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Geo-Strategic Trend - 19. page

Net Ease: China’s Water Cannon Injures Filipino Admiral, Renders Filipino Ship Inoperable

Chinese Internet portal NetEase has published a commentary claiming victory following an incident on March 5 when China’s maritime police used high-pressure water cannons against a Filipino boat, causing injuries to several Filipino crew members and damaging the ship. The Filipino boat was on a resupply mission for Filipino troops stationed at the disputed Second Thomas Shoal, a submerged reef in the South China Sea that is claimed by several countries including China and the Philippines.

The Associated Press reported that the Chinese water cannons shattered the windshield glass of the Filipino boat’s cockpit, resulting in four injuries. The NetEase article bragged that Filipino Admiral Alberto Carlos, who was aboard the resupply boat, was among those injured in the incident, adding that Adm. Carlos is Commander of the Philippines’ West Theater and calling him a “big fish” (i.e. an important person in the Philippines’ military).

From the NetEase article: “The Chinese Coast Guard ship fired a high-pressure water cannon at the supply ship where Carlos was, instantly shattering the glass in the cockpit of the Philippine supply ship. The situation in the Philippine ship’s cabin was chaotic. Four Filipino personnel were bleeding and injured, including Adm. Carlos. Subsequently, Chinese water cannons swept across the superstructure of the Philippine ship, destroying external equipment including communication antennas, causing serious damage to the Philippine ship.”

According to the NetEase article, a U.S. Morpheus-class littoral combat ship was in nearby waters during the incident. “The U.S. ship tried to enter the Second Thomas Shoal to assist the Philippine ship. However, not far from the Littoral Combat Ship, a PLA Navy warship and a carrier-based helicopter were on patrol, and so the U.S. ship dared not to act rashly.” The article also commented that, although the U.S. has signed a Mutual Defense Treaty with the Philippines, the Biden administration dared not take real actions to help the Philippines; it only offered lip service.

There have been several previous incidents involving clashes between the Chinese Coast Guard and the Philippine military, including another incident with a water cannon in August 2023 and an incident in February 2023 when the Chinese maritime police used a laser against a Philippine boat, temporarily blinding one Philippine soldier.

It is not clear whether the NetEase article is just an individually-authored piece or if it was written at the behest of orders from the CCP. The article appears to be written by an individual journalist, but the Chinese Communist Party has a long-standing practice of writing articles and then letting its fans (members of the “fifty-cent” party) publish the articles in their name, packaging the articles as “public opinion.”

Sources:

NetEase, March 9, 2024
https://m.163.com/dy/article/ISQ2OUKI05561T48.html

Associated Press, March 6, 2024
https://apnews.com/article/south-china-sea-philippines-disputed-second-thomas-shoal-5fec2d298151891d79cc077ff02f3a74

Briefings | | |   Defense/Military Geo-Strategic Trend

China Among Largest Foreign Direct Investors in Indonesia’s New Capital City

In 2019 Indonesian President Joko Widodo ratified a motion to move Indonesia’s capital city from Jakarta to the new planned city of Nusantara, which is currently under construction and is to be inaugurated in 2024. China has become one of the biggest foreign investors in this new “smart city,” focusing mainly on infrastructure and industrial projects. The Nusantara Capital Administration has held investment forums and conferences in Beijing, Shanghai, and Shenzhen, to attract China’s money. Widodo said in October 2023 that in two years Beijing would bypass Singapore to become the country that contributes most to Indonesia in terms of foreign direct investment.

Research published by the University of Kentucky in 2021 showed that China had already invested in “smart cities” in Southeast Asia countries such as Malaysia, the Philippines, Thailand, and Myanmar.

Source: Voice of America, March 6, 2024
https://www.voachinese.com/a/china-to-invest-in-indonesia-new-capital-20240305/7514971.html

Briefings | | |   Economy/Resources Geo-Strategic Trend Government/Politics

China’s Official Media Blasts European Parliament Statements on Taiwan

China Daily, the official English-language mouthpiece of Chinese government, recently published an editorial criticizing the European Parliament (EP) for making statements about Taiwan.

During a recent plenary session, the EP adopted the “Annual Report on the Implementation of the Common Foreign and Security Policy, 2023” in a vote of 338 in favor, 86 against and 122 abstentions. The report included language stating that “Neither Taiwan nor China is subordinate to the other” and “only Taiwan’s democratically elected government can represent the Taiwanese people on the international stage.” China Daily has argued that this wording is “problematic” and an “infringement on China’s sovereignty and territorial integrity.”

