermining sanctions and threatening global security and stability. Simply put, Hong Kong has gone rogue, serving some of the world’s most brutal regimes and damaging international security interests by smuggling military technology, money, and prohibited commodities through the territory to flout sanctions.
Hong Kong continues to trade on the reputation for adherence to international standards that it built up in the final years of British colonial rule, which ended in 1997, and in the first decade of Chinese control. Most major international financial institutions have significant operations in the city, and until recently its market for initial public offerings (IPOs) regularly bested that of New York City and London. But this reputation no longer reflects reality: Following Xi Jinping’s rise to power in 2012, and more forcefully since massive pro-democracy protests in 2019, China has moved to assert near-total political control of Hong Kong, eliminate its democratic institutions, and steadily undermine rule of law. It introduced two national security laws that have seen it imprison political opponents and co-opt the previously independent legal system, while passing several constitutional “reforms” to end free elections and curtail local autonomy.
Hong Kong’s emergence as the top global node for illicit finance and trade reflects deliberate government policy. John Lee’s October 2022 statement, noted above, that the city would not enforce sanctions on Russia was offered in response to a mega-yacht docked in the city that belonged to a sanctioned Russian oligarch—a particularly visible symbol of the city’s embrace of sanctions evaders. And for years, the government has openly flouted its legal obligation to enforce the U.N.’s North Korea sanctions against evaders within its borders. Such failures to act served as a green light for smugglers, making it clear that sanctions will not be enforced.
The world has changed, and the U.S. and the international community have failed to adapt. Hong Kong has become unrecognizable from its prior role as a reliable partner in maintaining international order and stability. The U.S. and the international community must act quickly to adjust to these new circumstances, or else Hong Kong will solidify its role as a key destabilizing force in the world.
COMMENT – We must stop treating Hong Kong as a separate and independent economic actor. The Chinese Communist Party benefits from that arrangement and it is used, not for the benefit of Hong Kongers, but to undermine global security.
Our collective failure to impose harsh responses for these activities has only made the Chinese Communist Party more confident that it can avoid responsibility for its material support to the Russian war effort.
2. On Day One: An Economic Contingency Plan for A Taiwan Crisis
Hugo Bromley and Eyck Freymann, Hoover Institution, July 25, 2024
The United States lacks an economic contingency plan for conflict with China. Hard decoupling through sanctions is not viable. Instead, the United States should prepare a “Day One” plan based on economic leadership and recovery. By harnessing incentives and market forces, Washington and core US allies can trigger avalanche decoupling in trade while working with the interests of third states and preserving dollar hegemony and the rules-based trading system.
3. China slaps travel restrictions on teachers, banking sector staff
Qian Lang, RFA, July 19, 2024
The ban appears to target teachers and students thinking of visiting overseas universities, commentators say.
Chinese authorities are extending travel restrictions to teachers, schoolchildren and bank staff ahead of summer vacation by requiring them to hand over their passports or ask permission before leaving the country, according to documents posted by social media users this week.
The fresh bans are the latest in a slew of travel restrictions on Chinese citizens that began after President Xi Jinping took power in 2012 and intensified during the three years of COVID-19 restrictions.
One notice received by a user working at a high school in the western city of Lanzhou asks class monitors to compile a list of students who have passports and hand it in to the school, according to a screenshot posted to WeChat.
A June 25 notice sent to staff in an unnamed county cited orders from the county education bureau as saying that all current teaching staff must hand over their passports to the school's party office, a new administrative office formed in a recent bid to install direct ruling Communist Party control over the country's universities.
"The party office will make a list ... and the county education bureau personnel department will hold this information," reads the notice, which was reposted by citizen journalist "Mr Li is not your teacher" to their X account. "Each department is requested to forward this information to all groups."
In another post also reposted by "Mr Li," a person holds a form that must be filled in and endorsed by their employer before they can apply for a passport.
4. Have Secrets, Will Travel? Not So Fast, China Says
Chun Han Wong, Wall Street Journal, July 24, 2024
With espionage concerns on the rise, Beijing issues new rules to stop leaks of sensitive information.
China’s government is tightening its rules on the protection of confidential information, including intensified scrutiny on international travel by people privy to state secrets, as concerns over espionage rise amid an increase in global tensions.
The changes also put a heavier burden on the country’s internet companies to stop leaks of sensitive information.
Published this week, the new regulations offer direction to authorities in implementing China’s state-secrets law, which was updated in February as part of Chinese leader Xi Jinping’s efforts to shore up safeguards against espionage and other threats to national security.
The changes require state agencies to draft lists of state secrets related to their areas of responsibility. The agencies are also required to ensure that personnel who handle classified information receive permission and undergo confidentiality training before traveling abroad.
All entities defined as “network operators”—a category that includes internet companies and network-infrastructure vendors—must establish mechanisms for detecting and dealing with leaks of confidential information and other secrecy breaches, according to the new regulations. They must also cooperate with authorities in investigations and regulatory actions related to state secrets.
5. Chinese National Indicted for Importation of Enough Chemicals to Make Millions of Fatal Doses of Fentanyl
U.S. Department of Justice, July 22, 2024
Minsu Fang, a Chinese national, was indicted for his role in importing over 2,000 kilograms of fentanyl precursors into the U.S. from China, later shipped to Mexico. Fang faces life imprisonment and a $10 million fine if convicted. The DOJ and DEA highlighted this seizure as a significant disruption of the global fentanyl supply chain, which poses a severe threat to American lives.
COMMENT – Even as the Chinese Communist Party restricts whole swaths of society from leaving the country, apparently Beijing is happy to let drug dealers travel to the United States.
I guess it is really hard for them to get the Chinese government subsidies and tax rebates for selling fentanyl precursors unless they actually travel here to sell them.
6. ‘Garbage time of history’: Chinese state media pushes back on claims country has entered a new epoch
Amy Hawkins, The Guardian, July 17, 2024
Authorities unhappy as Chinese chat groups and WeChat feeds buzz with discussion of whether China has entered period of inevitable failure.
First, there was the century of humiliation, in which China was subjugated by western powers. Then there was the era of reform and opening up, where China’s rapid economic development paved the way for what was supposed to be the Chinese century. But now, according to social media users , China is in another epoch worth naming: the garbage time of history.
In recent weeks, Chinese chat groups and WeChat feeds have been buzzing with discussion of whether China has entered a period of economic stagnation or regression in which failure is all but inevitable, called a “garbage time of history”.
The sentiment can be summed up by a graphic, widely shared on social media – and since censored on Weibo.
Entitled the “2024 misery ranking grand slam”, it tallies up the number of misery points that a person might have earned in China this year. The first star is unemployment. For two stars, add a mortgage. For a full suite of eight stars, you’ll need the first two, plus debt, childrearing, stock trading, illness, unfinished housing and, finally, hoarding Moutai, a famous brand of baijiu, a sorghum liquor.
7. VIDEO – China’s Third Plenum: A Plan for Renewed Reform?
CSIS, July 22, 2024
CSIS China experts Jude Blanchette (Freeman Chair), Bonny Lin (China Power Project) and Scott Kennedy (Trustee Chair in Chinese Business and Economics), along with Daniel H. Rosen (Rhodium Group) and Lingling Wei (Wall Street Journal) discuss the implications of the Chinese Communist Party’s Third Plenum meeting.
COMMENT - I recommend watching this. The panelists provide some really great insight.
8. U.S. Intercepts Russian and Chinese Bombers on First Joint Mission Off Alaska
Michael R. Gordon and Nancy A. Youssef, Wall Street Journal, July 25, 2024
Flights reflect growing military and security cooperation between Moscow and Beijing.
Russian and Chinese warplanes were intercepted off the coast of Alaska by U.S. and Canadian fighters Wednesday, marking the first time strategic bombers from the two U.S. adversaries have operated together near North America, a U.S. official said.
