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Le Figaro: French Intelligence Raised Alert about China’s Systematic Espionage

Taiwan Central News Agency carried an article that Le Figaro, the French daily newspaper, had originally published. The article reported that, in recent years, Chinese intelligence agents have widely used professional social websites to explore secrets and to penetrate into the administrative departments, power circles, and large companies in France. Such actions have generated a major threat to national sovereignty for France and put French economic assets at risk.

In the exclusive report that Le Figaro published, it stated that the French Directorate-General for External Security and the Directorate-General for Internal Security have gathered enough evidence to conclude that Chinese intelligence agents have used fake identities and created accounts on business and social websites such as LinkedIn or the Viadeo Group to contact at least 4,000 managers in French government agencies or their employees or some strategic corporate partners. There are about 500 such accounts on LinkedIn. A total of 200,000 Chinese intelligence agents who the Ministry of State Security manages are involved in this project. The online profiles of these Chinese agents show that they often appear to be young, funny, talented, hold a degree from a top university in China, carry a fancy title and work for companies that have over one thousand followers on social media. These agents generally start with warm greetings and complements to their target and extend an invitation for them to come to China for business seminars. Once the agents gather enough evidence such as private photos and financial transaction records, they then use these as a bargaining chip to force the target to work for the Ministry of State Security.

Other than using the online social media to look for their targets, Le Figaro reported that these Chinese spies also find Chinese students or visiting scholars in France to steal or make copies of their research secrets.

Source: Central News Agency, October 23, 2018
https://www.cna.com.tw/news/aopl/201810230355.aspx

Briefings | | |   Geo-Strategic Trend

China Said to Export Large Amount of Luxury Goods to North Korea

The United Nations imposed sanctions against North Korea’s nuclear and missile programs and called on all member states to implement it strictly so as to exert “maximum pressure” on Pyongyang and push the economically distressed North Korea back to the negotiating table. However, there are signs that, since North Korea stopped missile and nuclear tests and Kim Jong-un promised to go nuclear-free at the US-DPRK summit in June this year, sanctions have begun to lose power. At the same time, Russia and China are also calling for relaxation of sanctions against North Korea.

Yoon Sang-hyun, a South Korean opposition party lawmaker, pointed out that “Kim Jong-un has been purchasing luxury goods from China and other places, including a seaplane, high-end musical instruments, high-end TVs, cars, brand name liquors, luxury watches and other gifts, not only for his own family, but also as gifts for the elite inside the government.”

Yoon added that with the expansion of the loopholes, Kim Jong-un will soon be able to achieve the purpose of weakening and offsetting sanctions gradually without giving up nuclear weapons. The opposition law maker said that last year, North Korea imported $640 million worth of luxury goods from China.

China does not publish detailed classified data on customs imports and exports. The number that Yoon quoted is based on a list of embargoed goods from the Korean government.

Yoon pointed out that, compared with the peak level of $800 million in imports in 2014, the scale of North Korean imports of luxury goods from China has shrunk, but compared with the $666 million from 2016, it was a decline of only 3.8 percent. In addition, luxury goods accounted for 17.8 percent of the total value of North Korea’s imports from China ($3.7 billion) last year. Among all imported luxury goods, high-end TVs and other electronic appliances accounted for more than half or about $340 million, followed by cars ($204 million) and liquor ($35 million).

According to figures that China’s General Administration of Customs released last month, China’s January through August trade with North Korea fell by 57.8 percent year-on-year to $1.51 billion.

The figures that Yoon quoted also show that, since Kim Jong-un came to power at the end of 2011, the amount of money that North Korea spent on imported luxury goods from China has increased to $4 billion.

