Friends,
This week Beijing launched another massive military exercise in the waters and airspace surrounding Taiwan to remind the Taiwanese people just how much the Chinese Communist Party loves them.
This contradiction highlights just how much the CCP is caught in a dilemma of its own making.
The Party wants to annex the island nation because Taiwan’s thriving democracy threatens the legitimacy of CCP rule. The existence of democracy in Taiwan raises a question that the CCP is desperate to ensure the Chinese people never ask:
If people of Chinese heritage living in Taiwan can have a successful democracy, along with civil rights and freedoms, then why can’t Chinese people on the Mainland do the same?
Chinese leaders designed this exercise (along with their broader political warfare campaign) to intimidate the Taiwanese people into capitulation, but at the same time, the Party wants to win their hearts, so that the Taiwanese willingly submit to the Party’s rule.
This means that CCP leaders must assert that this demonstration of military force is really just an expression of how much Party leaders “love” Taiwan and the Taiwanese people.
I suspect you think I doctored this graphic, but no, this is an actual China Coast Guard propaganda poster that went viral this week… it says:
“Hello, my sweetheart! The patrol is in the shape of loving you.”
Creepy huh?
It is almost as weird and creepy as this mini-video that the PLA’s Eastern Command released in February for the Lantern Festival depicting Taiwan as a child and the PRC as an adult man with explosions, warships, and fighter jets in the background surrounding Taiwan:
The text in yellow generally translates to:
"You'll win if you go home.
Light lamps to ward off evil spirits.
Holding hands to leave the fire,
Small hands holding big ones."
Sooo… the Taiwanese “child” needs to hold the hand of the PRC to “leave the fire”… that the PRC is subjecting them to with their own warships, fighter planes, and bombers?!?
(Perhaps it sounds less weird and creepy in Mandarin…)
In essence, the CCP’s message to the Taiwanese people is: we love you so much and if you don’t come back, we will be forced to kill you.
If the PRC weren’t a nuclear-armed superpower, I’d say Taiwan should get a restraining order.
Perhaps, Xi should communicate his deepest feelings for Taiwan through a Broadway musical number… it might do the trick and convince the Taiwanese of how sincere he and other Party leaders really are.
So, I’ve taken it upon myself to help Xi out.
I’m not sophisticated enough to do a deep fake (and who knows, I might get in trouble given the sensitivities around AI and political topics), so in the spirit of satire here are some snapshots of Xi performing “You’ll Be Back” in the way I imagine he would do it.
Da da da dat da dat da da da da ya da!
Of course, Xi would be shaking those stiff shoulders of his back and forth during the chorus in true Jonathan Groff fashion…
[That song will be stuck in your head for the rest of the day… you’re welcome!]
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Missing Minister
This week, the Wall Street Journal aired the inaugural episode of its podcast The Journal with an explanation by their Chief China Correspondent, Lingling Wei, of the disappearance of Qin Gang, one-time Xi Jinping favorite and Foreign Minister.
Listen to that here: “The Missing Minister: The Vanishing of Qin Gang.”
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NYTs comes out swinging against PRC Panda Diplomacy
Below are a number of articles the Times published this week just as two Pandas arrived from the PRC at the National Zoo in Washington.
Some impressive investigative journalism by Mara Hvistendahl and her colleagues as they uncovered the abuse pandas experience in the PRC, the confidentiality clauses that the PRC imposes on these panda rentals, and the falsification of data surrounding the wild panda population.
The FedEx Panda Express landing at Dulles International Airport carrying Bao Li and Qing Bao, a pair of Giant Pandas on “loan” from the PRC.
***
Britain’s Beijing Reset
Coming on the heels of capitulating Diego Garcia in the face of a years-long political warfare campaign by the PRC and Russia, the UK’s new Foreign Secretary visited Beijing and Shanghai to jump start “engagement” and reset Sino-UK relations. David Lammy, who portrayed himself as “tough” on China to American audiences before Labour’s election victory this summer, seems to be leading the charge.
He traveled to Beijing without a commitment by the CCP to lift sanctions on his fellow members of Parliament, signaling that London won’t let that get in the way of “cooperation and economic benefit.”
Politico covered the details in their piece, UK’s David Lammy is in China — just don’t call it a reset (October 18, 2024).
Thanks for reading!
Matt
MUST READ
1. The Panda Factories
Mara Hvistendahl and Joy Dong, New York Times, October 15, 2024
In the 1990s, China began sending pandas to foreign zoos to be bred, in the hope that future generations could be released into nature. It hasn’t gone as planned.
Nearly three decades later, more pandas have been removed from the wild than have been released.
Aggressive artificial breeding has injured and even killed pandas.
What the program does best is make more cubs for zoos.
Two chunky pandas, a male and a female, arrived from China at the National Zoo in Washington on Tuesday. If everything goes as planned, they will eventually have cubs.
Exchanges like this have helped turn giant pandas into the face of conservation worldwide.
The panda program was created with the stated goal of saving a beloved endangered species. Zoos would pay up to $1.1 million a year per pair, which would help China preserve the pandas’ habitat. By following carefully crafted breeding recommendations, zoos would help improve the genetic diversity of the species.
And someday, China would release pandas into the wild.
But a New York Times investigation, based on more than 10,000 pages of documents, has found that the Chinese authorities and American zoos have put a rosy sheen on a program that has struggled, and often failed, to meet those objectives. The records, photographs and videos — many of them from the Smithsonian Institution Archives — offer a detailed, unvarnished history of the program.
They show that, from the beginning, zoos saw panda cubs as a pathway to visitors, prestige and merchandise sales.
On that, they have succeeded.
Today, China has removed more pandas from the wild than it has freed, The Times found. No cubs born in American or European zoos, or their offspring, have ever been released. The number of wild pandas remains a mystery because the Chinese government’s count is widely seen as flawed and politicized.
Along the way, individual pandas have been hurt.
COMMENT – Wait, wait… are you implying that there’s corruption and failure within a high-profile program controlled by the PRC Government?!? And that the PRC Government tries to cove it up by blocking access to data and silencing critics?!?
I’m SHOCKED! Who could possibly have predicted that there was something rotten in a program like this?
2. Want to Rent a Panda? Here Are 5 Things China Demands in Return.
Mara Hvistendahl, New York Times, October 19, 2024
Normally confidential contracts show that U.S. zoos are accepting increasingly strict terms governing panda cams and public statements.
Panda exchanges, like the one that sent two bears to Washington’s National Zoo this week, are governed by closely held contracts. In most countries, they are never released.
Lawyers for the Smithsonian, which operates the National Zoo, cited a confidentiality clause and refused to release a 2020 contract. The U.S. Fish and Wildlife Service, which regulates the import and export of exotic species, provided a San Diego Zoo contract with key passages blacked out.
But my colleagues and I found full copies of those documents and others in regulatory filings.
The contracts govern two pandas at the National Zoo and two more that arrived in San Diego this summer.
Comparing these contracts with past agreements revealed that American zoo administrators are ceding increasing authority to the China Wildlife Conservation Association, a government group that administers many panda agreements.
China’s national forestry bureau, which oversees the wildlife group, did not respond to a request to comment.
Here are a few of the terms.
Watch What You Tell Journalists
The arrival of pandas in Washington and San Diego were highly choreographed media events. But zoo administrators have agreed to limit what they tell journalists.
Administrators cannot discuss panda illness, death, disease or “any other important matters” without first consulting with their Chinese partners, whose views “shall be fully respected.”
“In cases where release of related information to the outside world or acceptance of media interviews is necessary, it shall be implemented only after communication and consultation between the parties and a consensus is reached,” the contracts read. “And where no consensus is reached, no news shall be released.”
In a statement, the San Diego Zoo said it was common for partners to discuss animal well-being “and come to a mutual understanding before sharing updates publicly.”
Previous contracts did not contain such “information management” restrictions.
Don’t Talk About the Money
Zoos pay up to $1.1 million a year to rent pairs of pandas from China. To raise money, zoos court donations from everyday people and big-ticket philanthropists.
The arrangement is, at its heart, a rental. China retains ownership of the pandas, and zoos pay for the right to display and breed them for a decade.
But the China Wildlife Conservation Association prohibits zoos from discussing the deal in that way. “Commercial terms such as ‘lease,’ ‘rental,’ ‘loan agreement’ or ‘contract’ shall not be used,” the National Zoo’s current contract dictates.
The zoo previously referred to this contract as a “loan.” Not anymore. Now it is a “cooperative research and breeding agreement.”
But even the term “loan” was a euphemism, said Ron Kagan, the former chief executive of the Detroit Zoo. Under his tenure, the zoo passed on hosting pandas because of ethical concerns about paying for a threatened species, among other reasons.
“You can call it whatever you want,” he said. “It’s not a loan if you’re paying.”
All-Expense Paid Travel
Zoos have agreed to pay for Chinese panda experts to travel to the United States regularly to give advice.
American zoos will pay for airfare, hotels and a daily stipend of $100 to $150 per person. “Payment shall be made by the American Party in cash or by other means directly to the experts themselves,” the two contracts say.
Zoos are also required to fly in experts to conduct research, help pandas acclimate and in some cases, consult on procedures like artificial inseminations.
Restrictions on Live Panda Cams
Last year, a panda at the Memphis Zoo, Le Le, died after panda enthusiasts watched him deteriorate on the zoo’s live video feed.
The zoo’s female, Ya Ya, came under scrutiny, too, with animal welfare groups and Chinese panda fans saying that she was too thin and had mangy fur.
Some even paid for a billboard in Times Square.
The zoo said that Le Le died of heart disease and that Ya Ya had a genetic condition that gave her patchy fur.
Some zoos previously promoted live, round-the-clock panda feeds. Going forward, they have agreed to limit their live feeds.
The San Diego zoo says it will now offer only a daytime feed. The zoo’s contract says it may show only “video footage or images that are first reviewed, edited when necessary, and approved” by the zoo.
Melissa Songer, a Smithsonian conservation biologist, said in August that the National Zoo pushed back on this provision. Its contract is less restrictive. But the zoo will offer footage on a delay, Dr. Songer said.
Break the Rules? Deal’s Off.
The China Wildlife Conservation Association can terminate the contract and recall pandas to China for a variety of reasons.
The “unauthorized release of relevant information” to the public is one example.
The Chinese group can also recall pandas for “improper feeding management” or “health issues in giant pandas with a risk of death.”
These clauses, too, were added after Le Le’s death.
COMMENT – If you are negotiating a contract for a zoo animal and the counterparty from an Authoritarian dictatorship demands a confidentiality clause, that is a huge red flag, and you should just walk away.
The National Zoo, which negotiated a contract with the PRC’s China Wildlife Conservation Association, refuses to let the public see the whole contract despite the fact that the Zoo is a part of the Smithsonian Institution, a federal entity that gets 2/3rds of its budget from U.S. taxpayers.
At the very least, these contracts must be negotiate transparently and the public should view and understand what the Chinese Communist Party demands for the “privilege” of renting a panda.
Jude Blanchette, China Books Review, October 17, 2024
“Xi Jinping Thought” — articulated in texts by China’s leader and dissected in two new books — has the power to reshape China for decades to come. So what exactly does Xi Jinping think?
It is a paradox that Xi Jinping remains an enigma, given that for the past 12 years he has been leader of the world’s largest military, second-largest nation by population size, second-largest economy, and second-largest political party.
Xi’s interactions with foreign leaders and other outsiders are highly scripted, leaving next to no space for spontaneous interactions. Little is known about his personal habits and interests. The circle he trusts for counsel is small and shrinking. In public appearances he is controlled, measured, enigmatic. China’s — and Xi’s — isolation during its draconian Covid lockdowns only exacerbated this trend toward impenetrability.
But if we don’t know much about Xi the man, the same cannot be said about what Xi thinks. Here, his output has been prodigious, assembled and presented to the world beginning in 2017 as “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” (习近平新时代中国特色社会主义思想). It doesn’t matter that the hundreds of speeches and commentaries with his name as the sole byline are produced by a sophisticated machine of propagandists and advisors — each and every piece with his name attached carries his imprimatur. Xi wants China’s political machinery and the Chinese people to know exactly what he thinks, for theirs is the burden of translating his ideas about economic development, military power, the structure of society and foreign relations into action. He wants the world to know what he thinks, for he sees global politics as a battle not only of influence and power, but also of ideas and narratives. And it is in that realm that Xi sees an opening to shape international perceptions of China, not just as a superpower, but as a global solutions provider.
“Xi wants the world to know what he thinks, for he sees global politics as a battle not only of influence and power, but also of ideas and narratives.”
Synthesizing Xi Jinping’s voluminous thought is the subject of two recent books, both published by Oxford University Press. Steve Tsang and Olivia Cheung’s The Political Thought of Xi Jinping (January 2024) provides a balanced, brisk overview of Xi’s ideas about governance, politics and society. Ambassador Kevin Rudd’s On Xi Jinping: How Xi’s Marxist Nationalism is Shaping China and the World (October 2024) is more ambitious, seeking a macro-thesis explaining Xi’s overall political-ideological project that centers Marxism — not just Leninism — in driving Xi’s agenda and worldview.
One of the first books to treat Xi’s ideas seriously (as opposed to the many other titles that explore his family story, his tenure as General Secretary, and his foreign and domestic policy), The Political Thought of Xi Jinping applied “three concentric circles” of sources to understand his underlying ideology: Xi’s oral and written remarks; the macro-policy plans that have been promulgated on his watch; and an analysis of how Xi’s vision has been implemented (or not).