Two Russian TU-95 Bear and two Chinese H-6 bombers flew into the Alaska Air Defense Identification Zone, a buffer zone in international airspace, the North American Aerospace Defense Command said. The flights, which came as close as 200 miles off the Alaskan coast, were the most recent sign of growing military and security cooperation between Moscow and Beijing.
“It’s the first time that we’ve seen these two countries fly together like that [but] they didn’t enter our airspace,” Defense Secretary Lloyd Austin told reporters at a press conference Thursday.
COMMENT - Just in case you needed more evidence that we are already in a Second Cold War with the PRC and Russia.
What will it take for the United States to consider a major military mobilization?
9. Narrowing the military gap
Lt Gen S L Narasimhan, Gateway House, July 18, 2024
Comparing the defense forces of India and China involves more than just counting weapons. While China's PLA has not fought since 1979, and faces challenges in training and command, it learns quickly and studies foreign campaigns. In contrast, India's military has extensive experience in both conventional and counterinsurgency operations.
Both nations have different strengths in training and technology absorption. China's larger, opaque defense budget and domestic production give it an edge, but India's increasing focus on indigenous procurement is helping it catch up.
Authoritarianism
10. The Illicit Flow of Technology to Russia Goes Through This Hong Kong Address
Aaron Krolik and Paul Mozur, New York Times, July 25, 2024
Defying sanctions, Russia has obtained nearly $4 billion in restricted chips since the war began in Ukraine. Many were shipped through a cluster of shell companies in Hong Kong.
From a nondescript seventh-floor office at 135 Bonham Strand near Hong Kong’s financial district, at least four companies are operating with a shadowy mission: facilitating the illicit trade of Western technology to Russia.
Shell companies at that address have acquired millions of restricted chips and sensors for military technology companies in Russia, many of which have been placed under sanctions by the U.S. government, according to an examination by The New York Times.
COMMENT - Despite warning Beijing for two years that providing material support to Russia’s war effort would incur massive sanctions, the United States and Europe have not followed through even with mounting evidence.
At this point, I think Beijing feels very confident it can help Moscow win on the battlefield AND avoid retaliation.
11. Hong Kong Book Fair exhibitors told to remove certain titles after ‘complaints’
Irene Chan, Hong Kong Free Press, July 19, 2024
12. Over 80% of Hongkongers think criticism of gov’t should be allowed, survey finds
Hillary Leung, Hong Kong Free Press, July 18, 2024
13. The noose around the press in Hong Kong tightens
The Economist, July 24, 2024
14. When party propaganda falls flat
The Economist, July 18, 2024
15. China Casts Itself as Peacemaker in First High-Level Talks with Ukraine Since Russia’s Invasion
Isabel Coles and Austin Ramzy, Wall Street Journal, July 24, 2024
Beijing has been a key player in helping Russia evade Western sanctions.
16. Censors Delete Question About Murdered Schoolbus Hero: "It's Been 22 Days. Who Killed Hu Youping?"
Alexander Boyd, China Digital Times, July 17, 2024
17. China’s third plenum sees Communist Party double down on economic, tech, military power
Wendy Wu, William Zheng, and Victoria Bela, South China Morning Post, July 21, 2024
18. China’s Top Prosecutors Order Arrest of Former Vice Chair of Hunan Legislature
Feng Huamei and Zhang Yukun, Caixin, July 20, 2024
19. Code of Silence
Ryan Ho Kilpatrick, China Media Project, July 19, 2024
20. China details expanded law on state secrets, eyeing data security
Laurie Chen, Reuters, July 23, 2024
21. Chinese Stocks Slump Amid Signs National Team Is Pulling Back
Bloomberg, July 23, 2024
22. Hong Kong plays leading role in sanctions evasion: report
Pak Yiu, Nikkei Asia, July 22, 2024
23. Why is Xi Jinping building secret commodity stockpiles?
The Economist, July 23, 2024
24. China Is Getting Secretive About Its Supercomputers
Stu Woo, Wall Street Journal, July 23, 2024
25. China Shows Few Signs of Tilting Economy Toward Consumers in New Plan
Keith Bradsher and Chris Buckley, New York Times, July 21, 2024
Environmental Harms
26. China-based emissions of three potent climate-warming greenhouse gases spiked in past decade
Mark Dwortzan, MIT News, July 18, 2024
When it comes to heating up the planet, not all greenhouse gases are created equal. They vary widely in their global warming potential (GWP), a measure of how much infrared thermal radiation a greenhouse gas would absorb over a given time frame once it enters the atmosphere. For example, measured over a 100-year period, the GWP of methane is about 28 times that of carbon dioxide (CO2), and the GWPs of a class of greenhouse gases known as perfluorocarbons (PFCs) are thousands of times that of CO2. The lifespans in the atmosphere of different greenhouse gases also vary widely. Methane persists in the atmosphere for around 10 years; CO2 for over 100 years, and PFCs for up to tens of thousands of years.
Given the high GWPs and lifespans of PFCs, their emissions could pose a major roadblock to achieving the aspirational goal of the Paris Agreement on climate change — to limit the increase in global average surface temperature to 1.5 degrees Celsius above preindustrial levels. Now, two new studies based on atmospheric observations inside China and high-resolution atmospheric models show a rapid rise in Chinese emissions over the last decade (2011 to 2020 or 2021) of three PFCs: tetrafluoromethane (PFC-14) and hexafluoroethane (PFC-116) (results in PNAS), and perfluorocyclobutane (PFC-318) (results in Environmental Science & Technology).
Both studies find that Chinese emissions have played a dominant role in driving up global emission levels for all three PFCs.
COMMENT - We’ve known since at least 2019, that the PRC has been violating the Montreal Protocol, which forbids the production and use chemicals like these.
27. Illegal Chinese fishing off East Africa hurts local communities: report
Mai Xiaotian, RFA, June 15, 2024
28. China Renews Call for Trillions in Climate Funds for Poor States
Bloomberg, July 25, 2024
COMMENT – Since the PRC is unlikely to contribute any funds to this, I suspect its sole reason is to extract funds from the U.S. and other developed economies through the purchase of Chinese manufactured green technology (solar, wind turbines, batteries) as well as getting funds to pay Chinese construction companies to build infrastructure projects in third countries.
Foreign Interference and Coercion
29. Canada wants to 'challenge, cooperate' with China, top diplomat says
Shigeru Seno, Nikkei Asia, July 24, 2024
30. China Squeezes Taiwan by Targeting Islands and Fishing Sites
Yian Lee, Bloomberg, July 23, 2024
31. PALM10: Pacific leaders discuss China, trade, and climate change
Rurika Imahashi, Sophie Mak, and Shaun Turton, Nikkei Asia, July 21, 2024
32. Asian Powers Set Their Strategic Sights on Europe
C. Raja Mohan, Foreign Policy, July 16, 2024
33. China Focuses on Kamala Harris’ Weaknesses After Biden Exits
Bloomberg, July 21, 2024
34. China brokers Palestinian unity declaration in bid to be global mediator
Christian Shepherd, Steve Hendrix, Niha Masih, and Sarah Dadouch, Washington Post, July 23, 2024
35. How to Push China’s Narrative Abroad
Alex Colville, China Media Project, July 23, 2024
36. The New Cold War
Robin Niblett, Atlantic Books, March 7, 2024
37. Pentagon concerned at growing Arctic cooperation between China and Russia
Reuters, July 23, 2024
Human Rights and Religious Persecution
38. Golog, Qinghai: After 30 Years, a Prestigious Tibetan School Is Liquidated
Lopsang Gurung, Bitter Winter, July 22, 2024
The Jigme Gyaltsen Nationalities Vocational High School was praised even by Communist authorities. But that it preserved Tibetan culture could not be tolerated.
The Jigme Gyaltsen Nationalities Vocational High School in Golog (also spelled Golok) Tibetan Autonomous Prefecture, Qinghai province, has been liquidated by the Chinese authorities on July 12. More than 90% of the inhabitants of Golog Prefecture are Tibetans and the area is part of historical Tibet, even if China assigned it to Qinghai province.
