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China to Build Internet Infrastructure for the Solomon Islands

The Solomon Islands received a $66 million loan from the Export-Import Bank of China, which will be used to build telecommunications towers on one of  the islands. Huawei will rtake on the project.

This is the first loan the Solomon Islands has received from China since it switched diplomatic relations from Taiwan to Beijing. With this 20-year loan at a one percent annual interest rate, the pacific government aims to improve telecommunications infrastructure to provide mobile communications and Internet service in its rural areas for the first time in 30 years. 161 mobiles are expected to be built, 48 percent of which will be completed by November 2023, when the Solomon Islands will host the Pacific Games.

Internet penetration in the Solomon Islands is currently below 30 percent. In 2018, Australia became involved after the Solomon Islands government announced it would award the contract for underwater communications cables to Chinese telecom giant Huawei. The excuse was that Chinese companies could not be allowed to intervene in critical communications infrastructure due to national security concerns. The Australian government promised that, in exchange, it would be willing to cover part of the expenses for the cable laying.

Not long ago, during her visit to the Solomon Islands, U.S. Deputy Secretary of State Wendy Sherman promised that the U.S. will open an embassy in the Solomon Islands within the year.. Earlier Vice President Kamala Harris announced that the United States will provide $60 million in annual assistance to Pacific Islands.

Source: Sputnik New (Russia), August 20, 2022
https://sputniknews.cn/20220820/1043224071.html

Briefings | | |   Geo-Strategic Trend

Korea Warned about Its High Dependency on China

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that the Korea Chamber of Commerce and Industry just released a report, warning that, in the past 20 years, South Korea’s export dependence on China for semiconductor products has surged nearly 13 times. The report said that, as South Korea is the fourth largest economy in Asia, Seoul needs to act to address associated risks. South Korea’s increasing reliance on China for value-added industries will increase the risk of South Korea being hit harder if the gap in production skills between the two countries narrows further. The report emphasized that the business community and the government must be fully committed to further technological development. They must take steps to diversify our exports so that China cannot take advantage of this dependence. The 2021 data showed that the precision instrument industry has the highest dependence on China’s exports, accounting for 42.5 percent of the overall exports to China, with semiconductors at 39.7 percent. Since 2003, China has surpassed the United States as South Korea’s largest export destination . Chipmakers are under pressure to side with Washington as the U.S. seeks to counterbalance China as a rising tech power. The report also expressed the concern that South Korea’s trade deficit with China is also growing, despite a surge in reliance on Chinese exports.

Source: NetEase, August 23, 2022
https://www.163.com/dy/article/HFDVQ9LJ0511CRN2.html

Briefings | | |   Geo-Strategic Trend

CNA: German Government Plans to Reject Chinese Investment in Port of Hamburg

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, in order to avoid increasing its dependence on China, the German government intends to veto the Chinese shipping giant China Ocean Shipping Company (COSCO’s) stake in the container terminal of Hamburg, Germany’s largest port. Hamburg is an important trans-shipment station for European and Chinese sea routes. Currently, one third of the containers handled by the Port of Hamburg come from or are about to be shipped to China. A year ago, Hamburg Hafen & Logistics (HHLA), which operates the Port of Hamburg, confirmed that Chinese state-owned  COSCO planned to buy a 35 percent stake in the Tollerort container terminal. German Economy Minister Robert Habeck intends to veto the deal, fearing that COSCO’s stake will increase its reliance on China. In recent years, Germany has become cautious about economic cooperation with China. Political circles generally have doubts about COSCO taking a stake in the Port of Hamburg terminal, and are unwilling to let the terminal and other infrastructure construction fall into the hands of China. The German government that came to power at the end of last year has set a policy goal of reducing its dependence on China. It is expected to announce a new China strategy early next year, reflecting its tough stance on China.