Tsang and Cheung, both academics at the University of London’s School of Oriental and African Studies (SOAS), succeed in their concise distillation of Xi’s major political and policy priorities, including both his aspirations and his paranoia. While the authors harbor clearly-articulated concerns about China’s grand strategy under Xi, the text is more analytical than alarmist. Clinical in their language, they steer the reader through a crisp 210 pages that build a foundational understanding of Xi’s expansive policy and political agenda since he came to power in late 2012.
According to Tsang and Cheung, “Xi Jinping Thought” is a body of evolving ideological and governance concepts that, unlike Mao Zedong Thought, is not wedded to Marxist principles of permanent revolution, but instead focuses on reinvigorating the Leninist tendrils that keep the Chinese Communist Party (CCP) in power domestically, and channeling China’s formidable resources to establish China as a comprehensive global superpower. While the authors see Xi Thought as deeply ideological, it is an ideology tied not to communism, but to serving the CCP. They conclude that Xi Jinping Thought:
“is mostly, if not exclusively, about the security of the regime and its core leader, without a real commitment to delivering socialist ideals. The elements in Marxism-Leninism central to Xi Thought come not from Marxist teachings but from the Leninist principles of organization, control, and discipline.”
It is worth lingering on this assertion, for the question of where and how Marxism matters to Xi Jinping and the CCP he commands runs through both of these books.
For Tsang and Cheung, Xi’s relationship to Marxism is complicated. While Xi’s immediate predecessors — Hu Jintao and Jiang Zemin — paid lip service to Marx, the authors see the current General Secretary as seeking to graft a “sinified” version of Marxism onto Leninism and nationalism. Like Mao, Xi wants to borrow from Marx, while ignoring the elements of Marxism that don’t fit with his governing philosophy. As Tsang and Cheung write:
“To Xi, the essence of the ideology is Marxism-Leninism as appropriated by himself based on his understanding of Chinese history for use in the era he is ushering in for China. In other words, while its doctrines are essentially Marxist-Leninist, their meanings are based on Xi’s interpretation, which is heavily ladened with party-centric nationalism.”
There is no doubt that, in an important sense, Xi draws deeply on the ideas of classical Marxism. Like prior CCP leaders, Xi sees not history, but History — a grand Hegelian sweep of events that moves, inexorably, towards Progress. George Kennan captured this belief in an unpublished essay from 1947 on the role of ideology in Soviet foreign policy:
“It is in the light of ideology, and in the language of ideology, that Soviet leaders become aware of what transpires in the world. They think of it, and can think of it, only in the terms of Marxist philosophy. Their own education knows no other terms … Ideology, we must remember, provides the jargon of official Soviet life. And in that sense, it pervades all understanding and discussion of objective reality.”
The eventual triumph of the stated goal of the “Great Rejuvenation of the Chinese Nation” (中华民族伟大复兴) is not a hypothesis for Xi; it is as inevitable as the dialectical march of historical materialism itself. For Xi, China’s rise is not just a political goal but a fulfillment of historical destiny, where the contradictions of global capitalism will be resolved in China’s favor, leading to the nation’s rightful place as a global leader in a new world order.
When Xi Jinping speaks of China entering a “New Era,” he draws not only from the legacy of periodization that has long defined traditional Chinese thought about the rise and fall of dynasties, but from the wellspring of Hegalian-Marxism and its vision of historical progress. The “New Era” signifies a decisive break from the past, where China, under the leadership of the Communist Party, will resolve the contradictions of development both domestically and internationally. This is not merely a narrative of economic growth or national strength; it is a comprehensive ideological mission to transform China, and the world around it. Xi sees himself as a key agent in this historical process, cementing the CCP’s legitimacy not just as a ruling party but as the ultimate custodian of China’s historical trajectory.
In On Xi Jinping, Kevin Rudd has written the most comprehensive analysis of Xi to date — one that will set the bar for future studies of Xi’s governing philosophy. Part of the richness of the book comes from Rudd’s unique vantage point, having served as Prime Minister of Australia from 2007–2010 and again in 2013, its foreign minister from 2010–12, and now its ambassador to the United States since 2023 (to say nothing of his time running Asia Society from 2021–231, and as a full-time student of Xi Jinping Thought while undertaking his DPhil at Oxford, which he received in 2022). Rudd is also likely the only author of a study on Xi to have spent time alone with his subject, as he did when Xi visited Canberra in 2010, when Rudd was serving as Prime Minister.
This singular work, which emerged from Rudd’s doctoral thesis at Oxford, brings with it a tactile ability to view Xi through multiple lenses: politician, bureaucrat, coalition-builder, grand strategist. The book draws from an extraordinary range of primary sources in Chinese, secondary sources and academic literature (the footnotes and bibliography alone are over 170 pages) to build a comprehensive composite of Xi’s worldview, the sources that inspire it, and how he is channeling that to transform China. There is very little by way of personal biography, unlike other titles on Xi — it is rather a study in ideas, ideology and governing philosophy.
Rudd argues that Xi is profoundly different from his immediate predecessors (Hu Jintao, Jiang Zemin, Deng Xiaoping) in three important respects. First, Xi has moved domestic politics towards what Rudd calls the “Leninist left,” which entails a dramatic centralization of decision-making, a disciplinary rectification of the Party, and a reinvigoration of orthodox ideology throughout the policymaking and governance apparatus. Second, economic policy under Xi has shifted to the “Marxist left,” with a de-emphasis on the growth-at-all-costs model that defined much of the Reform and Opening era, a higher tolerance for state intervention in the economy, and a shift in spending priorities toward technologies that will power the Chinese economy in decades to come. Third, foreign policy under Xi has become more confrontational and assertive, in a move toward the “nationalist right” that strives to center Chinese power in its regional relationships, to alter global institutions to better serve Chinese interests, and to create advantageous terms in its bilateral relationship with the United States.
Taken in whole, Rudd sees China’s transformations as coalescing into a new ideological-governance framework that he calls “Marxist-Leninist nationalism,” or “Marxist nationalism” for short. In his words, this:
“encompasses a clear-cut, historically determinist mission for a new era, an all-powerful Leninist party and paramount leader to oversee this mission, and a commitment to relentless struggle to overcome the emerging contradictions identified both at home and abroad through the tools of dialectical materialism.”
In contrast to Tsang and Chueng, Rudd does not view Xi’s national project as primarily focused on ensuring the Party’s grip on power, although he argues that this certainly matters to Xi. Nor does he see Xi’s adherence to Marxism as shallow or ideological theater. Xi, Rudd argues, is a real, bone fide Marxist, not just in his adoption of its analytical techniques, but also in how he sees the substance and direction of policy and governance more broadly. “Xi’s Marxist-Leninist Nationalism,” he argues, is “not just cynically seen as a convenient intellectual fiction to hold the party together and to define its enemies both within and without.” Instead, he sees a “fundamental commitment to Marxism-Leninism,” with dialectical materialism being the “intellectual engine room” of Xi’s Marxist worldview.
Rudd argues that Xi’s ideological convictions are genuine and foundational, driving his efforts to assert Party control, reshape the international order, and secure China’s future as a socialist superpower. This is perhaps the most substantial disagreement between these two works: Tsang and Chueng see Xi’s Marxism as a patina, whereas Rudd believes that Marx’s ideas — alongside those of Lenin and key aspects of Chinese history and culture — form the core of his worldview.
Marxist theory centers on the idea that history is driven by class struggle rooted in material conditions. Karl Marx argued that societies evolve through stages, from feudalism to capitalism, each defined by the dominant economic system and class relations. In capitalism, the bourgeoisie owns the means of production, while the proletariat sells its labor for wages. This relationship is exploitative, as capitalists profit by extracting surplus value from workers. Marx believed this exploitation would lead to the creation of a revolutionary class consciousness, driving the proletariat to overthrow capitalist systems. He predicted socialism would emerge in its place, with collective ownership of the means of production, eventually leading to a stateless, classless society (communism) where wealth is distributed based on need, not profit.
Can such a theory be plausibly overlain on the actual, existing political system in contemporary China, even under an ideologue such as Xi? Can one make a tenable case that Xi is attempting to steer the Party-state apparatus toward Marx’s utopian vision, or even toward a more pragmatic version of socialism?
It is true that Xi has frequently extolled Marx, calling him “the greatest thinker of modern times” and declaring that “the belief in Marxism and the faith in socialism and communism are the political soul of the Communists and the spiritual pillar that enables the Communists to withstand any test.” He has exhorted the CCP to realize communism, and invoked dialectical and historical materialism in countless speeches and articles as vital tools of statecraft and ideological orientation. It’s also undoubtedly true, as Rudd demonstrates, that Xi and the Party apparatus lean heavily on a Marxist lens to interpret the world, to understand the gyrations of History, and to explain the structural contradictions between socialist China and the capitalist West. Indeed, one cannot understand Xi, or China’s sui generis political architecture, without understanding the functional power of Marxist frameworks in shaping the Party’s worldview. Just as the once-open Russian and Chinese archives demonstrated that Soviet and Chinese leaders during the Cold War made key decisions based on ideology (in addition to realpolitik), so too will future historians discover the extent to which Xi’s ideological worldview drives his decision-making.
Yet Xi’s brand of Marxism is, to be charitable, conflicted. There is no doubt that Xi is hostile to free-market capitalism, and sees what he calls its “final demise” as the precondition for socialism’s “final victory.” Xi has also revamped and redefined China’s economic development model away from growth-at-all-costs to one that, purportedly, will pursue a better quality of economic activity, including more equitable income redistribution, environmental stewardship, and the redistribution of capital towards the “real economy” (away from the financiers and real estate speculation and towards manufacturing and a genuine housing market). Xi’s campaign to end absolute poverty through a “targeted poverty alleviation” policy inaugurated in 2013, for all its shortcomings, led to a meaningful decrease in poverty incidence in both rural and urban areas. And his administration also continues to push forward on hukou (rural registration) reform, which remains a critical barrier to social improvement for vast numbers of migrant laborers.
This, however, is Marxism at the far margins. What would Marx make of contemporary China under Xi? It is difficult to speculate, but there is much he would likely not approve of. Xi’s government routinely jails labor activists and student Marxists, cracking down on the very groups Marxists would champion. When his “common prosperity” initiative, which sought to reduce income inequality and ensure more equitable distribution of wealth, seemed in danger of encouraging calls for a full-blown European-style welfare state, Xi used the Party’s authoritative Qiushi journal to declare in October 2021 that China “should resolutely prevent falling into the trap of ‘welfareism’ to support lazy people.” This sounds more like Milton Friedman than Karl Marx. More than three years since “common prosperity” got its initial push, it has faded to the margins of policy discussion.
Although wealth distribution in China has long been highly unequal, citizens tolerated these disparities because they believed that their personal efforts could lift them from poverty to relative prosperity. Yet a recent Stanford University research paper shows that for the first time in 20 years, most Chinese respondents believe wealth is shaped by structural inequalities rather than individual merit. There has been no widespread tax reform, which is essential if China is going to adequately provide for the medical and social services needed to support the coming wave of retirees exiting the workforce. Despite some recent progress, educational opportunities and outcomes vary widely by income and geography. China’s healthcare system remains underfunded and ruthlessly capitalist.
Indeed, after more than a decade in power, Xi has failed to implement any significant policies that have fundamentally and genuinely moved China closer to a type of socialism that makes breakthroughs in enriching the people, not just the state. By way of comparison, areas that Xi Jinping clearly sees as priorities, such as national security, have witnessed a wholesale transformation as Xi applies his significant political capital to drive reform in the face of stiff opposition. A real Marxist would take the resources and energy that have been plowed into Xi’s anti-corruption campaign, his military modernization and his “overall national security outlook,” and instead channel them into fiscal, educational and health care reform.
Any plausible argument for prioritizing socialism evaporates when the field of analysis is Xinjiang or Tibet. For decades, the CCP has waged campaigns of repression and social transformation in Xinjiang and Tibet, aiming to tightly assimilate these regions into the full ideological and governance sphere of the Chinese Party-state. In Xinjiang, mass surveillance, forced internment of Uyghurs and restrictions on religious practices have been central to Beijing’s effort to suppress ethnic identity and dissent under the guise of counterterrorism. Similarly, in Tibet the CCP has sought to erode the region’s unique culture and religion through restrictions on Buddhist practices, heavy-handed political control and mass migration of Han Chinese settlers. Both regions have seen intensified efforts at sinicization, with Beijing seeking to reshape ethnic, cultural and religious identities in line with state ideology.
Of course, repression alone doesn’t negate the theory of Xi’s Marxism. Indeed, one of the oldest, most contested debates of the Cold War period was this: Did Marx invent the Gulag? In other words, was Stalinism and Maoism — and all the slaughter that accompanied actual, existing communism in the 20th century — the inevitable outcome of Marx’s ideas? If so, Xi is simply the direct and ineluctable offspring of Das Kapital. It is a valid question, and one where persuasive arguments have been put forward on both sides of the proposition. But it is important to recognize that labeling Xi Jinping as a “Marxist” should come with deep qualifications, as his governance agenda shows little commitment to the kind of radical economic and social transformation that Marx originally envisioned.
