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Briefings - 148. page

China’s Think Tank Report on Sino-U.S. Relations after the Russian-Ukraine War

The Chongyang Institute of Finance at Renmin University of China published a research report on May 30, titled. “The Great Siege: An Assessment of the Progress of U.S. Policy Toward China Since the Russia-Ukraine Conflict and China’s Response.” The report said that the Russia-Ukraine Conflict didn’t delay the United States from implementing comprehensive competition against China. The U.S. recently adopted an “integrated deterrence” strategy against China  and has sped up its strategic containment of China. By May 16, the U.S. had taken  24 actions to suppress China in the fields of the economy and trade, finance, ideology, military technology, and geo-politics. Though the U.S. called its strategic competition “integrated deterrence,” it has actually been conducting a “great siege” against China.

It listed five points related to the U.S. actions:

  1. Speed up building a small “Indo-Pacific economic and trade circle” (excluding China).
  2. Apply financial pressure on Chinese companies listed on the U.S. stock markets; threaten to freeze China’s assets outside China, and restrain American companies from investing in China.
  3. Attack China on the grounds of ideology .
  4. Stir up the Taiwan issue using the “salami slicing” method (advancing the U.S. position in small increments).
  5. Suppress China’s advancement in the military technology field.

Overall, the Biden Administration defines the Sino-U.S. relations as competition and its hard-line position will not change in a short period. The chance of a China-U.S. collision is increasing. There are three possibilities for the China-U.S. game:

  1. A high intensity game: China and the U.S. have a A full military confrontation.
  2. A mid-level intensity game: China and the U.S. gradually decouple.
  3. A low intensity game: The tension between China and the U.S. becomes the norm.

The report made the following recommendations:

  1. Create an anti-blockade and anti-sanction plan in the economic, trade, and finance fields. Develop Asia-Pacific regional cooperation to counter the U.S. Indo-Pacific Economic Framework (IPEF).
  2. Create a strategy to strengthen domestic finance.
  3. Speed up progress toward energy independence  and create a strategy to build self-sustained energy.
  4. Proactively define the agenda to lead the rhythm of the Sino-U.S. media fight.
  5. Talk to the world about the damage that would result from “Taiwan Independence” to prevent the U.S. from playing the Taiwan card against China.

It calls on China to give up the illusion that it can avoid strategic competition against the U.S., develop a bottom-line plan in case of a military showdown with the U.S., and proactively build the Sino-U.S. relations while adapting to the new norm of tense relations.

Sources: SINA, June 1, 2022
https://finance.sina.com.cn/china/2022-06-01/doc-imizmscu4593936.shtml?cre=tianyi&mod=pchp&loc=35&r=0&rfunc=30&tj=cxvertical_pc_hp&tr=181,

Briefings | | |   US-China Relations

Nikkei Chinese: Kishida Cabinet Approval Reached New High Since Taking Office

Nikkei Chinese Edition recently reported that the Nihon Keizai Shimbun and TV Tokyo conducted a joint public opinion survey from May 27 to 29. According to the survey, the approval rating for Fumio Kishida’s cabinet has reached 66 percent, the highest since taking office in October 2021. The result of the last survey in April was 64 percent. The disapproval rating for the cabinet was 23 percent. Regarding the summit between Fumio Kishida and U.S. President Joe Biden, 61 percent gave it a favorable rating. Regarding the Kishida government’s response to the Russian-Ukrainian crisis, 69 percent gave their approval. Some analysts expressed the belief that Japan’s Covid situation is gradually easing. Improved diplomatic and security measures have resulted in a higher approval rating. Regarding the policies that the voters want the government to prioritize, the number one was “recovering the economy” (40 percent). In terms of reasons for disapproval, ranked at the top were “the Liberal Democratic Party centered cabinet” and “lack of leadership” (both were at 35 percent).