Source: Deutsche Welle Chinese, October 23, 2018
https://p.dw.com/p/36xRW

Briefings | | |   Geo-Strategic Trend

Global Times: Trump Quitting UPU Because of Jealousy

Global Times recently reported that, after quitting the Paris Climate Agreement and UNESCO, along with many other organizations and agreements, U.S. President Trump once again decided to continue down this path. Now it is the turn of the Universal Postal Union (UPU). It appears that Trump could not live with the fact that, under UPU rates, China can enjoy a lower shipping rate when sending packages to the United States. UPU coordinates international postal shipping costs with a fair balance between industrialized countries and developing countries. The balance was to improve the economic development in Asia and Africa. Apparently, Trump’s Director of the Office of Trade and Manufacturing Policy, Peter Navarro, believes quitting UPU is one of the convenient methods to defeat China and to challenge the “status quo.” Chinese experts expressed their belief that Trump’s new move is not going to fundamentally change the fact that China produces affordable products, and the true victims will be the American consumers. {Editor’s note: The U.S. Postal Service loses money due to UPU lower rates for developing countries.}

Sources:
1. Global Times, October 18, 2018
http://world.huanqiu.com/exclusive/2018-10/13290946.html
2. CNN, October 17, 2018,
https://www.cnn.com/2018/10/17/business/postal-treaty-withdrawal/index.html

Briefings | | |   US-China Relations

World Journal: China Turns to Europe and South America for Pork

Well-known U.S. Chinese language newspaper World Journal recently reported that the U.S. advantage in the Chinese pork market is changing. The United States used to have a significant market share in the Chinese pork market. However, in April, China increased the U.S. pork import tariff by 25 percent and increased it again in July to 70 percent. This resulted in pork imported from the U.S. being very pricey. An additional situation is that China is now suffering from swine fever, which has added to its dependency on imported pork. The situation has been driving Chinese importers to turn to Europe and South America. Both Spain’s largest pork supplier El Pozo Alimentacion SA and some Argentina government officials told the press that they received orders from China. It appears that U.S. pork manufacturers will be hurt in the short run. In the long run, the global pork supply chain will most likely reshuffle. As the largest pork market, China consumes half of world’s pork. Today’s Chinese domestic supply level will not be able to fulfill the entire domestic demand.

Source: World Journal, October 20, 2018
https://bit.ly/2yrsFGl

Briefings | | |   Economy/Resources US-China Relations

Mainland Affairs Council: Beijing Interferes with Taiwan’s Election

On Monday October 22, Taiwan’s Investigation Bureau chief said in a Legislative Yuan hearing that the bureau had gathered intelligence that indicated the Chinese government had intervened in Taiwan’s election in the form of financial transfers.

China’s Taiwan Affairs Office (TAO) spokesperson Ma Xiaoguang responded that such a claim was “a pure fabrication.”

In response to TAO, Taiwan’s Mainland Affairs Council (MAC) stated that, according to the provisions of the Political Contribution Law and the Criminal Law, foreign forces may not provide political contributions to Taiwan’s election candidates or to groups, and may not  intervene illegally in Taiwan’s elections. The Investigation Bureau of the Ministry of Justice also stated that the judicial prosecuting authorities have investigated the relevant cases and that this Council does not express opinions.

MAC said that the government attaches great importance to and will fully safeguard the fairness and impartiality of the year-end elections. To this end, the election authorities and the police force have strengthened countermeasures to prevent external forces from improper intervention intended to undermine the operation of Taiwan’s democratic system.

MAC pointed out that the Chinese authorities used to use the cross-strait exchange platform to conduct United Front work to divide Taiwan and take advantage of any pre-election opportunities in order to make trouble. In the past, Beijing has used military exercises and harsh criticism in an attempt to interfere or influence elections. The Taiwanese people are very offended.

MAC appealed to mainland China asking it to face the cross-strait reality, respect and learn from Taiwan’s democratic electoral system, and not intervene in Taiwan’s elections and interfere in Taiwan’s internal affairs. The mainland should respect Taiwan’s democratic electoral mechanism and the people’s right to free elections.

Source: Central News Agency, October 22, 2018
https://www.cna.com.tw/news/acn/201810220349.aspx

Briefings | | |   Government/Politics

BBC Chinese: China Saw Slowest Growth Rate in Ten Years

BBC Chinese recently reported that, according to the Chinese National Bureau of Statistics, China’s third quarter GDP year-over-year growth rate fell to 6.5 percent. This rate is lower than the 6.6 percent Reuters estimated and is the lowest rate since 2008. China’s first quarter growth rate was 6.8 percent and the second quarter number was 6.7 percent. In the past few months, China has been taking action to improve liquidity and infrastructure investments. However, with its high debt level, the market did not turn optimistic. The Chinese stock market has been free-falling, which does not reflect the still “rapid” growth rate. Many experts now tend to agree that China’s best bet should be giving up some economic benefits to arrive at an agreement with the United States, and quickly declare success. This way, China can immediately focus on fixing some of the deeper issues in the economy. The Chinese leadership has been making positive comments to boost the market. Vice Premier Liu He recently just told the press that China and the U.S. are “in talks.”