When it comes to Xi’s pronouncements on Marx and Marxism, we might appropriate Leszek Kolakowski’s appraisement of Mao’s philosophical writings in his monumental 1976 book Main Currents of Marxism: “To put it mildly, much good will is needed to perceive any deep theoretical significance to these texts.” Xi’s speeches and writings on Marx and socialism mirror the superficiality of his grasp of — or genuine interest in — deep Marxism. Like the fear-driven attention lauded on Stalin’s 1938 course text History of the Communist Party of the Soviet Union, Xi’s orations on Marxism are politely applauded and his disquisitions in Qiushi magazine are carefully scrutinized in Party study sessions. But no cadre gets smarter about Marxism after reading or listening to them. Consider his speech marking the 200th anniversary of Marx’s birth, a moment when acumen as a Marxist interpreter should be most evident. Instead we get this empty pablum:
“A history of the development of Marxism is the history of Marx, Engels and their successors who have constantly developed according to the times, practice and the development of understanding, and the history of constantly absorbing all the excellent ideological and cultural achievements in the history of mankind to enrich themselves. Therefore, Marxism has been able to maintain its wonderful youth, constantly exploring new issues raised by the development of the times and responding to the new challenges facing human society.”
One can wade through Xi’s pronouncements on Marx in the hopes of enlightenment, but will search in vain for any original theoretical advancements — or indeed any sense that Xi believes in the fundamental Marxist project of the emancipation of the proletariat.
Xi also understands that Marxist ideas, if allowed to spread unchecked in China, could well become a potent weapon for criticizing the Party. The left flank of the ideological spectrum — as I explore in China’s New Red Guards: The Return of Radicalism and the Rebirth of Mao Zedong (2022) — has always been the most exposed for the CCP, as it is only from the left that the purported “socialist” orientation of the Party can truly be challenged on its face. To prevent this, Xi has deftly contained the discourse, ensuring that Marxist principles are sanitized and deployed selectively, under strict Party control, to reinforce loyalty and suppress dissent. By co-opting revolutionary rhetoric, Xi hopes to avoid Marxism being used to highlight contradictions in the Party’s governance or economic policies, which, for nearly 50 years, have diverged from socialist ideals. In this way, Xi’s Marxism becomes a tool of statecraft, not a weapon of proletariat liberation.
Rather, with Xi there is overlap with a critique of Stalinism that grew in the period around and after the Stalinist purges of the 1930s — what Trotsky called, in a 1937 essay, “the revolution betrayed.” Just as Trotsky condemned state capitalism under Stalin for “supporting unviable enterprises” and “perpetuating parasitic social strata,” Xi calls for the nation’s gargantuan state-owned enterprises to become “stronger, better and larger” in their service of national greatness and the enrichment of the state, not the people’s livelihoods. Likewise, the entrenchment of an ever more powerful Party bureaucracy and organization under Xi has created what Trotsky condemned as the “sole privileged and commanding stratum.” In Xi’s cult of personality we see, as Trotsky did under Stalin, an “increasingly insistent deification” which “with all its elements of caricature, [becomes] a necessary element of the regime.”
Of course there is no Trotsky in today’s China — at least not one willing to publicly level the charge of betraying the revolution. There is dissent and private grumbling, but the security and surveillance tools at Beijing’s disposal are too fearsome to ignore, and the consequences of open opposition are too high. Xi’s version of Stalinism will likely lurch along until he voluntarily steps down (highly implausible), is unseated (unlikely) or, more probably, dies on the throne.
If Xi Jinping Thought is not a vision for a genuine socialist movement driving towards a communist utopia, what is it? Here, both On Xi Jinping and The Political Thought of Xi Jinping are compelling in their description of Xi’s adherence to Lenin. In its purest form, Leninism advocates a highly disciplined, centralized political party to lead the working class in overthrowing a capitalist system. He argued that spontaneous revolution from the masses alone would be insufficient — a small, ideologically committed elite must guide the revolution to prevent it from being co-opted or crushed by reactionary forces. Once in power, this Party must suppress counter-revolutionary elements and begin building socialism by nationalizing industry, redistributing land and establishing state control over the economy. All of this can only be made possible by the implacable discipline of the Party apparatus. If Lenin had a foundational maxim, it was articulated in this 1920 essay:
“The Bolsheviks could not have retained power for two and a half months, let alone two and a half years, without the most rigorous and truly iron discipline in our Party.”
Mao Zedong had his own Leninist inclinations, but his path diverged sharply from Lenin’s, and thus from Xi’s. While Mao initially embraced the idea of a disciplined vanguard party, his relationship with the Communist Party eventually fractured in the late 1950s and early 1960s. In response, Mao turned against the very Party he helped create, launching the Cultural Revolution and igniting chaos within the ranks. He sought to purge the Party of perceived revisionists and counter-revolutionaries, believing that only through constant struggle and mass mobilization could the revolution stay alive. Mao saw revolution not as a one-time event but as a continuous, violent upheaval, often bypassing the Party apparatus and appealing directly to the masses.
Xi, on the other hand, has taken the opposite approach. His strategy centers on reinforcing the Party’s iron discipline and ensuring his absolute control over it. Rather than turning to the masses to challenge the Party’s authority, Xi has worked to instill loyalty within the Party itself, purging those he views as disloyal or corrupt but always under the banner of strengthening Party unity and organizational power. For Xi, the Party is not something to be questioned or overturned — it is the essential vehicle for maintaining stability and achieving national rejuvenation. While Mao ultimately went to war with his own Party, Xi has doubled down on Lenin’s vision of a tightly controlled, elite-driven organization, seeing it as the cornerstone of his political vision and the key to his long-term survival.
Xi understands that Leninism provides a potent ideological framework for autocrats, due to its inherent emphasis on centralized control, the suppression of political opposition, and the elevation of the Party as the sole legitimate representative of the people and their collective will. Built on a principle of concentrated leadership, justified by the need to prevent counter-revolutionary forces from undermining the socialist project, Lenin created a structural pathway for dictatorial power. One can easily see the path from Leninism to Stalinism to Maoism to Xi-ism.
But this is not Leninism for Leninism’s sake. Nor is it a continuous revolution to bring Marx’s vision of communism to China, or to realize heaven on earth. The true substance of Xi Jinping Thought is how to direct Leninism at a policy agenda focused on building and wielding comprehensive national power. While Chinese leaders and intellectuals since the late 19th century have sought to restore China’s central place in the international order, from Zeng Guofan and the Self-Strengthening Movement to Deng Xiaoping’s reforms, Xi is employing a new toolkit. He leverages cutting-edge technology, state-controlled capitalism and assertive foreign policy, with an unprecedented focus on expanding China’s influence across key global arenas. Unlike his predecessors, who often adopted more cautious or internally-focused approaches, Xi has mobilized far greater resources and directed the full machinery of the Party toward strategic ambitions on the world stage. His methods — which blend Leninist control with modern economic, technological and military prowess — represent a more aggressive and concentrated effort to reclaim China’s historical stature, with the long-term goal of challenging the current global power balance.
That is the goal. Yet it is becoming more evident by the day that to achieve this objective, Xi is corrupting the machinery of effective governance, like Stalin and Mao did before him. He has replaced pragmatism with paranoia, merit with loyalty, and debate with blind obedience. Governing institutions, that once seemed to be serving the nation as a whole, now serve one man’s unrelenting pursuit of power for the Party that he leads. Bureaucratic professionalism is giving way to fear-driven stagnation, as officials scramble to stay in favor, not to solve governance challenges. The promise of a prosperous, harmonious society has been bartered for the promise of stability, security and “national greatness.” Yet the price of pursuing these goals — paid in the currency of repression — continues to rise. The question is not just whether Xi will achieve his aims, but what will be left of China if he does.
COMMENT – To answer the rhetorical question in the title of this piece: Xi is certainly a Leninist, which is far more malignant than being a Marxist.
Excellent double book review by Jude Blanchette!
He did a spectacular job summarizing two books I’ve just started reading myself. Its why I subscribe to The Wire China.
I think it is more important than ever that Americans, Indians, Europeans, Japanese, and others have a detailed understanding of Xi Jinping’s ideas and worldview… his efforts to achieve his objectives for the PRC will have profound impacts on our world.
I think it is accurate to say that we live in the ‘Era of Xi Jinping’ and unless we get our collective acts together, we will find our children and grandchildren living in the world he defines.
4. China Falls into Its Own Trap
Walter Russell Mead, Wall Street Journal, October 14, 2024
Its economic model is unsustainable, but reform is too risky for the Communist Party.
Wars in the Middle East and Ukraine dominate the headlines, but the Indo-Pacific remains the fulcrum of world politics and where the 21st century will take shape. While bombs fall and missiles fly elsewhere, the Chinese Communist Party is wrestling with its greatest challenges since Deng Xiaoping’s reforms fueled a generation of blistering growth in the 1980s. Unfortunately, the economic choices China is making look set to promote greater repression at home and increased tension with neighbors and trading partners around the world.
According to recent Wall Street Journal reports, up to 90 million housing units across China stand empty in a country whose population is falling. Real-estate developers cannot service their loans. Local governments, which have long funded their programs by land sales to developers, are drowning in debt. With government encouragement, Chinese households invested nearly 80% of their total savings in real estate. Now that house prices have fallen about 30% since 2021 in some markets, shocked consumers are reining in their spending. Industrial profits are down 17.8% in the past year. Youth unemployment continues to rise. Europe and the U.S. are planning new tariffs against an expected flood of cut-price Chinese exports. Banks don’t want to lend, and foreigners don’t want to invest.
Faced with these problems, China is dodging the difficult task of structural reform. Policies designed to deflate the real-estate bubble are being replaced with measures to strengthen housing demand. Banks will be subsidized to make more loans to flailing factories and overindebted local governments. Efforts to rein in make-work infrastructure spending by local governments (like unneeded highways and bridges to nowhere) will likely yield to a renewed emphasis on creating jobs, even as subsidies encourage unemployed youngsters to get more degrees to qualify for nonexistent jobs.
The People’s Republic of China is caught in a trap of its own making. The success of China’s one-child policy spawned a demographic crisis. The relentless focus on housing created the biggest real-estate bubble since the dawn of time—and locked local governments and hundreds of millions of ordinary Chinese into an unsustainable Ponzi scheme. The success of China’s market reforms created wealthy entrepreneurs and an educated, ambitious middle class that must be suppressed and controlled if Communist rule is to survive. Tenacious support for an export-oriented manufacturing strategy and the infrastructure it needs committed China to a development path that offers diminishing returns at home and increasing hostility from abroad.
Globally, Beijing’s overreliance on export-driven economic growth and nationalist chest-thumping to lend communist rule an air of legitimacy impaled China’s communists on the horns of a dilemma. China’s massive industrial economy depends on raw materials and energy from abroad, as well as on access to foreign markets. But the geopolitical ambitions of a rising China and the export avalanche from its titanic industrial base combine to alienate foreign partners and undermine the free-trade consensus that allowed the country to flourish for so long.
Xi Jinping and his aides are not stupid. They know that overdependence on housing, exports and big infrastructure is an economic dead end. They know that world markets won’t absorb continuing Chinese export growth. They know that saber-rattling over Taiwan and the Philippines alienates their closest neighbors and alarms the U.S. But shifting China’s economic model onto a more sustainable path is, they fear, too economically expensive and politically risky.
For Mr. Xi and his colleagues, the supreme goal of statecraft is the maintenance of Communist Party control. This partly represents the personal interests of a red aristocracy determined to defend its privileges, and partly a sincere conviction that a country of China’s size and complexity requires centralized government control to survive. Unable to address its structural economic problems, the Communist Party is returning to its comfort zone: its abilities to repress and to play the nationalism card. It cannot reform China’s economy, but it can force churches to replace images of Jesus with portraits of Mr. Xi. It cannot wean itself from export-dependent growth, but it can accelerate the implementation of high-tech totalitarianism, monitoring citizens at almost every moment of their lives. It cannot return to the era of double-digit economic growth, but it can rally public opinion by whipping up nationalist sentiment.
Meanwhile, Beijing is looking to green tech and information technology for another round of export-led economic development. It already dominates the global solar-panel market and is well on its way to similar success in electric vehicles. Replacing Taiwan as the producer of the world’s most advanced semiconductors would, Beijing hopes, cement China’s position as a global military and economic superpower.
Other countries are bound to resent and resist China’s ambitions in these fields. Trade friction will increase even as nationalist public opinion drives Beijing toward ever more assertive and aggressive policies in its neighborhood.
Twenty twenty-five is going to be an interesting year.
COMMENT – In an effort to hold two conflicting ideas in your head at once, while I believe Xi Jinping intends to shape the world into a far more authoritarian dystopia (and he has the capabilities to do it)… I also believe, as Walter Russell Mead describes in this piece, that Xi faces some enormous challenges.
WRM is spot-on, the path to prosperity for the Chinese economy is clear… the problem is that the path requires reducing the control that the Chinese Communist Party exercises over the economy and reducing control over Chinese citizens (viewing them as individuals who make their own choices rather than subjects of the Chinese Communist Party).
If you think that Xi Jinping and his Party cadres are going to give up control (given Xi’s worldview described in the books reviewed above), then I’ve got a bridge to sell you in Shanghai.
5. China’s Stock Market Tumbles on Doubts About Government Stimulus
Rebecca Feng, Wall Street Journal, October 9, 2024
Index has worst day since February 2020, Finance Ministry calls press briefing for Saturday.
After a late-September burst of policy announcements about economic revival and a news conference Tuesday to tout them, the Chinese stock-market roller coaster took a plunge on Wednesday. Beijing’s answer: plans for another news conference.
