Skip to content

Geo-Strategic Trend - 6. page

Lianhe Zaobao: Hyundai Motor Sells Chongqing Factory at Half Price

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that South Korea’s Hyundai Motor Co.’s joint venture in China sold its factory in Chongqing for RMB 1.62 billion (around US$227.6 million), less than half the original asking price from when the factory was originally put up for sale in August of last year. Hyundai faces fierce price competition and slowing demand in China.

The factory started operations in August 2017 and is the second factory sold by Hyundai Motor in China. In addition to the recent sale, Hyundai Motor sold a Beijing-based factory in 2021. There are now three remaining Hyundai factories in China, down from five at the peak.

Hyundai said the sale was a move to optimize its business structure in China, aiming to shift focus from the volatile Chinese market to other Asian countries such as India and Indonesia. As China rapidly transitions to electric vehicles, South Korean carmakers Hyundai and Kia are facing difficulties in their China strategies. China is the world’s largest auto market. It’s worth noting that sales in the Chinese market accounted for only five percent of the two companies’ total global sales in the third quarter of 2023.

Source: Lianhe Zaobao, January 17, 2024
https://www.zaobao.com.sg/realtime/china/story20240117-1462659

China Obtains 99 Year Lease on Myanmar Port After Brokering Regional Ceasefire

China has obtained rights to a Port in Kyaukpyu, Myanmar for 99 years after Beijing negotiated a ceasefire between the Myanmar government and an armed alliance of opposition groups. The Kyaukpyu Port will give China a logistical presence on the Indian Ocean, enabling bypass of the Malacca strait shipping route. Some have said that Beijing supported the opposition group in Myanmar so as to pressure Myanmar’s government.

The past few months’ conflict in Myanmar started with three armed groups in northern Myanmar (the Kachin, the De’ang, and the Shan) banding together to form a “Myanmar Alliance Army.” The group launched attacks against Myanmar’s government forces in the name of “rescuing Chinese people and combating electronic fraud.” The alliance army secured a series of victories against the Myanmar government army, taking some territory.

On January 10th and 11th, China successfully brokered a ceasefire agreement between the two sides. The deal was struck in Kunming City, Yunnan Province, China. As part of the agreement, Beijing demanded that the Myanmar government enter a contract leasing Myanmar’s Kyaukpyu Port to China for 99 years. Having suffered defeats in the field, the Myanmar government had no choice but to cede use of the port.

According to the Aboluo website, Beijing provided support to the Myanmar Alliance Army in the form of advanced weapons, communication equipment, and drones. There were also rumors that Chinese soldiers dressed as members of the alliance army and fought some of the battles against the Myanmar government’s military. Aboluo commentary suggests that China supported the armed opposition in Myanmar not to “stop electronic fraud crime rings in Myanmar” but rather to secure use of the port in Kyaukpyu.

The Kyaukpyu Port is situated on the Indian Ocean; it may well become the best seaport serving the southwest and central regions of China. Its use will significantly reduce China’s dependence on shipping routes through the Strait of Malacca, making it easier for China to import and export to the global market directly via the Indian Ocean.

Beijing proposed a development plan for Kyaukpyu Port as early as 2007 under its “Belt and Road Initiative,” aiming to establish a land-sea transportation network connecting Kyaukpyu to China’s Kunming city via railways and highways. Negotiations between Beijing and Myanmar went on for 12 years. China and Myanmar signed a 50-year lease agreement for the port in 2018, but this agreement fell apart when Myanmar’s current leader Min Aung Hlaing came to power in a 2021 military coup.

Source: Aboluo, January 15, 2024
https://www.aboluowang.com/2024/0115/2004525.html

People’s Daily on Recent Financial Cooperation Between China and Arabic Countries

CCP newspaper People’s Daily has published a list of ways that China has been cooperating with Arabic countries recently.