Source: CNA, August 23, 2022
https://www.cna.com.tw/news/aopl/202208230378.aspx

Briefings | | |   Geo-Strategic Trend

The U. S. will Appoint Its First Arctic Ambassador

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the United States is worried about increased Russian military activity in the Arctic. Therefore, the U.S. plans to appoint its first Arctic Ambassador to drive U.S. policy and strengthen diplomacy in the Arctic. The U.S. State Department chief deputy spokesman Vedant Patel said that Secretary of State Blinken will soon appoint an ambassador-at-large for the Arctic who will engage with Arctic countries and indigenous peoples. Peace and stability in the Arctic is of critical strategic importance to the United States. Media reports also point out that the U.S. move reflects the growing importance of the Arctic region in terms of strategy, commerce and resources. NATO Secretary-General Stoltenberg said NATO will strengthen its presence in the Arctic. He pointed out that due to climate change, melting ice will make high latitudes more accessible, and high latitudes will become increasingly important in the future. Stoltenberg also called Russia’s capabilities in the Arctic a “strategic challenge” to NATO, warning that “the shortest path for Russian missiles and bombers to reach North America is to fly over the North Pole.” It is worth noting that, if Finland and Sweden formally join NATO, seven of the eight countries in the Arctic Circle will be NATO members. In March this year, the U.S. military conducted the first air defense integrated operations exercise in the Arctic. In addition, in August, the Russian Northern Fleet announced that it would start military training in the Arctic.

Source: Sina, August 28, 2022
https://news.sina.com.cn/w/2022-08-28/doc-imizmscv8069243.shtml

Briefings | | |   Geo-Strategic Trend

China Will Attend Russia’s Military Exercises

Despite the Western world’s sanctioning of Russia for invading Ukraine, China maintains closer ties with Russia. One of its recent actions is to plan to join Russia’s military exercise.

China’s Ministry of Defense announced on August 17 that it will send troops to join Russia’s military exercise “Vostok” (East) exercises from August 30 to September 5.

The announcement stated, “China’s participation in the exercise is aimed at deepening practical and friendly cooperation with the armies of the participating countries, improving strategic collaboration, strengthening the ability to respond to various security threats, and has nothing to do with the current international and regional situation.”

Russia rotates its military exercises among its military theaters every year. It held the military drill in its west theater in September last year. Belarus, India, Pakistan, Mongolia, Kazakhstan, Kyrgyzstan, Armenia and Sri Lanka participated in it.

Source:
1. China Government Ministry of Defense Website, August 17, 2022
http://www.mod.gov.cn/topnews/2022-08/17/content_4918561.htm?yikikata=7593b487-e571aa197f9a58947e98a2458a2124be
2. Net Ease, July 28, 2022
https://www.163.com/dy/article/HDBIKM3H0514R9OJ.html

Briefings | | |   Defense/Military Geo-Strategic Trend

Discrepancy in China-Europe Railway Express Statistics Shows Heavy Shipping from China to Russia

Epoch Times found that the shipping data of the China-Europe Railway Express revealed that China has increased its shipping on the railways, mainly to Russia, but not to other European counties.

Xinhua News reported that, by August 21, in China 10,000 trains had departed on the China-Europe Railway Express, the railway connecting China to Europe through Russia. It took China ten more days last year to reach this target. China shipped out 972,000 standard containers this year, a 5 percent increase over last year.

However, Deutsche Welle reported on July 20 that European countries (excluding Russia and Ukraine) only received 25 percent of the shipping capacity this year as compared to last year’s level, quoting the supply change report from the internally renowned accounting firm Price Waterhouse Coopers. The report said that there were 15,000 trains with 1.5 million standard containers on this railway last year, averaging 27,500 containers per week. However, since Russia’s invasion of Ukraine,  out of the concern for sanctions and merchandise being confiscated, European countries have stopped shipping from Russia over this train line, though is still in operation.

The China-Europe Railway Express has two routes. The northern route goes through Russia. The southern route goes through Kazakhstan and then to Russia. European countries used the first part of the southern route and then after arriving in Kazakhstan, they transit goods through Asabaijan, Georgia, and Turkey, or to the Caspian Sea via Baku, Azerbaijan. The new router can only ship 6,000 containers per week, less than 25 percent of last year’s capacity on the China-Europe Railway Express.

