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Lianhe Zaobao: China Foreign Investment Index Falls to 25-Year Low

Singapore’s primary Chinese language newspaper, Lianhe Zaobao, recently reported on data released by China’s State Administration of Foreign Exchange. The data show, between April and June of 2023, the growth rate of direct investment liabilities, a measure of foreign direct investment in China, dropped to US$4.9 billion.

The reported figure is 87 percent lower than the figure from the same period last year. This was the smallest quarterly total for foreign direct investment since records began in 1998.

The data from the Administration of Foreign Exchange reflects the trend of declining profits for foreign companies and reduction of their scale in China. Beijing’s three-year-long Zero-Covid program hampered the Chinese economy and limited access to Chinese markets, geopolitical tensions have been on the rise, and China’s post-Covid economic recover has been lackluster. As such, foreign companies are reevaluating the risks associated with doing business in China.

According to data previously released by the Chinese Ministry of Commerce, the actual use of foreign investment (FDI) in the country from January to June of this year fell by 2.7 percent year-over-year, the first decline in three years.

Source: Lianhe Zaobao, August 8, 2023
https://www.zaobao.com.sg/realtime/china/story20230808-1421584

Briefings | | |   Economy/Resources Geo-Strategic Trend

Australian Broadcasting Corporation: Chinese Police Communicating With Australians Over the Internet

Australian Broadcasting Corporation recently reported that it has obtained a Chinese government document indicating that Chinese police have begun using cloud technology to operate “contact points,” extending the reach of Chinese policing into Australia. The “contact points” are operated by the Hai’an Police Department in Jiangsu Province, using cloud meeting by Tencent (similar to a Zoom meeting) and WeChat to communicate with Australian citizens as well as Chinese people living in Australia. According to Chinese media Xinhua Daily, Chinese students in Australia have been hired as overseas liaison officers to onboard people into this online system.

The report follows the high-profile discovery of several clandestine “Chinese police stations” operating in Canada, the U.S., and several European countries earlier this year. Chinese authorities maintain that these covert police stations were merely providing administrative services such as renewal of passports or driver’s licenses, while human rights experts have said that the police stations were likely used to intimidate Chinese dissidents and monitor Chinese nationals living abroad.

Westphalian sovereignty, a well-known principle in international law, holds that each country has exclusive sovereignty over its territory. A consequence of this principle is that states should not conduct official business (including policing) within other countries. Western countries have viewed Chinese police activities within their borders as violations of their sovereignty.

 

Source: Australian Broadcasting Corporation, August 4, 2023
https://www.abc.net.au/chinese/2023-08-04/china-overseas-police-station-australian-contact-point-cloud/102685646

 

 

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People’s Daily: Chinese Cars Taking Over “Southern Markets”

People’s Daily stated that cars made in China are taking over the global markets, especially the “Southern World” (non-Western countries).

According to the latest data from the China Association of Automobile Manufacturers, China’s automobile exports reached 2.14 million units in the first half of 2023. This marks a year-on-year increase of 75.7 percent in reported auto exports.

Total reported export value reached $99.97 billion, up by 41.7 percent from the previous year. Total automobile export for this year is anticipated to reach 4 million units, a significant increase from the prior two years. Reported exports were just over 2 million units in 2021 and about 3.3 million units in 2022.

Chinese automakers dominate the fast-growing electric vehicle market in Southeast Asia, contributing three-quarters of the region’s electric vehicle sales in the first quarter of this year. Chinese cars are also gaining traction in markets like the UAE, Africa, the Middle East, and Latin America due to their affordability, features, and comprehensive warranty services.

The main factor driving Chinese car exports is competitive pricing, including the market’s ability to offer more features at the same price as competitors. Chinese car companies have been setting up joint ventures for localized auto production in countries such as Thailand and Brazil.

