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Quote from Huawei’s Senior VP – “Rely on Comrades on the Hidden Fronts to Take the Risks”

Overseas social networks recently circulated a speech that Huawei’s Senior Vice President, Chen Lifang, delivered in April, earlier this year, at a meeting with the company’s new employees. In one sentence, she mentioned “relying on comrades on the hidden fronts to take the risks” to obtain certain technologies on which the U.S. has imposed sanctions.

The quote was published on the Snowball’s (xueqiu) website, and other overseas websites carried it as well. The Senior Vice President cut to the chase at the meeting. “Why do we have to firmly study from the United States? How much do you understand about the real American manufacturing?” She gave examples of technologies on which China is still falling behind after 30 years of hard work. She said that in the field of composite materials, the process data accumulated by DuPont is more than 25 times what China has collected. In the field of turbofan engines, the number of materials and process tests completed in China is only 5 percent of what GE has done.

Chen expressed the belief that a long list of equipment, including smart grid advanced measuring instruments, material analysis precision testing instruments, mechanical performance testing equipment, new types of non-destructive testing equipment, environmental and safety testing instruments, and special defense testing instruments, all rely on imports. “For those technologies that are embargoed according to the Wassenaar Agreement (export controls for conventional weapons and sensitive dual-use goods and technologies), we can only rely on comrades working on the hidden fronts to take the risks to obtain them.”

She also said that as for equipment such as high-reliability and sensitive sensors, new composites, optical fibers, MEMS, biosensors, high-end (especially military-grade) electronic devices and variable frequency speed control devices, we can only rely on special means of importing goods to acquire them.

Chen did not clarify the term “hidden fronts” and the “special means of importing goods.”

Source: Radio France International, December 29, 2018
http://rfi.my/3VWd.T

Briefings | | |   Defense/Military

China’s Home Vacancy Rate Is over 20 Percent

On December 21, China’s Southwestern University of Finance and Economics (SWUFE) released a “2017 China Urban Home Vacancy Analysis” report. The report sampled over 40,000 households in 364 districts or county-level cities in 29 provinces.

The report shows that the home vacancy rates in China’s urban areas were 18.4 percent, 19.5 percent, 20.6 percent and 21.4 percent in 2011, 2013, 2015 and 2017 respectively. Its current vacancy rate is only behind Spain (28.3 percent) and Italy (22.7 percent). It is higher than the U.S. and most European countries.

Gan Li, SWUFE’s director of the Center for Chinese Family Finance Research, said that, in recent years, China’s home vacancy rate has received a lot of attention and is considered to be a key factor in judging the trend of the housing market. Yan Yuejin, a researcher at a housing think tank, said that a vacancy rate of over 20 percent indicates that the speculative investment in housing is high and that housing idleness is high.

Buying a house is considered an important means of property ownership. However, the report shows that families with vacant houses face higher financial risks. In 2017, 32.2 percent of households with vacant homes had housing liabilities, compared with 17.3 percent of households with no vacant homes.

Source: Central News Agency, December 22, 2018
https://www.cna.com.tw/news/acn/201812220223.aspx

Briefings | | |   Economy/Resources

“Christmas is a Shame for the Chinese,” a Middle School Principal Told the Students

In recent years, the Chinese government has been boycotting Christmas as a holiday. On December 24, a secondary school in Anhui Province told the students to “resist the Western holidays and start with myself.” The school principal also gave a speech entitled “Christmas is a shame for the Chinese.”

At the ceremony of the 125th anniversary of Mao Zedong’s birth, the school got one student representative to deliver a speech entitled “The Great Leader Chairman Mao.” The official Weibo account of the local Si County released important news about an event. The title was, “Resist Western Holidays and Start with Myself.”

This release mentioned that, in recent years, “foreign holidays” such as Christmas have been popular among elementary and secondary school students. Some young students “follow the trend and respect the foreign holidays. However, this runs against the school’s patriotic traditional culture education.” The release said that this year is the 125th anniversary of Mao Zedong’s birth. At this “special moment,” in order to further help students “to establish a correct viewpoint on life and values, and to improve students’ abilities to distinguish between right and wrong,” the middle school at Si County used the flag-raising ceremony to give the students an education in “resisting the Western holidays and starting with myself.”