This time, officials said they were going to talk about “intensifying fiscal policy.” Analysts said unless the message was reassuring, more wild turns were likely to follow.
China’s benchmark CSI 300 index closed down 7.1% Wednesday, its first daily decline in nearly a month and the biggest single-day decline since early 2020, in the depths of the initial wave of Covid-19 cases. Hong Kong’s Hang Seng Index, which includes many large Chinese stocks, declined 1.4%, a day after it suffered its worst daily fall since October 2008.
The turnabout this week is coming after a historic run-up in Chinese stock prices driven by hopes for government stimulus to revive the economy.
After the government said in late September it would do more for an economic turnaround, many individual investors in China rushed to open new trading accounts at major brokerages over the seven-day National Day holiday that began Oct. 1.
But a news conference on Tuesday, the first day after the holiday ended, let down many of these stock-market newcomers. At the event, China’s economic planning agency, the National Development and Reform Commission, didn’t describe concrete stimulus measures, instead reiterating past promises.
Investors remained jumpy on Wednesday.
The CSI 300 fell sharply in the morning, then bounced back briefly after a midday announcement by the Chinese Ministry of Finance that it would hold a news conference on Saturday. That reignited expectations Beijing was readying fiscal stimulus.
The rebound lasted less than an hour. Investors began to fear that the Saturday event wouldn’t produce specifics, and stock prices ended up lower than they had been before the announcement.
The fundamental cause of stock-market jitters remains the perilous state of China’s economy. The property market is unraveling, consumer sentiment is weak and youth unemployment is high. The jobless rate among China’s 16- to 24-year-olds—excluding those enrolled in school—rose to 18.8% in August from 17.1% in July. The country is still sitting on the precipice of deflation.
Markets will be closed this Saturday in mainland China, but few investors will be far from their phones. Some analysts said it was misguided to have expected specifics from the previous news conference because the economic agency’s job is to implement policy, not find money for new programs. By contrast, the Ministry of Finance has the authority to communicate fiscal stimulus plans.
COMMENT – While speculators are happy to make a quick buck (RMB) whenever the CCP announces some additional stimulus, confidence in the PRC’s capital markets in abysmal and for good reason… here is the five-year performance on the PRC’s main index, the CSI 300:
Some will assert that this means that Chinese securities are underpriced and therefore a good value, but the reason why they are underpriced is because they exist within a system without transparency and the rule of law. Capital markets require confidence… and very few people have confidence in PRC capital markets.
6. China’s Latest Round of Property Stimulus Fails to Inspire Markets
Jiahui Huang and Fabiana Negrin Ochoa, Wall Street Journal, October 17, 2024
Markets largely shrugged off the new measures, which were milder than expected.
China’s policymakers rolled out fresh stimulus aimed at boosting the country’s sluggish property sector, though the measures fell short of hopes for more specific liquidity support.
Authorities plan to fast-track credit for struggling property developers, and aim to renovate 1 million apartments in so-called urban shantytowns, a strategy used during the prior real-estate slump, the housing ministry and other policymakers said Thursday at a highly anticipated press conference.
More funds will be deployed for housing projects on the government’s “white list,” with 4 trillion yuan, equivalent to $550 billion, in loans to be available by the end of this year, Minister of Housing and Urban-Rural Development Ni Hong said, urging banks to lend to as many projects as possible.
Projects on Beijing’s “white list” are eligible for government-backed financing to complete unfinished apartments and ensure delivery of homes.
Markets largely shrugged off the news, which was milder than what many expected after an aggressive round of economic stimulus last month.
Chinese property stocks led losses in Shanghai and Shenzhen. China Vanke closed 7.9% lower in Shenzhen, while sector losses dragged the benchmark Shanghai Composite Index down 1.05% to close below the key 3200 level, finishing the day at 3169.38.
In Hong Kong, the Hang Seng Mainland Properties Index—which tracks the performance of Chinese property companies—gave up gains made earlier during the day, and closed 6.7% lower Thursday. Shares of developers Sunac China and China Vanke slid 27% and 17%, respectively.
Some analysts weren’t overly enthused by the latest moves, which echoed previous efforts by policymakers to aid the property sector.
China launched a similar state-financed slum redevelopment program in 2015. Back then, local governments compensated the residents of demolished homes with cash or new housing, and state policy banks provided loans to local governments to finance the program.
Zerlina Zeng, senior director at CreditSights, said the expanded “white list” and the loan-disbursement target sound encouraging, but will provide little additional funding to the sector or boost home-buying sentiment.
“This is because the proceeds of the loans will be parked at the escrow accounts and cannot be used to service debt or fund new projects,” she said. “The aim of the white list is to accelerate the construction of pre-sold but incomplete homes,” so its expansion won’t help reduce China’s excess property inventory or lift expectations about home prices, she added.
COMMENT – Here’s the chart of residential property prices in the PRC over the last five years… note the data ends in January 2024, so it does not include further drops in price this year.
Given that real estate made up 20-25% of the PRC economy over this period, these drops in value are hard to replace with other segments of the economy.
7. China’s ‘New Great Wall’ Casts a Shadow on Nepal
Hannah Beech and Bhadra Sharma, New York Times, October 12, 2024
Nepalis have complained that China’s breaches of the border threaten their land and their way of life.
The Chinese fence traces a furrow in the Himalayas, its barbed wire and concrete ramparts separating Tibet from Nepal. Here, in one of the more isolated places on earth, China’s security cameras keep watch alongside armed sentries in guard towers.
High on the Tibetan Plateau, the Chinese have carved a 600-feet-long message on a hillside: “Long live the Chinese Communist Party,” inscribed in characters that can be read from orbit.
Just across the border, in Nepal’s Humla District, residents contend that along several points of this distant frontier, China is encroaching on Nepali territory.
The Nepalis have other complaints, too. Chinese security forces are pressuring ethnic Tibetan Nepalis not to display images of the Dalai Lama, the exiled Tibetan spiritual leader, in Nepali villages near the border, they say. And with the recent proliferation of Chinese barriers and other defenses, a people have also been divided. The stream of thousands of Tibetans who once escaped Chinese government repression by fleeing to Nepal has almost entirely vanished.
Yet Nepal’s leaders have refused to acknowledge China’s imprints on their country. Ideologically and economically tied to China, successive Nepali governments have ignored a 2021 fact-finding report that detailed various border abuses in Humla.
“This is the new Great Wall of China,” said Jeevan Bahadur Shahi, the former provincial chief minister of the area. “But they don’t want us to see it.”
China’s fencing along the edge of Nepal’s Humla District is just one segment of a fortification network thousands of miles long that Xi Jinping’s government has built to reinforce remote reaches, control rebellious populations and, in some cases, push into territory that other nations consider their own.
The fortification building spree, accelerated during Covid and backed by dozens of new border settlements, is imposing Beijing’s Panopticon security state on far-flung areas. It is also placing intense pressure on China’s poorer, weaker neighbors.
China borders 14 other countries by land. Its vast frontier, on land and at sea, remained largely peaceful as China’s economy grew to become the world’s second-largest. But amid Mr. Xi’s tenure, Beijing is redefining its territorial limits, leading to small skirmishes and outright conflict.
“Under Xi Jinping, China has doubled down on efforts to assert its territorial claims in disputed areas along its periphery,” said Brian Hart, a fellow at the China Power Project of the Center for Strategic and International Studies in Washington.
Viewed individually, each action along China’s borders — fortifying boundaries, contesting territory and pushing into disputed zones — might seem only incremental. But the aggregated result is startling.
Near its eastern maritime reaches, in what are internationally recognized as Philippine waters, China has turned a coral reef into a military base. On its far western land border, China’s People’s Liberation Army has pushed into disputed mountain territory shared with South Asian neighbors.
Two dozen soldiers from India and China, both nuclear powers, died in high-altitude, hand-to-hand combat in 2020. Another border clash two years later injured more soldiers.
China’s border buildup is a major reason that the U.S. Department of Defense, in its 2023 China Military Power Report, declared that China has “adopted more dangerous, coercive, and provocative actions in the Indo-Pacific region.”
The shifting security landscape is drawing the attention of global powers and leading to new alliances. Small nations with ties to China, like Nepal, are vulnerable, even as they downplay or deny border disputes for fear of losing Beijing’s economic favor.
“Weaker states like Nepal,” Mr. Hart said, “face immense pressures because of the overwhelming power differential with China.”
“If China does not face costs for encroaching on its weakest neighbors, Beijing will be further emboldened to threaten countries in the region,” he added.
Nepal’s foreign minister, Arzu Rana Deuba, said in an interview with The New York Times that she had not received complaints about problems on the border with Tibet and that the government’s focus was more on the southern boundary with India, where more Nepalis live.
“We have not really thought much of looking at the northern border, at least I haven’t,” she said.
A Top Secret Report
The distance from Simikot, the capital of Humla District, to the frontier village of Hilsa is 30 miles. But the drive to the border with Tibet takes more than 10 bone-jarring hours through rough, rocky terrain. Humla is unconnected to Nepal’s national road network. Cars and heavy machinery must be flown in.
Himalayan passes in Humla reach nearly 16,400 feet. Deadly altitude sickness can set in fast. It was to this district, Nepal’s poorest and least developed, that members of a fact-finding mission — composed of Nepali Home Ministry officials, government surveyors and police personnel — traveled three years ago.
Armed with a 1960s map from when Nepal and China formally agreed upon their boundary, they set out to discover whether the official cartography diverged from the reality on the ground. The mission members trekked to remote border pillars. They chatted with yak herders and Tibetan Buddhist monks.
Eventually, they produced their report to Nepal’s cabinet. And then the report disappeared. The public was not allowed to see it. Even high-ranking officials and politicians were refused access, several people involved said.
The veil of secrecy extended to the historical map that the mission brought with it. Survey department employees said they have been cautioned that sharing it could be a security breach — a strange warning for a map accessible in American archives.
A copy of the report obtained by The Times shows that the government mission documented a series of small border infringements by China. Also coursing through the report are worries about China’s grander geopolitical intentions and fears about upsetting Nepal’s powerful neighbor.
A nation of 30 million people, Nepal is small, landlocked and underdeveloped. Its government is headed by a Communist, who this year replaced a former Maoist rebel as prime minister. In ideology and in economics, Nepal leans heavily toward China, even as it remains in the orbit of nearby India.
The report says that in several places in and around Hilsa, China constructed fortifications and other infrastructure, including closed-circuit TV cameras, that are either in Nepal or in a buffer zone between the two countries where building is prohibited by bilateral agreement. Chinese border personnel took over a Nepali irrigation canal fed by the Karnali River, the report said, although the Chinese retreated when the Nepali mission visited.
Chinese forces have illegally prevented ethnic Tibetans living in Nepali areas near the border from grazing their livestock and participating in religious activities, the report said. Such constraints bring extraterritorial menace to Mr. Xi’s campaign of repression in Tibet.
The report advised that Nepal and China urgently needed to address various border disputes, but a bilateral mechanism for resolving border problems, which includes joint inspections, has been stalled since 2006.
N.P. Saud, Nepal’s foreign minister until March, said in an interview with The Times that bilateral “border meetings are held frequently.”
But one of Mr. Saud’s deputies told The Times that no border inspections had occurred in more than 17 years. Asked about this, Mr. Saud amended his statement.
“I can share with you that the joint inspection team will work soon,” he said. “I can’t tell you the exact time until it is finalized.”
Mr. Saud said that he did not know why the Humla report had not been made public.
“The border of a country,” he said, “is not a matter of secrecy.”
Mr. Saud said Nepal could not make any determination on the report’s validity until the joint inspections restart.
“Until and unless we confirm the report,” he said, “how we can raise the issue internationally with another country?”
COMMENT - Everyone has to submit to Chinese imperialism.
8. Sinicization of Religion: China’s Coercive Religious Policy
United States Commission on International Religious Freedom, September 2024
Under Xi Jinping’s rule as the paramount leader of the Chinese Communist Party (CCP), the government has implemented the coercive “sinicization of religion” policy, which has fundamentally transformed China’s religious environment. Sinicization, or the complete subordination of religious groups to the CCP’s political agenda and Marxist vision for religion, has become the core driving principle of the government’s management of religious affairs.
Through regulations and state-controlled religious organizations, authorities incorporate CCP ideology into every facet of religious life for Buddhists, Catholic and Protestant Christians, Muslims, and Taoists.
They also forcibly eradicate religious elements considered contradictory to the CCP’s political and policy agenda with ultranationalist overtones. Government officials have installed CCP loyalists as leading religious figures, altered houses of worship with CCP-approved architecture, integrated CCP propaganda into religious doctrines, and otherwise criminalized non-CCP-backed religious activities, all with the goal to ensure the stability of CCP rule.
These government measures have routinely violated the internationally protected right to freedom of religion or belief. This report provides an overview of the Chinese government’s sinicization policy and its use to repress religious groups in the country.
COMMENT – Yet another damning report on how the Chinese Communist Party treats their own citizens.
9. Wiley Petitions USTR to Address China’s Role in Fentanyl Crisis with Section 301 Petition
Wiley Law, October 18, 2024
Wiley has filed a petition under Section 301 of the Trade Act of 1974, as amended, with the Office of the United States Trade Representative (USTR) on behalf of Facing Fentanyl and affected families seeking to address the People’s Republic of China’s (PRC) acts, policies, and practices related to its exports of illicit fentanyl to the United States.
