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Briefings - 35. page

Fentanyl Exports to the US: Insights on Stance of Xi Jinping and the CCP

Professor Yuan Hongbing, a Chinese legal scholar who lives in Australia and often reveals insider information about the high-level Chinese Communist Party (CCP), recently told Secret China that the international community lacks a basic understanding of Xi Jinping’s mindset. In late April of this year, U.S. Secretary of State Blinken met with Wang Xiaohong, Xi Jinping’s confidant and Minister of Public Security, in Beijing, attempting to address the issue of China’s export of fentanyl to the U.S. The U.S. even considered this issue as an important topic for cooperation with the CCP.

However, according to CCP insiders, Xi Jinping gave an “important speech” on the fentanyl smuggling issue during a secret National Security Council meeting a year and a half ago. Xi mentioned the Opium Wars (Editor’s Note: China had two wars with the Western countries in the period 1839 – 1860 in attempts to stop them from selling Opium into China. China lost both wars) and stated that the U.S. becoming a country of drug abuse is “retribution.” He also said that the rampant drug problem in the U.S. is a basis for the CCP to declare “rising in the East and declining in the West.” He suggested that the U.S. should blame itself for its own moral decline due to rampant drug abuse rather than holding Beijing responsible for American drug addiction. He emphasized in particular that the U.S. demands for Beijing to limit fentanyl production and regulate the channels through which fentanyl enters the U.S. are attempts to “harm China’s development interests” and constitute “economic warfare,” which “we firmly oppose and absolutely cannot accept.”

As a result of Xi’s speech, after the 20th CCP National Congress, Wang Xiaohong was tasked with coordinating the support of relevant CCP departments to expand fentanyl production and expand the channels through which fentanyl is directly or indirectly imported into the U.S. Wang also said at an internal meeting of the Ministry of Public Security that this action should be regarded as “part of an overall strategic war and part of unrestricted warfare against the United States.”

Source: NTDTV, May 9, 2024
https://www.ntdtv.com/gb/2024/05/08/a103878495.html

Briefings | | |   Grapevine

Guangming Daily: the Importance of Chinese-Built International Communications Platforms

Guangming Daily published an article saying that it is important for China to build its own international communications platforms.

“With the advancement of technology, international communication now presents a new characteristic: “platformization.” It is transitioning from “individual content going overseas” to “communication platforms going overseas.” International communication is entering an era of platformization. The core of the success or failure of international communication in this era of platformization lies in the ability to control the communication platforms. However, current international communication platforms are in a state of monopoly [by Western powers] and opposition [to China]. Western countries (led by the U.S.) are monopolizing communication platforms through technological advantages and are thus able to wield so-called “hostile” communication platforms to gain advantages in political discourse. This puts other countries in a situation where they have no platforms to use. Thus, the creation of such communications platforms is an important facet of [China’s plan to] build international communications capabilities. [Such Chinese-built platforms] would provide an important means to break through Western platform monopolies and through opposition from Western platforms. It is evident that the enhancement of cultural soft power relies on the support of international communication platforms.”

Source: Guangming Daily, May 13, 2024
https://theory.gmw.cn/2024-05/13/content_37319725.htm

Briefings | | |   Geo-Strategic Trend Government/Politics

Chinese Ministry of Foreign Affairs on Increased US Tariffs

The Biden administration recently announced increased tariffs on Chinese electric vehicles and other products. On May 15, Wang Yi, China’s Acting Minister of Foreign Affairs, gave a harsh response to a reporter’s question on the topic.

“Everyone has seen that for some time now, the U.S. has frequently imposed unilateral sanctions on China, abused Section 301 tariffs, and almost madly suppressed China’s normal economic, trade, and technological activities. This is the most typical hegemonic bullying in the world today! It shows that some people in the U.S. have reached the point of losing their minds in order to maintain their one-sided hegemony. The U.S.’ suppression of China by any means does not demonstrate America’s strength, but instead exposes the U.S.’ lack of confidence and confusion; it cannot solve the problems inside the U.S., but will instead further disrupt the normal operation of the international production and supply chain; it cannot stop China’s development and revitalization, but will instead inspire the 1.4 billion Chinese people to work even harder.

“The World Trade Organization (WTO) has clearly concluded that the U.S. Section 301 tariffs violate WTO rules and are acts that violate international law. International trade professionals with basic common sense all believe that the U.S.’ actions are harmful to others while not offering any benefits to the U.S. itself. As one of the WTO founders, the U.S. not only refuses to set a good example but also leads the way in violating WTO rules. Instead of correcting its mistakes, the U.S. continues to compound them. How can the U.S. explain the idea of “fair competition” that it touts? How can it gain the trust of the international community?