Jigme Gyaltsen was not any school. It was established in 1994 by a famous Tibetan teacher, Ragya Jigme Gyaltsen, and went on to win awards from the Chinese administration itself. It grew from the original 86 of 1994 to more than 1,000 students. Of the 2,559 students who graduated there in thirty years, 742 went on to college and 13 became tenured university professors. Alumni of Jigme Gyaltsen published more than 300 books and hundreds of articles in peer-reviewed journals. The school was featured as a model educational institution in several Chinese TV shows.
However, in the eye of the Chinese authorities Jigme Gyaltsen had an original sin. While proud of its courses in computer science, engineering, and medicine, the school taught pupils in both Tibetan and Chinese language, offered courses in Tibetan culture, had monks as teachers, and counted among its alumni distinguished monastic administrators. It thus became a victim of the Chinese effort to eradicate Tibetan culture from Qinghai.
It all started with the legal prosecution of the founder and principal, Ragya Jigme Gyaltsen, on trumped up charges of taking bribes, and of some students accused to use the symbols of Tibet’s national flag, which are banned in China. Earlier this year, the principal was found not guilty, yet he was excluded from the Tibetan Nationalities Council, of which he was a member. An investigation was launched to determine whether among pupils there were monks and nuns who had taken their monastic vows before turning 18, which is illegal under Chinese law.
Although investigations were inconclusive, on July 12 the authorities announced that the school had been liquidated, just days after what turned out to have been the last graduation ceremony, held on July 8.
COMMENT – The point of the Party’s policies is the erasure of all culture that does not comport to the Party’s vision of what it means to be China. This cultural imperialism will destroy Tibetan, Uyghur, and Mongol cultures inside the PRC… and when its finished erasing these cultures inside the PRC, the Party will seek to stamp out their remnants everywhere else.
39. The Erasure of the Uyghurs
Nick Holdstock, China Books Review, July 18, 2024
Oppression of Uyghurs in Xinjiang has slipped from headlines — but two recent memoirs by Uyghurs abroad attempt to portray the minority as more than just victims.
The last decade has been the darkest period in Uyghur history since the founding of the People’s Republic of China in 1949. Over 1 million Uyghurs and other Muslims have been interned in “reeducation” camps in the Xinjiang region of China since 2017. Mosques have been demolished, artists and intellectuals detained, and Arabic writing removed from many shops and signs. There have been forced sterilizations of Uyghur women, and forced marriages between Uyghurs and Han Chinese.
The Chinese government views every aspect of Uyghur identity and culture as a threat to its vision of ethnic unity, and its mechanisms of repression have become both more entrenched and more insidious. Although authorities announced at the end of 2019 that the “reeducation” centers were closing because those inside had “graduated,” evidence suggests that the region’s carceral system has diversified rather than diminished. Many former internees have been shifted to prisons or factories where they work long shifts under close scrutiny for minimal wages. Whether formally detained or not, Turkic and Muslim people in Xinjiang remain trapped within a mesh of surveillance and threat.
The last decade has been the darkest period in Uyghur history since the founding of the People’s Republic of China in 1949. Over 1 million Uyghurs and other Muslims have been interned in “reeducation” camps in the Xinjiang region of China since 2017. Mosques have been demolished, artists and intellectuals detained, and Arabic writing removed from many shops and signs. There have been forced sterilizations of Uyghur women, and forced marriages between Uyghurs and Han Chinese. The Chinese government views every aspect of Uyghur identity and culture as a threat to its vision of ethnic unity, and its mechanisms of repression have become both more entrenched and more insidious.
Although authorities announced at the end of 2019 that the “reeducation” centers were closing because those inside had “graduated,” evidence suggests that the region’s carceral system has diversified rather than diminished. Many former internees have been shifted to prisons or factories where they work long shifts under close scrutiny for minimal wages. Whether formally detained or not, Turkic and Muslim people in Xinjiang remain trapped within a mesh of surveillance and threat.
The Uyghur diaspora has been both traumatized and galvanized by these events. Uyghur activism has contributed to the introduction of U.S. sanctions against Chinese officials and companies, as well as the easing of some countries’ restrictions on immigration and asylum requirements for Uyghurs. Grassroots projects, including the Xinjiang Documentation Project (which collects sources about China’s policies in Xinjiang) and the Xinjiang Victims Database (which records the identities of incarcerated or missing members of ethnic minorities in the region), attempt to raise awareness of the ongoing repression. High-profile figures such as Jewher Ilham, the daughter of an imprisoned Uyghur scholar, continue to exert pressure on legislators and organizations. Such initiatives constitute a form of resistance that Milan Kundera called “the struggle against forgetting.”
Critiquing a regime that has already imprisoned a member of one’s family, or may do so in the future, requires great courage. Two recent memoirs shed light on the choices and costs involved in such acts of resistance. Both recount life in Ürümqi, Xinjiang’s capital, during different periods. Gulchehra Hoja’s A Stone Is Most Precious Where It Belongs (February 2023, Hachette) covers the two decades preceding her decision to leave China in 2001, when she was 28. Tahir Hamut Izgil’s Waiting To be Arrested at Night (August 2023, Penguin Press) focuses on the period from 2009 to 2017.
Both authors worked in Xinjiang’s cultural sector: Gulchehra as a dancer, singer and TV presenter; Tahir as a poet and filmmaker. Both authors now live in the U.S. and have no prospect of returning to their homeland. Like many memoirs written by exiles, the main purpose of Gulchehra’s and Tahir’s books is to highlight the crimes of the regime from which they have fled. As with any act of protest, one might ask how much such narratives of victimhood can really affect the regimes they critique. But Gulchehra’s and Tahir’s narratives also raise questions particular to their genre: How can a writer fashion their individual story, and the larger story of their people, in a way that generates interest and sympathy? What kinds of thoughts and feelings does such fashioning facilitate — and what might it suppress?
40. The Story of Zuhre Sultan, Uyghur Exile: “The CCP Took Away My Entire Family”
Ruth Ingram, Bitter Winter, July 24, 2024
29 of her relatives are detained, disappeared, dead, or still serving lengthy prison sentences. She tells her—and their—story to “Bitter Winter.”
Buwajir Allavedi was everyone’s friend. Mother of four children, she never strayed far from the village of her birth during the course of her 44 years, spending her days laboring in the fields, planting crops, tending sheep, and being a good neighbour. Her five times daily prayers were devout, and her ankle-length clothes and headscarf reflected her piety.
But her familiar routine and that of her family were shattered one day in 2017 when she disappeared. Her husband Hudavedi Ömer, then 49, also vanished at the same time, and the younger children were billeted with grandparents. The couple were initially detained for interrogation and later it emerged that an extra-judicial court had sentenced them both to 10 years in jail.
Hudavedi died in prison two years ago aged 54. The family was denied access to his body, and there was no Muslim funeral.
Zuhre Sultan, Buwajir’s younger sister, was heartbroken by this news when it eventually trickled down through the Uyghur exile rumor mill, and she blames the Chinese state for what she describes as his “murder.” She has been watching the events unfold in her homeland with horror since 2017. She has witnessed from her exile in Türkiye, where she came with her husband in 2014, the disappearance of family members one by one and their illegal sentencing for “crimes” unspecified. “We never hear directly that they have been arrested and rarely know why,” she told “Bitter Winter” from her home in Istanbul. “Sometimes we don’t hear for years and rely on friends of friends or TikTok videos for messages to reach us.”
She says the ache of not knowing and the pain of hearing snippets of bad news second or third hand is unbearable. “We are completely powerless to do anything, and the injustice eats away at us constantly,” she said. “We never know what tragedy will hit us next.”