The petition alleges that the PRC government is actively supporting the production and export of illicit fentanyl products to the United States, and has failed to implement sufficient legal measures to prevent such exports. As a result, the petition urges USTR to initiate an investigation into the PRC’s acts, policies, and practices; seek consultation with the PRC government to address these issues; and consider imposing countermeasures.
“The USTR is uniquely positioned to hold the PRC accountable for its role in the fentanyl crisis, which has claimed the lives of over 400,000 Americans,” said Wiley National Security Practice chair Hon. Nazak Nikakhtar. “By investigating the PRC’s unjustified and unreasonable acts, policies, and practices, and through potential economic countermeasures, USTR can compel the PRC government to stop the exports of illicit fentanyl to the United States, which costs the American people more than a trillion dollars annually.”
The USTR now has 45 days to determine whether to initiate an investigation pursuant to the Trade Act.
COMMENT – This is spectacular!
Since the Chinese Communist Party has played such a central role in the deaths of hundreds of thousands of Americans due to its export of fentanyl and its precursors AND it refuses to take action to stop it, the United States should impose severe penalties under whatever legal authorities we have available.
Here’s the factsheet released by the “Facing Fentanyl” coalition, let’s hope the next Administration pushes this forward:
Unfortunately, the Biden Administration has tried to ignore the CCP’s culpability and downplay the enormous harm the Party has done to the United States. Their theory seems to be if the American people knew the truth about the CCP’s culpability, then Americans would demand an even greater response than what Biden’s team has pursued with “managed competition.”
So instead of holding Beijing accountable, they have sought to downplay the problem.
Authoritarianism
10. Xi’s Stronger Grip on Legislature Shows Lack of Checks on Power
Josh Xiao, Bloomberg, October 15, 2024
Legal nods to ruling party’s status have surged to 69% from 4%. Erosion of checks and balances could cause more policy swings.
As the world waits for China’s lawmakers to put a price tag on fiscal stimulus, one thing is increasingly clear: Anything they produce will reflect the growing control of President Xi Jinping over all aspects of government and society.
Nearly 70% of laws made this year feature language explicitly affirming the party’s authority, exploding from 4% in 2018, according to a Bloomberg News analysis of legislative records. While the majority of such documents concern the running of state organs, national security or defense, others relate more directly to risks in the economy.
COMMENT - Whiff of desperation…
11. China Counts Wild Pandas. Nobody Believes Its Tally.
Mara Hvistendahl and Joy Dong, New York Times, October 15, 2024
The panda census methodology is widely seen as flawed, and China keeps the data shrouded in secrecy.
American zoos point to a rise in the wild panda numbers — 1,864 at last count — as proof that the tens of millions of dollars they have spent on conservation have hit their mark.
But that population number comes from a 2013 Chinese government tally that no one in the conservation world actually believes — including the zoos themselves.
Zoos worldwide rent pairs of pandas from China for up to $1.1 million a year, then breed them in the hope of releasing future generations into the wild.
It is one of the world’s signature conservation programs. We spent months investigating it and found that few pandas had been released and that individual pandas had been injured, burned and even killed by aggressive artificial breeding.
Zoos have glossed over the harms and declared the program a success, often by pointing to the uptick in panda numbers.
But a 2006 research proposal from the National Zoo in Washington declared that the census methodology had “never been examined systematically and scientifically for its accuracy” and had “no quantitative data” to back it up.
Another document from 2012 described a “lack of sound data on giant panda numbers in nature.”
“The number is, of course, not fully reliable,” said Jianguo Liu, an ecologist at Michigan State University who studies panda habitat in China.
12. Hong Kong denied entry to about 23,000 people in first 9 months of the year, immigration chief says
Hong Kong Free Press, October 7, 2024
13. Married to the Motherland
Dalia Parete, China Media Project, October 4, 2024
14. Chinese cyber association calls for review of Intel products sold in China
Eduardo Baptista, Reuters, October 16, 2024
Intel products sold in China should be subject to a security review, the Cybersecurity Association of China (CSAC) said on Wednesday, alleging the U.S. chipmaker has "constantly harmed" the country's national security and interests.
While CSAC is an industry group rather than a government body, it has close ties to the Chinese state and the raft of accusations against Intel, published in a long post on its official WeChat account, could trigger a security review from China's powerful cyberspace regulator, the Cyberspace Administration of China (CAC).
Intel and the CAC did not immediately respond to a request for comment. The company's shares were down 2.7% in U.S. premarket trading amid a broad tech sell-off following a disappointing update from chip equipment maker ASML.
"It is recommended that a network security review is initiated on the products Intel sells in China, so as to effectively safeguard China's national security and the legitimate rights and interests of Chinese consumers," CSAC said.
Last year, CAC barred domestic operators of key infrastructure from buying products made by U.S. memory chipmaker Micron Technology Inc after deeming the company's products had failed its network security review.
A similar security review on Intel products could negatively impact the company's revenues, over a quarter of which came from China last year.
BACKDOOR ALLEGATIONS
The allegations come at a time when China is dealing with a U.S.-led effort to restrict its access to crucial chipmaking equipment and components, in what Washington calls a bid to halt the modernization of China's military.
"Relationships between the U.S. and China are fragile and the more talk about restrictions on trade and tariffs, the more likely the other side will retaliate in a tit-for-tat situation," said Dan Coatsworth, investment analyst at AJ Bell.
CSAC in its post accuses Intel chips, including Xeon processors used for artificial intelligence tasks, of carrying several vulnerabilities, concluding that Intel "has major defects when it comes to product quality, security management, indicating that it is extremely irresponsible attitude towards customers."
COMMENT – The PRC is going to hammer Intel… and Intel is in no condition to weather these assaults.
Expect to see Intel ramp up its lobbying efforts in Washington to scale back export controls on semiconductors as Intel knows that is what Beijing expects of them.
Hopefully, officials at the Commerce Department are attuned to this and won’t cave to the CCP’s coercion of U.S. companies to lobby for changes in U.S. policy. This is the downside of too much economic dependence on the PRC.
As for Intel… their best course of action would be an aggressive effort to completely severe themselves form dependency on the PRC, remake themselves into a corporate champion for supply chains and electronics manufacturing that doesn’t touch the PRC, and advocate for significant export controls on semiconductors and semiconductor tools to the PRC. That is probably the only way they could save their storied company, but that would require bold leadership and an effort to embrace derisking/decoupling from the PRC… not the kind of half-measures they have been pursuing so far.
Is Pat Gelsinger a bold leader?
I guess we will find out in a few months… I suspect that the PRC would throw a wrench in any acquisition of Intel by Qualcomm… which makes the case for bold and aggressive derisking/decoupling even more critical.
Back in 2018, the PRC effectively blocked Qualcomm’s plan to acquire the European firm NXP.
In 2021, the PRC blocked Applied Materials’ plan to acquire Japanese firm Kokusai.
Last year, the PRC blocked Intel’s acquisition of Israeli firm Tower Semiconductor.
Unless and until the semiconductor industry pursues an aggressive derisking/decoupling from the PRC, Beijing will continue to coerce and undermine these companies for their own advantage.
15. Taiwanese businessman Robert Tsao and lawmaker Puma Shen hit with Chinese sanctions over alleged ‘separatism’
Hong Kong Free Press, October 14, 2024
16. Hong Kong man found guilty of breaching social distancing rules during 2020 protest loses appeal
Hillary Leung, Hong Kong Free Press, October 3, 2024
17. The People’s Republic of China Turns 75
Chloe Hadavas, Foreign Policy, October 13, 2024
18. The Hashtagification of Chinese Propaganda
Manya Koetse, What’s on Weibo, October 13, 2024
19. China Detains Employees at Apple iPhone Factory Run by Foxconn
Joyu Wang, Wall Street Journal, October 10, 2024
Taiwan says investor confidence may be damaged after four Taiwanese are held.
Four Taiwanese employees at Chinese facilities that make products for Apple have been detained by local authorities, Taiwanese officials said, the latest example of corporate detentions that have hurt business confidence.
The employees worked at a complex run by Taiwan’s Foxconn Technology Group in Zhengzhou, China, said Taiwanese agencies responsible for managing relations with China. One of the agencies said the employees were accused of an offense akin to breach of trust, although the exact nature of the allegations couldn’t be determined.
The Zhengzhou facility plays a central role in Apple’s iPhone supply chain and has sometimes been called iPhone City.
Taiwan’s Mainland Affairs Council, which handles policy toward Beijing, quoted Foxconn as saying that the company didn’t suffer any financial loss connected to the actions of the employees. Foxconn didn’t reply to a request for comment.
The council described the allegations as bizarre and said improper detention could severely damage investor confidence in China. It urged Chinese authorities to conduct a swift and transparent investigation into the matter.
The council in June upgraded its alert level for travel to China to the second-highest level, saying Taiwanese people should avoid nonessential trips. It said Beijing’s tightened national-security laws have led to Taiwanese citizens being illegally detained or interrogated.
The move came after China announced new rules targeting individuals it labels as “Taiwan independence die-hards,” threatening them with the death penalty. Taiwanese officials said such measures put many Taiwanese working in China at risk.
COMMENT – To be honest, I don’t see how actions like this will win hearts and minds in Taiwan. I guess with their own abysmal economic performance, the PRC lacks the “carrots” it once had.
20. Authorities transfer 200 Tibetan monastic students to state schools
Radio Free Asia, October 2, 2024
21. Is China taking away people's passports?
Luisetta Mudie and Kitty Wang, Radio Free Asia, October 8, 2024
Beijing steps up travel curbs on Communist Party members and state employees amid concerns they won't return.
The ruling Chinese Communist Party has been gradually stepping up controls on officials' personal trips overseas since pandemic restrictions ended, with many working in state organizations required to hand in their passports for "safekeeping," amid concerns that they may not return.
The party's disciplinary arm warned members earlier this year not to make overseas trips without getting the approval of their employer first, on pain of "severe disciplinary punishment."
Those who don't have a valid private passport may not be allowed to apply for one, while those who do are being told to hand them over on pain of disciplinary action, according official documents and people within the government system.
In July, Radio Free Asia reported that the authorities were stepping up travel restrictions on teachers, schoolchildren and state-owned bank staff ahead of summer vacation by requiring them to hand over their passports or ask permission before leaving the country.
A recent report in the Financial Times also quoted teachers as saying they were being told to hand in their passports.
Is this a new development?
Teachers were being ordered to hand in their passports as early as 2018, with authorities in the southeastern province of Fujian, the eastern province of Shandong and the northern region of Inner Mongolia warning them that any plans for overseas travel must first get government approval.
Similar warnings were issued to teachers, schoolchildren and state-owned bank employees ahead of the summer vacation this year, too.
Official websites have been warning of travel restrictions on employees of the Chinese state since President Xi Jinping took power in 2012, but travel curbs intensified during the three years of the zero-COVID policy, when people started leaving the country in droves in a phenomenon called the "run" movement.
Arriving air passengers in the southern city of Guangzhou told Radio Free Asia in May 2022 that border police had stepped up controls on incoming Chinese citizens, questioning them about their overseas activities and confiscating their passports.
In April of the same year, police in the central province of Hunan ordered local residents to hand over their passports, promising to return them "when the pandemic is over," amid a massive surge in people looking for ways to leave China or obtain overseas immigration status.
Who is affected by the travel restrictions?
The Chinese Communist Party's 99 million members are barred from obtaining foreign nationality or permanent residency in another country, and from applying for private passports without prior approval, according to a post on the official website of its Central Commission for Discipline Inspection.
They must also submit details of their proposed itinerary when taking private trips, and not deviate from the agreed route or engage in unauthorized activities, it said.
Officials in government departments, employees of state-owned companies and banks, and children have all been issued with warnings over private overseas travel in recent years, covering a large swathe of the population.
Travel bans have long been used by the Chinese authorities to target religious minorities and ethnic groups.
In 2022, Christians in eastern China told RFA Mandarin they were finding it harder to gain approval for their private passport applications, with applications rejected after Entry-Exit Bureau officials discovered the family's religious beliefs.
Passport recall orders and restrictions on new applications have been used to limit overseas travel by mostly Muslim Uyghurs since the beginning of the century, while similar restrictions have also been imposed on Tibetans under Xi's rule.
But restrictions are also sometimes extended to all citizens, should the government deem it necessary, as happened during the zero-COVID years.
Why is the government imposing such bans?
"Firstly, they're afraid that people will leave and never return," the wife of a high-ranking executive in a state-owned enterprise in the northeastern province of Jilin, who gave only the surname Liu for fear of reprisals, told RFA Mandarin in a recent interview.
The number of people fleeing China to seek asylum in the United States spiked sharply in 2023, as people made the grueling and dangerous overland trip to Mexico through Central America.
But there are also concerns that sensitive information could leak to overseas media or security services, as China's secret police step up warnings about potential foreign spies everywhere.
"Particularly those who work in government departments, who know more of the details about the Chinese Communist Party's internal operations," Liu said. "They strictly prohibit people from disclosing that kind of detail abroad."
Liu said her husband, who recently took a less demanding role at the company, is still subject to travel restrictions as a state employee.
"He may no longer be a leader ... but he's not retired yet, so they won't let him have a passport," she said, adding that the government is likely worried that officials will contribute to capital outflows by taking their money with them. "When people leave China, so does their money," Liu said.
