Chinascope – Page 108

China’s “Belt and Road” Investment Shifts Focus

China’s overseas investments related to the “Belt and Road” initiative are undergoing a shift, with a decrease in large-scale infrastructure projects and an increase in soft investments in areas such as biotech and digital technology. According to data from fDiMarkets, a service that tracks foreign direct investment, China’s greenfield investments in local entities, factories, and sales channels are growing in the digital and biotech sectors. Investments in IT, communication, and electronic components have grown sixfold to $17.6 billion, while biotech investments have surged to $1.8 billion, a 29-fold increase since the start of the then Belt and Road initiative in 2013.

Etana Biotechnologies, an Indonesian start-up, has acquired the technology for the development of messenger RNA (mRNA) vaccines from Suzhou Aibo Biotechnology in China. The vaccine plant is to be completed in 2022 with a target of 100 million doses.

The development of digital and biotech sectors represents a shift in China’s overseas investment strategy away from large-scale infrastructure and fossil fuel projects. In the past decade, China has reduced its investment in coal and fossil fuels by 99 percent and has set a goal of decarbonizing by 2060. Meanwhile, China’s investment in metals such as aluminum has also peaked and since 2018, it has declined . The soft investments in digital and biotech sectors are seen as more cost-effective than hard infrastructure investments, and the smaller investment amounts could help to reduce debt risks for emerging market countries.

Source: Nikkei, May 8, 2023
https://zh.cn.nikkei.com/china/ceconomy/52291-2023-05-08-05-00-03.html

Briefings | | May 10, 2023 | Geo-Strategic Trend

Guangdong Strengthens Management of Government Officials’ WeChat Groups; Bans Negative Comments

Several government branches in Guangdong Province and other regions have recently required Chinese Communist Party (CCP) members and officials to report activities on the WeChat groups that they are affiliated with, including the content of images, texts, and videos.

Two images circulating on Twitter and WeChat show the cover of a “Personal WeChat Group Registration and Reporting Form” printed in April by the Guangdong Provincial CCP Commission for Discipline Inspection and the Guangdong Provincial Supervision Commission .

One of the attachments to the WeChat Group Registration and Reporting Form, entitled Attachment 4, “Self-Examination Table for the Purification of Moments,” lists seven items that need to be reported promptly, including distorting, negating, and attacking the Party’s and China’s’ National history; vilifying and slandering party leaders and heroic models; advocating Western “constitutional democracy,” “universal values,” and human rights issues; questioning the achievements of poverty alleviation; spreading pessimistic views regarding topics such as employment, housing, education, and the polarization of rich and poor; and attacks and slander against the effectiveness, safety, and fairness of Chinese COVID-19 vaccines.

On September 5, 2019, a university in Hubei Province required teachers and students to register in WeChat groups across the provinces. On March 28 last year, the Wuhan City’s Confidentiality Bureau issued a “Notice on Confidentiality Management of WeChat Work Groups in Government Agencies and Units,” which requires government branches to establish WeChat groups only after obtaining approval. “An application must be submitted as per the work needs, specifying the purpose, time of establishment, and responsible person.” The group leader is then determined as the group administrator and has to sign the “WeChat Group Administrator Confidential Responsibility Statement.”

Source: Radio Free Asia, May 9, 2023
https://www.rfa.org/mandarin/yataibaodao/renquanfazhi/gt2-05092023034525.html

Briefings | | May 10, 2023 | Government/Politics

Russia Authorizes Export of Up to 30 Percent of Enriched Uranium Nuclear Fuel to China

According to a government decree released on May 2nd, Russia has authorized its state-owned nuclear fuel company, TVEL, to export new nuclear fuel to China for the next three years. The fuel to be exported will be enriched with uranium-235 to no more than 30.4 percent purity. The Federal Service for Technological and Export Control (FSTEC) of Russia is responsible for issuing the necessary licenses to TVEL for exporting such nuclear fuel to China, and should do so before April 12, 2026.