Economist Davy Jun Huang explained that the discrepancy in shipping data is between the starting point and the receiving point. Beijing has an increase in shipping but Europe (excluded Russia and Ukraine) receives less than 25 percent of the shipping capacity, meaning the majority of shipping ends in Russia.

Xinhua News also reported the returning shipping is about 88 percent of the departing shipping, indicating Russia might have exported a large quantity of agricultural products to China. That ratio was 50.6 percent in 2016.

Source: Epoch Times, August 22, 2022
https://www.epochtimes.com/gb/22/8/22/n13807912.htm

Briefings | | |   @CS Economy/Resources Geo-Strategic Trend

China’s Military Recruiting Targets Science and Technology College Graduates

China’s Ministry of Defense announced that it will recruit more college graduates into the armed forces to boost its education quality.

At a Ministry of Defense press conference on August 25, Senior Colonel Tan Kefei, the military spokesperson, talked about China’s new military recruiting this year, “According to the recruitment order issued by the State Council and (the Chinese Communist Party’s) Central Military Commissions, the military will recruit soldiers twice this year. The second half-year recruitment started on August 15 and will end by September 30. The recruitment is targeting college students, focusing on college graduates at all levels, with priority given to science and technology students and skilled personnel who are needed to prepare for war. … The age limit for masters’ graduates and college students has been raised to under 26 years old (it used to be 24 years). To encourage high-quality youth actively and enthusiastically to apply for enlistment, the relevant departments of the military continue to implement a series of preferential policies for enlisted college students to retain their schooling or school enrollment status, receive state education subsidies, be able to switch their college major after retiring from the military (some colleges have restrictions on students switching their major), exempt from tertiary school to college entrance exam, and receive extra points in graduate study entrance exam.”

Some commentators said that Beijing did this as part of improving its military quality and part of releasing the unemployment stress for college graduates. China’s National Statistics Bureau reported the unemployment rate as 19.9 percent for youth who are between the age of 16 and 24.

Source:
1. Net Ease, August 26, 2022
https://www.163.com/dy/article/HFN1FSVN0530SFP3.html
2. People’s Daily, August 15, 2022
http://finance.people.com.cn/n1/2022/0815/c1004-32502731.html

Briefings | | |   Defense/Military

China’s Local Officials’ Unconventional Tricks to Boost Home Buying

Ming Pao, a Hong Kong based daily Chinese-language newspaper, recently reported a viral online video of a Chinese official’s speech on promoting home purchasing. Deng Bibo, head of Chinese Communist Party (CCP) committee in Shimen County of Changde City, Hunan Province, called on CCP cadres at a local real estate trade show to spearhead efforts to buy properties. “I hope that at today’s meeting, we, comrades and leaders, will take the lead in buying properties. After buying one unit, buy a second, third and fourth unit.”

Deng’s remark was not an isolated incident. According to the mainland Chinese media, the government of Si County in Suzhou City, Anhui Province, also issued an “Initiative on creating prosperity for the real estate industry,” calling on civil servants to mobilize their friends and relatives to participate in the home buying campaign.

In Huzhou city, Zhejiang Province, there is a “Notice on promoting the stable and healthy development of the real estate industry in our city.” The proposed measures include encouraging state-owned enterprises to acquire the unsold houses of real estate developers, and adjust the policy on the use of the “housing provident fund,” a mandatory contribution by employees and employers for the purpose of housing expenditures.

In the first seven months of this year, the total sales area of commercial properties in China dropped by a whopping 23.1 percent over the same period last year, and sales revenue by 28.8 percent. It is believed that sluggish consumer purchasing power is behind the downturn in the housing market.

In addition to traditional measures of stimulating the housing market, Beijing also passes political pressure onto local governments to “stabilize the property market.” That is why local officials, who generally look to the housing market for fiscal revenue, are coming up with unconventional tricks such as Deng’s remark and practices in other provinces.

Source: Ming Pao, August 18, 2022
https://news.mingpao.com/pns/%e4%b8%ad%e5%9c%8b/article/20220818/s00013/1660759572212

Briefings | | |   Economy/Resources