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China Recalibrates “Belt and Road” Lending

AidData, a research lab at William & Mary’s Global Research Institute, released a new report titled “Belt and Road Reboot: Beijing’s Bid to De-Risk Its Global Infrastructure Initiative.” The report details how Beijing has recalibrated its financing of overseas development.

China remains the world’s largest source of international financing for infrastructure development, surpassing both the U.S. and the World Bank. The report outlines China’s strategies for mitigating risks in its lending portfolio. To address distressed debts, short-term measures include emergency lending to debtors and sweeping repayments from borrowers’ cash collateral. Meanwhile, China has been de-risking its overseas investment portfolio by outsourcing risk assessment to Western banks that have “stronger due diligence standards and safeguard policies.”

In the face of soft power challenges, Beijing has adapted its allocation of international aid and credit, emphasizing investment in countries where neither China nor the U.S. holds a dominant soft power advantage. Additionally, Beijing has doubled investment in regions where China has gained reputational favor at the expense of the U.S.

Source: AidData, November 6, 2023
https://www.aiddata.org/blog/belt-and-road-bounces-back

Briefings | | |   Economy/Resources Geo-Strategic Trend

Lianhe Zaobao: China’s Most Popular Online Maps Do Not Show Israel

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the name “Israel” no longer appears on major Chinese online electronic maps such as Baidu Maps and AMap. Israel does still appear if the user specifically searches for the word “Israel.” All other nations in the region still have their names correctly displayed.

At a press conference of China’s Ministry of Foreign Affairs, a reporter asked about the reason behind this change in the apps’ behavior, inquiring whether Beijing had required the apps to remove Israel. The spokesperson of the Ministry responded that “the relevant country is clearly marked on the standard map issued by the Chinese competent authorities.” He also stated that the Chinese position on the Palestinian-Israeli situation is: “China has always condemned and opposed all acts that harm civilians and violated international law, and has always been committed to working with the international community to promote ceasefires, ensure the safety of civilians, improve humanitarian assistance, and prevent serious humanitarian disasters.”

Source: Lianhe Zaobao, October 31, 2023
https://www.zaobao.com.sg/realtime/china/story20231031-1446946

Briefings | | |   Geo-Strategic Trend

North Korea Closes Consulate in Hong Kong

According to well-known Chinese news site NetEase (NASDAQ: NTES), North Korea has just announced the closure of its Consulate General in Hong Kong. The move follows the closing of North Korean embassies in many African countries such as Angola and Uganda.

It is reported that North Korea plans to close 12 of its embassies and consulates in Spain, Hong Kong and other places, accounting for nearly a quarter of its 53 diplomatic missions around the world. These closures have triggered widespread attention to changes in North Korea’s foreign policy.

North Korea has long implemented a planned economy, and the size of the country’s economy has continued to shrink. According to one estimate, closing an embassy or consulate could save the North Korean government approximately US$500,000 per year. North Korea may also believe that, given the current diplomatic environment, it does not make sense to maintain North Korean diplomatic missions in countries with which the country has less friendly or less important relations.

Although North Korea’s move will affect the relationship between China and North Korea to some extent, the Chinese Ministry of Foreign Affairs stated that it respects North Korea’s decision. This statement from China likely creates international space for North Korea to further adjust its foreign policy. If China were to strongly oppose or criticizes North Korea, on the other hand, this would inevitably lead to a rebound in North Korean public sentiment and cause unnecessary negative impacts on relations between the two countries.

Source: NetEase, November 1, 2023
https://www.163.com/dy/article/IIFOSRAG05562Z7A.html

Briefings | | |   Geo-Strategic Trend

UDN: Canadian Bans WeChat on Government Devices

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that Canada has banned the use of Chinese messaging app WeChat on government-issued mobile devices, citing privacy and security risks. The Canadian government stated in an announcement that the applications WeChat and Kaspersky will be removed immediately from government-issued devices and that users of those devices will be blocked from downloading those two programs in the future.

The new bans follow action by Ottawa authorities to ban TikTok on government devices in February of 2023. Anita Anand, chairwoman of the Canadian Treasury Board, which oversees Canada’s federal public services, said Canada’s information chiefs believe the two apps “pose an unacceptable risk to privacy and security.” She added that no information leaks have been detected yet, but that the two platforms’ data collection methods on mobile devices “provide substantial access to device content.” She concluded that “the decision to remove and block WeChat and Kaspersky apps is to ensure that Canadian government networks and data remain secure and protected, in line with the practices of our international partners.”

According to UDN, WeChat did not respond to a request for comment.

Source: UDN, October 31, 2023
https://udn.com/news/story/6809/7541156

Briefings | | |   Geo-Strategic Trend Information/Technology

Chinese Automakers to Produce Cars in Mexico

Chinese automakers are eyeing the American car market, making substantial investments in Mexico so that they can take advantage of geopolitical and trade agreement benefits. Since China faces high tariffs and restrictions on exporting cars to the U.S., Mexico’s strategic location and the USMCA trade agreement have made the country a favorable location for Chinese companies to produce electric vehicles (EVs) for export to the U.S.