A recent op-ed in the state-backed Shenzhen Special Zone Daily warned that state employees "must not keep hold of his passport for the sake of his own convenience, and must not take chances and conceal his overseas travel itinerary."
"Unauthorized illegal travel abroad is not a trivial private matter, but a major public matter related to discipline ... and political consciousness," the Feb. 8, 2024, article said.
COMMENT – Nothing screams paranoia and desperation quite like collecting your citizens’ passports and restricting their ability to travel.
22. China's 'entrepreneurship for everyone' era ends as state sets agenda
Wataru Suzuki, Nikkei Asia, October 16, 2024
23. Chinese finance professionals switch careers as industry crackdown dims prospects
Samuel Shen and Selena Li, Reuters, October 16, 2024
24. McKinsey Revamps Its China Operations Amid New Risks
Yoko Kubota and Raffaele Huang, Wall Street Journal, October 17, 2024
McKinsey is overhauling its China business after cutting back on government-linked clients and reducing the unit’s workforce by nearly 500 people, about a third of the total.
To reduce security risks associated with doing business in China, the U.S.-based consulting firm has been separating its China operations from other global operations, people familiar with the matter said—a practice increasingly popular among multinational companies.
Western businesses with decades of experience in China—both McKinsey and those it advises—are facing some of their most challenging times because of geopolitical tensions and the slowing Chinese economy. McKinsey has been facing scrutiny in Washington over work linked to the Chinese government, while some Chinese clients have been shifting to local rivals.
Over the past two years, McKinsey’s workforce in Greater China, which includes Hong Kong and Taiwan, has shrunk by hundreds of employees, people familiar with the matter said.
COMMENT - Smart move McKinsey.
Environmental Harms
25. China Seeks Carbon Data from Ships as Trading Scheme Grows
Weilun Soon, Bloomberg, October 11, 2024
Authorities in China have started to ask some overseas shipowners to report on their carbon emissions, highlighting greater scrutiny of the industry as the regulatory framework shifts.
The requests for figures on voyages that service local ports affect some tanker and container-ship owners, according to people familiar with the matter, who asked not to be identified. The move follows the EU’s recent adoption of a carbon levy on vessels, and could help in China’s expansion of it.
COMMENT – Expect to see the PRC Government target foreign shipowners with these data requirements that will be used to discriminate against foreign shippers.
26. China's child policies will increase its future carbon emissions, researchers say
Phys.org, October 14, 2024
27. 'Illegal' Chinese Ships Trigger Coast Guard Response
Micah McCartney, Newsweek, October 11, 2024
South Korea has stepped up its enforcement of Chinese fishing operations within the U.S. ally's maritime zone.
The crackdown is in response to an anticipated uptick in these "illegal activities," Yonhap News Agency cited the South Korean coast guard's western regional headquarters as saying Thursday.
Autumn is a peak season for fishing in the Yellow Sea, known as the West Sea in Korea, and the agency pointed out fishing grounds appeared in waters off the southwestern coast earlier this month.
Seoul's maritime authorities said that from Wednesday afternoon, large numbers of Chinese vessels had been gathering near southwestern islands, including South Jeolla Province's Gageo Island, with some attempting to sail inter Korean waters without permission.
Foreign Interference and Coercion
28. VIDEO - Trudeau Accused of Allowing Beijing Interference in Canadian Politics
India Today, October 17, 2024
29. VIDEO – Is Trudeau's Diplomatic War with India A Smokescreen for Chinese Interference in Canadian Politics?
India Today, October 16, 2024
COMMENT – I think Indian media outlets are on to something… Trudeau is desperate to shift the narrative around foreign interference away from how the Chinese Communist Party assisted his Liberal Party during the 2019 and 2021 Canadian national elections to Indian “interference” in Canada.
It does appear that the Indian Government has sought to go after individuals in Canada and the United States, but the timing of the revelations about India’s actions seems designed to distract Canadian voters from the fact that Trudeau turned a blind eye to CCP interference… interference that helped him hold on to power as Prime Minister and his Liberal Party win seats in two national elections.
30. Five key takeaways from Prime Minister Justin Trudeau's testimony on foreign interference
Benjamin Lopez Steven, CBC News, October 16, 2024
Prime Minister Justin Trudeau testified at the public inquiry into foreign interference on Wednesday, describing what he says he knew about foreign attempts to meddle in Canadian politics and what led to his explosive claim in the House of Commons that India was behind the killing of Hardeep Singh Nijjar in June 2023.
His testimony spanned several hours and happened only days after the RCMP said Indian government agents were involved in crimes in Canada. Those allegations prompted both countries to expel six diplomats each and created a deeper rift in the diplomatic relationship.
Here are five key takeaways from Trudeau's testimony:
PM puts focus on Conservatives
Trudeau said that he has the names of Conservative parliamentarians who are involved in foreign interference — a claim that prompted a sharp rebuke from the Conservative Party.
The prime minister also said that he instructed the Canadian Security Intelligence Service (CSIS) to warn Conservative Leader Pierre Poilievre in order to protect the party's integrity.
"I have the names of a number of parliamentarians, former parliamentarians and/or candidates in the Conservative Party of Canada who are engaged, or at high risk of, or for whom there is clear intelligence around foreign interference," he said.
When questioned by Conservative Party lawyer Nando De Luca, Trudeau also said the names of Liberal parliamentarians and individuals from other parties are on the list of parliamentarians at risk of being compromised by foreign interference.
The term "parliamentarian" can refer to senators or members of the House of Commons.
Poilievre has so far resisted going through the security clearance process that the federal government has offered to him — a security clearance that would permit the Conservative leader to view the intelligence Trudeau referred to in his testimony.
COMMENT – In response to Prime Minister Trudeau’s testimony that he had a “list” of Conservative Party parliamentarians involved in foreign interference prompted the leader of the Conservatives (Pierre Poilievre) to release this letter:
Rather than confront foreign interference by the Chinese Communist Party, it appears that Prime Minister Trudeau tried to cover up the assistance his Party received during both the 2019 and 2021 national elections while trying to distract the Canadian public with denials and counteraccusations.
31. Ex-chief of staff to public safety minister denies stalling spy warrant approval
Global News, October 9, 2024
32. A 2021 Chinese interference analysis stalled with Trudeau security adviser
Alex Boutilier, Global News, October 7, 2024
A 2021 analysis of China’s foreign interference operations intended to spark discussion among senior government figures did not make it to Prime Minister Justin Trudeau or cabinet ministers, the Hogue commission heard Monday.
The report, produced by the Privy Council Office (PCO) and the Canadian Security Intelligence Service (CSIS) and delivered in January 2022, was stalled for months in the office of Trudeau’s then-national security adviser, Jody Thomas.
The foreign interference inquiry, overseen by Justice Marie-Josée Hogue, has heard repeatedly about the challenges of ensuring that vital intelligence reaches senior decision-makers.
As the nerve centre of government, PCO has a division called the Intelligence Assessment Secretariat, tasked with supporting the prime minister and their national security adviser digest intel from a variety of sources.
The 2021 analysis attempted to combine what CSIS knew about China’s operations in Canada, gleaned from roughly 100 separate intelligence reports, with trends observed in Beijing’s interventions overseas.
National security sources told Global News that the report made it to Trudeau and select cabinet ministers, allegations which the government broadly denied.
Martin Green, a former senior intelligence official with PCO, recommended to Thomas that the report be shared widely — to select senior bureaucrats and cabinet ministers, as well as within the security and intelligence community.
“There were some pretty dramatic issues that we were (facing), so foreign interference at that immediate juncture was not, I think, top of mind,” Green, who retired from PCO’s Intelligence Assessment Secretariat earlier this year, testified Monday.
“I raised the issue several times (with Thomas) thinking that it would still be good to have that conversation, so I can’t really speak to why it was not the subject of a (deputy ministers’) meeting or not … I can make the recommendation, but I can’t say, you know, you gotta go do this.”
Trudeau and his cabinet were eventually required to have that conversation — after the document was leaked to Global News and formed part of ongoing reporting into foreign interference operations in Canada.
Green previously told the commission that he remembered “feeling ill” when the document was leaked, and said it was “very problematic” that it was reported publicly.
The heavily-censored version of the report, released by Hogue’s foreign interference commission Monday, reveals little that a casual observer of the foreign interference file wouldn’t already know.
Namely, that the Chinese government is the most “significant” foreign interference threat to Canadian democracy, that Canada remains “highly vulnerable” to those operations, and that China’s activities are “sophisticated, persistent and multi-dimensional.”
33. Russia and China ramp up covert meddling in Georgian democracy
Hiroyuki Akita, Nikkei Asia, October 13, 2024
Despite massive casualties among his military, Russian President Vladimir Putin continues his invasion of Ukraine, yet the threat posed by Russia to neighboring countries extends beyond its firepower. Moscow engages in various covert operations, including intimidation and misinformation, to manipulate ex-Soviet states with weak democratic traditions.
Russia is not alone; China is also seeking to expand its influence among former Soviet satellites, using its economic clout to infiltrate their power centers. If the West allows the stealth campaigns of the Kremlin and Beijing to go unchecked, the tide of democracy in the former Soviet sphere will recede, increasing the sway of both Russia and China.
34. America v China: who controls Asia’s internet?
The Economist, October 8, 2024
35. A firehose of antisemitic disinformation from China is pointing at two Republican legislators
Jeremy B. Merrill, Aaron Schaffer and Naomi Nix, Washington Post, October 10, 2024
36. BBC head warns Russia, China filling space left by scaled back World Service with ‘unchallenged propaganda’
Hong Kong Free Press, October 15, 2024
37. Apple opens its ‘most extensive’ lab outside US in China amid fierce rivalry with Huawei
Iris Deng, South China Morning Post, October 11, 2024
The new facility in the Hetao Shenzhen-Hong Kong tech cooperation zone is one of several Apple research centres in China.
Apple has opened an applied research laboratory in the southern Chinese tech hub of Shenzhen, as the US giant bolsters it commitment to the world’s largest smartphone market amid heightened competition with domestic players, including Huawei Technologies.
The facility started operations on Thursday at the Shenzhen Park in Hetao, a cooperation zone developed under the directive of the central government to deepen the city’s tech partnerships with neighbouring Hong Kong, according to a report by state media People’s Daily.
Apple announced in March its plans to build a new Shenzhen lab, which the company said would boost its testing and research capabilities for its major products, including the iPhone, iPad and Vision Pro mixed-reality headset, and also serve to strengthen the firm’s collaboration with local partners.
COMMENT – Investors in Apple should be asking whether the company is capable of reducing its deep dependencies on the PRC… if not, the value of Apple should go down given the obvious risks the company faces.
Human Rights and Religious Persecution
38. China, Catholics Told “Honor Thy Father” Means “Honor the Communist Party”
Liu Mengyao, Bitter Winter, October 15, 2024
Gansu priests were trained this month to preach that “always being of one mind and one heart with the Party” is the proper way to recognize the CCP as the father of the people.
“Honor Thy Father” is a main commandment for Christians. It was discussed earlier this month at something called “Party-Oriented Sermon Exchange Activity” for priests of the government-controlled (and now Vatican-approved) Patriotic Catholic Church of the Gansu province, celebrating the 75th anniversary of the founding of the People’s Republic of China in October 1949.
120 priests and lay workers went through a training on how to prepare truly “Sinicized” sermons, and the theme was “Filial Piety in Chinese Culture and the Bible.”
Father Wu Binbin, a member of the Provincial Catholic Preaching Exchange Activity Propaganda Team, offered the keynote speech. He noted that both Chinese and Catholic culture are very much about respecting the elders. Surely, those who are of old age are included, and a good way of honoring them is to “actively support the social pension work of government departments,” Father Wu said.
However, he insisted that the notion of the “elders” goes beyond biological connections. Broadening the idea of the “elders,” the Chinese Communist Party (CCP) and its leaders should also be acknowledged as “elders.” “Honor Thy Father” also means “Honor the CCP,” which is the father of the Chinese Catholics and of all Chinese people.
The sermons on the theme “Honor Thy Father” should thus teach Catholics to “guide the church members and religious people to firmly support the leadership of the Chinese Communist Party, unswervingly listen to the Party, feel the Party’s grace, and follow the Party, always be of one mind and one heart with the Party, and walk in the same direction with the Party,” Wu said.
As one of the lay Catholic workers in attendance told “Bitter Winter,” “We do not see any progress after the Vatican-China deal of 2018. We are told that we should preach more and more loyalty to the Party. What about loyalty to the Church and the Pope?”
COMMENT – As far as I can tell, the Vatican seems to be A-Okay with this.
39. China: Free ‘Bridge Man’ Protester
Human Rights Watch, October 11, 2024
Peng Lifa, Who Sparked ‘White Paper’ Protests, Forcibly Disappeared for 2 Years.
Chinese authorities should immediately release the man who unfurled banners critical of Chinese President Xi Jinping and the draconian “Zero-Covid” policy on Beijing’s Sitong Bridge two years ago, Human Rights Watch said today.
The authorities have not released information about the protester’s identity, though many in China believe that his name is Peng Lifa (彭立发, also known as Peng Zaizhou [彭载舟]), age 50. There are also unverified reports that some of his family members may have been put under house arrest.
“The Chinese government may have taken away the ‘Bridge Man,’ but his arrest ignited widespread support for a free and democratic China,” said Maya Wang, associate China director at Human Rights Watch. “Two years since Peng Lifa was taken into police custody and forcibly disappeared, his message continues to resonate.”