  • Starting on January 1, 2024, Saudi Arabia, Egypt, the United Arab Emirates (UAE), Iran, and Ethiopia officially became members of the BRICS countries, increasing the total number of BRICS member countries from 5 to 10. Abdullah, the Minister of Economy of the UAE, stated that there would be additional capital injection into the BRICS Development Bank.
  • On November 28, 2023, China People’s Bank and the UAE Central Bank renewed their Renminbi/Dirham Bilateral Currency Swap Agreement, valid for 5 years, with a swap scale of 35 billion RMB/18 billion UAE Dirhams.
  • In November 2023, the People’s Bank of China signed a bilateral currency swap agreement with the Saudi Central Bank, with a swap scale of 50 billion RMB/26 billion Saudi Riyals. The agreement is valid for 3 years and can be extended with mutual consent.
  • In October 2023, the China Export-Import Bank signed a cooperation agreement with the African Bank of Morocco. Both parties will “actively promote economic and trade exchanges and financial cooperation through project financing, parallel financing, and trade financing.”
  • The Chinese Ambassador to Saudi Arabia, Chen Weiqing, said that as of 2023 the China’s Export-Import Bank and the National Bank of Saudi Arabia have successfully implemented the first RMB loan project [to Saudi Arabia]. The Bank of China and the Industrial and Commercial Bank of China have also opened branches in Saudi Arabia.
  • The 2023 International Maritime Awards ceremony was held in Shanghai, where the COSCO Shipping Ports’ Abu Dhabi Terminal won the “Port Terminal Innovation Award.” The terminal was jointly constructed by COSCO Shipping Ports and the Abu Dhabi Ports Authority, with support from China’s Silk Road Fund. Since opening in 2018, the terminal has established direct connections with 65 ports worldwide. Its container throughput exceeded 1 million standard containers in 2022.
  • On October 30, 2023, the China Development Bank completed the full disbursement of a 7 billion RMB loan agreement with the Central Bank of Egypt.
  • On October 9, 2023, the China Export Credit Insurance Corporation issued the first medium-to-long-term insurance policy for a “new energy power” financing project, providing medium-to-long-term export buyer credit insurance support for the “Manna 2” 500 MW photovoltaic power (solar power) station project in Oman. In the same month, the performance test for Unit 4 of the Hassyan Power Station project in Dubai was successfully completed, marking the commercial operation of all 4 units at that power station. The power station was jointly financed and constructed by China’s Silk Road Fund, the Harbin Electric Group, and UAE investment institutions, representing the first investment of the Silk Road Fund in the Middle East.
  • The Industrial and Commercial Bank of China recently held a bond listing ceremony at the Nasdaq Dubai Exchange. The “green bonds” issued by the bank were simultaneously listed on stock exchanges in Hong Kong, Dubai (UAE), Singapore, and Luxembourg, with a total issuance size of approximately USD 2 billion.
  • In November 2023, Shanghai Stock Exchange signed a “memorandum of understanding for cooperation” with Dubai Financial Market. Both parties “plan to jointly explore and develop financial products related to ESG (environmental, social, and corporate governance) and sustainable development, as well as cross-border indices, exchange-traded funds (ETFs), and other financial products.”

Continue reading

More Taiwanese Foreign Investment in U.S. Than in China, a First in 30 Years

In the near future, Taiwanese investment in mainland China is expected to plunge to around 10% of investment levels seen in 2023. Although some investment data from the end of 2023 have not yet been released, available data suggest that Taiwan’s 2023 investments in the U.S. were about triple those in mainland China, with the U.S. attracting about nine times more investment from Taiwan than in 2022. This marks the first time since 1993, when Taiwanese regulations allowed for investment in China, that America has attracted more Taiwanese funding than China. The decline of Taiwan’s investment in China is attributed both to the economic slowdown affecting the mainland as well as to inability of Taiwan and Mainland China to set aside political issues across the Taiwan Strait.

U.S.-China confrontation has led to punitive tariffs, worsening the business climate for Taiwanese companies operating in China. Another factor driving Taiwanese investment trends are steps taken by Taiwan’s Democratic Progressive Party government to reduce Taiwan’s economic dependence on China. The DDP under Tsai Ing-Wen even offered financial incentives for Taiwanese companies operating in China to move their production back onshore to Taiwan.

