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CCP Leverages U.S. Legal System to Counter U.S. – Trying to Stop Sanctions and Criticism

Voice of America (VOA) reported that the Chinese Communist Party (CCP) is leveraging the U.S. legal system, using the law as “both a sword to attack opponents and a shield to protect its interests.”

Chinese drone manufacturer DJI filed a lawsuit against the U.S. Department of Defense (DOD) on October 18, alleging that DOD’s inclusion of the company on the list of companies cooperating with Beijing’s military was erroneous and had caused significant financial losses. China’s semiconductor firm, AMEC, filed a similar lawsuit in the U.S. on August 16. Previously, Chinese companies Xiaomi and Hesai successfully removed themselves from the list by suing DOD. Analysts told VOA that these Chinese companies’ success was not due to a lack of military involvement, but because they exploited loopholes in the U.S. Administrative Procedure Act.

In addition, the CCP can use its state power and resources to hire top-tier U.S. law firms to start legal battles to coerce or even silence organizations or individuals from criticizing it.

Li Rui, Mao Zedong’s former secretary and a senior member of the CCP, left behind diaries detailing the inner workings of the party and his own views. According to his wishes, his daughter, Li Nanyang, handed over the diaries to the Hoover Institution at Stanford University in California. However, Li Rui’s widow, Zhang Yuzhen, filed a lawsuit in Beijing in April 2019 to reclaim the diaries (so that she could take them back to China) and won the case. Stanford University filed a countersuit in the U.S. This ongoing legal battle has lasted for over five years and required Stanford, Li Nanyang, and her attorney’s law firm to spend thousands of hours. Zhang Yuzhen hired four different law firms, three of which are among the largest in the U.S. Li Nanyang’s attorney pointed out that Zhang would not be able to hire those U.S. attorneys on her own, which Zhang neither confirmed nor denied.

Anna Puglisi, a former senior fellow at Georgetown University’s Center for Security and Emerging Technology, published a scholarly paper in May 2024 titled “How China’s Hybrid Economy Distorts Competition.” The paper highlighted the CCP’s direct or indirect relationship with companies like BGI Genomics and MGI Tech, and how China uses market access to protect its own global companies and undermine other global players. In June and July of this year, Puglisi received letters from prominent U.S. law firms hired by BGI and MGI, accusing her of defamation and demanding that she and Georgetown University retract the paper and cease related analysis.

In May 2019, Scott Paul, president of the Alliance for American Manufacturing (AAM), a nonprofit based in Washington, testified during a congressional hearing on transportation and infrastructure, stating that BYD and CRRC, two Chinese companies, are state-owned and state-supported, and had begun securing lucrative contracts funded by U.S. taxpayers to provide rail transit vehicles and electric buses for major U.S. cities. He warned that this trend would systematically undermine the competitive landscape of the U.S. locomotive and vehicle manufacturing industries. BYD filed a defamation lawsuit against AAM and several of its employees. The lawsuit dragged on for nearly two years, with several dismissals and unsuccessful appeals, until October 2022, when the Supreme Court refused to hear BYD’s appeal, ruling that BYD failed to prove that AAM’s statements were defamatory. However, the chilling effect of the lawsuit became apparent when AAM’s insurance company, Hartford, partially canceled AAM’s insurance in April 2021.

Source: VOA, October 23, 2024
https://www.voachinese.com/a/ccp-us-law-repression-20241020/7817608.html

Briefings | | |   @CS US-China Relations

Xinhua Commentary: US Struggles in Rebuilding Its Manufacturing Industry

Xinhua News Agency published a commentary on the U.S.’ failing to integrate global warming efforts in bringing manufacture businesses back to China.

Recently, Boeing announced plans to cut approximately 17,000 jobs globally, which stands in stark contrast to the high demand for global aviation manufacturing. This incident reflects several issues within American manufacturing: high labor costs, a shortage of skilled technical workers, and supply chain disruptions.

Since the 1960s, the offshoring of U.S. manufacturing has sparked widespread discussion about America’s “deindustrialization.” To address this problem, following the 2008 global financial crisis, various policies were introduced to revitalize the manufacturing industry, from Obama’s “reindustrialization” to Trump’s “America First” and now Biden’s “supply chain resilience” policy.

During this process, the U.S. has pursued protectionist trade policies and “long-arm jurisdiction” measures to forcibly bring manufacturing back. These actions have led to rising production costs, pressure on fiscal expenditure, high inflation, and damage to the supply chain, resulting in further decline of already hollowed-out industries.

According to a recent survey by the Financial Times, over two years into the Biden administration’s ambitious plan to reshore manufacturing, many projects, particularly in the clean technology and semiconductor sectors, are struggling to get off the ground.