“Unilateral actions and protectionism go against the current trend and will surely be crushed by the wheels of history. At this critical moment of global economic recovery, the international community needs to warn the U.S. against creating more troubles for the world going forward.”

Wang Wenbin, the spokesperson of the Ministry of Foreign Affairs gave a comparatively mild response at the news briefing on May 15:

“I want to emphasize that the U.S. is compounding its own mistakes by politicizing economic and trade issues via further increased tariffs on China. These actions will only result in significantly raised costs of imported goods, causing American businesses and consumers to bear more losses and imposing a greater burden on American consumers.

“We urge the U.S. to earnestly abide by the rules of the WTO and immediately lift the tariffs imposed on China. China will take all necessary measures to defend its own rights and interests.”

Sources:
1. Foreign Affairs Ministry website, May 15, 2024
https://www.mfa.gov.cn/wjbzhd/202405/t20240515_11305072.shtml
2. Xinhua, May 15, 2024
http://www.xinhuanet.com/20240515/89921f9e65e747398d9dd95ecec99cd5/c.html

Briefings | | |   US-China Relations

China’s Trade-in Plan to Promote Economic Growth

To create economic growth, Beijing has been carrying out a “Trade-in (以旧换新)” plan to encourage industries and consumers to replace their equipment and durable goods, even including cars. Two articles on the People’s Daily website on May 14 showed some examples.

Industry

In one example, the Tianjin Power Company plans to invest over 700 million yuan (around US$100 million) this year to replace its old equipment, aiming to enhance the power grid’s digital and smart-tech capabilities.

Chuan Cheng Pharmaceutical Co., Ltd., located in Liaocheng, Shandong Province, is currently updating its exhaust gas treatment equipment. The new equipment will reduce carbon emissions by 410.4 tons and is expected to increase the company’s revenue by 1.3 million yuan.

The Liaocheng Development Zone has established a special team to promote large-scale equipment updates as well as trade-ins of consumer goods. The team is focused on 54 project areas, including industrial equipment and recycling. The team has identified an investment demand of 22.47 billion yuan and an update demand of 9.09 billion yuan.

Consumer Goods

Companies are offering subsidies for home-appliance trade-ins and for services to dismantle and take away existing home appliances. Applicable large household appliances include refrigerators, TVs, and air conditioners. Local governments are offering automobile trade-in initiatives, issuing policies to create and regulate a market for used cars and to promote services for dismantling scrapped cars and reuse of old car parts.

Sources:
1. People’s Daily, May 14, 2024
http://finance.people.com.cn/n1/2024/0514/c1004-40235482.html
2. People’s Daily, May 14, 2024
http://env.people.com.cn/n1/2024/0514/c1010-40235221.html

Briefings | | |   Economy/Resources

The New Great Game: China’s Growing Clout in Central Asia

A Radio France International article discussed the great geopolitical game unfolding in Central Asia, not between Britain and Russia as in the 19th century, but among the emerging nations of Central Asia and their powerful neighbors – Russia and China.

The French TV channel interviewed historian Emmanuel Lincot to understand this political and economic struggle. Lincot explains that while China had less influence than Russia and Britain in the 19th century, it sought strategic depth by conquering Xinjiang/East Turkestan.

Lincot argues that Beijing has been more successful than Moscow and the West in opening up Central Asia. Chinese companies have built roads and pipelines across the region under China’s Belt and Road Initiative since 2013. There are local divisions in the region, however, with some groups opposing China’s growing clout.

China has bolstered its influence through the Shanghai Cooperation Organization, using it to extradite Uyghurs to China. It is also considering construction of small military bases in Tajikistan aiming to combat drug traffickers and Uyghur militants. For Beijing, economic development in Central Asia goes hand in hand with national security.

Lincot notes that China has failed to win trust among the Muslim populations who increasingly resent the new Chinese order. Protests have been occurring in anti-regime states and support is growing for Turkic Muslim groups like Uyghurs.

Russia will need to contend with China’s new assertiveness in Central Asia. Beijing held a China-Central Asia summit in May 2023, signaling China’s intention to draw former Soviet states away from Moscow and into Beijing’s orbit. The US, EU and Turkey are also aiming to boost their influence in this resource-rich region.

Source: Radio France International, May 14, 2024
https://rfi.my/AbO5

Briefings | | |   Geo-Strategic Trend

Chinese-Brand Surveillance Cameras Widespread in Eastern Europe, Raising Security Concerns

An investigation by Radio Free Europe across nine countries revealed that Eastern European nations have purchased millions of Chinese-manufactured surveillance cameras over the past five years, despite security flaws, lax data management by the manufacturers, and manufacturer ties to the Chinese government.