Source: Nikkei Chinese, May 30, 2022
https://cn.nikkei.com/politicsaeconomy/politicsasociety/48706-2022-05-30-09-39-02.html

Briefings | | |   Geo-Strategic Trend

China’s Attempts to Influence the Pacific Islands

China’s Foreign Minister, Wang Yi, visited the Pacific Islands from May 26 to June 4. However, Beijing failed to convince the island countries to sign key cooperation treaties at the Second China-Pacific Islands Foreign Minister Meetings on May 30.

Reuters reported that China drafted two treaties for the meeting. One was the “China-Pacific Islands Countries Common Development Vision.” The second was a five-year development plan. China said it will provide millions of dollars in aid to the ten island countries and establish a free trade agreement (FTA) to let them enter China’s market of 1.4 billion people. In return, China will have a big influence over these countries. China will train police for these ten countries, set up forensic labs, participate in local network security work and intelligent customs, develop political connections, conduct sensitive marine mapping, and obtain more local natural resources.

On May 20, Micronesia’s President Panuelo sent a letter to state heads of 21 countries in the Pacific. He said that his cabinet asked him to carefully consider Beijing’s suggestion and considered that China’s FTA recommendation was dishonest. President Panuelo warned in his letter that China’s recommendation will in essence tie the economy and the society of the island countries to Beijing.

The foreign ministers of these islands countries didn’t sign China’s two documents on May 30.

In the past, China has been working on the Pacific Islands:

  1. In 2002, China convinced Nauru to cut its diplomatic ties with Taiwan.
  2. China set up an economic office in the Pacific Islands to secure economic and trade relations, as well as its fishing business with these countries.
  3. China, through the military medical system, gradually provided equipment and built medical facilities in the name of military medical humanitarian aid in the three countries that have defense departments: Papua New Guinea, Fiji, and the Kingdom of Tonga.
  4. China has built a large number of tourist hotels in the Federated States of Micronesia and Fiji.
  5. China has gradually taken control the mines in these countries.
  6. In April this year, China signed a secret treaty with the Solomon Islands which allowed China to have police exchanges and a possible naval base on the Solomon Islands.

Sources:
1. BBC, June 1, 2022
https://www.bbc.com/zhongwen/simp/chinese-news-61651994
2. Epoch Times, June 4, 2022
https://www.epochtimes.com/gb/22/6/4/n13752471.htm

Briefings | | |   Geo-Strategic Trend

USCC: China’s Interest in the U.S. Agriculture Industry

The U.S.-China Economic and Security Review Commission (USCC) published a report that China is investing in the U.S. Agriculture industry in order to mitigate its own food shortage. These investments reduce Beijing’s reliance on imports and help China to obtain modern agricultural technologies. The report examines the main areas of Chinese investment in the United States, including land, livestock, grain, and relevant infrastructure, such as agricultural equipment and technology. It also presents considerations for lawmakers regarding further Chinese integration in the U.S. agriculture sector.

Source: USCC, May 26, 2022
https://www.uscc.gov/research/chinas-interests-us-agriculture-augmenting-food-security-through-investment-abroad

Briefings | | |   US-China Relations

A Chinese City’s Penalty Is a 10-Day Detention for Skipping Multiple PCR Tests

On May 31, the city government of Siping in China’s northeastern Jilin Province announced it would launch massive Covid-19 PCR testing for residents starting on June 2. The testing requires that “no one is left behind.” The authorities vowed to inflict punishment on anyone who did not participate in the drive. Punitive measures would include restricting access to neighborhoods and public places, paying for the cost of make-up tests, and being admonished by local police. For those who failed to take the required tests on more than two occasions, the penalty would include 10-days of administratively detention, a fine of 500 yuan (US$ 75), being blacklisted in China’s social credit system, and public naming and shaming.

The announcement sparked criticism from Chinese netizens. Some said, “The Siping municipal government is openly breaking the law.” Others questioned, “Which law is the basis for such a detention rule? This is serious damage to the rule of law in China!”

Draconian measures to combat the epidemic adopted by Chinese authorities have triggered public discontent. For example, in Jiangsu, medical staff would throw away all the food in the refrigerator that belonged to the Covid patient. In Shanghai a netizen complained saying that the disinfection personnel entered his residence without his consent.

