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Geo-Strategic Trend

CNA: China’s First-Quarter FDI Fell Sharply

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, according to the latest data released by China’s Ministry of Commerce, China’s actual use of foreign direct investment (FDI) in the first quarter was 301.67 billion yuan (around US$42.5 billion), a year-over-year decrease of 26.1 percent.

{Editor’s note: The Ministry of Commerce press release mentioned several industries in China that saw year-over-year increases in FDI, as well as several foreign countries that increased their direct investment in the country. The release omitted data about which industries’ FDI contracted and which foreign countries decreased their FDI in China.} China’s accommodation and catering industry grew the fastest in terms of FDI in the first quarter, reaching 84.7 percent year-over-year growth, followed by the construction industry, which grew at 17.5 percent year-over-year. The actual use of foreign investment in the medical equipment and instrumentation manufacturing industry increased by 169.7 percent year-over-year. In the first quarter, German investment in China increased by 48 percent year-over-year. ASEAN investment in China increased by 5.8 percent year-over-year. The head of the Foreign Investment Management Department of the Chinese Ministry of Commerce explained that fluctuations in data are common. The official press release did not disclose investment figures for other countries.

Source: CNA, April 19, 2024
https://www.cna.com.tw/news/acn/202404190337.aspx

Briefings | | |   Economy/Resources Geo-Strategic Trend

BBC Chinese: New U.S. Land-Based Missile System Deployed in Philippines

BBC Chinese Edition reported on April 19th that the U.S. Army’s new land-based missile launch system, the Typhon Weapon System, was recently deployed in the northern Philippines. This is the first time this new land-based missile system has appeared in the “First Island Chain.” Medium-range missiles have a range of more than 2,000 kilometers. This means the Typhon System is able to reach China’s southeastern coastal areas, the South China Sea, and the Taiwan Strait.

Experts view this development as a warning to China and a message about the United States’ military capabilities in the Indo-Pacific region. In response to the U.S. move, Beijing immediately released a high-profile counter-signal, announcing military dialogue with Cuban military leaders.

The Typhon System has mobile combat capabilities and can be mounted on heavy transport aircraft for quick deployment. The Tomahawk missiles launched by the Typhon system have medium-range strike capabilities. This means it is capable of long-distance deep strikes against high-value targets such as command and control centers, ammunition depots, and airports. The Typhon System has a longer range than the U.S.’s Army Tactical Missile System (ATACMS).

The war in Ukraine has shown how difficult it is to attack a mobile system such as the Typhon. The system can also launch the RIM-174B Standard Extended Range Active Missile, which is able to attack both land and sea targets. This latest deployment appears to serve as a verification that the United States can quickly deploy the system to overseas military theaters.

Source: BBC Chinese, April 19, 2024
https://www.bbc.com/zhongwen/simp/world-68853532

Briefings | | |   Defense/Military Geo-Strategic Trend

China’s Gallium Export Restriction Sends Prices Soaring, Heightens Strategic Concerns

The price of gallium has more than doubled since China restricted exports of the metal last summer. The export controls, first announced in July 2023, were to “safeguard national security and national interests.” Demand for gallium has not fallen, as gallium is of strategic importance to the semiconductor industry.

An article from the Radio France Internationale (RFI) “Raw Materials” column notes that China’s decision to restrict gallium exports had immediate consequences. Chinese gallium exports nearly halted in August and September of 2023 before resuming at much lower volumes. In the first two months of 2024, China’s gallium exports were just over 2,700 kg, compared to over 8,800 kg in the same period during the previous year.

The supply disruptions have caused prices to skyrocket, doubling in just 8 months. In late March of 2024, gallium prices reached $575/kg in Rotterdam. Prices have spiked due to concerns over shortages and the need to replenish depleted inventories. Demand remains strong; there are no substitutes for gallium in many high-tech applications.