Source: Xinhua, October 17, 2024
http://www.xinhuanet.com/20241017/b99368fad2d74d4b856b4e647b3bbaff/c.html

Briefings | | |   US-China Relations

RFI Chinese: US May Impose Tariffs on Solar Panels from Four Southeast Asian Countries

Radio France Internationale (RFI) Chinese Edition recently reported that the United States may impose new tariffs on solar panels from four Southeast Asian countries. These U.S. domestic manufacturers see competition from cheap imports from Chinese companies operating in Malaysia, Vietnam, Thailand and Cambodia as a threat to the Biden administration’s goal of promoting local production of clean energy technologies needed to combat climate change.

The American Solar Manufacturing Trade Council Alliance (AASMTC) stated in a petition to the U.S. government that Chinese manufacturers operating in the four Southeast Asian countries have received generous subsidies from the governments of these countries, including cheap financing, electricity and land tax exemptions, etc. These Chinese manufacturers also received support through China’s Belt and Road Initiative, according to AASMTC. The U.S. Commerce Department decided to consider the impact of cross-border subsidies for the first time.

The United States has already imposed a series of tariffs on solar imports. Not all U.S. manufacturers want to impose new tariffs on solar imports, as some U.S. companies assemble panels with low-cost solar cells from Southeast Asia.

Source: RFI Chinese, September 30, 2024
https://tinyurl.com/yh2pukn2

Briefings | | |   US-China Relations

Chinese Ambassador to the U.S. Lays Down Four “Red Lines” That U.S. Should Not Cross

According to the website of the Chinese Embassy in the U.S., China’s Ambassador to the U.S. Xie Feng delivered a keynote speech at the Vision China event on Sep 12. He stated that China has drawn four “red lines” [that the U.S. should not cross]. These particularly sensitive areas for the CCP are:

  • Taiwan,
  • (China’s record on) democracy and human rights,
  • (China’s institutional) path and system, and
  • (China’s) right (to economic development).

Xie said that, among these, the Taiwan question is the “most paramount in China-US relations and must not be crossed.”

He stated that “the notion of ‘democracy versus authoritarianism’ is a fallacy. China’s political system and development path are non-negotiable, and the legitimate rights of the Chinese people to have a better life must not be deprived.”

Radio France International reported that Xie also remarked that the attempt to completely decouple China and the U.S. is a “fantasy,” and viewing each other as new Cold War rivals is the “greatest strategic misjudgment of the 21st century.” He warned that a conflict between China and the U.S. would be an “unbearable burden for the world.”

He stated that “no conflict, no confrontation” is the bottom line for both sides to uphold.

Source: Radio France Internation, September 13, 2024
https://www.rfi.fr/cn/中国/20240913-中国对美划出四道红线-台湾，人权，制度与发展权

Briefings | | |   US-China Relations

Xinhua: Starlink Helps US Navy Increase Internet Speed Twentyfold

Xinhua recently reported that the U.S. Navy will soon begin the full-scale deployment of SpaceX’s Starlink satellites. This will provide high-speed internet connections to all its bases and ships. Satellite internet connectivity is expected to facilitate naval operational improvements. Currently the U.S. Navy uses Department of Defense satellites for connectivity. However, the six geostationary satellites for Internet access provide slow connection speeds. To achieve faster speeds, the U.S. Navy recently began using Starlink and Britain’s Eutelsat OneWeb. Low-Earth orbit satellites can improve the Navy’s connectivity capabilities, with on-ship speeds expected to reach about 1Gbps. This new capability is called Sailor Edge Afloat and Ashore (SEA2) by the U.S. Department of Defense. SEA2 operates 20 times faster than any other satellite before. It’s worth noting that SEA2 received the cybersecurity certification that has never been issued to such services before. Rob Wolborsky, Chief Engineer at U.S. Information Warfare Systems Command, stated that “this is a once-in-a-lifetime transition, and we’re working to deliver it to the fleets as quickly and aggressively as possible.”

During the COVID-19 period, the U.S. Navy recognized the need for increased connectivity. Due to pandemic-era restrictions, ships were not allowed to dock in many ports across the globe, cutting them off from the rest of the world. The U.S. Navy is likely to receive Starlink access through the StarShield program, which was established under a contract signed last year between the Department of Defense and SpaceX to provide satellite Internet connections to the U.S. Armed Forces.

Source: Xinhua, September 5, 2024
http://www.xinhuanet.com/milpro/20240905/dc67d657e8ba43bd80fb5955475ffd5e/c.html

Briefings | | |   Defense/Military Information/Technology US-China Relations

Chinese State Media Says Sullivan More Humble During Recent Trip to Beijing

A video published by the account Yuyuantantian (玉渊谭天) analyzed U.S. National Security Advisor Jake Sullivan’s meeting with Wang Yi in Beijing in late August. It claimed that Sullivan “lowered his position” comparing to his past behavior when dealing with China. This media account is owned by China’s state media China Media Group.

