Skip to content

Briefings - 219. page

Australia Reconsiders China’s Lease of Darwin Port

The Australian government is reconsidering its decision to lease the Darwin port to a Chinese-owned company and may suspend the lease in response to national security concerns.

In 2015, the government of the Northern Territory of Australia reached a lease agreement with the Chinese company, Landbridge Group. Landbridge paid a one-time rent of over AU$500 million for the right to operate the Port of Darwin for up to 99 years, claiming at the time that the deal would promote Australia-China trade and tourism.

Huangfu Jing, an Australian commentator, observed that, with the deterioration of Australia-China relations, local opposition has been growing louder and louder. “In the early years, the international environment had not come to the point it is at today. The mainstream (Australian) society, especially the business community, believed that we could make money and trade with China. It (the Northern Territory government) made use of such opinions and facilitated the sale for its own benefit.”

The Port of Darwin is a dual-use civilian and military port, where U.S. Marines are stationed on a rotational basis. Huangfu added, “Beijing actually monitors every move the US Marines make in the Northern Territory and (the deal) does far more damage to Australia’s national interests than what the rental income covers. Landbridge is ostensibly a private company, but few Chinese private enterprises that can invest overseas are not under Beijing’s control.”

Australian media reports that the National Security Committee in Canberra has asked the Department of Defence to review and advise on the lease. Prime Minister Morrison also said last week that if national security becomes an issue at the port, action should be taken.

Joseph Cheng, retired professor at the City University of Hong Kong, said the Darwin Port is sensitive not only because of the presence of U.S. troops, but also because China sees it as a breakthrough in promoting its “Belt and Road” strategy. “There is an immense ocean stretching from China to the South Pacific. If China could obtain some bases on some of the islands, it would be very helpful to China for it to maintain a global communication system and a global satellite monitoring system. It would be very convenient to have Darwin Port as a connection point in the middle. The port stretches north to Papua New Guinea and then to Indonesia. The waters between the north coast of Australia and Indonesia are also believed to have rich oil and other energy resources.”

Source: Radio Free Asia, May 3, 2021
https://www.rfa.org/mandarin/yataibaodao/gf-05032021064232.html

Briefings | | |   Geo-Strategic Trend

China’s New Administrative Measures on Religious Clergy

On May 1, the “Administrative Measures of Religious Clergy” promulgated by China’s State Administration of Religious Affairs (SARA) came into effect. The Administrative Measures, published on February 9 of this year, are composed of seven chapters and 52 articles, that define the “rights and obligations” of China’s religious clergy and regulate their behavior. Among them, Article 3 states that religious clergy should “love the motherland, support the leadership of the Chinese Communist Party (CCP), and support the socialist system.” They should also “practice the core socialist values,” and adhere to the principle of “independence and self-management of religion” and the “direction of the localization of religions.”

On May 2, almost immediately after the implementation of these “Administrative Measures,” a video and several photos taken in Wenzhou, Zhejiang Province, went viral on the Internet. The video and photos show a local Christian clergyman preaching in a church, using a local dialect, and quoting the Bible to explain Xi Jinping’s political propaganda slogan, which includes “the main mission during the era of Xi Jinping.”

Pastor Liu Yi, now living in California who is also the founder of the Chinese Christian Fellowship of Righteousness, commented, “Under the control of the Chinese Communist Party, many so-called pastors and preachers in Christianity have taken it upon themselves to take the party’s position. They have used the pulpit of the church to become the mouthpiece for propagating the policies of the Chinese Communist Party. For example, the ‘sermons’ from a church in Zhejiang circulating online are very telling. They are not preaching the Bible, but rather, the propaganda of the Communist Party.”

Pastor Liu Yi explains that there are seven “national religious groups” in China, “namely, the Chinese Buddhist Association, the Chinese Taoist Association, the Chinese Islamic Association, the Chinese Catholic Patriotic Association, the Chinese Catholic Bishops’ Conference, the Chinese Christian Three-Self Patriotic Movement Committee and the Chinese Christian Association. These national religious organizations are all under the direct leadership of the United Front Work Department of the Chinese Communist Party.”