Currently, gallium supply remains heavily dependent on China. An IFRI (Institut Français des Relations Internationales) researcher noted that, while current prices make gallium production and refining more profitable, this may not fundamentally reshape the industry as the price surge is unlikely to be permanent.

Recognizing the strategic importance of gallium, a French working group has begun exploring Europe-based solutions. While Europe ceased primary gallium production in 2016, the BRGM analysis suggests that Europe still has the technical capabilities to address the current shortage.

Source: Radio France International, April 12, 2024
https://rfi.my/AVnv

Briefings | | |   Geo-Strategic Trend

Chinese Social Media Reaction: Overwhelming Support for Iran, Condemnation of Israel in Response to Iran’s Attacks

On Saturday, the Iranian Islamic Revolutionary Guard Corps launched missile and drone attacks against Israel. Major world powers condemned Iran’s attacks, but China only expressed “deep concern” over the escalating situation, without condemning Iran directly.

On Chinese social media, many netizens continued to express anger towards Israel and support for Iran. A Weibo post claiming “99% of Iran’s missiles and drones were intercepted” gained over 70 million views. Under a CCTV News Weibo post about the attacks, most comments opposed Israel, with some expressing doubts about the reported low numbers of casualties.

Many netizens directly expressed fury towards Israel and support for Iran. One commented “This proves that Iran is kind, humanitarian and conscientious.” Another post about Iran’s first-ever direct attack on Israel also gained over 100 million views. Comments under a Xinhua News post about the U.S. reaffirming support for Israel were overwhelmingly “anti-American” and “anti-Israel.” One user said “Keep attacking, the Chinese people support Iran.”

On less censored platforms like NetEase News, some netizens held “non-mainstream” views. One supported Israel, saying “Israel, keep winning every Middle East war! Destroy the false prophets!” Others took a neutral stance, with one saying “As China navigates global turmoil, it must focus on self-development and strengthening itself to withstand any potential crisis.”

Source: Voice of America, April 14, 2024
https://www.voachinese.com/a/china-iran-israel-attack-20240414/7569323.html

Briefings | | |   Geo-Strategic Trend

RFI Chinese: China Asks Telecom Operators to Phase Out Foreign Chips

Radio France Internationale (RFI) Chinese Edition recently reported that, people familiar with the matter said Chinese officials earlier this year directed the country’s largest telecom operators to phase out foreign processors at the heart of their telecom networks by 2027. This would be a hit to U.S. chip giants Intel and Advanced Micro Devices (AMD). China’s Ministry of Industry and Information Technology set the 2027 deadline in order to speed up the government’s efforts to stop using such core chips in its telecommunications infrastructure. Chinese regulators also ordered state-owned mobile operators to check whether “non-Chinese” semiconductors are commonly used in their networks and to draft a timetable for replacement.

In the past, efforts by the Chinese telecommunication industry to wean itself from dependence on foreign semiconductors was to be hampered by a lack of quality chips produced domestically. Now, the quality of domestic chips has improved and their performance has become more reliable.

Currently, U.S. chipmakers Intel and AMD supply most of the core processors used in networking equipment in China and globally; geopolitical concerns now cloud their future business prospects in China. In October of last year, China Telecom purchased approximately 4,000 artificial intelligence servers, 53 percent of which used Intel processors. According to tender documents, the rest of the AI servers use Huawei’s processors. In the past, Intel chips accounted for a much higher share of server procurements.

Source: RFI Chinese, April 12, 2024
https://tinyurl.com/ykpb26j6

Briefings | | |   Geo-Strategic Trend Information/Technology

Chinese Military Attaché Tails Taiwanese Vice President-Elect in Czechia

Several vehicles followed Taiwanese Vice President-elect Ms. Hsiao Bi-khim during a visit to Prague in March. A Chinese Military Attaché, holding a diplomatic passport and working for the military department of the Chinese Embassy in Prague, was driving one of the vehicles. The Czech Ministry of Foreign Affairs is reportedly “handling” the matter, which is “not yet resolved;” the Czech government has summoned the Chinese ambassador and is considering designating the individual involved as persona non grata, potentially leading to his expulsion from the country.