Zuhre, who shares a large extended family with her husband, has lost count of the numbers but estimates that around 29 of their family members disappeared in 2017 and at least 15 that she knows of were later sentenced to lengthy jail terms. These are the ones she has heard about; but they could be the tip of the iceberg, she said. The family heard in 2021 and 2022 that 14 had been released from so-called “re-education” camps or shorter prison sentences, but 13 of the other 15 are still detained. Two of the 15 have already died in detention, including her husband’s older cousin Abdugupur Sultanni, who passed away in custody at 65, two years ago, halfway through a lengthy jail term.
Since all contact was severed by the Chinese State in 2017, expatriate Uyghurs have been unable to speak to their relatives and friends directly. “Even if we could contact them, we are reluctant to risk their safety,” she said, noting that Uyghurs in her homeland have been imprisoned simply because they once visited Türkiye or have relatives there.
Her sister’s son Abduhalik Eziz, now 35, disappeared in 2017, and her daughter Bumeryem, now 30, and her husband Abdukerim Mamut were detained for a period and were later understood to have been sentenced to 25 years and 10 years respectively. Their children were left with Abdukerim’s elderly mother.
Hudavedi’s younger brother Mohammed Eli Ömer, now 37, an Arabic translator, was hunted down to Lanzhou in inner China and returned to Xinjiang to face “trial” where he was given 10 years. His wife meanwhile had escaped to Türkiye where she now lives, daily wondering what has become of her husband.
The catalogue of those unaccounted for includes Zuhre’s older brother’s two sons, whose fate was not known until 2020. The youngest, Abduvahid, quiet and even tempered, had opened a small bazar stall in the capital Urumqi selling the famous hand made knives from their hometown Yangizar, not far from Kashgar at the furthest western edge of the vast Taklamakan Desert. He was recalled by the local police to his hometown in 2010 and arrested in 2017. His membership of a local gym was portrayed in court as training for insurrection and he was sentenced to 10 years.
His brother Abdurazak Huseyin, now 34, was working on his father’s land, but was nevertheless arrested in 2017 and sent to jail for 10 years.
Zuhre’s cousin Abdushukur Ömer, now 50, and his wife Buhilich Sawut were convicted for the “crime” of having seven children and punished with 10 years in jail. Two of their six boys were also sentenced to 10 years, with the other children taken in by an aunt. “They were just living their normal lives,” said Zuhre. “Do you see this kind of thing happening anywhere else in the world?”
Abdushukur’s boys, Abdusupur Abdughupur, now 34, and Abdurahman Memtimen were both sentenced to 10 years. Abdusupur owned a shop in Urumqi but was recalled to his village in 2017 to face arrest and 10 years imprisonment. Abdurahman, now 34, who grew up in the large extended family in the same village where they all played as children and partied together celebrating the Uyghur traditional milestones of life is now seven years into a 10-year sentence. His wife, now living with her mother-in-law, is working their land, and also forced to labour for free for the government in the mountainous areas, flattening and breaking up the stony ground. “With most of the young and healthy men in prison, only women and the elderly are left to do the back breaking work of tilling the fields,” said Zuhre.
COMMENT – For all the outrage generated by the conflict in Gaza, it is really quite amazing how well the Chinese Communist Party has done at deflecting criticism of its gross crimes against an entire population of Muslims.
Now to see Beijing acting as the intermediary and champion of Palestinians must strike Uyghurs living in exile as deeply cynical.
To borrow Adrian Zenz’s post from October 2023:
41. Exiled pro-democracy Hong Kong activists blocked from accessing pensions
Amy Hawkins, The Guardian, July 21, 2024
42. 12 Hongkongers jailed for up to 3 years and 4 months over rioting linked to 2019 PolyU siege
Kelly Ho, Hong Kong Free Press, July 19, 2024
Industrial Policies and Economic Espionage
43. NSF-backed SECURE Center will support research security, international collaboration
National Science Foundation, July 24, 2024
Today, the U.S. National Science Foundation announced a five-year $67 million investment establishing the Safeguarding the Entire Community of the U.S. Research Ecosystem (SECURE) ($50 million to University of Washington and $17 million to Texas A&M University). Research security is a concern because some foreign entities attempt to unethically — or even unlawfully — access and use U.S. research. As mandated in the "CHIPS and Science Act of 2022," the NSF SECURE Center, led by the University of Washington with support from nine institutions of higher education, will serve as a clearinghouse for information to empower the research community to identify and mitigate foreign interference that poses risks to the U.S. research enterprise. The SECURE Center will share information and reports on research security risks, provide training on research security to the science and engineering community and serve as a bridge between the research community and government funding agencies to strengthen cooperation on addressing security concerns.
“NSF is committed to principled international collaboration. At the same time, we must address threats to the research enterprise,” said NSF Director Sethuraman Panchanathan. “The SECURE Center is how we bring the research community together to identify risks, share information and leverage national expertise on research security to develop solutions that protect essential research being done at institutions across the nation. This is a community-focused platform, and the research community will be the drivers of how SECURE Center tools and services are designed, used and improved upon.”
COMMENT – NSF is careful not to mention the PRC and its researchers explicitly, but of course this entire program is in place because the Chinese Communist Party entices its researchers and others to violate the rules and norms governing research integrity.
My hat’s off to NSF for getting this off the ground.
44. US warns tech start-ups on security threats from foreign investors
Financial Times, July 24, 2024
45. China's rare earth rule to speed supply chain shifts: Solvay CEO
Cheng Ting-Fang, Nikkei Asia, July 24, 2024
46. The Electric: Don’t Be Surprised to See Chinese EVs Manufactured in the U.S.
Steve LeVine, The Information, July 22, 2024
47. Malaysia Reviews Dumping Laws as Cheap China Goods Spark Concern
Anisah Shukry, Bloomberg, July 23, 2024
48. China’s Proposal to Raise Retirement Age Sparks Worker Unease
Josh Xiao, Bloomberg, July 23, 2024
49. China hopes US firms can ‘play a strong role’ after top executives visit Beijing
Kandy Wong, South China Morning Post, July 23, 2024
50. Europe Still Vies with China as Top Market for Russia’s Pipeline Gas
Bloomberg, July 22, 2024
51. Chinese officials warn of risks from higher US tariffs, urge US business leaders to help mend ties
Elaine Kurtenbach, Associated Press, July 24, 2024
52. Nippon Steel to end 20-year joint venture with China's Baosteel
Yuji Ohira, Nikkei Asia, July 23, 2024
53. Is Vietnam losing its appeal for China’s manufacturers bypassing US tariffs?
Ralph Jennings and Mandy Zuo, South China Morning Post, July 23, 2024
54. Western miners push for higher metals prices to ward off Chinese rivals
Ernest Scheyder and Pratima Desai, Reuters, July 22, 2024
55. China faces growing scepticism over its commitment to decade-old policy pledges
Joe Cash and Kevin Yao, Reuters, July 22, 2024
56. Buffett’s Berkshire Hathaway Trims BYD Stake to Below 5%
Jiahui Huang, Wall Street Journal, July 23, 2024
57. China’s Xi Jinping bets on high tech for ‘great rejuvenation’
Joe Leahy and Cheng Leng, Financial Times, July 22, 2024
58. Volkswagen is reeling in China. Can EVs help it grow in the US?
Victoria Waldersee and Joseph White, Reuters, July 23, 2024
59. Drug giants eye China for deals despite growing Sino-US tensions
Andrew Silver and Kane Wu, Reuters, July 23, 2024
60. Apple and Micron Leaders Visit China as US Ramps Up Chip Curbs
Yuan Gao, Bloomberg, July 23, 2024
Cyber & Information Technology
61. China Drops Sanctions on US Communications Firm in Rare Reversal
Bloomberg, July 22, 2024
62. Pressured to relocate, Microsoft’s AI engineers in China must choose between homeland and career
Viola Zhou, Rest of World, July 23, 2024
63. How to access Chinese LLM chatbots across the world
Zeyi Yang, MIT Technology Review, July 23, 2024
64. Elon Musk, With Tesla Factories in China, Tweets Ai Video of Chinese President Xi Jinping Wearing Pooh Clothes
Sharon Adarlo, The Byte, July 22, 2024
Tesla is driving on rocky ground in China, where sales have slumped and its availability is subject to government approval.