The annual report also calls for supporting Taiwan’s participation in international organizations. China Daily has responded by accusing the EP of “interfering in China’s internal affairs.” It argues that the report will negatively impact China-EU relations, accusing some European Parliament politicians of being influenced by a “Cold War mentality” or “instigated by Washington to challenge China over Taiwan.”

Source: China Daily, March 3, 2024
https://global.chinadaily.com.cn/a/202403/03/WS65e4799fa31082fc043ba45f.html

Briefings | | |   Geo-Strategic Trend

Sina: US-led “Shared Principles on 6G” Aims to Curb China’s 6G Development

Well-known Chinese news site Sina (NASDQ: SINA) recently published an article commenting on a “Joint Statement Endorsing Principles for 6G” that was jointly released by the United States as well as nine other countries. The article stated that “this US-led effort is obviously aimed at curbing China’s 6G development.”

The Sina article quoted sources saying “this move is intended to compete for dominance of the 6G standard.” The article also stated that “China has an extremely large user base, and Chinese technology companies such as Huawei have their own independent 6G strategies. … China has established a 6G promotion group in 2019 to systematically promote various tasks such as demand, technology, standards and international cooperation. The group also launched 6G technology trials.”

The ten countries party to the statement include the United States, the United Kingdom, Australia, Canada, the Czech Republic, Finland, France, Japan, South Korea and Sweden. A copy of the statement released by the White House on February 26 enumerated six “shared principles” to be fulfilled by 6G networks: “Trusted Technology that is Protective of National Security”, “Secure, Resilient, and Protective of Privacy”, “Global Industry-led and Inclusive Standard Setting & International Collaborations”, “Cooperation to Enable Open and Interoperable Innovation”, “Affordability, Sustainability, and Global Connectivity”, and “Spectrum and Manufacturing.”

Sources:
Sina, February 28, 2024
https://news.sina.com.cn/c/2024-02-28/doc-inakqwnf2276916.shtml

The White House, “Joint Statement Endorsing Principles for 6G: Secure, Open, and Resilient by Design.”
https://www.whitehouse.gov/briefing-room/statements-releases/2024/02/26/joint-statement-endorsing-principles-for-6g-secure-open-and-resilient-by-design/

Briefings | | |   Geo-Strategic Trend Information/Technology

Global Times: South Korea’s EV Subsidy Plan Unfavorable to Chinese Companies

Global Times, a tabloid under the Chinese Communist Party’s flagship People’s Daily newspaper, recently reported that the South Korean Ministry of the Environment has updated its electric vehicle (EV) purchase subsidy plan for 2024. According to the article, certain vehicles will be disadvantaged by the new subsidy plan, including:

  • vehicles equipped with lithium iron phosphate batteries (the main product of Chinese battery companies), and
  • cars built by foreign companies that are not able to set up direct after-sales service centers throughout South Korea.

The new subsidy plan introduces a “battery environmental protection factor” aiming to account for the “waste battery recycling value” in the subsidy. According to this new standard, electric vehicles equipped with lithium iron phosphate batteries will be subsidized less on the grounds that such batteries contain less valuable recyclable metals. Subsidies for Korean consumers purchasing EVs equipped with Chinese batteries will shrink by up to 40 percent.

“Some have said that this move is the South Korean government’s response to the rapid increase in the domestic supply of electric vehicles equipped with Chinese batteries.” One commentator said that “the new policy is to align with foreign policies such as the U.S. Inflation Reduction Act, which is detrimental to Chinese battery companies to a certain extent.” According to Yonhap News Agency, “about 96.4 percent of South Korea’s EV battery imports currently come from China.”

Source: Global Times, February 7, 2024
https://m.huanqiu.com/article/4GUtT6ffRr9

Briefings | | |   Geo-Strategic Trend Information/Technology

Chinese E-Commerce Giants Temu and SHEIN Gain Ground in Japan

Chinese e-commerce platforms like Temu and SHEIN have seen large gains in Japan by offering low prices and decent quality. Temu, which focuses on daily essentials, has acquired over 15 million monthly active users in Japan within 6 months of its launch. This figure already exceeds 50% of the average user base of Japan’s top 3 e-commerce sites – Amazon Japan, Rakuten Ichiba, and Yahoo Shopping. Meanwhile, SHEIN has surpassed leading Japanese fashion marketplace ZOZOTOWN with 8.39 million users in January 2024, more than triple the number from a year earlier.