Czech media outlet Seznam Zpravy reported that several vehicles were seen following Hsiao’s police motorcade when she arrived in the Prague city center. At an intersection, one of the trailing vehicles ran a red light, almost crashing into her convoy. The Czech police stopped the vehicle and found that the driver held a diplomatic passport of the People’s Republic of China. He worked for the military department of the Chinese Embassy in Prague. The Chinese military diplomat denied that he had been following Ms. Hsiao, claiming that he was just going to a nearby Chinese restaurant for a meal. Nevertheless, reports pointed out that the car had been following her all the way to her hotel.

Ms. Hsiao Bi-khim’s visit to Prague was part of a tour of the Czech Republic, Poland, and Lithuania in March.

Source: China Times (Taiwan), April 6, 2024
https://www.chinatimes.com/cn/realtimenews/20240406000948-260408

Briefings | | |   Geo-Strategic Trend

China and Thailand to Carry Out Joint Moon Exploration

On April 5th, China’s National Space Administration and Thailand’s Ministry of Higher Education, Research and Innovation jointly signed a “Memorandum of Understanding on Cooperation for Exploration and Peaceful Utilization of Outer Space” as well as a “Memorandum of Understanding for Cooperation on an International Lunar Research Station.”

Xinhua reported that “China and Thailand will establish joint committees and working groups to strengthen cooperation in the fields of space exploration, space applications, building space capacity. This will be done through joint space projects, scientific exchange programs, personnel training plans, data and information exchange, and organization of joint thematic workshops and scientific seminars.”

“China’s Chang’e-7 mission [planned for 2026] will reportedly carry a ‘Global Space Weather Monitoring’ device developed by Thailand. This will be the first time a Thai scientific instrument enters deep space from Earth orbit. China’s Chang’e-8 mission [planned for 2028] provides opportunities for international collaboration, with the ability to carry payloads of 200 kilograms. Thailand has submitted several applications regarding lunar surface robots and scientific payloads. The applications are currently being processed.”

“China has already signed space cooperation agreements with more than 10 countries and international organizations.”

Source: Xinhua, April 5, 2024
http://www.xinhuanet.com/20240405/8b67999f500143a0825a9609a5283f91/c.html

Briefings | | |   Geo-Strategic Trend Information/Technology

RFI: Taiwan Rejects China’s Relief Aid After Earthquake

Following the magnitude 7.4 earthquake that struck Taiwan on the morning of April 3rd, Radio France Internationale (RFI) reported that Taiwan’s Mainland Affairs Council quickly rejected aid offered by mainland China, saying it was not needed.

Analysts explained that Beijing’s aid always comes with conditions attached and is not a true gesture of goodwill. Some suggested that, instead of providing aid, it would be better for the mainland to stop interfering with the Taiwanese government’s disaster relief effort.

The report stated that “China has been unwilling to give up the threat of force to expand its control over Taiwan, and the Taiwanese people are naturally highly suspicious of China’s intentions.” The article mentioned that mainland China blocked the United Nations from providing much-needed assistance to Taiwan 25 years ago when it suffered “The Great 921 Earthquake.” In recent years, mainland aircraft and warships frequently disturb the areas surrounding Taiwan. This trend is only intensifying. Because of these ongoing military threats, people in Taiwan are highly suspicious of China’s intentions.

Some scholars expressed the belief that China may have anticipated Taiwan’s reaction. The argument is as follows: When Beijing made an offer that was very likely to be rejected, they were not actually trying to help; they were setting a trap to embarrass Taiwan for rejecting aid that appears to have been offered in goodwill.

Source: RFI, April 5, 2024
https://tinyurl.com/nhdmnk2s

Briefings | | |   Geo-Strategic Trend