Source: Central News Agency (Taiwan), May 31, 2022
https://www.cna.com.tw/news/acn/202205310229.aspx

Briefings | | |   Social Stability

Chinese Property Developer Fantasia Owes US$149 million In debt and May Face Liquidation

Fantasia Holdings Group, the Chinese developer founded by the niece of a former Chinese vice-president Zeng Qinghong, might face liquidation after it received a wind-up petition from creditors for failing to repay an outstanding loan of US$149 million.

A winding-up petition is the legal mechanism by which a business creditor can apply to the court to wind-up a company for non payment of debts. It can result in compulsory liquidation.

On May 26, Shenzhen-based Fantasia received a wind-up petition that Flower SPV 4 Limited had filed. The filing had been submitted to the Hong Kong stock exchange on Monday. The petition was filed by the creditor on May 24 in the Grand Court of the Cayman Islands, where Fantasia is registered.

Trading in shares was suspended on April 1 following Fantasia’s previous financial difficulties. The company said that its stock trading will remain suspended until further notice.

Zeng Qinghong was the right-hand man of China’s former president Jiang Zemin. The story of Fantasia’s financial difficulties was widely reported by mainland Chinese media.

Source: Central News Agency (Taiwan), May 30, 2022
https://www.cna.com.tw/news/acn/202205300094.aspx

Briefings | | |   Economy/Resources

China’s Coldest Labor Market: College Graduates Break 10 million for the First Time

2022 will see 10.76 million college graduates in China, an increase of 1.67 million over last year. This will be the first time in history for the number to break the 10 million mark. This record number, however, is facing a difficult economic situation due to the epidemic.

In 2020, China’s economy was hit hard by the first wave of the epidemic. In the first quarter, China’s GDP fell 6.8 percent year-over-year.  This was not only the lowest since China began publishing quarterly GDP data in 1992. It was also the first time that quarterly growth was negative.

Two years ago, the city of Wuhan was locked down for 76 days. This year. however, Shanghai has been put on a pause for more than 60 days. In terms of economic importance, the two cities are not on the same scale. Shanghai is not only China’s center for manufacturing and foreign trade. It is also the country’s financial hub. The economic devastation brought by the two-month lockdown will be far greater than it was in Wuhan.

Data released by China’s National Bureau of Statistics on May 16 showed that the national urban unemployment rate rose 0.3 percentage points to 6.1 percent in April, a new high since March 2020. Most notably, the unemployment rate for the 16-24 year old population was recorded at 18.2 percent, the highest since that data became available.

Source: BBC Chinese, May 31, 2022
https://www.bbc.com/zhongwen/simp/chinese-news-61632336

Briefings | | |   Economy/Resources

LTN: Pompeo Said Blinken’s Speech Underestimated the China Threat: the CCP is Evil

Major Taiwanese news network Liberty Times Network (LTN) recently reported that U.S. Secretary of State Antony Blinken delivered a policy speech on China on May 26 in which he criticized China for its increasing threats to Taiwan, emphasizing that the U.S. policy toward Taiwan will remain unchanged. In addition, he also said that the United States avoids seeking conflict or creating a new Cold War situation. Former U.S. Secretary of State Mike Pompeo said bluntly that Blinken’s speech was like diplomatic rhetoric and underestimated the threat of the Chinese Communist Party (CCP). Pompeo said in an interview that the Chinese Communist Party intends to cause damage to the United States, ranging from the Chinese military, cyber-attacks and economic plunder. He did not feel that Blinken’s speech made the core point, which is that the CCP is evil. If it is only seen as related to the international order, then Chinese leader Xi Jinping will recognize the U.S. signal as a green light. Some observers have expressed the belief that a cold war is real and that China wants it to get worse. America needs to wake up from the fog of peace and confront the looming threat from China.

Source: LTN, May 28, 2022
https://news.ltn.com.tw/news/world/breakingnews/3941821

Briefings | | |   US-China Relations