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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

Briefings | | |   Geo-Strategic Trend

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

Briefings | | |   Geo-Strategic Trend Social Stability

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

Briefings | | |   Economy/Resources Geo-Strategic Trend

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

Briefings | | |   Geo-Strategic Trend

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

Briefings | | |   @CS Geo-Strategic Trend

Australian Court Delivers Landmark Verdict: CCP United Front Work Member Convicted of Foreign Interference

In November 2020, the Australian police charged former Liberal Party member Di Sanh “Sunny” Duong, also known as Yang Yisheng, with violating the “Foreign Interference Laws”: Duong was accused of preparing or planning foreign interference activities. On Tuesday, December 19, 2023, an Australian court ruled that the charges were substantiated. This marks the first such verdict under foreign interference laws enacted in 2018. Duong may face up to 10 years in prison.

According to the Australian Broadcasting Corporation (ABC), prosecutors informed the court that Duong had maintained regular contact with Chinese intelligence agencies and attempted to influence then Federal Minister Alan Tudge to further the goals of the Chinese Communist Party (CCP).

Born in Vietnam, Sunny Duong, 68 years old, is a well-known businessman in the Australian Chinese community. He serves as the chairman of the Oceania Cambodia Vietnam Chinese Association and holds various leadership positions in Chinese community organizations in the Australian state of Victoria. He is believed to be associated with the China Council for the Promotion of Peaceful National Reunification, which is controlled by the CCP’s United Front Work Department.

ABC’s report stated that prosecutor Patrick Doyle SC told the jury that Duong’s actions couldn’t be compared to the espionage seen in spy novels or 007 movies. He said that Duong’s actions were rather a “subtle form of interference,” emphasizing that the motivation was to gain influence [for the CCP].

A secret recording showed that Sunny Duong told a colleague, “What I do won’t be reported in the media, but Beijing knows what I’m doing.”

Source: Voice of America, December 19, 2023
https://www.voachinese.com/a/australia-court-finds-melbourne-man-guilty-of-foreign-interference-121923/7404075.html

Briefings | | |   @CS Geo-Strategic Trend Government/Politics

CNA: The U.S. Became South Korea’s Largest Export Market

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, in December 2023, South Korea’s exports to the United States exceeded its exports to China for the first time in 20 years.

Amid tensions over global economic security and technology supply chains, this is an important sign of changes in international relations. According to South Korea’s Ministry of Trade, South Korea’s December 2023 exports to the U.S. and to China were US$11.3 billion and US$10.9 billion, respectively. South Korea’s overall export volume increased at an annual rate of 5.1 percent. South Korea’s overall import value fell by 10.8 percent compared with the same period last year, and the trade surplus expanded to US$4.5 billion.

Although single-month data is not enough to prove that there has been a long-term shift in trading patterns, this change can still be taken as a reflection of the economic challenges facing China. In the meantime, the United States has been trying to win support from its allies to reduce global supply chain dependence on China and to limit Beijing’s access to advanced semiconductor technology. South Korea has forged closer ties with the United States under President Yoon Suk Yeol.

Source: CNA, January 1, 2024
https://www.cna.com.tw/news/aopl/202401013004.aspx

Briefings | | |   Geo-Strategic Trend

Xinhua: North Korea Claims South Korea Misjudged its Military Activity

Xinhua reported that Kim Yo Jong of North Korea has claimed that South Korea misjudged North Korea’s military movements. The following is a translation of the report.

According to the report from the Korean Central News Agency (North Korean media), Kim Yo Jong, Vice Chairman of the Central Committee of the Workers’ Party of Korea, made a statement on January 7, pointing out that South Korea has made a misjudgment and speculative assumptions about the movements of the North Korean military.

The report stated that South Korea claimed that North Korea fired shells northwest of Yonpyeong Island on the afternoon of January 6, and that the shells fell in the western sea area north of the “Northern Limit Line.” Kim Yo Jong of North Korean responded to this claim in the statement, saying that the North Korean military had in fact detonated explosives simulating the sound of coastal artillery. North Korea’s purpose was to observe South Korea’s reaction.

Kim Yo Jong said that South Korea mistook the explosive sound for artillery fire, took the sounds as provocative shelling, and falsely claimed that the impact point was in the sea buffer zone north of the “Northern Limit Line” in the western sea area.

Kim Yo Jong also warned that even if South Korea makes a small provocation, the North Korean military will immediately respond with “shelling.”

According to another report by Yonhap News Agency (South Korean media) on January 7, the South Korean Joint Chiefs of Staff dismissed Kim Yo Jong’s remarks as just “low-level psychological warfare” denigrating the detection capabilities of the South Korean military. He stated that if North Korea provokes South Korean territory and national security, the South Korean military will respond resolutely and decisively based on the principles of “immediate, strong, and thorough countermeasures.”

There have been persistent disagreements between the two Koreas over the demarcation of the western sea area of the Korean Peninsula. South Korea has delineated a maritime boundary called the “Northern Limit Line” between the “West Sea Five Islands,” including Yonpyeong Island, and the western coast of North Korea, which North Korea does not recognize.

Source: Xinhua, January 7, 2024
http://www.news.cn/world/20240107/8c243d2644a54e719a9956b811cdcfb4/c.html

Briefings | | |   Defense/Military Geo-Strategic Trend