The secret behind behind the business models of Temu and SHEIN is the direct supply chain they have with small and medium manufacturers in China. This allows them to offer competitive pricing without compromising much on quality. Aggressive marketing tactics like heavy discounts and coupons have also helped them to rapidly gain market share.

As growth in the overseas footprint of Chinese ecommerce firms (now including TikTok) continues, they face barriers ranging from national security concerns to consumer rights and competition / IP infringement issues.

Some have voiced concern that the rise of Temu and SHEIN in Japan could threaten existing Japanese players. Moreover, these firms may face issues with the Japanese government over human rights concerns and intellectual property violations affecting the companies’ supply chains. SHEIN is also facing a lawsuit from leading Japanese fashion brand Uniqlo.

In the US, Temu and SHEIN are already in the crosshairs of the US-China Economic and Security Review Commission for links to forced labor in Xinjiang as well as IP theft.

Source: Nikkei Chinese, February 21, 2024
https://zh.cn.nikkei.com/china/ccompany/54870-2024-02-21-05-00-53.html

Briefings | | |   Geo-Strategic Trend

Foreign Automakers Struggle in China’s Shifting Market

Japanese and Western automakers are struggling in the Chinese market, with steeper sales declines in 2023 compared to the Chinese auto market more broadly.

Honda’s 2023 sales fell 10% to 1.23 million vehicles in China while Nissan’s sales dropped 16% to 790,000 units. Toyota sales were flat at 1.9 million units. Mitsubishi Motors announced in October 2022 that it would cease production in China due to poor sales. Within about two months Mitsubishi’s dealership in Guangzhou was replaced by an outlet for a Chinese auto brand.

Volkswagen’s 2023 sales in China rose 2% to 3.23 million while sales of GM’s Buick brand fell 20% and Cadillac sales dropped by 8%.

Sales in China of electric and plug-in hybrid passenger vehicles increased by 30% in 2023, with Chinese automaker BYD expanding its selection of electric car models. China’s market for gasoline passenger vehicles shrank 7%, while the broader market for passenger vehicles (including electric vehicles) grew 4% to 21.92 million units.

Japanese brands Honda and Nissan lagged in electric vehicle sales even as their gasoline models face fierce price competition from Chinese brands. Japanese automakers face hard choices on where to focus limited resources. They face stiff price competition from Chinese manufacturers, though sales in China remain high enough to warrant continued competition in the electric vehicle segment. The plug-in hybrid segment may get less attention going forward.

Fierce price competition has spread to affect gasoline car models, and major foreign brands have cut prices substantially. Japanese brands offered steep discounts, with discounts on new Hondas averaging $3,500 and Nissan discounts averaging $3,200. Meanwhile, the average discount on BYD vehicles averaged just $750.

Source: Nikkei Chinese, February 22, 2024
https://zh.cn.nikkei.com/industry/icar/54748-2024-02-22-05-00-31.html

Briefings | | |   Geo-Strategic Trend

Mingpao: China’s 2023 Foreign Direct Investment Hit 30-Year Low

Mingpao, one of the primary Hong Kong newspapers, recently ran a report on data released by China’s State Administration of Foreign Exchange. According to the released data, China’s “Direct Investment Liabilities” in its international balance of payment table rose by just US$33 billion in 2023. This represents a decrease of 82 percent from 2022, marking the lowest level of Foreign Direct Investment (FDI) in  China since 1993.

According to data from the Japanese government, net new investment by Japanese companies in China last year was the lowest in at least 10 years, and was lower than the funds flowing from Japan into Vietnam or India. Taiwanese government data showed that new investment by Taiwanese companies in Mainland China last year also reached the lowest level since 2001, with new investment reaching a year-over-year decrease of 39.8 percent. New foreign investment by Korean companies in China in the first nine months of 2023 also dropped 91 percent compared with 2022, falling to the lowest level since 2002. However, German companies’ direct investment in Mainland China hit record high last year.

Advanced economies across the globe have raised interest rates even as China has been cutting rates to stimulate its economy. Thus international companies are increasingly incentivized to store their cash overseas, outside of China, where they can earn more interest.

Source: Mingpao, February 20, 2024
http://tinyurl.com/3xx4p6r2

Briefings | | |   Economy/Resources Geo-Strategic Trend