On October 13, 2022, a man in a construction outfit unfurled two banners on Sitong Bridge in Haidian district in Beijing. One read: “We want food not Covid testing; we want freedom not lockdowns; we want dignity not lies. We want reform not the Cultural Revolution; we want to vote not a leader; we are citizens not slaves.” And another read: “Go on strike, depose the traitorous dictator Xi Jinping.” The police immediately took him away and he has not been seen since.
Under international human rights law, government authorities commit an enforced disappearance when they refuse to acknowledge the arrest or detention of someone, and provide no information on the person’s fate or whereabouts with the aim of removing them from the protection of the law.
Peng’s protest was rare in a country where police closely monitor all public spaces and dissidents. Control was especially tight in the capital ahead of the Chinese Communist Party’s 20th National Congress at the time of the protest. While authorities quickly censored all news about it, Peng’s messages nonetheless spread.
Peng Lifa’s banner from October 14, 2022 hanging from the Sitong Bridge in Beijing.
COMMENT - Yet another reminder that there are brave Chinese citizens who are willing to speak truth to power.
40. David Lammy urged to raise human rights concerns on China trip
Eleni Courea, The Guardian, October 16, 2024
David Lammy must “engage with China as it really is under the leadership of Xi Jinping” and raise human rights concerns during his trip to the country, UK parliamentarians who have been hit with sanctions by Beijing have said.
The foreign secretary is expected to hold high-level meetings in China this week. The visit forms part of an effort by Labour to improve relations with China after they deteriorated under successive Conservative governments. Rachel Reeves, the chancellor, plans to travel to the country next year and restart high-level economic dialogue.
The rapprochement is controversial because of human rights and security concerns about China, including its treatment of the Uyghur Muslim minority in Xinjiang and crackdown on democratic freedoms in Hong Kong.
In a letter to Lammy on Tuesday, the group of parliamentarians wrote that “Beijing is testing the UK’s resolve [and] seeking to establish new parameters for engagement”.
Beijing imposed sanctions on the group, which includes the Labour peer Helena Kennedy, in 2021 for criticising its human rights record in Xinjiang.
In their letter, the parliamentarians urge Lammy to raise the case of political prisoners in Hong Kong, including the British citizen Jimmy Lai, and the “heinous treatment” of the Uyghur community.
They call on the foreign secretary to express “deep concern” about China’s “unilateral alteration of the status quo” in Taiwan. The Chinese military held drills around Taiwan on Monday in what it called a “stern warning” against those seeking “independence” for the self-ruled island.
The Guardian reported last week that the Foreign Office had asked that a visit to the UK parliament by Tsai Ing-wen, the former Taiwanese president, be delayed so as not to anger China before Lammy’s trip. Tsai is travelling to Prague and Brussels on her first international tour since leaving office.
COMMENT – Looks like the Labour Party is falling back into old habits.
41. EU condemns China for human rights violations against Uyghurs
Lyndon Lee, Voice of America, October 11, 2024
The European Parliament overwhelmingly passed an emergency resolution Thursday condemning the Chinese government's persecution of Uyghurs and urging China to immediately and unconditionally release detainees, including Uyghur economist Ilham Tohti and Gulshan Abbas.
The resolution is fueled by widespread concern from the international community and highlights its continued concern about the human rights situation in Xinjiang.
The resolution, which was adopted by a vote of 540 in favor, 23 against and 47 abstentions, strongly condemns China's “repression and targeting of Uyghurs with abusive policies, including intense surveillance, forced labor, sterilization, birth prevention measures and the destruction of Uyghur identity, which amount to crimes against humanity and a serious risk of genocide.”
The European Parliament's resolution pays attention to the cases of two high-profile Uyghurs. Ilham Tohti, a 54-year-old economist, was sentenced to life in prison in 2014 on charges of "separatism." Tohti has long worked to promote dialogue between Uyghurs and the Han Chinese and is considered a moderate intellectual. In 2019, the European Parliament awarded him the Sakharov Prize for Freedom of Thought for his efforts to uphold human rights.
42. US bans new types of goods from China over allegations of forced labor
Didi Tang, Associated Press, October 2, 2024
43. Zhu Bin: Christian School Founder Detained in Beijing
Meng Yaoting, Bitter Winter, October 8, 2024
44. Tibet, Monk Sentenced to 18 Months for Sharing Dalai Lama Teachings on WeChat
Lopsang Gurung, Bitter Winter, October 4, 2024
Xiangba Qupei was punished for “divulging sensitive information”—in fact, thoughts of His Holiness.
Last week, relatives of a Tibetan monk called Xiangba Qupei from Rebgong (Ch. Tongren) received confirmation that he had been sentenced to 18 months of jail last August. The family had not been previously informed of the trial, nor of the decision. Rebgong is part of historical Tibet, although the Chinese made it the capital of the so-called Huangnan Tibetan Autonomous Prefecture in Qinghai province.
The monk’s “crime” was sharing the Dalai Lama’s teachings on WeChat Moment. He is currently detained in Xining City, Qinghai’s capital.
Xiangba Qupei was arrested at his monastery in mid-March for allegedly “sharing sensitive information” on March 10, Tibet’s uprising anniversary. The “sensitibe infirmation” was in fact teachings by His Holiness.
Detained in a Rebgong prison since March 22, he was sentenced to 18 months in August and moved to Xining on September 22 to serve his term. Not only did Chinese authorities not inform his family about the arrest and prosecution, they threatened them against inquiring about his situation. Voice of Tibet had reported on the sentence against him, which has now been confirmed.
Xiangba Qupei was monitored by Chinese Communist Party authorities for years, especially around Tibetan Uprising Day. He went to India in 1986, studied at Dharamsala Debate College, and returned to Tibet in 1996. Since then, he has practiced Buddhism in Rebgong monasteries, gone on pilgrimages, and taught English and Tibetan calligraphy to other monks.
45. China's workers complain of being 'beasts of burden'
Wang Yun, Radio Free Asia, October 6, 2024
46. Free Unjustly Convicted Uyghur Filmmaker
Human Rights Watch, October 17, 2024
The Chinese authorities should immediately release the Uyghur filmmaker and director Ikram Nurmehmet, who was sentenced to six and a half years in prison after being convicted on politically motivated charges, Human Rights Watch said today.
Xinjiang’s Urumqi Intermediate People’s Court convicted Nurmehmet, 33, in January 2024 for “actively participating in terrorist activities” while he was studying in Turkey between 2010 and 2016, knowledgeable sources told Human Rights Watch. During the trial, Nurmehmet said the authorities held him in a dark room for 20 days and tortured him until he gave a false confession, which was the sole basis for his conviction along with his possession of a Turkish residency permit. Although his parents and wife attended the trial, the authorities did not inform his family about his conviction for more than half a year, on August 23.
“More than seven years after the Chinese government began its abusive ‘Strike Hard Campaign’ in Xinjiang, the authorities continue to prosecute young Uyghurs like Ikram Nurmehmet on politically motivated charges,” said Maya Wang, associate China director at Human Rights Watch. “Ikram Nurmehmet and the hundreds of thousands of Uyghurs who have been wrongfully imprisoned should be immediately freed.”
Nurmehmet is currently being held in Urumqi No. 1 Detention Center. Four other Uyghurs whose identities are unknown were also convicted in connection to Nurmehmet’s case.
China’s Criminal Procedure Law prohibits the use of evidence obtained through torture. Yet in practice, judges rarely throw out such tainted evidence and almost never acquit defendants who were tortured to confess. During political campaigns targeting particular types of crime, including the “Strike Hard Campaign against Terrorism and Extremism” in the Uyghur region since late 2016, the police, procuratorate, and the judiciary are often under immense pressure to cooperate, disregard the rules, and use torture to further prosecutions.
During the Strike Hard Campaign, the Xinjiang authorities have made foreign ties a punishable offense, targeting Uyghurs and other Turkic individuals with connections to an official list of “26 sensitive countries,” including Turkey and other Muslim majority nations. Uyghurs who have been to these countries, have family there, or otherwise communicate with people there, have been interrogated, detained, and often tried and imprisoned.
Industrial Policies and Economic Espionage
47. China Considering Higher Tariffs on Car Imports
Jiahui Huang, Wall Street Journal, October 17, 2024
China reiterated that it may raise tariffs on imported internal-combustion-engine cars with large engines sizes, after the European Union voted earlier this month to increase import duties on China-made electric vehicles.
The Ministry of Commerce is studying measures related to raising tariffs on imports of large-engine, fuel-powered cars, and will make a decision after considering relevant factors, ministry spokesperson He Yadong said at a Thursday press conference.
He added that there are significant disagreements between the China and the EU on the latter’s decision to move ahead with tariffs on Chinese EVs. China has invited EU officials to visit China for further negotiations, he added.
This isn’t the first time that Chinese authorities have raised the possibility of higher tariffs on imported cars. The commerce ministry in late August met with representatives from automakers and academic experts on the matter.
EU member states in early October voted to move ahead with additional tariffs of up to 45% on China-made EVs, which will apply for the next five years.
If China decides to levy higher tariffs on imported cars, that would affect German automakers the most, given the volume of German car imports, China Passenger Car Association president Dongshu Cui said.
The value of cars with an engine size of more than 2.5 liters imported from the EU in the first eight months of the year slid 13% from a year earlier to $10.2 billion, China Passenger Car Association data showed. The EU exported a total of 196,000 such cars to China in 2023, according to CPCA data.
“This could be more of a political move rather than having real impact on automakers,” CCB International analyst Qu Ke said, noting a current drop in Chinese car imports.
The additional EU duties on China-made cars range from 7.8% to 35.3%, on top of the existing standard 10% import tariff on all imported automobiles. The U.S. and Canada have imposed a 100% tariff on Chinese EV imports.
48. Growing asymmetry: Mapping the import dependencies in EU and US trade with China
François Chimits, Mercator Institute for China Studies, October 1, 2024
49. China engaging in ‘predatory’ resale of US LNG, report says
Brian Dabbs, E&E News, October 16, 2024
50. China’s Australia trade sees more EVs, green tech even as EU, US tariffs fly
Kandy Wong, South China Morning Post, October 16, 2024
51. China’s yuan is nowhere close to displacing the greenback
The Economist, October 14, 2024
52. Divided we stand: The EU votes on Chinese electric vehicle tariffs
Agathe Demarais, European Council on Foreign Relations, October 9, 2024
53. China and Russia Arctic Policy Convergence? Shifting Geopolitics in the North
Antonio Graceffo, Geopolitical Monitor, October 14, 2024
54. China’s Li Qiang calls for ‘rational’ views in talks with EU chief Michel as trade row simmers
Dewey Sim, South China Morning Post, October 11, 2024
Meeting on Asean forum sidelines makes little progress amid fears that intensifying disputes could erupt into trade war.
Chinese Premier Li Qiang on Friday said China hoped the European Union would “correctly view” its development and adopt “rational” policies towards the Asian giant as a trade row threatens to devolve into a trade war.
In a meeting with European Council President Charles Michel, Li said the international community expected China and the European bloc to push for healthy, stable and sustainable development of ties as the world faced rapid changes.
“China regards Europe as an important direction for China’s diplomacy and an important partner in promoting Chinese-style modernisation,” he was quoted by Chinese state news agency Xinhua as telling Michel.
COMMENT – I’m certain European leaders would welcome “rational” policies… but that starts with Chinese leaders like Premier Li Qiang recognizing the impacts of the PRC’s beggar thy neighbor policies and how countries are being compelled to protect themselves from Beijing’s harmful approach to trade and economic relations.
Demanding that other countries suffer from the fact that the PRC refuses to make “rational” economic reforms is disrespectful and will be rejected.
55. Behind Xi Jinping’s Pivot on Broad China Stimulus
Lingling Wei, Wall Street Journal, October 15, 2024
56. Chinese Automakers Display Force at Paris Auto Show
Melissa Edy and Liz Alderman, New York Times, October 15, 2024
57. China’s stocks cap weekly loss as caution prevails before finance minister’s briefing
Zhang Shidong, South China Morning Post, October 11, 2024
58. ‘China is not Cuba’s sugar daddy’: ties between communist nations weaken
Ed Augustin, Financial Times, October 13, 2024
COMMENT – Well the Chinese Communist Party has certainly learned one lesson from the collapse of the Soviet Union: don’t give money to a corrupt and failing Cuban Communist regime.
Here’s the latest on Cuba:
Power Outage Plunges All of Cuba Into Darkness (New York Times, October 18, 2024), “The Cuban government had just announced emergency measures to reduce electricity use — then the power went out across the entire nation.”
Cyber & Information Technology
59. TikTok Sets Aside $1 Billion To Cover Future European Data Privacy Fines
Iain Martin, Forbes, October 11, 2024
60. US Weighs Capping Exports of AI Chips from Nvidia and AMD to Some Countries
Mackenzie Hawkins, Bloomberg, October 14, 2024
61. TikTok executives know about app’s effect on teens, lawsuit documents allege
Bobby Allyn, Sylvia Goodman, and Dara Kerr, National Public Radio, October 11, 2024
62. The American Who Waged a Tech War on China
Issie Lapowsky, Wired, October 10, 2024
63. Chinese think tank advises data centers to stick with Nvidia AI GPUs — homegrown Chinese GPUs suffer from 'high costs' and 'complex engineering'
Hassam Nasir, Tom’s Hardware, October 13, 2024
Military and Security Threats
64. Cyber criminals are increasingly helping Russia and China target the US and allies, Microsoft says
David Klepper, Associated Press, October 15, 2024
65. Exclusive: Act on 'Problematic' Chinese Arctic Research, US Officials Urged
Didi Kirsten Tatlow, Newsweek, October 17, 2024
U.S. lawmakers from both sides of the aisle have asked the government to do more to address scientific research by China in the territory of America's Arctic allies that has potential military applications, Newsweek has learned.
