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China Seeks to Become Cyber Superpower

On March 21, the Chinese Communist Party’s mouthpiece People’s Daily published an article titled, “Make Steady Progress on the Path to Being a Cyber Superpower.”

A year ago, in March 2018, the Central Leading Group for Cybersecurity and Informatization was changed to the Central Cyberspace Affairs Commission. It is in charge of the top-level design and overall layout of China’s cyber industry and coordination and the supervision of major projects in the field.

At the National Cybersecurity and Informatization Work Conference held in April 2018, Xi Jinping gave a speech. “(Xi) emphasized that informatization has brought a rare opportunity for the Chinese nation. We must sharply grasp the historical opportunities of informatization, strengthen the positive propaganda over the Internet, safeguard cybersecurity, promote the breakthroughs in core cyber technologies, play the leading role of information technology in economic and social development, strengthen the military-civilian integration in the field, actively participate in international governance of cyberspace, and independently advance the development of a cyber superpower.”

The article named a list of technologies that China has been pushing forward, including facial recognition, the unmanned supermarket, VR online education, the unmanned cockpit, an artificial intelligence TV anchor, e-government, rural e-commerce, online education, a shared economy, smart travel, mobile payments, remote diagnosis, big data, and cloud computing.

As of November 2018, the number of AI related patent applications in China exceeded 144,000, accounting for 43.4 percent of the total global applications, ranking China as first in the world. From 1997 to 2018, the population of Internet users in China increased from 620,000 to 829 million, with the Internet penetration rate growing from 0.03 percent to 59.6 percent. The scale of online retail transactions now ranks No. 1 in the world. In the next 5 to 10 years, China plans to build the world’s largest IPv6 commercial application network, enabling the next generation of the Internet to be deeply integrated with the various fields of the economy and society.

Source: People’s Daily, March 21, 2019
http://paper.people.com.cn/rmrb/html/2019-03/21/nw.D110000renmrb_20190321_2-01.htm

Briefings | | |   Information/Technology

China’s Local Governments, Including Capital City of Beijing, Face Fiscal Challenges

For years, debt-ridden Chinese local governments have been facing lots of fiscal challenges. During the recent “Two Sessions,” Wu Sufang, the Beijing city government’s Finance Bureau Chief asked for the central government to step up its support. On March 7, Wu publicly stated that Beijing is facing a “slowdown in the growth of its fiscal revenue,” and 2019 is the “tightest year for a balanced budget.”

Wu added that the centrally-administered state-owned enterprises and their branches, the financial industry, and high-tech enterprises are relocating (outside of Beijing). This is having a major impact on Beijing’s industrial growth and fiscal revenue.

An article in the official media pointed out that the primary reason for the difficulty with Beijing’s finances is the “cleaning up of Beijing’s migrant population.” Starting in late 2017, Beijing launched campaigns to evict the migrant population. The decline in Beijing’s population has led to the relocation of industries such as manufacturing, retail, wholesale, transportation, and warehousing. The consequence was that the GDP and the tax revenue decreased.

The second reason is the housing market. The central government’s crackdown on real estate speculation affected Beijing’s official land sales revenue and real estate investments have declined. The third reason is China’s effort to cut taxes to keep the economy from further going south.

Source: Central News Agency, March 19, 2019
https://www.cna.com.tw/news/acn/201903190069.aspx

Briefings | | |   Economy/Resources

Nearly One-third of China’s Cities See Shrinking Population

The population of nearly one-third of China’s cities is shrinking. This is based on a study that the research team at Tsinghua University in Beijing conducted between 2013 and 2016. The South China Morning Post said in a report that, through satellite, researchers had monitored the light density of more than 3,300 Chinese cities and counties.

Long Ying, a city planning scholar at Tsinghua University, led this study. Long said that the population of 938 cities in China has shrunk. This was more than any other country in the world. One interpretation of the results could be that the economic engine of nearly one-third of China’s cities is slowing down. Official statistics show that China is facing huge economic and demographic challenges.

Source: Central News Agency, March 19, 2019
https://www.cna.com.tw/news/acn/201903190162.aspx

Briefings | | |   Economy/Resources

German Foreign Minister Warns against Being Naive When Dealing with China

In a discussion on the EU’s China strategy at the EU foreign ministers meeting in Brussels, the German Social Democratic Party’s Foreign Minister, Heiko Maas, said that, in order to defend its own interests and values, it is important for the EU to develop relations with China in a united fashion, instead of each country acting in its own way.

In view of China’s efforts to participate in important infrastructure projects in Europe, Maas warned that one should not be too naive. He said, of course, people should see that “China is also pursuing its strategic interests through economic policies.”

Maas’s remarks are a warning regarding China’s telecom giant Huawei’s participation in 5G construction. He may also be critical of Italy. Following some smaller EU economies, Rome announced that it will reach a framework agreement with China on the Belt and Road Initiative. Through this project, China hopes to open up trade routes to Europe and Africa. Rome, on the other hand, hopes to promote China’s investment in ports such as Genoa and Taranto.  Several EU countries criticized Rome’s move.

Source: Radio France International, March 18, 2019
http://rfi.my/3pHG.T

Briefings | | |   Geo-Strategic Trend

Apple Data Center in China’s Ulanqab Breaks Ground

The Apple (Ulanqab) Data Center Project held a groundbreaking ceremony on March 15 in Ulanqab, Inner Mongolia Autonomous Region. The data center is Apple’s first data center in northern China and will use 100 percent renewable energy. In February 2018, Ulanqab City and Apple held a ceremony for the signing of a cooperation agreement of the iCloud China North Data Center Project. The project is scheduled to be completed and put into operation in 2020.

