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Geo-Strategic Trend

LTN: China Was Pleased with Pope’s Refusal to See Pompeo

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, according to Italy’s largest newspaper, Corriere della Sera, the Vatican is renewing its two-year agreement with the Chinese government on the appointment of bishops. Both sides refused to comment on this matter. The content of the agreement remains secret. The Vatican’s internal evaluations did not really conclude that this agreement was a good one. However, the attitude was, a bad agreement is better than nothing. The Vatican has been keeping largely silent on China’s human rights violations in Xinjiang, Hong Kong and in the religious communities in China. Some said there is a possibility that Vatican and China may establish a formal relationship in two years. Sources in the Vatican also revealed that China was pleased with the fact that the Pope refused to see U.S. Secretary of State Mike Pompeo.

Source: LTN, October 19, 2020

Exporting Excess Capacity through “One Belt One Road”

An internal Chinese Communist Party (CCP) document that Jilin Province issued reveals that the purpose of China’s “One Belt One Road” strategy is to enable China to export excess capacity.

The document disclosed that one of the main tasks of China’s industrial transformation and upgrading is to “solve the excess capacity” problem through the “One Belt One Road” strategy.

According to the Jilin Provincial Government, “with the ‘One Belt One Road’ strategy leading us, our province should take the initiative to find the consumer market, digest excess capacity, adjust economic structure, promote industrial transformation, and promote product upgrading.” The document mentioned China’s first automobile manufacturing plant “FAW” located in Jilin Province, saying that “Changchun FAW and its supporting enterprises will usher in a rare opportunity.”

FAW has had a serious overcapacity problem. Its brands, Pentium, Red Flag, FAW Jilin, and FAW Tianjin have a combined total production capacity of 780,000 vehicles. In 2017, the sales volume was only 210,000 vehicles, and the capacity utilization rate was less than 30 percent.

According to statistics that the China Association of Automobile Manufacturers released, due to the continued decrease in sales and the continued increase in production capacity, the capacity utilization rate of passenger vehicles in China has dropped from 66.55 percent in 2017 to 53.74 percent in 2019.

Internal documents from Anhui Province also show that local governments are actively transferring excess production capacity through “One Belt One Road.”

In the documents, the CCP Chuzhou municipal government in Anhui Province encourages companies with excess capacity to invest in countries along the “One Belt One Road” and focus on supporting companies involving cement, glass and construction materials to establish production facilities along the route.

Source: Epoch Times, October 7, 2020

Huawei Lost another Major EU Customer

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that French-owned telecommunications giant Orange Belgium officially announced it selected Nokia’s 5G technology to deploy its 5G network throughout Belgium. Orange decided to build its future 5G infrastructure on top of its current Ericsson network. Orange Belgium also operates in Luxembourg, where Nokia 5G technology will also be used. In the meantime, Orange Belgium’s competitor Proximus also announced the decision to use Nokia in its Belgium and Luxembourg networks. Belgium is the focal point of the United States on pushing out Huawei since the EU Executive Branch and the EU Parliament are located in Belgium’s capital, the City of Brussels. The U.S. sanction on Huawei brought the deep worry that Huawei may not be capable of keeping up with supply. Huawei commented on Orange’s decision, saying this is a loss in a fair bidding process, and Huawei respects fair play. Huawei has been serving the Belgium market for over ten years.

Source: Sohu, October 12, 2020

HKET: UK Introduces National Security and Investment Bill

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that the British government has been drafting a National Security and Investment Bill to govern sensitive technology related to foreign investments, especially in the areas of defense and infrastructure. The draft was planned to be discussed in the Cabinet after its completion by the end of this month. The Parliament is scheduled to review and approve the Bill next month, at the earliest. The biggest debate about the new bill was regarding the authorization of cabinet members to overturn past or current investment projects. British laws rarely have retroactive power. The British government has been considering legislation to regulate national security related foreign investments since the last quarter of 2019. It is widely recognized as a move against Chinese investments. Prime Minister Johnson already ordered the phase-out of Huawei equipment. The most sensitive project with Chinese involvement is the Hinkley Point C nuclear project.

Source: HKET, October 14, 2020

India warned Amazon and Flipkart about Products’ Country of Origin

The Indian government issued warning letters to Amazon’s Indian unit and Walmart’s Flipkart, stating that the two e-commerce companies did not indicate the country of origin for the goods sold on their platforms, a violation of government regulations.

Reuters reported on Saturday, October 17, that at a time of intense India-China relations, the letter that the Ministry of Consumer Affairs, Food and Public Distribution issued on Friday showed that the Indian government has strengthened the implementation of the regulation as one of its attempts to slash imports of goods made in China.

