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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

CCTV: Former Deputy Director of the National Bureau of Statistics: China Has More Houses Than 1.4 Billion People Can Consume

Chinese Central Television (CCTV) reported that He Keng, Deputy Director of the Financial and Economic Committee of China’s 11th National People’s Congress and former Deputy Director of China’s National Bureau of Statistics, said “Currently, there is an oversupply in the real estate sector. The exact number of vacant houses varies significantly according to different experts, and with a population of 1.4 billion people, it’s unlikely that all of them can be occupied. It is not wise to aggressively promote real estate development in the face of so many vacant properties. Therefore, in this situation, real estate companies must transition early and do so proactively.” He Keng spoke on September 23 at the 2023 China Real Economy Development Conference.

Source: CCTV, September 24, 2023
https://news.cctv.com/2023/09/24/ARTIvq9vNjNa9MzGGtrgkPHo230924.shtml

Briefings | | |   Economy/Resources

Xi Revives Mao-Era ‘Fengqiao Experience’ to Consolidate Power

{Editor’s note: The “Fengqiao Experience” refers to a practice from China’s Cultural Revolution where masses of citizens would monitor and “reform” those who are labeled as class enemies. In the town of Fengqiao, Zhejiang Province, CCP cadres relied on grassroots mobilization of masses to “reform reactionary elements,” a practice which Mao promoted for nationwide adoption.}

According to China’s CCTV, this year marks 60 years since Mao Zedong promoted implementation of the “Fengqiao Experience” throughout China. On September 20th, Xi Jinping visited the town of Fengqiao, saying that the country must “uphold and develop” the Fengqiao Experience in the new era to “correctly handle internal contradictions” and “solve problems at the grassroots level.”

Xi first mentioned the Fengqiao Experience in 2013, saying that CCP cadres in Fengqiao pioneered the practice of “relying on the people to resolve conflicts on the spot.” He asked cadres to apply “rule of law thinking and rule of law methods” in resolving issues affecting “vital interests of the masses.”

In an interview with Radio Free Asia, exiled Chinese scholar Chen Pokong said that Xi’s reintroduction of the practice shows that Xi must be facing much opposition from within the CCP, and that he is now consolidating power and mobilizing people to fight against his political opponents within the CCP.

Sources:

Radio Free Asia, September 26, 2023
https://www.rfa.org/mandarin/yataibaodao/zhengzhi/hcm-09262023070943.html

Wiktionary.org, “Fengqiao” (楓橋)
https://en.wiktionary.org/wiki/%E6%A5%93%E6%A9%8B
retrieved 2023-09-28

Briefings | | |   Government/Politics

Central American Parliament Approves China’s Rubberstamp Congress as Permanent Observer, Abolishes Observer Status of Taiwan Legislature

The Central American Parliament ratified an agreement on September 25th to admit China’s National People’s Congress (NPC), the country’s rubberstamp Congress, as a permanent observer. Chinese Foreign Ministry spokesman Wang Wenbin welcomed the move at a press conference on September 26th, saying China is willing to further friendly cooperation with the Central American Parliament and countries in Central America on the basis of the one-China principle.

The agreement was approved by a majority vote at the Central American Parliament’s plenary session in Managua, Nicaragua. Wang said the decision reflects the parliament’s firm determination to develop ties with China.

On August 21st, the Central American Parliament adopted a resolution to abolish the status of Taiwan’s Legislative Yuan as permanent observer and admit China’s NPC instead. On September 22nd, the Speaker of the Central American Parliament and the NPC Standing Committee Chairman signed the agreement in Beijing, making the NPC a permanent observer.

The Central American Parliament statement said the NPC’s accession as observer will deepen dialogue around cooperation in areas like education, health, infrastructure, trade, agriculture and food security.

Source: Sputnik News, September 26, 2023
https://sputniknews.cn/20230926/1053644515.html

Briefings | | |   Geo-Strategic Trend

China’s Local Bond Issuance at Record High

China’s Ministry of Finance released an update on local government bond issuance from January to August 2022. Total issuance reached RMB 6.3 trillion, up 4% annually, hitting a record high.

The issuance by Guangdong Province was the highest, with RMB 655 billion (US$ 89.7 billion) issued, followed by Shandong (RMB 480.3 billion or US$ 65.7 billion) and Sichuan (RMB 401.1 billion or US$ 54.9 billion). Other major issuers were Hebei, Jiangsu, Zhejiang (over RMB 300 billion or US$ 41 billion each), and Henan, Anhui, Hunan, Yunnan, Guangxi, Fujian (over RMB 200 billion or US$ 27.4 billion each).

The Ministry of Finance’s report categorized bonds as either new bonds for infrastructure projects or refinancing bonds to repay maturing debt. During the period January-August, new bonds totaled RMB 3.7 trillion (US$ 510 billion), down 12% annually, and refinancing bonds totaled RMB 2.6 trillion (US$ 360 billion), up 44%.

The rise in issuance of refinancing bonds reflects increased pressure facing local governments attempting to service mature debts. China’s weak economic conditions, real estate downturn, declining government revenue from land sales, and slow tax revenue growth have all made local governments more dependent on taking out new debt to repay old debt.

Source: Central News Agency (Taiwan), September 26, 2023
https://www.cna.com.tw/news/acn/202309260299.aspx

Briefings | | |   Economy/Resources