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UDN: Vietnam to Restart Rare Earth Mine, Will be Largest in the World

Vietnam will restart its largest rare earth mine next year according to a recent report by United Daily News (UDN), one of the primary Taiwanese news groups. Two companies participating in the bid told Reuters that this Western-backed mining project will be the largest rare earth mine in the world. According to estimates from the U.S. Geological Survey, Vietnam ranks second in the world in rare earth reserves. A large part of these reserves remain untapped.

U.S. President Biden recently visited Hanoi with the aim of deepening relations between the United States and Vietnam. He signed an agreement enhancing Vietnam’s ability to attract U.S. investors for the purpose of developing rare earth mines.

Analysts and foreign officials say the purpose of the U.S. investing in Vietnam’s rare earth mines is to lighten dependence on China and reduce supply chain risks. Given China’s near-monopoly position as the world’s biggest rare earth metal producer, China has been able to set low prices so as to discourage other countries’ willingness to invest in their own rare earth mining operations. Refining rare earths metals is a very complex process, and China has mastered many related processing technologies.

Source: UDN, September 25, 2023
https://money.udn.com/money/story/5599/7463726

Briefings | | |   Economy/Resources Geo-Strategic Trend

Lianhe Zaobao: U.S. Companies Pessimistic About Business Prospects in China

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to a survey of its member companies by the U.S.-China Business Council, rising bilateral tensions are affecting every aspect of U.S. companies’ operations in China. This includes hurt sales, lower profits, and canceled or delayed investments.

In this latest annual survey, the proportion of companies expressing pessimism about the prospects of their business in China over the next five years rose to 28 percent from 21 percent last year, setting a new record high. The share of companies with an optimistic outlook dropped to a record low of 49 percent. More than one-third of the companies surveyed said they had reduced or suspended investment plans in China during the past year, also a record high and well above the 22 percent in last year’s survey. This means the businesses’ commercial presence in China will likely see further decline.

These businesses’ decisions are driven by the increased costs and uncertainty of doing business in China, as well as by increased restrictions on selling products into the Chinese market. Particularly unsettling for U.S. companies are China’s far-reaching rules on data handling, personal information, and cybersecurity. Some 97 percent of the companies surveyed expressed concern over these issues.

The U.S.-China Business Council said that most of the companies involved in the survey are large U.S. multinationals that have been operating in China for decades.

Source: Lianhe Zaobao, September 27, 2023
https://www.zaobao.com.sg/realtime/china/story20230927-1437188

Briefings | | |   US-China Relations

CNA: India Suspends Travel Visas Issuance to Hong Kong Passport Holders

Primary Taiwanese news agency Central News Agency (CNA) recently reported that India has suspended the issuance of tourist visas to holders of Chinese and Hong Kong SAR passports. In the past, Hong Kong passport holders could apply for an Indian e-Visa online or submit their application in person at the Indian Consulate General office in Hong Kong. Business visas are not affected, and British National (Overseas) (BNO) passport holders are still eligible to apply for visas.

This move may be related to the tense relations between China and India. Regarding visa eligibility of Hong Kong BNO passport holders, India is probably drawing a distinction between Hong Kong SAR passport holders (regarding them as Chinese citizens) and BNO passport holders, who are British nationals.

The Indian online visa platform shows a list of countries and regions whose residents can apply for Indian visas. Mainland China, Hong Kong and Macau are excluded from the list, but Taiwan residents are included.

The Consulate General of India in Hong Kong did not respond to CNA’s inquiries on this matter.

Source: CNA, September 30, 2023
https://www.cna.com.tw/news/acn/202309300053.aspx

Briefings | | |   Geo-Strategic Trend

Xi Jinping: Six Points on “Promoting Chinese-Style Modernization”

On the eve of China’s National Day, Xi Jinping published an article outlining six directives for promoting “Chinese-style modernization”:

  • First: top-level design and self-reliance are preconditions for China’s being able to open up to the outside world. Xi said that promoting Chinese-style modernization requires comprehensive planning and systematic implementation. It involves both top-level design to meet development goals and bold exploration.
  • Second: adhere to strategies long-term rather than changing course arbitrarily.
  • Third: defend previous accomplishments while innovating to uphold Chinese characteristics and principles.
  • Fourth: balance efficiency and fairness, creating higher efficiency than capitalism while safeguarding social justice.
  • Fifth: achieve a dynamic balance between vigor and order, stimulating creativity while preventing undesirable values.
  • Sixth: prioritize self-reliance and strengthen national scientific capabilities, looking to [the country’s] strategic needs as the guide for original research and winning key technology battles.