So it's head-scratching that Tesla CEO Elon Musk posted an AI video that disrespects Chinese President Xi Jinping on the social media platform X-formerly-Twitter, which should drive other Tesla execs with any shred of common sense into a fit of worry.
With Enya's soothing song "Only Time" playing in the background, the AI video Musk shared shows a parade of world leaders walking down a fashion runway while wearing clothes that at times poke fun at their history or recent news about them. For example, former President Bill Clinton shows up in a blue tulle dress, a reference to the infamous blue garment of his one time paramour Monica Lewinsky.
But for the Chinese leader, the video goes for the jugular. Xi Jinping is dressed in a pants-like robe emblazoned with what looks like Winnie-the-Pooh and the acronym "CCP," standing for the ruling Chinese Communist Party — a serious disparagement in the authoritarian China, where dissidents have for years used the lovable children's character to poke fun at Jinping.
COMMENT – I guess Elon is just so confident in himself that he’s certain that Xi and the Party would never retaliate.
65. Why Chinese companies are betting on open-source AI
Zeyi Yang, MIT Technology Review, July 24, 2024
For Alibaba and several Chinese AI startups, open-source AI presents an opportunity for faster commercialization and global recognition.
I've talked a lot about Chinese large language models in this newsletter, and I’ve managed to try out quite a few of them in the past year. But many people, especially those who aren’t very familiar with China or the Chinese language, probably don’t even know how to start if they want to test these models themselves.
The good news is it’s actually not that hard! I recently dug around and realized that many Chinese AI models are much more accessible overseas than I expected. You can access the majority of them either by registering accounts on their websites or using popular open-source AI platforms like Hugging Face. So I published this practical guide today that lists a dozen of the top Chinese LLM chatbots you can use and the methods to easily access them in minutes, from anywhere in the world.
During my experiments with these models, one thing soon became clear: While most Chinese AI companies have set a higher bar for access to their products than their Western counterparts, a trend toward open-sourcing AI models is making them ever more accessible to an overseas audience.
Take Qwen (or Tongyi Qianwen, as it’s called in Chinese), for example. This is Alibaba’s flagship AI foundation model. Unlike the company’s domestic competitors like Baidu, ByteDance, or Tencent, Alibaba has chosen to offer Qwen as an open-source model and allow developers and commercial clients to use it for free.
The model, which just received a major 2.0 update this June, has received a lot of international recognition. In Hugging Face’s most recent ranking that compares the performance of all major open-source LLMs, Qwen2 was ranked at the very top, surpassing Meta’s Llama 3 and Microsoft’s Phi-3.
Similarly, a few Chinese startups, like DeepSeek and 01.AI, have also decided to make their models open source, and the performance of their LLM products also earned them a high ranking on the leaderboard. Companies like them are giving their models out for free to people both inside and outside China.
The natural question to ask is, why? What does open-source AI mean, and why are these companies betting that making their models more open and accessible will be a good business decision?
For Alibaba, it’s a strategy to grow its cloud business, says Kevin Xu, a tech investor and founder of Interconnected Capital. “The simple economic consideration is that if their open-source model becomes popular, more people will use Alibaba Cloud to build AI applications using Alibaba's open-source models, and that obviously benefits Alibaba Cloud as a business,” he says.
Everything Alibaba has done in open-source AI—releasing its own models to the public and building an open-source platform mimicking Hugging Face in hopes of gathering the AI community in China—serves the purpose of getting more people to sign up for Alibaba Cloud and pay to use its servers.
Even for Chinese AI startups that aren’t in the cloud business, open-source AI still offers a tried-and-true playbook for faster commercialization. On the development side, it allows them to adapt established open-source models like Meta’s Llama to accelerate their product development process. On the market side, it pushes them to think of alternative model architectures that can help them stand out from the mainstream.
“Right now, AI in the West tends to have a very fixed view of how to make an AI model better, [which] is just to add more data or to scale it up larger,” says Eugene Cheah, the San Francisco–based founder of Recursal AI, an open-source AI platform. It’s extremely hard for smaller latecomers in the LLM industry to play this game and develop a model that will rival GPT-4 or Gemini when OpenAI and Google have an outsize advantage in computing resources.
The problem is even more acute for Chinese companies, since US export controls mean they can’t easily access cutting-edge chips. “Because they are constrained by the GPU shortages,” says Cheah, “I see Chinese groups as being willing to experiment on wild ideas to improve the model. And some of these things are bearing results”—they have led to more efficient models that are cheaper to train and use, which can appeal to budget-conscious clients and help the Chinese firms find a niche market alongside the AI giants.
Why does it matter? For one thing, these open-source AI models present an alternative future where the industry isn’t just dominated by deep-pocketed players like OpenAI, Microsoft, and Google. And they also show that Chinese scientists and companies are able to create state-of-the-art open-source LLMs that can even surpass products from their Western counterparts.
Xu notes that Abacus AI, a San Francisco–based startup, released a model this year that’s adapted and fine-tuned from Alibaba’s open-source Qwen model. It’s even referred to as “Liberated Qwen.”
The Chinese AI companies’ introduction of high-performing models that US startups can build upon is an example of the best-case scenario of open-source AI, “where everyone builds on top of each other like a positive development loop,” Xu says. ”It’s not just a single direction where the Chinese companies are taking all the best stuff from the US, but things are now [also] going back the other way.”
COMMENT – Mark Zuckerberg is convinced that open source AI models (like his Llama 3.1 released this week) will better protect the interests of the United States and other democracies nefarious activities from China (he says so in his public letter this week).
I’m deeply skeptical. See the next article.
66. AI race: Alibaba, Tencent quickly adopt Meta’s new Llama 3.1 model amid excitement
Ben Jiang, South China Morning Post, July 25, 2024
China’s biggest tech firms moved quickly to adopt the most advanced open-source large language model from the owner of Facebook on their cloud platforms.
Chinese technology giants Alibaba Group Holding and Tencent Holdings have rushed to offer the latest artificial intelligence (AI) model from Facebook owner Meta Platforms into their cloud services, as the debut of Llama 3.1 drew widespread attention this week.
Alibaba Cloud, the e-commerce giant’s online computing platform, was among the first to include the latest open-source Llama family of large language models (LLMs) – the technology underpinning generative AI products such as ChatGPT – by integrating it into its Bailian model training platform, the company said on Tuesday in a post published to its official WeChat account. Alibaba owns the South China Morning Post.
Alibaba said it is offering one month of free compute resources that can be used for training and inferencing tasks with Llama 3.1, which launched on Monday.
COMMENT - Given how quickly Chinese companies are embracing open source AI models (and Meta’s in particular), I suspect that Zuckerberg is wrong about the superiority of open source models in protecting U.S. national security interests.
67. China vs. World: Cybersecurity Reporting Duel
Tom Uren, Lawfare, July 19, 2024
68. Nvidia preparing version of new flagship AI chip for Chinese market
Fanny Potkin, Reuters, July 22, 2024
Military and Security Threats
69. VIDEO – Will China and Taiwan Come to Conflict?
China Books Review, July 25, 2024
Earlier this month, at Asia Society in New York, we hosted a panel discussion about The Boiling Moat: Urgent Steps to Defend Taiwan, a new essay collection edited by Matt Pottinger, distinguished visiting fellow at the Hoover Institution and former deputy national security advisor. In the book, Pottinger and his coauthors — including military and political figures and scholars from around the world — map out a workable military strategy for Taiwan, the United States, Japan, Australia and Europe to pursue collectively to avert a devastating war. They lay out urgent steps to deter the People’s Republic of China from pursuing an invasion or blockade — and grave consequences for democracies everywhere if deterrence fails. You can read Pottinger’s own essay on how to avoid conflict in Taiwan, excerpted here at China Books Review and at our sibling magazine The Wire China.
