Geo-Strategic Trend - 4. page

On March 4th, chairman Wang Huning of the Chinese People’s Political Consultative Conference delivered a statement on the topic of China-Taiwan relations. The statement, titled “Work Report of the Standing Committee,” proposed a strategy of “strengthening cross-strait industrial cooperation, building a common market across the straits, holding the sixth Cross-Strait Grassroots Governance Forum, and promoting the integrated development of both sides of the strait.”

Song Guocheng, a Senior Researcher at the International Relations Research Center of Taiwan’s Chengchi University, called Wang Huning’s plan a “spider strategy” to gradually swallow Taiwan. Song published an article on the implications of Wang’s strategy, analyzing four key phrases used in Wang’s statement. Below are translations of the major points from Song’s analysis.

The first key phrase from Wang Huning’s statement was “cooperation” (合作). Cooperation sounds great. By just saying “cooperation,” the Chinese Communist Party (CCP) can sidestep sanctions and allegations over foreign interference, as it is not “changing the status quo across the Taiwan Strait.” Cross-strait cooperation is, however, a “big brother leading the little brother” style. It could lead to the so called “peaceful evolution” of Taiwan – using economic ties to drive political change, using profit to lure Taiwanese people into acting against their country’s best interest, merging with Taiwan [economically], and making its people willing to submit to subjugation [by China].

The second key phrase is “shared marketplace” (共同市場). This term implies “mutual benefit and shared interests.” But the strategy behind this term is to use the “big economy” of mainland China to “melt/dissolve” the “small economy” of Taiwan; this is the “spider strategy,” with the big enveloping the small, trapping Taiwan in a huge “economic spider web,” using honey as poison to slowly consume Taiwan.

The third key phrase is “grassroots cross-strait governance” (兩岸基層治理). Governance sounds neutral, but it is a sovereignty issue when one discusses “cross-strait governance.” Neither side of the [Taiwan] strait is subordinate to the other, and the governance on each side is unrelated to that on the other side. Of course, the CCP will be able to achieve [such governance] if it can rope in Taiwan’s municipal leaders, public figures, community organizations, agricultural associations, guilds, chambers of commerce, student unions, hometown associations… etc. It uses various pretexts such as “exchange, learn, observe, and inspect” to break through the wall of sovereignty between the two sides. This is its softest, most gentle, and most intimate “slow swallowing” policy.

The fourth key phrase is “integrated development” (融合發展). Development sounds so pleasant, and integration sounds wonderful: you are part of me, and I am part of you! But the true meaning behind this phrase is as follows. “Integration” means slow erosion of Taiwan’s anti-communist consciousness, and “development” means gradual subsumption of Taiwan’s sovereignty. This is a “patchwork policy” to unify Taiwan, also known as the “stacking blocks” policy or the “great dissolution” strategy. Once the puzzle is completed and the blocks are stacked, the time will be ripe for natural unification of China.

Source: Up Media, March 7, 2024
https://www.upmedia.mg/news_info.php?Type=2&SerialNo=196367

Taiwanese news agency Central News Agency (CNA) recently reported that China has cancelled or postponed about one million tons of Australian wheat imports and about 500,000 tons of U.S. wheat imports.

Farmers are currently in a cycle of overproduction, and global wheat prices are falling, reaching their lowest point in three and a half years. China, the world’s largest wheat importer, canceled or postponed wheat purchase plans for the end of last year and early this year, anticipating the falling prices.

A Singapore-based commodities trader who sells wheat to Asian countries said that Chinese buyers have canceled some Australian wheat transactions and have delayed shipments from the first quarter to the second and third quarters. Another trader said that trading companies have canceled previously-scheduled shipments at Australian ports that were originally scheduled for transport to China. Since the beginning of this year, the volume for wheat futures on the Chicago Mercantile Exchange has fallen by more than 14 percent, reaching the lowest trading volume since August of 2020.

Australia accounts for 10-15 percent of the global wheat trade of 100 million tons per year. The Australian wheat industry is mainly export-oriented, with 65-75 percent of the country’s total output sold to more than 50 countries around the world. Australia is China’s third largest wheat supplier, following the United States and Canada.

Source: CNA, March 14, 2024
https://www.cna.com.tw/news/acn/202403140293.aspx

A report from the American think tank Rhodium Group suggests that China likely set a new record in outward direct investment in the EV industry last year. This year, China’s overseas investment in EV will remain strong, but will shift from primarily investing in the battery sector to manufacturing electric cars in Europe, Latin America, and Asia. This shift will aim to appeal to host countries’ demand for high value-added investment and job creation in exchange for market access.

So far, Chinese EV manufacturers have focused mainly on auto exports rather than on overseas production. The volume of Chinese car exports surged in 2022-2023, triggering an EU anti-subsidy investigation into Chinese EV imports. As a result, BYD announced plans to build a car factory in Hungary. This move would bypass potential anti-subsidy tariffs that the EU might impose.

Chinese EV manufacturers realize that the EU welcomes direct investment even though it might block direct auto exports from China. Unlike the U.S., which would strictly scrutinize Chinese EV production on U.S. soil, EU member states compete with each other to provide incentives for Chinese companies. The Rhodium Group anticipates that the EU’s investigation into Chinese EVs will encourage direct investment by the Chinese electric car industry in the EU.

China is also attempting to circumvent U.S. restrictions by investing in US trade agreement partners such as Morocco and Mexico.

Source: Deutsche Well, March 14, 2024
https://p.dw.com/p/4dVjM

Radio France Internationale (RFI) reported that “Chinese goods are pouring into European markets, and the first wave of repercussions for German industry has begun to take shape.” Below are some key points from the report:

Within China, sales of electric vehicles (EVs), consumer goods, and industrial products have stalled. State-owned enterprises are facing overcapacity. China’s plan [to alleviate the overcapacity] is to flood the European market with these products.

Products from China no longer just involve steel batteries and solar panels, which dominated the market for years with unparalleled prices. The mechanical engineering industry is another area where China has over-invested, and Chinese goods are now putting greater pressure on European manufacturers. It is said that Chinese manufacturers can produce around 50 million cars annually, but domestic demand may only be as much as 23 million vehicles. China plans to export the surplus to the rest of the world.

In terms of technical specifications, Chinese cars are at least comparable to most German cars, but they are often much cheaper in terms of price. “In the near future, a wave of industrial products may spread from China to Germany.” This is a harbinger for serious issues potentially facing Germany’s core automotive industry. Businesses and policymakers must find new answers to address these challenges.

Source: Radio France Internationale, March 15, 2024
https://rfi.my/AQv7