Source: Central News Agency (Taiwan), September 30, 2023
https://www.cna.com.tw/news/acn/202309300186.aspx

Briefings | | |   Government/Politics

New “People’s Armed Forces Departments” in Chinese State-Owned Enterprises

The Shanghai Urban Investment Group recently established a People’s Armed Forces Department (AFD) under the management of the PLA Shanghai Garrison. This follows similar AFDs established by other state-owned enterprises (SOEs) in cities like Wuhan and Huizhou this year.

Chinese law allows for establishment of AFDs for purposes of enterprise security and emergency management. Some believe the recent trend represents Beijing’s response to growing social unrest or civil rights activism. Others have wondered if the trend is in preparation for greater “management [of society] by the military.”

The AFD of the Shanghai Group, whose business focuses on urban construction and infrastructure, was established on September 28th with PLA officers present. An attending PLA official requested that the AFD help “grasp the political nature of the Party’s armed forces work.” Commentator Bi Xin provided the interpretation that AFDs are meant to “control unrest between the government and people.” It is plausible that military cooperation with an urban construction business such as the Shanghai Group could aid in suppressing potential unrest.

Over 20 SOEs have now established armed forces departments this year. In August, three SOEs in Huizhou set up a joint AFD. In September, the Wuhan Agricultural Group set up an AFD, noting that other Wuhan SOEs had done so as well. The Mongolian-based dairy distributor Mengniu Group also established a AFD in May.

Commentator Zhang Jianping said that “maintaining social stability” (suppressing unrest) is in the interest of urban construction and real estate businesses given how indebted the sector has become. He also remarked that AFDs are useful in that they provide veteran PLA soldiers with jobs, and that Chinese society has recently become more and more unstable and unlawful.

Source: Radio Free Asia, October 3, 2023
https://www.rfa.org/mandarin/yataibaodao/zhengzhi/gt1-10032023022605.html

Briefings | | |   Defense/Military

CCP Funds Taiwan Communist Party to Infiltrate Elections: Chairman Indicted

The chairman and vice chairman of the Taiwan People’s Communist Party (TPCP), Lin Te-wang and Cheng Chien-hsin, were indicted on charges of receiving financial support from China’s Taiwan Affairs Office (TAO) to influence Taiwan’s elections. Prosecutors said Lin was expelled from Taiwan’s Kuomintang party (KMT) in 2016, lost an election, then formed the TPCP in 2017 and served as its chairman. Since then, Lin has contacted TAO officials and led delegations to China to develop ties. In 2018, a TAO official instructed Lin to run for office and nominated Cheng as well. During their campaigns, they received funding from the TAO. The TPCP has also protested visits by U.S. officials. Prosecutors said the TPCP has become an agent of China, using intimidation to influence Taiwan’s sovereignty and democracy.

Analysts say this incident shows China’s sophisticated infiltration model of using small parties to influence specific groups so as to achieve the effect of “encircling the city from the countryside.” The lack of awareness by Taiwanese people is also a problem, with numerous cases of Taiwanese people spying for China.

Prosecutors have indicted Lin and Cheng and recommended harsh sentencing under Taiwan’s Anti-Infiltration Law. Nonetheless, some experts have expressed concern that Taiwan’s legislation is inadequate for this case, with punishments lighter than in other countries — that there is a need for greater consciousness among the public regarding China’s hostile intentions and latent infiltration across all levels of society.