Joining the event for a conversation about this book with Matt Pottinger were: Amb. Winston Lord, U.S. Ambassador to China from 1985 to 1989; Zongyuan Zoe Liu, the Maurice R. Greenberg Fellow for China Studies at the Council on Foreign Relations; and Jianying Zha, writer and journalist; they were moderated by Orville Schell, Arthur Ross Director of the Center on U.S.-China Relations at Asia Society. The panelists began by discussing the shifts in China over the past decades that have led to this moment of potential conflict in the Taiwan Strait. The event was disrupted by protests, and the video below was edited to focus on the content of the program.
COMMENT - The Chinese Communist Party and its boosters have tried very hard to disrupt talks, presentations, and panels involving Matt Pottinger.
70. Rising tensions over outer space – a new diplomatic hot zone
Rebecca Connolly, Lowy Institute, July 19, 2024
71. Trump Is Giving Taiwan the Ukraine Treatment
Lili Pike, Foreign Policy, July 24, 2024
72. China’s Dangerous Nuclear Push
Amy J. Nelson and Andrew Yeo, Foreign Affairs, July 22, 2024
73. China companies supply Belarus defense contractor with Russia ties
Takayuki Tanaka and Yusuke Hinata, Nikkei Asia, July 24, 2024
74. New top US envoy to Taiwan pledges to help the island with self-defense as threats from China loom
Associated Press, July 10, 2024
75. Chinese national busted in New York for importing enough fentanyl precursors to kill millions of Americans
Sam Cooper, The Bureau, July 23, 2024
76. China Makes Nuclear Weapons Demands to U.S. and Allies
Ryan Chan, Newsweek, July 23, 2024
77. VIDEO – Preparing for war against China, Russia and North Korea
60 Minutes Australia, YouTube, July 21, 2024
78. The flashpoints that threaten a détente between China and the Philippines
Kathrin Hille, Financial Times, July 23, 2024
One Belt, One Road Strategy
79. After spurning China for years, Brazil reveals plan to join Belt and Road Initiative
Igor Patrick, South China Morning Post, July 20, 2024
Opinion Pieces
80. China and the U.S. Are Careening Toward a South China Sea Crisis
Craig Singleton, Foreign Policy, July 23, 2024
Last November’s summit between U.S. President Joe Biden and Chinese President Xi Jinping in Woodside, California, was hailed as a harbinger of progress in stabilizing a superpower relationship that was spiraling toward conflict. Yet more than eight months later, it’s evident that leader-to-leader engagement merely extended the illusion of constructive bilateral engagement—reinforcing, rather than reversing, the declining trend lines in the U.S.-China relationship.
Indeed, the principal paradox of the Biden administration’s China policy lies in its unintended consequences. Far from mitigating Beijing’s brashness, Washington’s diplomatic overtures have instead emboldened Xi, who appears not merely disinterested in stabilizing relations but actively working to undermine them. Left unchecked, further accommodating Beijing’s aggression today could lead to Chinese overreach tomorrow, raising the specter of miscalculation—or worse, war.
Nowhere is this dynamic clearer than in the South China Sea, where Washington and Beijing are careening toward a crisis.
The South China Sea has long been a flash point for territorial disputes. China, the Philippines, Vietnam, Malaysia, Brunei, and Taiwan all assert overlapping claims over this strategically significant and resource-rich region, through which an estimated $3.37 trillion in trade traverses annually. Many of these disputes date back to the mid-20th century. However, regional tensions have surged in recent years as China has aggressively expanded its territorial and maritime claims, frequently asserting “indisputable sovereignty” over all South China Sea islands and their adjacent waters.
A pivotal moment came in 2016, when the Permanent Court of Arbitration in The Hague, in a case brought by the Philippines, explicitly invalidated China’s claims over nearly 90 percent of the South China Sea. The tribunal—which adjudicates international disputes, including those arising from the United Nations Convention on the Law of the Sea—also noted that China had “violated the Philippines’ sovereign rights” by illegally operating in its exclusive economic zone (EEZ) and interfering with Philippine petroleum exploration. But instead of accepting the ruling, Beijing rejected it outright. Over the Obama administration’s objections, Beijing subsequently built and militarized several artificial islands throughout the South China Sea, including Mischief Reef and Fiery Cross Reef within the Philippines’s internationally recognized waters, greatly heightening regional anxieties.
Fast-forward to today, and long-simmering tensions have sparked repeated clashes between the China Coast Guard and the Philippine military. The most notable area of contention is around Second Thomas Shoal, a disputed reef located in the Philippines’s EEZ but claimed by China. Since last December, Chinese vessels have repeatedly fired water cannons at Philippine ships seeking to resupply a remote, rusting outpost located at the shoal. Chinese forces have also rammed Philippine ships to prevent them from completing their resupply missions, which occur every four to five weeks.
Last month, China Coast Guard crews upped the ante by boarding a Philippine resupply vessel and threatening sailors with swords, resulting in severe injuries, including the severing of a sailor’s thumb. Following the incident, Chinese ships forcibly towed Philippine vessels away from Second Thomas Shoal. Manila has since vowed to defend its sailors with the “same level of force” should Chinese crews assault them again. A clash of this nature could prompt Manila to invoke its 1951 Mutual Defense Treaty with Washington, which obligates each country to defend the other in the event of an “armed attack” by an aggressor nation. Should that occur, the United States could find itself quickly drawn into a direct confrontation with China.
Further complicating the situation are rising maritime tensions in the Taiwan Strait—another area China claims in its entirety. This month, the China Coast Guard detained a Taiwanese fishing boat it says was operating in Chinese waters near the Kinmen Islands, which are governed by Taiwan but located just six miles from China’s coast. The incident led to a standoff between China’s and Taiwan’s coast guards, resulting in China seizing the boat and its crew. Days later, China dispatched 30 warplanes and nine naval vessels to encircle and intimidate Taiwan. Shortly after, Beijing escalated the situation further by sending 66 aircraft to encircle the island, with most of them blatantly violating Taiwanese airspace and tying the highest number of such violations ever recorded.
These and other recent risky rendezvous are not occurring in isolation. Instead, they comprise part of Beijing’s brand of regional revisionism, which aims to cement China’s control over the South China Sea by persistently and provocatively pressuring its neighbors in ways just short of open conflict. But beyond relying on brute force to assert its claims, China is increasingly leveraging its domestic laws to justify actions that clearly violate international norms, a tactic known as “lawfare.” In establishing an ostensible legal basis for its illegal maritime maneuvers, backed by its massive military buildup, China stands to both waive the rules and rule the waves—confounding its neighbors and forever altering the status quo in the South China Sea.
Beijing’s own legal rationale for its most recent activities can be found in a little-noticed provision of its 2021 Coast Guard Law known as Order No. 3. This directive, which came into full force in June, just two days before the latest incident with the Philippines, gives the China Coast Guard significant new authority to detain foreign vessels that enter China’s maritime “jurisdiction,” a likely reference to areas covered by China’s unilateral South China Sea claims. Adding to the uncertainty, the law also authorizes the use of force against vessels that “infringe on China’s national sovereignty,” without specifying what constitutes such an infringement. Such ambiguity fosters a climate of fear among China’s maritime neighbors, which must now weigh the risks of responding to China’s illegal incursions with the possibility that doing so could lead to war.
All told, Beijing’s evolving lawfare strategy underscores the urgent need to reestablish regional deterrence. Defending the Philippines, a U.S. treaty ally, is crucial not only for maintaining regional stability but also for reaffirming U.S. commitments to upholding other international norms and sovereignty claims. If the United States allows China to continue bullying the Philippines, other treaty allies such as Australia, Japan, and South Korea would rightly question Washington’s commitment to their defense. Such sentiments are already proliferating in many Southeast Asian nations—including Indonesia, Malaysia, Singapore, Thailand, and Vietnam—where polls suggest the United States is increasingly viewed as an unreliable security partner. Should these perceptions of U.S. weakness worsen, it could further embolden China. That makes it vitally important for Washington to take decisive action now, not later.