Source: Radio Free Asia, May 4, 2021
https://www.rfa.org/mandarin/yataibaodao/shehui/sc-05042021141937.html

Briefings | | |   Government/Politics

UDN: Jack Ma not Allowed to Leave China

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that Jack Ma, the founder of the Chinese online giant Alibaba, has not been allowed to leave the country. The Chinese authorities are currently investigating how Alibaba’s Ant Group, formerly known as Ant Financial and Alipay, received IPO approval so rapidly. The IPO was originally set to be the largest IPO in the world, but was later called off unexpectedly. Alibaba was fined RMB 18.2 billion (around US$2.8 billion) by the Chinese government on April 10, because of its market monopoly tactics. Two days later, the Ant Group was ordered to reform. The current round of investigation is focusing on the relationship between Jack Ma and important government officials. Ma is banned from leaving China until the investigation concludes. This is the first sign that indicates the investigation is spreading into government agencies. One of the key targets for this new investigation is the Shanghai Stock Exchange STAR Market, officially known as the Shanghai Stock Exchange Science and Technology Innovation Board. It is a Chinese science and technology focused equities market established on July 22, 2019, with strong support from Chinese Communist Party Secretary General Xi Jinping. Jack Ma originally planned to list Ant Group there, and on the Hong Kong Stock Exchange at the same time. This new round of investigation also includes some of China’s sovereign wealth funds.

Source: UDN, April 29, 2021
https://money.udn.com/money/story/12926/5421151

Briefings | | |   Economy/Resources Government/Politics

Huawei Set to Make Electric Vehicles

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, ever since the last batch of a shipments of 120 million high-end chips from Taiwan last December, Huawei’s mobile phone sales have been in freefall, income growth reached a record low and cash flow reached a seven-year low. Huawei’s board changed its strategy from “technology orientation” to “survival orientation.” In addition to getting into the cloud computing business, Huawei is partnering with Chinese-owner Seres, an electric vehicle and component manufacturer headquartered in Santa Clara, California, to make electric vehicles (EVs). Huawei’s online shopping site recently presold 3,000 Seres EVs in two days, while Tesla China was combating questionable consumer complaints. Starting in June 2020, Huawei conducted a re-organization and established the structure of an EV branch. The Huawei Smart Car Solutions Business Unit (BU) now has nine departments, including Architecture and Integration; Strategy and Development; Policy, Standards and Patents; Marketing; MDC (Mobile Data Computing); Quality Control and Operations. The BU branch plans to have three product lines: Smart Driving, Smart Cabin, and Smart Automobile Cloud. All heads of the departments of this BU come from Huawei’s top leadership team. The initial BU has around one thousand staff members and the goal is to expand to five to six thousand. Huawei also aims to produce a world-leading car operating system to compete against Tesla, Apple and Google. However, the company is facing a difficulty in finding manufacturing partners in the EV industry.

Source: Sina, April 30, 2021
http://finance.sina.com.cn/tech/csj/2021-04-30/doc-ikmxzfmk9802173.shtml

Briefings | | |   Information/Technology

Global Times: Reviewers Thought Biden’s First Congressional Speech Was “Boring”

Global Times recently published a report after Biden’s first televised congressional speech. With data aggregated from the U.S. and British media, it appears the speech suffered from a very poor performance and it had only around 22.6 million viewers. That was not even half of Trumps equivalent speeches. Trump’s 2017 February speech to Congress attracted over 48 million viewers. Even his lowest viewership, for the 2020 February State of the Union Address, had over 37 million viewers. Obama’s first congressional speech in February 2009 had 52.3 million viewers. The low-profile Biden speech received reviews like “boring,” “socialist dream,” “dividing the country,” and “full of empty clichés.” The speech did touch on topics related to his “blue-collar blueprint” government investment plans, gun control, police reform and immigration, as well as his China policies. Global Times also mentioned that Biden’s speech was not the only event seeing a dramatic decline in viewership. The Oscar ceremony in the same week also set a record low viewership of around 10 million, which was a freefall of 58 percent from last year’s number.

Source: Global Times, April 30, 2021
https://world.huanqiu.com/article/42vtGLIjmeV

Briefings | | |   US-China Relations

State Owned Banking Regulatory Agencies Summoned 13 Top Online Financing Companies

Xinhua reported that, on April 29, four financial regulatory agencies including the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the Administration of Foreign Exchange summoned 13 top online financing companies including Tencent and Meituan Finance.

Chinese economists and scholars told Radio Free Asia that these online financial companies bypassed China’s banking system to serve small to mid-size customers and self-employed individuals and have become a threat to traditional banking financing channels. The meeting was meant to warn these companies that Beijing has formed a plan to take over these private online financing companies. Other internet companies like Taobao, We Chat and QQ are not only a trading platform but they also draw large numbers of users. Therefore they would be the next target. One commentator told RFA, “Beijing will be very nervous and vigilant about such a platform and force that can connect with or and even unite the people. So, it needs to have a more a comprehensive and thorough control.”  These take-overs will not only benefit the state-owned banks but also control public opinion and limit the development of the private economy.