Source: Radio Free Asia, October 3, 2023
https://www.rfa.org/mandarin/yataibaodao/gangtai/twspy-10032023102526.html

Briefings | | |   Geo-Strategic Trend

China’s Version of the Story on Removal of Floating Barriers at the Scarborough Shoal

{Editor’s Note: Last week many international media reported that China’s Coast Guard deployed floating barriers in the disputed Scarborough Shoal area to block Philippine fishing boats from entering those waters. The Philippine Coast Guard responded by cutting the ropes so that its fishermen could enter the lagoon and fish.}

China’s state media has said that reports about the Philippine Coast Guard are a lie, saying that it was China that removed the floating barrier from the Scarborough Shoal, not the Philippine Coast Guard. Xinhua published a statement by Chinese Coast Guard Spokesperson Gan Yu on September 28:

On September 22nd, official vessels of the Philippine Fisheries and Aquatic Resources Bureau illegally entered the waters near China’s Scarborough Shoal without China’s government approval, engaging in provocative activities. The Chinese Coast Guard lawfully employed measures such as verbal warnings and route controls to effectively manage the situation. They temporarily deployed anti-intrusion nets in response to the Philippine vessels’ attempt to forcibly enter the lagoon. On September 23rd [the China Coast Guard] proactively removed those blockades and restored the area to a state of normal control. These operations were conducted professionally and in accordance with the law. The Philippine claim that they removed Chinese barriers [by themselves] is entirely fabricated and self-staged.

Source: Xinhua, September 28, 2023
http://www.news.cn/world/2023-09/28/c_1129890388.htm

Briefings | | |   Geo-Strategic Trend

Miles Yu: Xi Jinping Misjudges U.S. Politics in Making Abstract Demands of Biden

In July’s episode of the “China Insider” podcast hosted by Miles Yu, who served as principal China policy and planning adviser under former U.S. Secretary of State Mike Pompeo, Yu talked about how Xi Jinping misjudged U.S.-China relations this year. According to Yu, Xi’s main concern has not been specific U.S. policies but rather how U.S. political ideology might influence the Chinese Communist Party’s (CCP’s) regime. Xi wished to secure a series of commitments from U.S. leadership, but what Xi asked for was not easy for the U.S. to carry out concretely. Thus Xi’s perceived stumbling blocks in U.S.-China relations have not been addressed.

In a March 2023 phone call, Biden agreed to several abstract requests made by Xi, including commitments regarding U.S. geopolitical influence over China and Taiwan. Biden’s administration has not followed up with concrete actions, however. Yu points out that Xi operates within communist China’s authoritarian and dictatorial model, so he has been unable to understand why his demands are unrealistic from the perspective of the U.S. model of government.

Yu said that Xi made several strong demands of Biden during their phone call in March.

  • First, Xi hoped that the U.S. government would clearly state that it does not seek “regime change” in China. Biden thought for a moment and gave a commitment on that.
  • Second, Xi demanded that the Biden government assure China that it won’t organize “anti-China alliances.” Biden thought about this request and said that the U.S. has a strong alliance system worldwide, but there is no alliance system specifically targeting a particular country. So Biden agreed to this request by Xi.
  • Third, Xi Jinping asked Biden to promise not to support Taiwan independence. Biden agreed.

Following the phone call, Xi believed that he had secured some fundamental ideological commitments from the U.S. government. The Biden administration, on the other hand, felt that Xi’s demands were abstract and unrealistic (hard or impossible to implement) — this is why Biden was willing to agree to them.

After the phone call, the U.S. government didn’t take any concrete measures based on Xi’s demands — they couldn’t be implemented. China has been complaining that President Biden has not kept his promises and hasn’t taken concrete actions. Under pressure from the Chinese Communist Party (CCP), the Biden administration sent cabinet-level members to China to visit, hoping to implement some measures from the March phone call. However, these officials (including Antony Blinken, Janet Yellen, and John Kerry) focused on specific, practical matters and did not address the larger strategic issues that were irking Xi. Indeed, in Yu’s assessment, Xi and the CCP have a misguided understanding about how the U.S. political system works — despite a series of cabinet-level visits to China, Xi’s demands couldn’t be addressed.

Source: Hudson Institute Website, July 28, 2023
https://www.hudson.org/foreign-policy/zhongguoneimu

Briefings | | |   @CS US-China Relations