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Italy Contemplates Exiting “Belt and Road Initiative” as CCP Dispatches Delegation amidst Coercive Communications

Italy, the only G7 country participating in China’s “Belt and Road Initiative,” is contemplating its withdrawal from the program. To persuade the Italian government to renew the agreement, a delegation led by Liu Jianchao, head of the International Department of the Chinese Communist Party, is reportedly being sent to Rome. The main objective of Liu’s visit is to engage in a dialogue with Italy’s center-right governing coalition, particularly with Prime Minister Giorgia Meloni, in order to secure the renewal of the “Belt and Road Initiative” agreement by the end of the year.

Italy joined the initiative in 2019 under former Prime Minister Giuseppe Conte, but its economic benefits were considered to be below expectations. The current memorandum of understanding for cooperation is set to expire at the end of this year, and, if it is not renewed, it will become invalid. On multiple occasions, the Meloni government has expressed its inclination to withdraw from the initiative .

The Chinese Ambassador to Italy, Jia Guide, warned that if the “Belt and Road Initiative” is not renewed by the end of the year, it will pose a significant obstacle to bilateral exchanges. China is planning to send an important delegation, including ministers responsible for propaganda and customs, to visit Italy in the near future. However, if Italy withdraws from the initiative, China has threatened to suspend such exchanges and visits.

China has also hinted at possible economic and trade consequences for Italy if it chooses to withdraw from the “Belt and Road Initiative.” The official Chinese media outlet, the Global Times, has conveyed coercive messages in this regard.

Source: Radio Free Asia, June 23, 2023
https://www.rfa.org/mandarin/Xinwen/4-06232023105817.html

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: U.S. Nuclear Aircraft Carrier to Make Rare Stop in Vietnam

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the US aircraft carrier USS Ronald Reagan will dock in the central Vietnamese port city of Da Nang on June 25, for six days. The USS Ronald Reagan is the ninth ship of the Nimitz-class nuclear-powered aircraft carrier. While the situation in the South China Sea remains tense, it is very rare for a US warship to call at the port of this Southeast Asian country. The Ronald Reagan was the third US aircraft carrier to visit Vietnam after the Vietnam War. In 2020, to commemorate the 25th anniversary of the end of the Vietnam War, the fourth ship of the Nimitz-class nuclear-powered aircraft carrier, the USS Theodore Roosevelt, docked in Vietnam. China claims almost the entire South China Sea, which includes the exclusive economic zones of Vietnam and other countries in the region. The South China Sea is an important waterway for international routes. American aircraft carriers often pass through this resource-rich sea area and Chinese warships often track and monitor them. The Chinese aircraft carrier Shandong fleet sailed southwest of the Taiwan Strait only a few days ago.

Source: Lianhe Zaobao, June 23, 2023
https://www.zaobao.com.sg/realtime/world/story20230623-1407046

Briefings | | |   Geo-Strategic Trend

EUCCC: European Companies’ Confidence in Doing Business in China Has Deteriorated

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the European Union Chamber of Commerce in China (EUCCC) just released its latest survey. The survey showed that, in the face of growing risks and a more unstable business environment, European companies’ confidence in doing business in China has deteriorated. Companies have begun to review their investment and business strategies in China. According to the survey, 64 percent (a record high) of the respondents said that doing business in China has become more difficult in the past year, and 30 percent of the companies said that their revenue shrank compared with the same period last year. This ratio increased by 20 percentage points and reached the highest level in history. Around 75 percent of the companies have reviewed their supply chain strategy in the past two years, with 24 percent saying they plan to relocate some of their supply chains to China and 12 percent who have already moved some of their supply chains out of China. In addition, 10 percent of the respondents said that they have moved or plan to move their Asian headquarters or business unit headquarters out of China. The number of respondents who regard China as the top three investment destinations in the future has dropped by 13 percentage points compared with the same period last year. Surveys point to increased decoupling between headquarters and China operations, mainly to manage risk. Jens Eskelund, president of the EUCCC, said the negative trends seen from this year’s survey were worrying and reflected challenges posed by an uncertain policy environment in China and heightened geopolitical tensions.

Source: LTN, June 21, 2023
https://ec.ltn.com.tw/article/breakingnews/4340888

Briefings | | |   Economy/Resources Geo-Strategic Trend

HK01: German Intelligence Agency Identified China as the Biggest Threat to Economic and Scientific Espionage

Popular Hong Kong new online media HK01 Network recently reported that, Germany just released the Report of the Federal Office for the Protection of the Constitution. Although Germany releases this report every year, this time it is extraordinary both in terms of the strength of its warnings and in measuring changes in Germany’s security environment within a year. German Interior Minister Nancy Faeser said at a press conference that Russia’s war on Ukraine is a turning point for Germany’s domestic security. However, the strongest warning in the Report is directed at China, which it calls Germany’s “greatest threat in terms of economic and scientific espionage.” Earlier, the German government released, for the first time, a comprehensive national security strategy aimed at expanding Germany’s efforts to counter new military, economic and geopolitical threats. The Report indicated that Germany was one of the most important targets for Chinese investment in Europe in 2022. Direct investment not only provides opportunities for China to close its innovation deficit and achieve technological leadership, but also opens the door to political influence, espionage, and sabotage. These activities could also jeopardize Germany’s competitiveness as an industrial and technological hub and undermine the legal system of a market economy. Ultimately, this threatens to lead to a loss of prosperity and thus jeopardize democracy, social cohesion and Germany’s independence. Chinese Premier Li Qiang was visiting Germany at the time the Report was published.