Data show that Taiwan’s total foreign investment approvals from January-November 2023 rose 87% year-over-year to $25.7 billion. Meanwhile, Taiwanese investments into mainland China dropped 34% during the same period, falling to just $2.9 billion or 12% of total foreign investment approvals. Back in 2010 when Taiwan and China signed the landmark Cross-Strait Economic Cooperation Framework Agreement, 84% of Taiwan’s investment went to the mainland. That fell to 34% in 2022 and was 12% in 2023.

Approvals for Taiwanese investments in Europe and the U.S. have surged, with investments in the U.S. for January through November of 2023 totaled $9.6 billion, nine times higher than the same period in 2022. Taiwan’s 2023 investments in Europe and the U.S. comprised 37% of total Taiwanese overseas investment. Taiwan’s investments in Germany rose 25-fold to $3.9 billion (15%), exceeding investments in mainland China figure. Taiwanese investments in semiconductor facilities and other technology are playing a key role in driving this trend.

Source: Nikkei, January 2, 2024
https://zh.cn.nikkei.com/china/ccompany/54450-2024-01-02-08-47-53.html

Lianhe Zaobao: China’s Weibo Blocked “Taiwanese Election” Search Results on Election Day

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that Taiwan’s presidential and legislative elections took place on January 13, and Mainland Chinese netizens were paying close attention to the election results. After voting began at 8 a.m. that day, the relevant term “Taiwan Election” was on the “hot search ranking list” on Weibo, one of the largest social media platforms in Mainland China. The number of views on the topic quickly reached 163.2 million. However, the popular topic was soon blocked on Weibo.

Before the “Taiwan Elections” topic was blocked, many Mainland Chinese netizens posted comments and discussion on this topic. Some netizens called for improving relations between Mainland China and Taiwan after the Taiwanese election, and some netizens expressed their hopes for the DPP’s presidential candidate Lai Ching-te to win the election so that the Chinese military would “unify by force” sooner. (Taiwan’s DDP party, which won the presidency in the election, is the party that’s most opposed to cooperation with Beijing.)

Since Chinese official media, including Xinhua News Agency, CCTV News and People’s Daily, had very little coverage of the Taiwan election that day, some netizens asked on Weibo: “Is today the voting day for Taiwan? Why is there no news coverage?” Many related topics were blocked on Weibo as well. The Spokesperson of the Chinese Ministry of Foreign Affairs said in a press conference two days earlier that “the United States must not interfere in Taiwan’s elections in any form” – this quote remained visible on Weibo.

Source: Lianhe Zaobao, January 13, 2024
https://www.zaobao.com.sg/news/china/story20240113-1461930

UDN: China’s Exports Fell 4.6 Percent Last Year

United Daily News (UDN), one of the primary Taiwanese news groups, recently ran a report on official 2023 data published by the China’s General Customs Administration. According the data, which are denominated in U.S. dollars, 2023 exports fell by 4.6 percent year-over-year, imports fell by 5.5 percent year over year, and aggregate imports and exports decreased by 5.0 percent year-over-year. China’s annual trade surplus was US$823.22 billion.

The last time that China experienced a decline in USD-denominated exports was seven years ago, in 2016, when exports fell by 7.7 percent.

At the “2023 Imports and Exports Press Conference” held by China’s State Council Information Office, official RMB-denominated data were released. Priced in RMB, China’s 2023 exports increased by 0.6 percent year-over-year, imports decreased by 0.3 percent year-over-year, and aggregate imports and exports increased by 0.2 percent year-over-year.

 

Chinese YoY Trade Growth, 2023
in USD in RMB
Exports -4.6% +0.6%
Imports -5.5% -0.3%
Aggregate -5.0% +0.2%

 

Wang Lingjun, deputy director of China’s General Customs Administration, said “the complexity, severity, and uncertainty of the external environment have increased. To further promote the stable growth of international trade, China needs to overcome some difficulties and make more efforts.”