Source: People’s Daily, August 7, 2023
http://world.people.com.cn/n1/2023/0807/c1002-40051652.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

EUCCC: EU Companies in China Experiencing Commitment Fatigue

Primary Taiwanese news agency Central News Agency (CNA) recently reported that Jens Eskelund, chairman of the European Union Chamber of Commerce in China (EUCCC), said that China’s efforts to revitalize the private economy are insufficient and that Chinese officials have been unwilling to seriously discuss how to solve the country’s core economic problems. He also said that EU companies in China are experiencing “commitment fatigue” and are are beginning to doubt whether the Chinese government will enact meaningful economic support policies.

Eskelund said that the EUCCC has yet to see signs that the Chinese government is willing to implement structural reforms to address the fundamental challenges facing the Chinese economy, thus preventing foreign private companies from realizing their potential to support the Chinese economy. He mentioned that the Chamber of Commerce has met with Chinese government officials many times since the Chinese government relaxed its strict Zero-Covid measures, but these officials have not been willing to seriously discuss how to solve the country’s core problems.

China’s overall economy is weak, and the manufacturing and service industries are shrinking. The Chinese government has issued multiple documents in the past month promising to revitalize the country’s private sector. Chinese officials have thus far refrained from enacting large-scale monetary and fiscal stimulus measures, however, instead using relatively modest measures to boost consumption.

Source: CNA, August 5, 2023
https://www.cna.com.tw/news/acn/202308053001.aspx

Briefings | | |   Geo-Strategic Trend

Australia and U.S. Establishing Joint Intelligence Center

Major Australian Chinese language newspaper Australian Chinese Daily recently reported that the agreement just reached at the Annual Meeting of the Australian and US Defense Ministers (AUSMIN) has further deepened the Australia-US military alliance. In response to China’s growing threat to regional stability, U.S. intelligence analysts will be placed in the defense intelligence agency in Canberra, and Australia’s northern air base will be expanded to accommodate more U.S. military aircraft. The talks also reached an agreement to re-expand the deployment of the U.S. military in Australia, including amphibious combat forces and maritime reconnaissance aircraft. As expected, the U.S. will provide advanced technology to aid in Australia’s domestic production of missiles and will ensure that Australia is a secondary supplier of U.S. missiles.

According to the Daily report, the AUSMIN communiqué contains multiple criticisms of China. It accuses China of exacerbating regional tensions with its “excessive maritime claims,” urges China to end its threat of force against Taiwan, and asks Beijing to cooperate with the United States constructively.

The new Australia-U.S. joint intelligence center is likely to track China’s security agreements with countries in the South Pacific and Southeast Asia, as well as to monitor China’s further militarization efforts in the South China Sea.

Source: Australian Chinese Daily, July 31, 2023
https: //www.acd.com.au/australian-news/aomeifangzhangwaizhanghuitangongbaozezhongguo-qianghuajunshilianmengshelianheqingbaozhongxin/

Briefings | | |   Geo-Strategic Trend

Lithuania Winning Standoff Against Beijing on Taiwan Issue

Over a year ago, Lithuania faced unprecedented pressure from China for refusing to toe Beijing’s line on the Taiwan issue. It took the lead in exiting the China-led “17+1” cooperation mechanism with Central and Eastern European countries in 2021 and later allowed Taiwan to open a representative office in Vilnius under the name “Taiwan.” In response, China launched a comprehensive retaliation, including applying economic sanctions, calling back its Ambassador, and downgrading diplomatic relations.

Recently, Matas Maldeikis, Lithuanian Member of Parliament, revealed in an interview with the Voice of America, that the swift and decisive victory the communist regime of China expected did not happen. Lithuania’s economy grew and its exports increased by 45 percent in just a year and a half after Beijing’s sanctions. This demonstrates that countries need not bow to pressure from Beijing.

Maldeikis mentioned Lithuania’s historical tradition of resistance to power and its people’s values as reasons for daring to confront China on the Taiwan issue. Lithuania understood the political dynamics at play and refused to compromise its principles for short-term economic gains, showing a willingness to withstand market pressure and not betray values for profit.