In a letter sent on Wednesday to Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin, a bipartisan congressional committee said the People's Republic of China was seeking influence and access in the strategically important Arctic region, and that it was expanding its "dual-use"—mixed military and civilian—research, including in NATO allies Norway and Iceland, in ways that may challenge U.S. security.
Newsweek reported in July that a Chinese institute in Svalbard archipelago in the Norwegian Arctic was carrying out potential dual-use research including in the areas of radar and missile tracking, that the institute was using a name that masked its role in China's military industry, and that it was undertaking classified research and working with the Chinese People's Liberation Army (PLA).
"In recent years, the PRC has increased its effort to seek access to and exert influence in the Arctic, including expanding dual civil-military research efforts in the region," says the letter sent by the House Select Committee on the Chinese Communist Party and seen exclusively by Newsweek.
66. Letter to Secretary of State and Secretary of Defense on the PRC’s dual-use Arctic Research
Select Committee of the CCP, October 16, 2024
67. Chinese Cyber Agency Rejects US Hacking Claims in New Report
Bloomberg, October 14, 2024
68. The US wakes up to China’s latest threat – big ships
Selwyn Parker, Lowy Institute, October 11, 2024
69. Statement From Pentagon Press Secretary Maj. Gen. Pat Ryder on PRC Military Drills Near Taiwan
U.S. Department of Defense, October 14, 2024
70. Chinese chemical manufacturer is targeted by federal prosecutors trying to stop flow of fentanyl
Noah Goldberg, Los Angeles Times, October 16, 2024
71. U.S. Officials Race to Understand Severity of China’s Salt Typhoon Hacks
Dustin Volz and Drew FitzGerald, Wall Street Journal, October 11, 2024
72. Scale of Chinese Spying Overwhelms Western Governments
Max Colchester and Daniel Michaels, Wall Street Journal, October 14, 2024
73. With Jets and Ships, China is Honing Its Ability to Choke Taiwan
David Pierson and Amy Chang Chien, New York Times, October 16, 2024
74. Nuclear-War Risks Rise Again, Stoked by Global Conflicts
Laurence Norman, Wall Street Journal, October 16, 2024
75. ‘Q Day’ Is Coming. It’s Time to Worry About Quantum Security.
Steven Rosenbush, Wall Street Journal, October 9, 2024
One Belt, One Road Strategy
76. Value-added and value lost: The macroeconomic limits of China’s Africa strategy
Theodore Murphy, European Council on Foreign Relations, October 4, 2024
77. China-led regional group calls for countering protectionist policies, sanctions
Gibran Naiyyar Peshimam, Reuters, October 16, 2024
78. Congo Wants to Pivot Away from China’s Dominance Over Its Mining
Michael J Kavanagh and William Clowes, Bloomberg, October 9, 2024
79. Pakistan’s provinces demand electricity equity
Amit Bhandari, Gateway House, October 16, 2024
In the backdrop of the Shanghai Cooperation Organisation summit being held in Islamabad this week, is a restive state and peoples. Three high profile attacks in just a week were followed by a show of defiance from the large Pashtun community, demanding political equity – but also electricity concessions.
The military has been stepping in to resolve commercial power deals, underlining the criticality of this issue in Pakistan.
COMMENT – To see how countries might perform under the tutelage of the PRC, we should look no further than Pakistan, China’s “all weather friend.”
Given the track record of countries like Pakistan and Cambodia (another long-time satellite of the PRC), leaders from developing economies should probably ask themselves: Has there ever been a country that has risen to economic prosperity under the wing of the PRC?
I can’t think of one.
Opinion Pieces
80. How America Can Regain Its Edge in Great-Power Competition
Nadia Schadlow, Foreign Affairs, October 9, 2024
81. Desperate China is gearing up for a war with the West
Matthew Henderson, The Telegraph, October 10, 2024
The weakening economic situation is leading Xi towards aggressive trade measures
At the Chinese Communist Party (CCP) Plenum in July, Xi Jinping outlined a major programme for reviving the economy.
A mainly monetary stimulus package intended to achieve this was announced on 24 September, just ahead of the National Day Golden Week holidays, triggering a surge in China’s stock market. But the holidays showed little sign that consumer confidence is recovering. Disappointment at no further fiscal stimulus measures since the holidays has wiped most of the recent gains off China shares.
The Chinese economy remains mired in troubles largely of its own making. Xi Jinping has not delivered the breakthrough in domestic confidence that is desperately needed. Instead he has doubled down on repressive, anti-entrepreneurial controls at home, and has increased China’s sanctions and tariff burden by crude aggression and coercion overseas. Where is all this leading, and what are the implications not only for global prosperity, but also peace and security?
It helps to be clear that despite continual emphasis on “reform and opening up”, Xi has no real interest in either. An instinctive Marxist-Leninist and would-be autarch of a repressive Party-State, he mistrusts anything that might empower private enterprise at the cost of Party authority.
Xi also fears the spread of liberalism akin to what the CCP believes led to the collapse of the Soviet Union. Since this distorted logic has led to intractable increases in ills such as youth unemployment and other quantitative indications of deep-rooted malaise, Xi now bans publication of statistics revealing policy failure. Instead he has come up with an empty formula he calls “high-quality growth”, wreathed in aspirations about “balance” and “sustainability”.
Like his equally tenuous notion of a “dual cycle economy” where China becomes more self-sufficient while seizing an international lead in exports of new technology, this euphemism merely highlights his lack of a deliverable, robust vision for renewed growth and prosperity.
82. The Double-Edged Sword of Semiconductor Export Controls
Jack Whitney, Matthew Schleich, and William Alan Reinsch, CSIS, October 4, 2024
U.S. policymakers are increasingly leveraging export controls on advanced semiconductors and related technologies to constrain China’s development of military and dual-use capabilities. But notably, expanding U.S. trade restrictions have heightened political and commercial pressure on Chinese semiconductor companies to wean off U.S. technology wherever possible, with potential negative impacts for U.S. technological leadership. This report, the first in a series of four, explains how export controls have accelerated and scaled Chinese efforts to design out (i.e., adopt alternative sources for U.S. technologies) and design around (i.e., innovate new technologies that bypass U.S. technologies altogether), ultimately facilitating a shift of global semiconductor supply chains away from the United States.
This report describes how the design-out and design-around strategies jeopardize U.S. economic and national security due to the diversion of sales and innovation to China and other nations’ technology champions. The report then describes Chinese efforts to develop advanced packaging capabilities to “leapfrog” U.S. and allies’ leadership in leading-edge chip design and manufacturing. It is argued that advanced packaging provides a key example of the design-around trend and threatens to shift the balance of U.S.-China competition in critical technologies.
The report concludes with emphasizing the importance and challenges of greater multilateralization as well as potential avenues to mitigate the negative impacts of controls on U.S. companies.
This report is made possible through generous support from Applied Materials and ONTO Innovation.
COMMENT – Hmmm… why would a company pay to have a think tank write a public report?
Oh yes, Applied Materials is one of the companies that stands to lose sales if the Commerce Department enforces export controls on semiconductor tool companies.
This is just corporate lobbying… great job CSIS!
83. A Second Trump Presidency Stands to Radically Remake World Trade
Greg Ip, Wall Street Journal, October 16, 2024
Tariffs could rise to highest levels since the 1930s. Anything from a global trade war to a U.S.-led system against China could be the result.
In his first term as president, Donald Trump resurrected tariffs as a tool of economic diplomacy, regularly deploying them as a lever to extract new trade deals from other countries. The result was a world trading system with a bit more friction, but it remained largely intact.
If Trump carries out what he has described on the campaign trail, his potential second term would be radically different. More than just a tool for negotiation, higher tariffs would be an end unto themselves. By one estimate, tariffs could reach their highest level since the 1930s.
In the short run, some prices in the U.S. would rise, and growth might suffer as consumers and businesses adjust to the new taxes on imported goods. The long-term impact depends crucially on whether other countries retaliate, and how far Trump would be willing to negotiate. The outcome could be anything from an all-out trade war, to a new trading system among U.S. allies united by their collective frustration with China.
A new Trump term may assume that “the global trading system of the late 20th century is not sustainable,” said Oren Cass, founder of American Compass, a conservative think tank that is close to Trump advisers and backs Trump’s tariff plan. “The endgame here isn’t some kind of negotiation where we all get back to 1995,” when the World Trade Organization came into force. Rather, it’s a “fundamental rebalancing.”
The free trade consensus that prevailed from 1995 until Trump’s election in 2016 isn’t going to return even if Vice President Kamala Harris, the Democratic nominee, wins. She may add to the mix of tariffs imposed on China during Trump’s first term and manufacturing support overseen by President Biden. But these would represent incremental changes, whereas a re-elected Trump could fundamentally remake the world trading system.
Trump’s plans remain shrouded in uncertainty. He has called for an across-the-board tariff of 10%, later suggested 10% to 20%, and at least once even said 50% to 200%.
He has proposed a tariff of 60% on goods from China, or maybe more. He has also proposed reciprocity, or U.S. tariffs that match those of its partners. That should spare Mexico and Canada, which under the United States-Mexico-Canada Agreement negotiated in Trump’s first term don’t charge tariffs on the U.S. But Trump has separately said autos from Mexico would face tariffs of 100%. Mexico imposes no tariffs on U.S.-made autos.
In short, no one knows what Trump has in mind.
COMMENT - Another great piece of analysis from Greg Ip.
84. The coming polar war
Pippa Malmgren, UnHerd, October 10, 2024
85. The US Can’t Stay ‘Ambiguous’ in the Taiwan Strait
Andreas Kluth, Bloomberg, October 16, 2024
86. TikTok v. Garland Oral Argument: Did TikTok Admit It Doesn’t Have First Amendment Rights?
Joel Thayer, Federalist Society, October 9, 2024
87. Exploding pagers and spy chips: the rising risk of hardware tampering
Chris Miller, Financial Times, October 7, 2024
88. How the U.S. Air Force Can Reclaim the Skies
Roger Wicker and Eric Schmitt, Wall Street Journal, October 13, 2024
89. China’s overcapacity could enable a green Marshall Plan
Huang Yiping, South China Morning Post, October 16, 2024
90. China is trying to fix its economy — except the real problem
Keith B. Richburg, Washington Post, October 16, 2024
91. China Is Turning Japanese
Andy Kessler, Wall Street Journal, October 13, 2024
92. China’s economic ills are serious but not incurable
Martin Wolf, Financial Times, October 15, 2024
Unfortunately, policymakers have made things worse by resorting to temporary palliatives.
Need China turn into Japan? No. Might it turn into Japan? Yes.
Moreover, the longer it waits to tackle its ailments, the more likely it is to fall seriously ill, with slow growth and chronic deflationary pressure. Some outside analysts believe this is inevitable. But wanting to believe something does not make it true. China’s disease is not incurable. But it is serious.
It is vital to distinguish causes from symptoms, before seeking the cure. Because Chinese policymakers have refused to recognise the nature of the disease, they do not cure it. Over time, they have made it worse, by resorting to temporary palliatives. That happened to Japan in the 1980s and 1990s and has been happening to China in the past two decades. But China retains important strengths. It can still avoid stagnation.
The Chinese government has now announced monetary and fiscal stimulus. That was predictable. It is what, willy-nilly, Japan needed to do. It is also why Japan has had near-zero interest rates for three decades and its net public debt is 159 per cent of GDP. Just as is true of China’s policies now, this was the result of an underlying condition of “underconsumption”, or structurally deficient demand. Given that condition, demand needs to be stoked. Huge property bubbles are a feature of such economies, not a bug, as is the desperate need to intervene manically when they burst.
Between 2000 and 2024, China’s gross national savings averaged 45 per cent of GDP and Japan’s averaged 28 per cent. Meanwhile, those of the US averaged only 18 per cent. When investment opportunities are superb, these high savings rates can finance superfast growth. In China, as with Japan, the high savings rates financed incredibly fast growth until the early 2000s. Yet after a long period of such growth, the supply of high-return investments inevitably declines. So investment weakens, as does demand. What was a strength turns into a weakness.
One solution, taken by both Japan and China, was to run a huge current account surplus, alongside the high investment. But, in both cases, this encountered external resistance, notably from the US — in the 1980s, for Japan, and in the 2010s, for China. In both cases, monetary policy was loosened, credit exploded and a huge boom in real estate was unleashed, again in the 1980s in Japan and the 2010s in China. This rapid growth of credit-fuelled investment in real estate became the new engine of demand. According to a recent paper for China Leadership Monitor by Logan Wright of Rhodium Group: “Property construction represented around 23-27 per cent of GDP from 2011 to 2021.” If so, it absorbed about half of China’s savings.
COMMENT – I agree with Martin: “it is vital to distinguish causes from symptoms, before seeking the cure.”
The problem with Martin’s analysis is that he pretends that China’s ills are economic… they aren’t, China’s economic problems are symptoms as well… China’s ills are political.
Chinese Communist Party leaders “could” do the things Martin points out… if they weren’t in the Chinese Communist Party.