Source: HK01, June 21, 2023
https://tinyurl.com/5n92u5pm

Briefings | | |   Geo-Strategic Trend

Worker Strikes Have Increased in China

China Labor Bulletin, a non-government organization based in Hong Kong, reported that it has counted 140 worker strikes in China from January to May, the highest number in the past seven years. One cause was that companies, struggling with reduced orders for their products, have been unable to pay workers’ salaries or their severance pay when laying people off. Many of the strikes have taken place in China’s manufacturing centers in Guangzhou, Shanghai, Jiangsu, and Zhejiang provinces.

Source: Liberty Times, June 15, 2023
https://ec.ltn.com.tw/article/breakingnews/4334834

Briefings | | |   @CS Economy/Resources Social Stability

Party Publications Are Just Junk

A report published by Toutiao, a Chinese news and information content platform, revealed that nobody reads the Chinese Communist Party’s (CCP’s) publications. However, this report, titled, “The Party Newspaper and Party Publications, How Long Can You Survive?” is no longer available due to the CCP’s Internet control.

The article reported a case in which a local postal office signed an agreement with an institution. The agreement was that the post office would stop delivering the party’s newspaper and publications to which that institution had subscribed. Instead, the post office would just keep them in its storage area and after a certain time, sell them as old paper (in China authorities pay a little money for old paper and books for recycling). The postal service would then give the institution the money, including the proceeds from selling the party publications and the cost savings from the delivery service.

In China, the CCP forces government offices and institutions to subscribe to many party newspapers and publications. In some places it even requires individual party members or school teachers to subscribe to party publications using their own money.

Source: Epoch Times, June 18, 2023
https://www.epochtimes.com/gb/23/6/18/n14018188.htm

Briefings | | |   Government/Politics

China’s Hope to Rescue the Housing Market Burst

An Epoch Times article listed five points that suggest that China’s dream to rescue its real estate industry is only an illusion:

  1. The funding for real estate development keeps sliding. According to China’s National Bureau of Statistics, investment in the real estate industry was 13.289 trillion Yuan (US$1.85 trillion) in 2022, 10 percent down from a year ago. Investment in the period of January to May this year was 45.7 trillion yuan, down 7.2 percent from the same period last year. More and more people are selling their homes. Shanghai has an inventory of 200,000 pre-owned homes for sale. It sold 16,000 homes in May, which was  one-third lower than the sales volume in March.  In May, over 100 cities saw the largest price drop  since 2022.
  2. There has been a big jump in the number of foreclosed homes. There were 606,000 foreclosed homes in 2022, but only 118,000 were sold.
  3. The “Guaranteed Delivery” effort did not work. Due to a lack of funding, China put in 500 billion Yuan in July 2022 to help real estate builders to complete their pending housing construction projects . A year has passed. South China and the south China regions completed 56 percent and 46 percent of their housing projects, respectively. Southwest China and the central China regions completed only 15 percent and 16 percent.
  4. Real estate companies are struggling. The total profits of 69 publicly-traded real estate companies dropped in 2021. In 2022, the proceeds even became negative. More than 20 companies have been suspended from trading (they even face the risk of being delisted).
  5. Seven companies had been traded below 1 yuan for over 20 days and thus are likely to be delisted.

Source: Epoch Times, June 19, 2023
http://cn.epochtimes.com/gb/23/6/19/n14019226.htm.

Briefings | | |   Economy/Resources

China’s Universities Conduct Investigations on Multiple Journal Retractions

Chinese universities have launched an initiative to investigate academically unethical papers published in the past five years. They aim to address the country’s high rate of retractions in international journals. Over 30 universities, including Ningbo University, Hangzhou Normal University, and Chengdu University of Information Technology, have announced their intention to participate in the three-month campaign, following a notice by the Ministry of Science and Technology. The focus will be on local research institutes and universities, particularly papers included in personnel assessments or which were awarded performance incentives.

The investigation will target various forms of misconduct, such as plagiarism, duplication, content fabrication, manipulation of peer reviews, ghostwriting for hire, and inappropriate honorary authorship. China ranked second globally in terms of the the number of papers published in top international journals in 2022, but it also had a significant number of retractions. Out of 5,488 retractions indexed in the Science Citation Index (SCI), 2,879 retractions (52 percent of the total) came from China.

This nationwide self-examination and rectification of academic papers is unprecedented in scale, as previous investigations were conducted by individual universities following international retractions. However, there are concerns that relying solely on self-examination may not effectively address the issue, as there is a problem of institutional protection of academic misconduct in China. This protection is attributed to the allocation of research funding, and it suggests that a more comprehensive solution is needed.

Jia Hepeng, a professor at Soochow University, expressed doubts about the long-term impact of this campaign and the centralized research system that heavily relies on quantitative assessment. Despite these concerns, the initiative is seen as a positive step towards addressing academic misconduct and serves as a wake-up call for the academic community in China. While the effectiveness of the campaign-style investigation is expected to be limited, taking action is viewed as preferable to no action at all.

Source: Central News Agency (Taiwan), June 19, 2023
https://www.cna.com.tw/news/acn/202306190066.aspx

Briefings | | |   Information/Technology