Beijing’s strong support for China’s domestic electric vehicle industry, along with the prominence of Chinese company CATL as the world’s largest lithium battery producer, has positioned China as a major player in the EV market. Chinese automakers, such as JAC and Giant Motors, have already been assembling cars in Mexico for several years. Recently, Chinese companies Chery and Foton also began setting up factories in Mexico.

Source: Voice of America, November 1, 2023
https://www.voachinese.com/a/focusing-on-the-us-ev-market-chinese-companies-invest-heavily-in-mexico-20231031/7335006.html

Briefings | | |   @CS Economy/Resources Geo-Strategic Trend US-China Relations

Japanese Embassy in China Received 1 Million Harassing Phone Calls

During the two months following the start of wastewater discharge by Tokyo Electric Power’s Fukushima Daiichi nuclear plant, the Japanese embassy in Beijing has received approximately 1 million harassing phone calls from within China. The Japanese government asked China to address the situation as it was interfering with the embassy’s normal operations, but the problem persists.

The embassy investigated the calls and found that over 40,000 of them were made on August 25th, the day after discharge into the Pacific Ocean began. The volume of harassing phone calls decreased by the end of August. At present, the embassy is still receiving about 10,000-15,000 such calls per day.

Most of the calls involve verbal abuse, silence, or explicit threats against Japan or the Japanese embassy (e.g. threatening to “blow up [the embassy]”). The embassy documented malicious phone numbers and reported them to China’s public security authorities.

At a Japan-China relations forum on October 20th, Ambassador Hideo Tarumi acknowledged the harassing calls and said “rationality” was needed to advance bilateral relations.

Chinese law stipulates that frequent harassing calls interfering with normal life can incur legal liability.

Source: Kyodo News, October 27, 2023
https://china.kyodonews.net/news/2023/10/80198c16ac64.html

Briefings | | |   Geo-Strategic Trend

Sing Tao: Nomura Re-examines Its China Strategy

Primary Hong Kong news media Sing Tao News Group recently reported that leading Japanese securities firm Nomura is re-examining its Shanghai joint venture strategy as its business losses in China continue to worsen. The firm’s subsidiary Nomura Orient International Securities (NOIS) has followed the lead of Morgan Stanley and Goldman Sachs in terms of its shrinking footprint in China: management reorganization and layoffs have occurred, and many employees have resigned. In the meantime, Nomura has cut loose about 10 Hong Kong-based investment bankers, including some who focused on China-related deals. The Hong Kong layoffs were announced very recently and affected both junior and senior bankers, including managing directors and executive directors. Kenji Teshima, chairman of Nomura’s China Business Committee, said that now is a good time to review and re-evaluate the business.

China’s Zero Covid restrictions during the pandemic seriously affected the business’ expansion during that time. More recently, the market environment has undergone major changes that affect Nomura’s operation in China. The profitability of NOIS has continuously deteriorated since its establishment at the end of 2019.

According to available documents, the losses of NOIS more than doubled last year. Although the organization’s client list and assets under management continued to grow, successive years of losses have caused concerns among Nomura’s partners. Moreover, many department heads working for NOIS have resigned since the beginning of this year, including the heads of wealth management, compliance and risk management.

Source: Sing Tao, October 26, 2023
https://std.stheadline.com/realtime/article/1960012/

Briefings | | |   Economy/Resources Geo-Strategic Trend

Opinion: Chinese Youth Have No Opinions, They Just Follow CCTV Ideology

A a post on Chinese website Zhihu argued that Chinese youth do not have opinions of their own; their opinions are solely based on what the Chinese Communist Party’s mouthpiece China Central Television (CCTV) has taught them. The posting was removed by internet censors. The following translation is based on a copy of the post published to Twitter:

In the Russia-Ukraine War, why do most Chinese people support Russia? In the Israel-Hamas conflict, why do most support Hamas? In pandemic control, why did most people support the zero-COVID approach? The conclusion is the same in all cases: most people are “the New Youth” or “the CCTV Youth.” They believe whatever is said on CCTV. In reality, they don’t [really] support Russia, Palestine, or the zero-COVID approach; they’re simply supporting the CCTV’s news broadcast.

[Back in 2022] these people supported the zero-COVID policy and even had a full-scale online fight against those who suggested alternatives such as “coexistence with the virus.” But when CCTV announced that zero-COVID controls would be lifted and society would open up, what happened? Nothing! The zero-COVID policy supporters held no protests, they did not argue in favor of the policy, and they did not have any inclination to fight for it. There was no resistance at all. Those people did not dare to have an opinion [different from what was on CCTV]. So, in reality, China does not have pro-Russia camp, a pro-Hamas camp, or a zero-COVID camp; these positions are all temporary. The only dominant camp is the “CCTV Youth” camp.

Source: Twitter @zhanglifan, October 22, 2023

Briefings | | |   @CS Geo-Strategic Trend