The school principal delivered a speech titled, “Christmas is a shame for the Chinese.” He said that in 1860 “Christian followers of the British and French allied forces invaded our country and attacked and looted Beijing.” He added that in 1900, during the Siege of the International Legations, “Christians killed our people, leaving exposed bodies on the streets. Christians insulted our women.”

The principal also said that after the allied forces invaded China, “on the day before their Christmas Day, that is, December 24, they ran competitions on murder, arson, and robbery.” “These utterly conscienceless religious followers prayed to the Lord Jesus so that the Lord would bless them so they could kill people without sin.”

Source: Central News Agency, December 25, 2018
https://www.cna.com.tw/news/acn/201812250328.aspx

Briefings | | |   Government/Politics

Chinese Hawk Admiral: Strike at What the U.S. Fears

Luo Yuan, rear admiral in the People’s Liberation Army Navy, the deputy secretary-general of the Chinese Academy of Military Sciences, and a well-known hawk, was invited to attend a meeting in Shenzhen on December 20 and delivered a speech regarding the current Sino–U.S. relationship.

Luo Yuan claimed that the US-China trade war “is definitely not a simple economic and trade friction” but an “important strategic issue.” The origin of the conflict is that “the U.S. national strategy has changed.” In the United States, there are many differences between the two parties, between the House and Senate, and among the White House, the Department of Defense, and the Department of State. The only consensus they have is the China issue.

In his speech, Luo Yuan strongly advocated that China should respond with “asymmetric counterattacks.” That is, “use my strength to attack the enemy’s shortcomings. Strike at what the enemy fears. Focus our development on the enemy’s soft spot.”

Luo Yuan said that the “five fundamental foundations of the United States” are the military, the dollar, talent, the ballot, and the creation of enemies. Among them, in the military, “the United States is most afraid of death.” Luo suggested using a missile to sink one U.S. ship and cause 5,000 casualties, and two with 10,000 casualties. “Let’s see if the U.S. is afraid or not.”

On the ballot, Luo Yuan claimed that playing the U.S. soybeans card would particularly hurt Iowa, a stronghold of the Trump campaign. Targeting American made cars would make GM, Ford, and Chrysler “second-rate companies.” Luo also suggested playing the airplane card, as one out of every three Boeing’s 737 passenger jets are sold to China. These three items are China’s “bargaining chips with the United States.”

Source: Central News Agency, December 23, 2018
https://www.cna.com.tw/news/acn/201812230157.aspx

Briefings | | |   US-China Relations

Foreign Ministry: Russia Does Not Rule Out Joint Projects with China in Africa

At an interview with Sputnik News on December 18, Kemarsky Andrei Vadimovich, Head of the African Department of the Russian Foreign Ministry, stated that Russia does not rule out the emergence of prerequisites for joint projects with China in Africa.

Kemarsky expressed that the volume of Chinese cooperation with African countries is much greater than the Russian trade and economic cooperation with the continent.

“We are interested in sharing the experience of cooperation with Africans. There is a lot to learn from Chinese partners. In turn, China seems to be interested in our cooperation with Africa, in particular in the field of science and technology, the promotion of high technologies, where we already have some good ideas. Some prerequisites for joint projects cannot be ruled out.”

Source: Sputnik News, December 18, 2018
http://sputniknews.cn/politics/201812181027142092/

Briefings | | |   Geo-Strategic Trend

UK Think Tank: China A Key Supplier of Armed Drones to the Middle East

On Monday December 17, 2018, a UK defense think tank, The Royal United Services Institute (RUSI) published a report, “Armed Drones in the Middle East, Proliferation and Norms in the Region.” A key finding of the report was that, “despite the selective drone export policy that the U.S. upholds, over the past few years, several countries across the Middle East (Jordan, Iraq, Saudi Arabia, and the UAE) have acquired armed drones either by purchasing them from China or (Israel, Iran, and Turkey) by building them domestically.”

“China has often been described as a no-questions-asked exporter of drones, a country that is ‘less encumbered by human rights considerations over its sales of drones.’ The country is not a member of the Missile Technology Control Regime (MTCR – – an informal and voluntary partnership among 35 countries to prevent the proliferation of missile and unmanned aerial vehicle technology capable of carrying above 500 kg payload for more than 300 km.).”