The Ministry gave these two companies 15 days to explain why the goods sold on the platform did not indicate the country of origin, and threatened that it would then take action. However, the letter did not mention the specific actions to be taken, referring only to legal actions that have provisions for fines.

After the bloody border conflict between India and China broke out in June of this year, relations between the two countries have continued to escalate. India has since blocked at least 177 mobile applications from China, and Chinese products exported to India have also met with additional inspections and delays.

Source: Voice of America, October 17, 2020

Concerns over China and UN’s Joint Data Center

China’s investment in data collection has increased in recent years, with its tentacles extending around the globe. There have been concerns about the news that China will cooperate with the United Nations to establish a data center.

Xi Jinping, the head of Chinese Communist Party, said at the general debate of the 75th session of the UN General Assembly, “China will set up a UN Global Geospatial Knowledge and Innovation Center and an International Research Center of Big Data for Sustainable Development Goals to facilitate the implementation of the 2030 Agenda for Sustainable Development.”

According to the Chinese government website and state media, as early as April last year, the Ministry of Natural Resources signed a memorandum of intent with the UN Department of Economic and Social Affairs in Beijing to initiate preparations for the establishment of a United Nations Global Geospatial Knowledge and Innovation Centre in Deqing, Zhejiang. The work aims to share global geospatial data and promote exchanges and cooperation among UN member states in the field of geographic information. In addition, the National Bureau of Statistics of China and the United Nations Department of Economic and Social Affairs will jointly establish the big data research institute which will also be located in Hangzhou, less than an hour away from Deqing.

Ms. Rosett, an adjunct fellow with the Hudson Institute, wrote a Wall Street Journal opinion article in which she stated, “Mr. Xi’s promised U.N.-China geospatial and big-data complex would allow for detailed mapping of everything from topography and infrastructure to human behavior, across time and around the globe. China under its own steam is already collecting and in some cases pilfering troves of data world-wide. However, the U.N. badge of legitimacy would make it easier for Beijing to secure flows of data from member states, influence U.N. standards and norms for such data collection, shape the results, feed them into the U.N. system—and project the Chinese Communist Party’s techno-tyranny around the world.”

Source: Radio Free Asia, October 14, 2020

BBC Chinese: Pew Poll Showed Significant Chinese Reputation Decline

BBC Chinese Edition recently reported that the Pew Research Center just released multi-national poll results which indicated a significant decline in China’s reputation among 14 advanced Western countries and Asian countries. The Japanese result showed an 86 percent negative response.  Sweden, the first country in the West that established a formal relationship with China, was second with a poll that showed 85 percent negative. Australia had the third highest negative view about China, with 81 percent of the people surveyed choosing negative. This is a 24 percent expansion from last year. In the United Kingdom 75 percent of the people reported a negative view, which represents a 19 percent expansion from last year. The United States negative number is at 73 percent, which is the highest in 15 years and is a 20 percent increase since President Trump took office. An average of 78 percent among all the people surveyed distrusted Xi Jinping and 61 percent thought China did poorly in dealing with the pandemic. Among nine countries, negative views against Xi increased by 10 percent in the past year.

Source: BBC Chinese, October 6, 2020

Pompeo: If China Attacks Taiwan, Appeasement Is Not the Answer

On October 6, U.S. Secretary of State Pompeo participated the quadrilateral security dialogue, or Quad, with Japan, India and Australia. He also accepted an exclusive interview with the Nikkei. During the interview, the reporter asked whether the United States was prepared to defend Taiwan if China unilaterally attacked Taiwan. Pompeo said that the “U.S. is committed to reducing cross-strait tensions,” the mission of the Trump administration in the world. The United States “looks to bring peace, not conflict.” It is shameful that the Communist Party of China instigates tensions with Vietnam, Japan, as well as a series of incidents in the Himalayas (the Sino-Indian border). “This is the Chinese using coercive power. This isn’t how great nations operate.” Pompeo also stressed that “appeasement is not the answer” and the U.S. is the best partner for security with Taiwan and Japan.

The U.S. has a NATO agreement with European countries but there is no similar agreement with the countries in the Asia Pacific region. Facing China’s rapid increase in military and economic influence, security cooperation among many countries is indispensable. Pompeo said. “When one talks about security, one is talking about economic capacity and the rule of law, the ability to protect intellectual property, trade agreements, diplomatic relationships, and all of the elements that form a security framework. It is not just military.” He also stressed that the democratic countries should unite and strengthen the foundation to “counter the challenge that the Chinese Communist Party presents to all of us.”

Source: Liberty Time News, October 6, 2020