This resilient stance has set an example for other nations on how to navigate relations with China.

Source: Voice of America, August 7, 2023
https://www.voachinese.com/a/lithuania-china-taiwan-european-union-20230804/7212200.html

Briefings | | |   @CS Geo-Strategic Trend

Huanqiu: Russian Border Guards Mistreated Chinese Citizens

Huanqiu (a.k.a. The Global Times), a Chinese state-run newspaper, reported that China’s Embassy to Russia posted an article on the open internet complaining that the Russian government had mistreated five Chinese citizens. There have been many previous incidents where Russian authorities treated Chinese citizens badly, but the Chinese government has always remained silent in the past.

The Huanqiu article said that the Chinese Embassy to Russia lodged a complaint with the Russian authorities on August 4, 2023, after five Chinese citizens were prevented from entering Russia via the Karauzek border checkpoint in Astrakhan Oblast. The individuals’ tourist visas were canceled and they were denied entry to the country. Upon receiving a distress call, the consular staff at the Chinese Embassy to Russia investigated the situation, consoled the affected individuals, and promptly contacted the Russian authorities to seek a resolution. The embassy requested that Russia facilitate the reapplication for visas and ensure the smooth entry of the affected individuals as per their initial request.

According to the article, the Chinese Embassy reviewed videos uploaded by the individuals on August 2 that showed the Russian border personnel questioning them for 4 hours. After reviewing the video, the Chinese Embassy took immediate action. Embassy staff met with Russian authorities, including the Ministry of Foreign Affairs, the Federal Border Guard Service, and the Federal Security Service, to express concerns over the incident. The embassy criticized the “excessive and brutal enforcement actions” of the Russian border guards, which “seriously harmed the legitimate rights and interests of Chinese citizens.” They emphasized that such behavior was not in line with “the friendly relations between China and Russia or the increasing trend of friendly exchanges” between the two countries’ people. The embassy urged Russia to “thoroughly investigate the incident, take active measures to rectify the negative impact, and ensure that similar incidents do not occur in the future, while respecting and safeguarding the dignity and legitimate rights of Chinese citizens.”

The article stated that the reported reason for the detention was a discrepancy between the Chinese nationals’ intended destination within Russia and the destination that they had given on their visa applications.

Source: Huanqiu, August 4, 2023
https://hqtime.huanqiu.com/article/4DzJZ1NrAwU

Briefings | | |   Geo-Strategic Trend

Xinhua: Chinese and Russian Think Tanks Say AUKUS Is Promoting Nuclear Proliferation

China’s state-run Xinhua news reported on August 3rd that the China Arms Control and Disarmament Association and the Russian Center for Energy and Security Studies jointly released a research report in Vienna, Austria, titled “The Risks of AUKUS Nuclear Submarine Cooperation on Nuclear Non-Proliferation Mechanisms and Global Security.” The report claims that AUKUS, a trilateral security pact between Australia, the United Kingdom, and the United States, is intensifying the risk of nuclear proliferation. The report additionally says that AUKUS “poses a serious challenge to the international nuclear non-proliferation system and the safeguards of the International Atomic Energy Agency (IAEA), severely threatening regional peace and stability.”

The report says that AUKUS cooperation “undermines international norms and creates negative impacts on various non-proliferation mechanisms, nuclear safety, and security, leading to increased arms competition and global insecurity.”

Li Song, the Chinese representative to the United Nations and other international organizations in Vienna,  said that AUKUS nuclear submarine cooperation should be handled through consultation and consensus among the member states of IAEA, the International Atomic Energy Agency. He said that China will continue to work towards promoting “open, inclusive, and sustainable” intergovernmental discussion processes at the IAEA.

Source: Xinhua, August 3, 2023
http://www.news.cn/world/2023-08/03/c_1129784778.htm

Briefings | | |   Geo-Strategic Trend US-China Relations