According to official statistics, WeChat users now exceed 1.2 billion, Taobao has over 800 million, and QQ has close to 600 million. After Beijing issued an antitrust fine of more than 18 billion (US$2.78 billion) against Alibaba not long ago, it immediately demanded that, within a specified time limit, 34 online companies including Tencent, JD.com, ByteDance, Baidu, and Meituan conduct an internal restructuring.

Source: Radio Free Asia, April 30, 2021
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql1-04302021044205.html

Briefings | | |   Economy/Resources

Chinese Phone Makers and House Builders Leap into Electric Vehicle Market

Baidu, Xiaomi, Huawei, OPPO, Evergrande and other Chinese companies have recently announced their commitment to doing electric vehicle research and development. These companies are not car makers: Xiaomi, Huawei and OPPO are phone makers; Baidu, which has already invested in driverless vehicles, is in Internet-related services; and Evergrande started out as a real estate developer.

At the Shanghai Auto Show in April, while Tesla was under the spotlight because of a consumer dispute, the electric cars that local automakers presented and also the aforementioned companies attracted a lot of attention.

As Chinese financial media and Radio Free Asia reported, Evergrande launched nine new electric car models at the Shanghai Auto Show using the brand name “Hengchi.” Evergrande boasted that they were developed in cooperation with car manufacturers such as Swedish supercar producer Koenigsegg. The nine models that Evergrand launched were later found to be “model cars” which had only a shell and no brakes or suspension system. For this reason, Evergrande sent an army of security personnel to guard the stage and wouldn’t allow the audience to  take pictures of the chassis of the display cars.

It was widely believed that China’s manufacturing sector still has great difficult in achieving self-sufficiency in the area of critical parts and components, as well as in the core technologies such as auto chips. Making a car is a much more complex business than making a smartphone. The “great-leap-forward” model of investing in electric vehicles cannot last long.

Some argue that China’s domestic demand has not yet recovered, and that it is a question whether most people can afford an electric vehicle. One cannot rule out the possibility that some companies and local governments are making the initial investment in order to solicit financial subsidies from the central government.

Source: Central News Agency, May 2, 2021
https://www.cna.com.tw/news/acn/202105020185.aspx

Briefings | | |   Economy/Resources

China’s Newly Amended Maritime Traffic Safety Law Raises Concerns

On Thursday April 29, China passed a newly amended Maritime Traffic Safety Law, over which a Taiwanese scholar expressed the concerns that Beijing is using the law to expand the gray zone of potential conflicts.

The National People’s Congress (NPC), China’s rubberstamp parliament, announced that the law will come into force on September 1.

Under Article 53 and Article 54, foreign vessels are required to report to the maritime authorities if they are submersible, nuclear powered, carry radioactive or poisonous materials or may in any other way endanger safety in navigation.

Article 92 stipulates that if a foreign ship may threaten the safety of China’s internal waters and territorial waters, the maritime authorities have the right to order it to leave. If a foreign ship violates Chinese laws and regulations on maritime traffic safety or prevention of pollution, the maritime authority may exercise the “right of hot pursuit.” The “right of hot pursuit” refers to the right of the authority of the coastal state to chase a foreign ship to the high seas, arrest those on board and bring the ship back to its port so they can face a trial. It can do this if it has sufficient reason to believe that the foreign ship has violated the laws and regulations of the state.

In addition, in the amended maritime law, China has changed the wording from the phrase “coastal waters” to “jurisdictional waters.

Su Tzu-yun, senior security analyst with Taiwan’s Institute for National Defense and Security Research, considers that both the Maritime Traffic Safety Law and the Maritime Police Law, a new law passed in January, are tools of the Chinese Communist Party (CCP) to claim and protect its national sovereignty and interests. The CCP is using the law to expand the gray area of conflict, and has raised concerns that this could become a loose cannon for maritime conflicts.

Su said that the Chinese government’s “jurisdictional waters” refers to “the internal waters, the territorial sea, the contiguous zone, the exclusive economic zone, the continental shelf, and other waters under the jurisdiction of the People’s Republic of China,” which it defines more broadly than “coastal waters.” However, the CCP has built many artificial islands in the South China Sea and claims that the 12 nautical miles surrounding each of them are all territorial waters, which gives the CCP an excuse to enforce the law when other countries simply carry out free navigation missions.

Source: Central News Agency, April 30, 2021
https://www.cna.com.tw/news/acn/202104300257.aspx

Briefings | | |   Geo-Strategic Trend