The Chinese government believes that, in the future, Ulanqab will take advantage of the data center to promote the penetration of big data into a number of fields, and deeply integrate with various industries to form a big data and cloud computing ecology.

Source: China News Service, March 16, 2019
http://www.chinanews.com/cj/2019/03-16/8781614.shtml

Briefings | | |   Information/Technology

Qiushi Publishes Xi Jinping’ Article on Media Integration

Qiushi, The Chinese Communist Party’s flagship publication published an article that Xi Jinping wrote, titled, “Accelerate the Development of Media Integration and Build a Communication Pattern for Omnimedia.”

The article emphasized that it is an imperative issue to promote media integration and build the Omnimedia. It asked that the products of the information revolution be used to enlarge and strengthen the CCP’s official media.

The article proposed to build a batch of “influential and competitive” new mainstream media. The mainstream media are said to give priority to a mobile platform and should firmly occupy the “commanding heights” of public opinion to give ideological guidance. The article suggested using artificial intelligence in gathering news and in production, distribution, reception, and feedback.

Source: People’s Daily, March 16, 2019
http://paper.people.com.cn/rmrb/html/2019-03/16/nw.D110000renmrb_20190316_7-04.htm

Briefings | | |   Government/Politics

Guangdong Tops China’s “Stability Maintenance” Budget

The Hong Kong based newspaper Ming Pao published an article by Bruce Lui, a senior lecturer in the Department of Journalism at the Hong Kong Baptist University. The Chinese government’s “stability maintenance” expenditure last year was 1.37 trillion yuan (US$200 billion). It is expected that the actual cost of “stability maintenance” this year will exceed 1.4 trillion yuan.

China’s official defense budget for 2019 is 1.19 trillion yuan (US$180 billion). Lui said that the phenomenon of the stability maintenance expenditure continuously surpassing military spending shows whether the Beijing authorities purpose “is mainly to prevent people or to prevent foreign enemies.” Although most of the outsiders think that these maintenance funds are mostly used in Xinjiang, Tibet, and Sichuan, as a matter of fact, according to past years from the China Statistical Yearbook, the top seven provinces in year 2017 in terms of “stability maintenance” spending were Guangdong, Jiangsu, Xinjiang, Shandong, Zhejiang, Sichuan and Beijing, .

Guangdong spent around 121.4 billion yuan (US$18.05 billion), about 11 percent of the national total, more than twice that of Xinjiang province.

Lui’s article said that, after Chinese President Xi Jinping took office, Guangdong has always topped the stability maintenance spending, with an average annual growth rate of 13 percent. In recent years, it has increased at a rate of about 20 percent to 30 percent, much faster than the spending in Xinjiang.

He believes that Guangdong’s huge stability maintenance costs relate to Hong Kong. For years Hong Kong’s stability maintenance fund has come out of Guangdong. Intelligence, national security, military and research personnel from Shenzhen, Guangzhou, and even Zhuhai have been traveling to Hong Kong to collect all forms of intelligence and have launched operations. This has resulted in a constant increase in spending.

These personnel have exaggerated the situation in Hong Kong and the problem of Hong Kong independence so that they are able to obtain more manpower, material, and financial resources. “For those who can initiate a special project regarding Hong Kong independence, funds will be put in place.”

Lui pointed out, “Hong Kong people are deeply integrated into the Greater Bay Area. This area is not only an economic area, but also an important area for stability maintenance. Technology will keep you under surveillance without any trace.” “When Hong Kong’s people see the news of the Xinjiang Re-education Camp next time, can you think of some sort of “re-education camps” that are more expensive, invisible but more technologically advanced running around you?”

Source: Central News Agency, March 13, 2019
https://www.cna.com.tw/news/acn/201903130272.aspx

Briefings | | |   Social Stability

China’s Three-Self Churches Vow to Eliminate Foreign Influence

China’s Three Self Churches belong to the Chinese Communist Party-controlled Three Self Patriotic Movement. The three ‘Self’s are self-governance, self-support, self-propagation, and the rejection of foreigners’ influence on church leadership.

Rev. Xu Xiaohong, Chairman of the National Three Self Churches, gave a speech at a session of the Chinese People’s Political Consultative Conference, which started on March 5.

Xu said, “It must be recognized that the surname of Chinese churches is ‘China,’ not the ‘West.’ The anti-China forces in the West are trying to influence China’s social stability and even subvert China’s political power through (the use of) Christianity. They are doomed to fail. For individual black sheep that participate in the subversion of national security under the banner of Christianity, we firmly support that the state brings them to justice.”

Xu added that on this issue one needs “continuously to eliminate the ‘foreign imprints’ on China’s Christian churches,” and “continuously to carry forward and practice the core values of socialism.”

Estimates have been made that more than half of China’s 60 million Protestants worship in unregistered churches.

In response to Xu comments, Xu Yonghai, an elder of the Divine Love Fellowship of the Beijing Christian House Church, said that since the 1950’s, members of the Three Self Churches have been leading armed police to search for elders and pastors. “In 1995, the authorities arrested me. This was also due to the role of the Three Self Churches.”

Source: Central News Agency, March 12, 2019
https://www.cna.com.tw/news/acn/201903120052.aspx

Briefings | | |   Government/Politics