The report found widespread use across EU and NATO member states or aspiring member states of cameras made by the partially state-owned companies Hikvision and Dahua. Cash-strapped European governments are increasingly opting for products from such low-cost, state-subsidized Chinese firms.

While most countries lack national databases of surveillance cameras, available data and RFE’s reporting showed that Hikvision and Dahua dominate the security camera markets in Hungary, Serbia, Romania, Moldova, Ukraine, Bosnia and Herzegovina, Kosovo, Bulgaria, and Georgia. Experts warn that these companies’ well-documented vulnerabilities make the cameras susceptible to hacking and foreign adversaries, and yet the cameras are in use at sensitive sites like Romanian military bases and Hungary’s counter-terror headquarters.

Such cameras are banned from use in the government by the U.S., the U.K., and Australia. As of now, Europe has not yet implemented similar restrictions. However, with a string of Chinese espionage scandals erupting during President Xi’s recent Europe tour and the EU cracking down on Chinese trade practices, the European foothold of these security camera manufacturing firms could become another flashpoint.

Use of such security devices in countries like Hungary and Serbia is likely to grow as those countries’ relationships with Beijing deepen, heightening concerns over privacy and national security risks from the Chinese-made technology.

Source: Voice of America, May 12, 2024
https://www.voachinese.com/a/china-surveillance-cameras-central-eastern-europe/7605597.html

Briefings | | |   Geo-Strategic Trend

Chinese Middle Class Flocks to Thai Property Amid Economic Pessimism

Recent data show that Chinese buyers were the largest foreign buyers of property in Thailand last year. Analysts suggest that Thailand’s visa-free policy for Chinese tourists and the lack of anti-Chinese sentiment in the country attracted China’s middle class to invest in Thai property. The phenomenon also reflects public pessimism about China’s economic prospects.

Eric, a resident of Fujian, spent around $276,000 to buy two Bangkok apartments for personal use and investment, seeing the Thai properties as a potential stopover for overseas migration if China’s economy worsens.

Statistics show that Chinese buyers purchased 6,614 Thai apartments worth $927 million last year, nearly 46% of total sales, boosting local demand above pre-pandemic levels. Property managers confirm the influx of Chinese buyers.

While foreign ownership in Thailand is capped at 49% and buying doesn’t lead to citizenship, the visa-free policy and lack of anti-Chinese sentiment are positives for Chinese buyers, according to real estate professionals.

Analysts suggest that the present Chinese capital inflow could boost Thailand’s economy and that it reflects public pessimism about China’s prospects. Some cite the competitive “inner circularity” [of China’s economy] and economic gloom as reasons for the exodus of middle class capital.

Hangzhou and Xi’an recently announced the complete removal of housing purchase restrictions, allowing purchases without eligibility checks. Some view this as a “desperate move” by China to prop up the real estate industry. Despite 29 cities lifting purchase restrictions since early last year, the recovery in China’s property market still seems slow, with current inventory potentially taking 5 years to digest if the present pace of sales continues.

Source: Voice of America, May 13, 2024
https://www.voachinese.com/a/chinese-buyers-flock-to-thailand-to-hedge-domestic-property-slump/7608611.html

Briefings | | |   Economy/Resources

U.S. Becomes Germany’s Largest Trade Partner, Surpassing China

Well-known Chinese news site NetEase (NASDAQ: NTES) reported that, according to calculations based on official data from the German Federal Statistics Office, the United States surpassed China to become Germany’s largest trading partner during the first quarter of this year. Data show that from January to March, the trade volume between Germany and the United States – exports and imports combined – reached 63 billion euros. Meanwhile, the trade volume between Germany and China during the same period was slightly less than 60 billion euros.

In the first quarter, Germany’s imports from China fell by nearly 12 percent year-on-year, while its exports to China fell by just over one percent. Currently, the United States accounts for about 10 percent of German merchandise exports. China’s share  of merchandise exports has dropped to less than six percent.

Vincent Stamer, an economist at Commerzbank, explained that “German exports to the United States are rising mainly due to the strong U.S. economy.” Juergen Matthes, economist at the German Institute for Economic Research (IW) said, “China’s economy performed worse than many expected, while the U.S. economy beat expectations.”

In 2023, China maintained its status as Germany’s largest trading partner for the eighth consecutive year, with total China-German trade reaching 253 billion euros. Meanwhile, US-German trade totaled more than 252 billion euros in 2023.

Source: NetEase, May 9, 2024
https://www.163.com/dy/article/J1P0UH7A05566Z8K.html

Briefings | | |   Geo-Strategic Trend