“Beijing has capitalized on a gap created in the market. Over the past few years, it has supplied armed drones to several countries that are not authorized to purchase them from the US, and at a dramatically cheaper price.”

The report states, “It remains to be seen whether and how the loosening of restrictions that the current U.S. administration has imposed on the exportation of armed drones will alter the dynamics in the region. Nonetheless, the proliferation of armed UAVs (Unmanned Aerial Vehicles) in the Middle East is unlikely to stop and could, in fact, even accelerate, either through domestic production or through reliance on external suppliers, such as Beijing.”

In recent years, China’s UAV manufacturing technology has improved rapidly, causing widespread concern in the international community. In November, the official Chinese news agency quoted Lei Qiang, a chief drone pilot of the Aviation Industry Corporation of China (AVIC) who stated that, although the Chinese drone started late, it has developed rapidly in recent years. Both technology and production have seen great improvement. China’s “UAV development ranks among the world’s top echelons.”

Source: Royal United Services Institute, December 17, 2018
https://www.rusi.org/publication/occasional-papers/armed-drones-middle-east-proliferation-and-norms-region
Xinhua, November 7, 2018
http://www.xinhuanet.com/politics/2018-11/07/c_1123679748.htm

Briefings | | |   Geo-Strategic Trend

On Structural Reform: “What Cannot be Changed Will Not Be Changed”

At the Chinese Foreign Ministry’s regular press briefing on Tuesday, December 18, a reporter asked, “It is reported that Peter Navarro, Director of the White House National Trade Council, said that the purpose of the US-China trade negotiations is not only to ask China to buy more American products. More importantly, China needs structural reforms. What is your response?”

Spokesperson Hua Chunying started with a vague statement, “It is hoped that teams on both sides can earnestly implement the consensus reached at the meeting of the two heads of state … seeking mutually beneficial and win-win results.”

In response to Navarro’s, “China needs structural reforms” question, Hua then suggested that Navarro and “officials or people who hold these thoughts” should “carefully read and study” Xi Jinping’s speech at the celebration of the 40’s anniversary of China’s “Reform and Opening Up” policy earlier that day. Hua continued and repeated paragraphs from Xi’s speech.

In particular, he said, “To advance reform and development in a large country like China with more than 5,000 years of civilization and more than 1.3 billion people, there is no textbook that can be regarded as a golden rule and there is no one who can boss us around like a master teacher.”

“We will resolutely change what should be and can be changed and will resolutely not change what should not and cannot be changed.”

These words were much tougher than the 45-hour speech of Xi Jinping at the Trump-Xi meeting on December 1. At that meeting, Xi Jinping personally promised China would carry out structural reforms; Xi’s promise clearly played an important role in the agreement of the 90-day trade truce.

Source: Radio France International, December 18, 2018
http://rfi.my/3Wy.T

Briefings | | |   US-China Relations

Mao Yushi Does Not Want to Stay in the CCP; Communist Ideology Is the Past

Mao Yushi, born in 1929, is a Chinese economist. He co-founded the Unirule Institute of Economics, which promotes private property, freedom of choice, voluntary exchange, the rule of law, and other attributes of a free market economy. On May 4, 2012, Mao Yushi was awarded the Cato Institute’s Milton Friedman Prize for Advancing Liberty for his work in classical liberalism and free-market economics. In October 2014 Beijing began a “crackdown on dissent” and banned the publication of his works. In January 2017 they shut down his Web site.

In a recent interview with Voice of America, Mao said the main obstacle to China’s transition toward a market economy is the intervention of power. To solve these problems requires a clean political clarity, freedom of speech, supervision by ordinary people, and an emphasis on an independent judiciary.

Mao believes that in today’s era, the communist ideology is becoming part of the past. The world is changing in the direction of democracy, the rule of law, constitutionalism, and human rights. “Willingly or unwillingly, this is a matter of fact.”

“I have also thought it through. I don’t want to stay in the (CCP) party any more. Many intellectuals share this thought.” Mao added that top leaders and the middle class Chinese are sending their children to the United States. This shows the power of the historic trend.

Mao projects that the time before the advent of China’s political reforms “will not be long.” The change will come true.

Source: Central News Agency, December 15, 2018
https://www.cna.com.tw/news/acn/201812150102.aspx

Briefings | | |   Government/Politics