The video took the footage of Sullivan during his meeting and made two points: First, Sullivan asked Wang Yi to speak before him. Second, when it was Sullivan’s turn to speak, he repeated what Wang just stated and thus the video called him the “repetition machine.”

Source: CCTV, August 29, 2024
https://content-static.cctvnews.cctv.com/snow-book/index.html?item_id=14919843106935979314

Briefings | | |   US-China Relations

Former Aide to New York Governor Accused of Acting as Chinese Agent

Linda Sun, who served as a staff member for former New York Governor Andrew Cuomo and also as the former Deputy Chief of Staff for current Governor Kathy Hochul, has been accused of acting as an agent for China and the Chinese Communist Party. The prosecutor handling the case stated that, starting in 2016, Linda Sun took actions at the request of Chinese consulate officials to limit contact between Taiwanese government officials and the New York Governor’s office. Linda Sun and her husband Chris Hu received substantial financial rewards for their work on behalf of China, including multi-million-dollar deals for Hu’s business activities in China, travel benefits, promotion of a family friend’s business, and the securing of employment for Sun’s cousin in China. The indictment states that the couple “laundered millions of dollars for foreign entities and used the illicit funds to purchase luxury cars and multi-million-dollar properties in New York.”

In January 2019, Linda Sun wrote to a Chinese official expressing how much she valued her relationship with the Chinese consulate, noting that during her time working for Governor Cuomo she had done a great deal to foster the relationship between the state’s government and the consulate. She also mentioned that she had successfully blocked all contact between the New York state government and the Taipei Economic and Cultural Office, rejecting all requests from that office.

Linda Sun’s assistance to Beijing included her arranging for Governor Cuomo to attend a “SelectUSA” reception in Washington, D.C., hosted by the Chinese Embassy, rather than an event hosted by Taiwan around June 21, 2016. She also prevented the Governor from meeting with then Taiwanese President Tsai Ing-wen during her visit to New York in July 2019. Sun joined local Chinese “community leaders” in Manhattan to oppose Tsai’s visit.

After the case against Sun was made public, New York Governor Hochul requested that the State Department expel the Chinese Consul General in New York, Huang Ping. Huang has since left the New York mission, though the U.S. State Department announced that Huang’s departure was not due to an expulsion but rather due to Huang’s reaching the end of a regular rotation term as consul general.

Sources:
1. VOA, September 4, 2024
https://www.voachinese.com/a/former-new-york-governor-aide-linda-sun-prevented-cuomo-from-meeting-tsai-ing-wen-20240903/7770612.html
2. Politico, September 4, 2024
https://www.politico.com/news/2024/09/04/hochul-chinese-consul-general-00177319

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

RFI Chinese: PwC Expects Six-Month Business Ban from Chinese Authorities

Radio France Internationale (RFI) Chinese Edition recently reported that PwC China told clients it that expects Chinese authorities to impose a six-month business ban starting as early as September. This will be part of punitive measures imposed on PwC following a PwC audit of collapsed Chinese real estate developer Evergrande. China’s securities regulator said in March that Evergrande had reported an inflated revenue of nearly US$80 billion in Mainland China in the two years prior to defaulting on its debt in 2021. The regulators charged that PwC China’s audit of Evergrande’s accounting records had been improper.

PwC’s business ban and a potential hefty fine are probably the toughest action ever taken by Chinese regulators against a Big Four accounting firm. The Chinese government has stepped up scrutiny of the role of auditors in financial scandals, this time in the crisis-ridden real estate sector, which once contributed about a quarter of China’s GDP. PwC China was China’s highest-revenue accounting firm in 2022, with revenue reaching 7.9 billion yuan (around US$1.11 billion). PwC China’s rival Deloitte China was given a US$31 million fine last year for “serious audit deficiencies” related to Deloitte’s audit of China Huarong Asset Management. As part of the penalty imposed by Beijing, Deloitte China suspended operations for three months last year.

Many of PwC’s publicly listed Chinese clients have been banned for three years from cooperating with audit firms sanctioned by the authorities. This year, PwC China lost at least two-thirds of its accounting revenue from its Chinese-listed clients. That being said, Chinese-listed companies and state-owned enterprise clients account for only a minority of PwC China’s revenue; PwC is actively reassuring its largest internationally-listed clients, including internet giants Alibaba and Tencent, that it can complete their 2024 audits work.

Source: RFI Chinese, August 22, 2024
https://tinyurl.com/zdtten7b

Briefings | | |   Government/Politics US-China Relations