Source: UDN, January 12, 2024
https://udn.com/news/story/7333/7703838

China Detains Alleged MI6 Spy

China’s Ministry of State Security (MSS) announced on Monday (January 8th) that the head of a foreign consulting firm, surnamed Huang, was found to be spying for the British foreign intelligence agency MI6. According to MSS, Huang was recruited by MI6 in 2015 and established an “intelligence cooperation relationship” with them.

MSS claims that MI6 instructed Huang to enter China several times using his identity as a cover to collect China-related intelligence and identify potential recruits for MI6. Huang allegedly provided his MI6 handlers with “9 classified-level state secrets, 5 secret-level state secrets, and 3 intelligence reports.”

MSS states that MI6 provided Huang with professional intelligence training in the UK and equipped him with special espionage gear to facilitate intelligence gathering in China. Chinese national security authorities allegedly uncovered evidence of Huang’s espionage and have taken him into criminal custody. No further details (besides the surname) were provided regarding Huang’s identity, current status, or location. The MSS announcement did not elaborate on Huang’s background, which consulting firm Huang was running, or who his MI6 handlers were.

Source: Deutsche Welle, January 8, 2024
https://p.dw.com/p/4ayJ9

The CCP’s Nine Modes of Interference in Taiwan’s Election

Taiwan will have its Presidential election on January 13. The Epoch Times listed nine modes of influence that the Chinese Communist Party (CCP) has been exercising in attempts to force an election outcome favorable to Beijing.

  1. Xi Jinping and the CCP’s Taiwan Affairs Office have been making veiled threats of war, sending a message to Taiwanese voters. In Xi Jinping’s New Years address on December 26, 2023, Xi Jinping stated that the reunification of Taiwan is “a must” and “historically inevitable.” Chen Binhua, spokesperson for China’s Taiwan Affairs Office, referred to the presidential and vice-presidential candidates of Taiwan’s Democratic Progressive Party (DPP), Lai Ching-te and Hsiao Mei-chin, as “war instigators.” At the same time, Chen expressed a willingness to cooperate with Hou Youyi, the presidential candidate from Taiwan’s Kuomintang (KMT) party. The CCP’s endorsement of Hou Youyi is clear.
  2. On January 9th, the CCP launched a satellite using the Long March 2C carrier rocket. The rocket flew over the southern end of Taiwan’s airspace. This served as a reminder to the Taiwanese people that the CCP’s rockets could be overhead at any moment.
  3. The Chinese military conducted maritime exercises in the East China Sea from January 8 to 9.
  4. Chinese military aircraft and warships persist in infringing upon Taiwan’s airspace and territorial waters.
  5. Chinese surveillance balloons over Taiwan – From December 7, 2023 to January 10, 2024, a total of 30 Chinese surveillance balloons flew over the median line of the Taiwan Strait or directly crossed into Taiwan’s airspace.
  6. Inviting Taiwanese politicians to visit mainland China – Liu Zhaoxuan, the former head of Taiwan’s Executive Yuan (the Taiwanese executive cabinet) during Ma Ying-jeou’s presidency, visited China and met with Wang Huning, a CCP Central Committee’s Politburo Standing Committee member. One day later, Ma Ying-jeou suggested that the KMT and the Taiwan People’s Party join forces and rally behind a single presidential candidate to beat the DPP. Vice Chairman Xia Liyan of the KMT visited mainland China on December 13, 2023; this was his fourth visit to the mainland since the summer of 2023. The CCP has also launched a campaign to invite Taiwan’s local officials and village heads to visit mainland China.
  7. Beijing has increased economic pressure on Taiwan, recently announcing increased import tariffs on several categories of Taiwanese goods.
  8. The CCP has provided campaign funds for favored Taiwanese politicians.
  9. The CCP has utilized online platforms to conduct cognitive warfare and disinformation warfare against Taiwan’s population. Techniques employed “integrate cyber, information, psychological and social engineering attack methods and can operate simultaneously with other physical means to influence the attitudes and behaviors of target individuals or groups to gain an advantage.”

Source: Epoch Times, January 10, 2024
https://www.epochtimes.com/gb/24/1/10/n14155496.htm