Despite repeated U.S. declarations of an “ironclad” commitment to the Philippines, China’s behavior remains unchanged. Beijing is betting that Washington, preoccupied with multiple global crises, will hesitate to fully honor its treaty obligations and attempt to dissuade Manila from risking a conflict over the shoal. This dangerous brinkmanship is designed to erode both U.S. resolve and Philippine resistance. Defusing tensions will require a counterintuitive approach: The United States must increase pressure on China and signal that further provocations will prompt a decisive and coordinated response. Such warnings must then be matched with credible actions to ensure their effectiveness.
One immediate deterrent would be for U.S. Coast Guard personnel to accompany Philippine sailors on so-called advise-and-assist missions to contested areas such as Second Thomas Shoal. Publicizing these missions would undoubtedly force China to reconsider aggressive action against Philippine vessels, knowing that an attack could prompt the United States to significantly escalate its involvement—a scenario Beijing is not yet ready to contend with and will likely seek to avoid. This approach would be far less provocative than deploying U.S. warships to escort resupply ships. If managed correctly, the presence of U.S. Coast Guard personnel could extend deterrence options while providing a buffer to de-escalate tensions, allowing for diplomatic offramps that could help China lower the stakes without losing face. Inviting Japan and other allies to participate in these missions could bolster regional security and demonstrate a unified stance against Beijing. Announcing new joint military exercises between the United States and its allies could further signal resolve to China and pressure it to course-correct.
Washington must also make a more concerted effort to mobilize international coalitions against Beijing, reaffirming core principles of freedom of navigation and territorial sovereignty. These issues should be raised in forums such as the United Nations Security Council, repeatedly if necessary. While concrete actions might be limited, such moves would force China to defend its actions on the global stage, potentially incurring reputational damage and rallying international support against its policies to change maritime borders by force. Recent statements from NATO leaders labeling China a “decisive enabler” of Russia’s illegal land grab in Ukraine highlight a growing international willingness to condemn authoritarian expansionism, underscoring that this issue extends beyond U.S.-China competition to a broader global context.
Lastly, while Washington has been overly cautious about sanctioning Chinese entities supporting Russia’s war machine, there exists substantial precedent for targeting China’s illegal maritime activities. Beyond targeted sanctions against Chinese personnel, U.S. policymakers should bolster existing sanctions on Chinese entities aiding in the buildup of China’s increasingly militarized Coast Guard. Working with allies, the focus should be on the China Shipbuilding Industry Corp. and China State Shipbuilding Corp., key players in constructing and maintaining Coast Guard vessels. Reinforcing technology export bans against these companies and their subsidiaries could also constrain the expansion and modernization of China’s maritime fleet over time.
Of course, reestablishing deterrence in the Pacific after years of accommodating Chinese aggression in the South China Sea and elsewhere will not be easy. But Washington must draw the right lessons from its failure to prevent Russia’s annexation of Ukrainian territory—namely that deterrence, once lost, all too often leads to war, a fate that must be avoided in Asia. Believing that this week’s provisional agreement between Manila and Beijing, which permits limited Philippine resupply missions to Second Thomas Shoal, will hold would be foolhardy. China has already made clear that the deal is temporary and that it will never accept a permanent Philippine presence on the shoal. Such signaling bolsters the case for strengthening deterrence to prevent future escalation—that is, before Beijing’s brinkmanship pushes the region into deeper conflict.
COMMENT – Great analysis by Craig Singleton. Years of aggression by the PRC against its neighbors has not resulted in a major reaction by the United States. This has convinced Beijing that coercion and the threat of force works.
81. I love Hong Kong – but I’ve renounced my citizenship for my own safety
Kit Fan, The Telegraph, July 19, 2024
When poet and novelist Kit Fan received a cautionary phone call, he made the heartbreaking decision to sever ties to his homeland.
82. China and Russia Are Breaking the World into Pieces
Hal Brands, Bloomberg, July 21, 2024
Geopolitical blocs, rival ideologies, a tech race: Are we back in the 1960s?
From Ukraine to Gaza to the South China Sea, the world is littered with crises. International cooperation is paralyzed by diplomatic rivalry; techno-optimism has given way to a pervasive techno-anxiety . The sole superpower is limping toward an election with fateful consequences, as its rivals feverishly arm themselves for wars present and, perhaps, future. Each of these challenges, in turn, is symptomatic of a deeper historic shift underway.
“The current international environment is in turmoil, because its essential elements are all in flux simultaneously.” Henry Kissinger wrote that in 1968, as a whirlwind of change — decolonization, domestic protest, a changing balance of power — was roiling the arrangements that had emerged after World War II. But Kissinger’s assessment is also a good starting point for understanding a disordered globe today.
For a generation after the Cold War, the world was structured by a set of verities : the triumph of democracy over autocracy, the virtues of globalization and innovation, the prospects for great-power peace, and the stabilizing role of American power. Those verities underpinned a world that was remarkably favorable for the US and its allies. They were also historically propitious for global finance and trade. The reason today’s world seems so chaotic is that those old verities are crumbling, as the contours of a new era take shape.
The emerging order is one in which geopolitical blocs are back, and strategic rivals wage vicious ideological and technological fights. The international economy is a battleground, as interdependence and insecurity go hand in hand. Global governance and problem-solving increasingly look like artifacts of a happier age. International violence is intensifying, as the risk of major war — even global war — ticks higher. US power still looms large, but America’s behavior grows more erratic as its politics become less stable.
All this turmoil could still produce a decent future. But first, policymakers and dealmakers must understand the age of fragmentation underway.
Globalization’s Golden Age
The post-Cold War world had its insecurities, its injustices, its outrages. But the world that emerged after the opening of the Berlin Wall still felt like a time of unique progress and promise.
Democracy was trouncing autocracy: The number of democracies increased from around 40 in the early 1970s to 120 by the year 2000. Globalization was running riot: World trade increased roughly fourfold between 1989 and 2019, while flows of foreign direct investment grew eightfold between 1992 and 2000. Economic openness was raising living standards around the world. It was also, the thinking went, deflating international tensions by creating a common prosperity that only the most vicious rogues would disrupt.
Globalization was propelled, in turn, by the digital revolution, which facilitated trade and boosted productivity. Information technology also seemed to favor freedom: Social media fueled protests that toppled repressive governments in Egypt and Ukraine in the early 2010s.
Progress had its dark side, of course. Catastrophic terrorism, of the sort the US suffered on 9/11, showed how weak actors could exploit the ease of international travel, communications and finance to strike with global reach.
In general, however, a world that was supposedly being pacified by economic integration seemed ever-more conducive to great-power peace. And as the threat of major war receded, the leading powers would channel their energies into initiatives and institutions — from countering violent extremism to building the World Trade Organization — meant to tame transnational threats and strengthen global rules of the road.
All this progress was underpinned by the US. American alliances locked in peace and stability in Eastern Europe and the Western Pacific. Washington championed democracy and globalization; it catalyzed collective action against nuclear proliferation and other problems. American tech firms fostered innovations that powered the digital age. The post-Cold War order, as one Pentagon strategy document put it, was “ultimately backed by the US.”
It was also a wonderland for firms and investors that rode globalization’s wave. Multinationals could reap new efficiencies in an open, integrated world economy. They could trade and invest in a climate of security provided by Uncle Sam.
Globalization helped keep inflation low, in part by allowing developed economies to tap bargain-basement labor. Not least, the dilemmas of doing business with repressive regimes, or even potential rivals, seemed negligible given the expectation that trade itself would make problematic actors become responsible stakeholders.
In this sense, the post-Cold War era was a golden age. But now, its key elements have come undone.
83. China Can’t Evade the Iron Laws of Economics
John Lee, Wall Street Journal, July 24, 2024
Xi shifts to ‘high quality’ from ‘high speed’ growth. He will preside over a new phase of failure.