Source: BBC Chinese, October 19, 2018
https://www.bbc.com/zhongwen/simp/chinese-news-45915821

Briefings | | |   Economy/Resources

Duowei News: Xi Jinping Speeds up Military-Civilian Integration – Opportunity for Private Businesses?

Duowei, the Pro-Beijing Overseas media, reported that Xi Jinping recently hosted the second National-level Military-Civilian Integration Development Committee meeting and delivered a speech. China has been pushing for Military-Civilian integration which promotes cutting-edge technology and talent exchanges between the military and private companies in order to enhance military strength and the competitiveness of private companies. The military-civilian integration development strategy was included in the report of the 19th National Congress and written into the Constitution.

The Duowei article stated that promoting the integration of military and civilian development means that the future development of China’s national defense industry will introduce the power of private capital, which will provide new opportunities for the future development of the military industry. According to the article, there are currently about 130,000 private high-tech enterprises in China, but only about 3,000 have entered the military field. The conversion rate of China’s military scientific research results is only 15 percent, far lower than the 40 percent rate in developed countries. Among the major enterprises that have obtained research and production licenses for weapons and equipment, private enterprises account for more than two-thirds. Meanwhile technical cooperation and the flow of talent between the Chinese military, military research institutes, and private high-tech enterprises are also surging. Private companies could have the opportunity to participate in the areas of National defense information, equipment manufacturing, and the development of new materials. The article concluded that the advancement of military-civilian integration could provide a different way of thinking in the current media speculation that Beijing is allowing “the state to advance and the private sector to retreat” or Guo jin min tui (国进民退).

Source: Duowei News, October 18, 2018
http://culture.dwnews.com/renwen/news/2018-10-18/60091829_all.html

Briefings | | |   Government/Politics

RFA: The Last Private Think Tank Faces Shutdown

Radio Free Asia (RFA) published an article about Tianze, a private think tank that is facing shutdown in China. Beijing Tianze Research Institute is considered the last private think tank. It consists of liberal Chinese economists. For many years, the institute was registered under the name of the “Tianze Consulting Company.” On October 9, the Beijing Municipal Administration of Industry and Commerce notified Tianze that its license had been revoked because it conducted business that was “outside the scope of its business.”

During a hearing held on October 17, the lawyers representing Tianze questioned how the Beijing Industrial and Commercial Department misused the law. The charge regarding its business scope referred to the claim that the company launched business in education without prior approval. Tianze countered that they ran seminars but not schools. On the other hand, if the Department found that the business scope of the enterprise had changed and there was no industrial and commercial registration, in accordance with the regulations, it should first have issued a warning to require the enterprise to register. Only in the case of “serious circumstances” can they revoke the license. Also, during the annual inspection, the Beijing Industrial and Commercial Department never raised the issue.

The famous economists Mao Yuzhen, Zhang Shuguang, Sheng Hong, Wu Bin and others, and the Beijing Elephant Culture Company founded Tianze in 1993. It operates under the name of the Tianze Research Institute Co., Ltd. In 2005, it got in trouble due to the comments its members made in support of the reform of the property rights of  state-owned enterprises and in promoting marketization. In 2012 its business license was revoked.

Subsequently, the Tianze Research Institute continued to operate under the name of the Tianze Consulting Company. In January 2017, the authorities closed the company’s website claiming it failed to obtain a permit. At the beginning of 2018, the landlord of the house that Tianze rented forcibly took it back and the police welded the entrance door shut.

Currently, the Tianze Institute is still waiting for the final verdict. RFA called the Beijing Haidian Industrial and Commercial Bureau, but the no one ever answered the phone.

Source: Radio Free Asia, October 19, 2018
https://www.rfa.org/mandarin/yataibaodao/renquanfazhi/xql2-10192018105407.html

Briefings | | |   Government/Politics