84. Europe must prepare militarily and economically for a Taiwan war
Philippe Le Corre, Nikkei Asia, July 25, 2024
Once merely aware of the risks, European leaders now have deep concerns.
85. Don’t expect Trump 2.0 to be so tough on China
Ben Scott, Lowy Institute, July 24, 2024
86. How foreign firms can stay on their feet in China’s dynamic market
Yuhan Zhang, South China Morning Post, July 23, 2024
87. How Four U.S. Presidents Unleashed Economic Warfare Across the Globe
Jeff Stein and Federica Cocco, Washington Post, July 25, 2024
Today, the United States imposes three times as many sanctions as any other country or international body, targeting a third of all nations with some kind of financial penalty on people, properties or organizations. They have become an almost reflexive weapon in perpetual economic warfare, and their overuse is recognized at the highest levels of government. But American presidents find the tool increasingly irresistible.
By cutting their targets off from the Western financial system, sanctions can crush national industries, erase personal fortunes and upset the balance of political power in troublesome regimes — all without putting a single American soldier in harm’s way.
But even as sanctions have proliferated, concern about their impact has grown.
COMMENT – An interesting article by the Washington Post, not good, just interesting. I’m sure they meant it to be a piece of reporting, but it is really just an opinion piece.
88. The tragic cost of Taiwan's silence on its South China Sea claims
William Han, Nikkei Asia, July 22, 2024
89. China’s Leaders Just Held a Third Plenum. So What?
Nick Frisch, Foreign Policy, July 23, 2024
90. China misses plenum chance to steady economy before U.S. election
Paul Cavey, Nikkei Asia, July 23, 2024
91. What's Wrong About ‘Chat XiPT’ Is Bigger Than China
Catherine Thorbecke, Bloomberg, July 23, 2024
92. The Limits of the China Chip Ban
Hanna Dohmen, Jacob Feldgoise, and Charles Kupchan, Foreign Affairs, July 24, 2024
Washington’s Export Controls Could End Up Helping Beijing.
In 2022, amid rising U.S.-Chinese tensions, the Biden administration rolled out export controls to prevent Beijing from obtaining advanced semiconductors and the equipment to produce them domestically. The stated objective of these restrictions was to deny China the cutting-edge AI capabilities it could use to modernize its nuclear and conventional weapons. U.S. Secretary of Commerce Gina Raimondo insisted that the controls were “laser-focused” on impeding Beijing’s military development. But these measures may also protect the United States’ technological and economic edge over China. Although leadership in AI is not officially stipulated as an aim of the restrictions, U.S. officials, including Raimondo and U.S. National Security Adviser Jake Sullivan, have regularly asserted that it is central to the country’s competitive economic advantage, which in turn advances its national security.
But the chip controls will probably fall short of achieving either outcome. They are unlikely to substantially slow Beijing’s military modernization, much of which can be accomplished using older legacy chips. Where cutting-edge AI chips are needed, the Chinese military can use previously imported chips, smuggled chips, and domestically designed and produced chips. The controls will likely be more consequential when it comes to enabling the United States to maintain its technological edge. By impeding China’s ability to develop and deploy AI throughout its economy, the export restrictions could slow China’s growth and curb its competitiveness, thereby helping the United States stay ahead.
The benefits, however, will be only temporary and the costs high. There are strong indications that the controls are expediting China’s indigenous development of its own semiconductor supply chain. As a result, U.S. actions may impede Chinese innovation and growth only in the short term, and thereafter actually speed up its technological advance. Meanwhile, chip equipment companies in the United States and in allied countries are already seeing declines in revenue as they are forced to leave the Chinese market, denying them funds to fuel research and development. China’s semiconductor industry may soon be able to catch up, potentially leaving the United States and its partners with diminished leverage over China at the same time as export controls increase the risks of economic decoupling and geopolitical fracture.
The current U.S. strategy is flawed. Washington should place less emphasis on slowing down China and focus more on improving its own innovative prowess. Moving forward, the U.S. government must capitalize on the temporary Chinese slowdown afforded by export controls to establish a decisive lead in the most important technologies of tomorrow.
COMMENT – I put this piece in the opinion section because it seems to me that it represents how “expert research” has been coopted by industry and Beijing.
A friend made some “random reactions” to this article and I think everyone would benefit from those to show just how poorly thought through this article is:
The authors generally dismiss or do not mention the ability for the controls to slow China’s ability to achieve AGI, which will likely be achieved through large scale compute according to current LLM scaling laws, on clusters of hundreds of thousands of H100 equivalents. The export controls are going to seriously impede China’s ability to train AGI through traditional scaling
The authors state that chip equipment firms are seeing declines in revenue from the PRC, when the opposite is true, every SME firm has seen an increase in revenue from the PRC. I don’t know of any SME firm that has reported actual declines in their China revenue.
The authors also assert that China will catch up soon in SME, which is highly unlikely as even China’s indigenous DUV tool is years, perhaps even a decade, behind ASML. Chinas DUV tool is only an alpha prototype that is not usable on a HVM manufacturing line. Their EUV program is at best, 7-10 years away from a working alpha prototype.
The authors also say Chinese AI chips are close in performance to US chips - that is not the case. The best Chinese AI chip is roughly equivalent to an A100, which is already five years old and two generations behind NVIDIA’s forthcoming Blackwell GPU. They again claim that Chinese GPU’s are as good as “one of NVIDIA’s better chips” however that is the A100, which is now discontinued and replaced by the H100, which is 4x the performance at FP16, and soon to be replaced by the B100, which is an even larger increase.
The authors state the military does not use advanced chips. This may be the case for actual weapons, but the research, design, and development of advanced strategic weapons requires the best chips and compute to simulate and test such weapons, for nearly all advanced platforms and intelligence collection, which their paper nonetheless recognizes.
The authors mention smuggling, which is a problem. They state 3,000 H100s could be smuggled into China, which is correct, and could be used to train good models. However that would likely be = 1e21 FLOP, or GPT2…not sure how that is “relatively advanced.” The authors have corrected this to state 11,000, which would be GPT3.5 equivalent, still far from current models being trained now, on 100K plus H100 chips. It is unlikely China is smuggling such large quantities, and if they are, they are not to single entities.
The authors claim chiplets will provide China an ability to work around controls. Certainly chiplets help, but if the PRC has only 7nm logic chiplets and the rest of the world has 2nm and below chiplets, the west will still have computationally superior accelerators.
Back to my views: There is a LOT of misinformation out there about technology restrictions and export controls, particularly as they touch the semiconductor sector.
In my opinion, much of that is being driven by the semiconductor industry itself as it seeks to degrade and dismantle restrictions on its business decisions. I suspect that there are quite a few in the various semiconductor companies (tool and equipment companies, software companies, chip designers, chip manufacturers) who view themselves above national security concerns. They believe that they shouldn’t be regulated/restricted from supplying the world’s largest hub of electronic manufacturing (the PRC).
The semiconductor industry has a lot of money to spread around for lobbying and influence (even more after the CHIPS Act) through think tanks, it is unfortunate to see an organization like CSET (Center for Security and Emerging Technology), under its new leadership, join the chorus of industry inspired attacks on export controls.
I suspect Beijing is very pleased to see articles like this and happy that semiconductor companies are helping them dismantle controls and restrictions because it would be much easier, and cheaper, for the PRC to achieve its technological objectives if those controls didn’t exist or weren’t enforced very well.
I would much rather see organizations like CSET figure out how export controls and technology restrictions could be better enforced.
93. Xi Is No Fan of Bankers. He’s Got Reasons
Shuli Ren, Bloomberg, July 23, 2024
94. We must not mistake China’s success on green energy for a global one
Brett Christophers, Financial Times, July 20, 2024
95. China, the United States, and the future of a rules-based international order
Paul Gewritz, Brookings Institution, July 22, 2024