Russia and China are actively cooperating in the peaceful nuclear energy sector, including in the field of fast neutron reactors, which use uranium-235 of higher purity than traditional thermal neutron reactors. The two countries are working together to construct a 600 MW CFR-600 fast neutron reactor, which is China’s flagship project in the field of “fast” nuclear energy. In late 2017, China began building its first fast reactor at a nuclear power plant in Xiapu, Fujian Province. In June 2018, Russia and China signed an agreement to cooperate in building and operating the CFR-600 fast neutron reactor, and subsequently signed an agreement to provide nuclear fuel for the reactor.

In addition, the government decree also authorized TVEL to export new nuclear fuel with uranium purity not exceeding 5 percent to India before April 12, 2026, which will be provided to nuclear power plants under the supervision of the International Atomic Energy Agency. The Kudankulam Nuclear Power Plant in India, in which Russia is a partner, has already commissioned units 1 and 2, and construction of another four units is underway as part of the plant’s second and third phases.

Source: Sputnik News (Russia), May 3, 2023
https://sputniknews.cn/20230503/1050025294.html

Briefings | | May 9, 2023 | Geo-Strategic Trend

China’s April Manufacturing PMI Declined

According to the official numbers released by China’s National Bureau of Statistics, China’s April manufacturing Purchasing Managers’ Index (PMI) fell to 49.2 percent. In terms of the company sizes, the PMIs of large, medium, and small companies are 49.3 percent, 49.2 percent and 49.0percent, respectively – all lower than March. The new orders sub-index was 48.8 percent, a decrease of 4.8 percentage points from the previous month, indicating that the demand in the manufacturing market has dropped. The raw material inventory sub-index was 47.9 percent, a decrease of 0.4 percentage points from the previous month. This continued the decreasing trend. The employment sub-index was 48.8 percent, a decrease of 0.9 percentage points from the previous month.

In the meantime, Caixin just released its official Chinese Manufacturing PMI numbers for April. Caixin PMI is a well-respected economic indicator monitored globally by financial institutions. Caixin’s China Manufacturing PMI recorded 49.5 for April. With the release of the previous backlog of demand, China’s manufacturing industry returned to a contraction trend in April, reflecting that the recovery of the manufacturing industry is still not solid. Employment is also a prominent problem facing the Chinese economy, especially for young people.

Sources:
(1) National Bureau of Statistics, April 30, 2023
http://www.stats.gov.cn/sj/zxfb/202304/t20230429_1939136.html
(2) Caixin, May 4, 2023
https://pmi.caixin.com/2023-05-04/102042089.html

Briefings | | May 9, 2023 | Economy/Resources

CNA: China’s Foreign Investment Fell to A Five-year Low Last Year

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, as China strengthens its pressure on foreign capital, foreign direct investment in China only reached US$180 billion in 2022, an annual decrease of 48 percent, a new low since 2017. Economists say new investment into China has slowed and will be hard to recover. The outlook for foreign investment in China has become murkier as China revises its anti-espionage law, broadening its scope to potentially cover day-to-day business activities of foreign investors, as well as targeting foreign consulting firms that provide services to multinational corporations. At the same time, growing tensions between China and the United States may also limit investment, and the U.S. government is also preparing to impose new restrictions on U.S. companies investing in China. This may put foreign capital, which can bring innovative ideas and cutting-edge technology to China, at particular risk. The entry of these companies into China is an important channel for China to learn to improve production efficiency and people’s living standards. China’s appeal as a destination for foreign direct investment had waned ahead of recent Chinese pressure on foreign capital, due to China’s clashes with the West over trade, technology, and national security. In the meantime, low-cost manufacturing destinations such as India and Vietnam are growing. Economists say the fragile political environment means foreign capital in China is likely to remain concentrated in only a few big companies willing to maintain or expand existing businesses, especially those eager to tap China’s consumer market, such as McDonald’s and Starbucks.

Source: CNA, May 5, 2023
https://www.cna.com.tw/news/acn/202305050174.aspx

Briefings | | May 9, 2023 | Economy/Resources Geo-Strategic Trend

Concerns Over China’s Newly Passed Anti-Espionage Law

China passed a new Anti-Espionage Law on April 26, which will be enforced on July 1. Epoch Times published an article to analyze the law.

Article 4 defined what is counted as espionage activity. Item 3 broadened it to include “activities conducted, or instructed or financed to be conducted by others, by foreign agencies, organizations, and individuals other than spy organizations and their agents, and activities conducted by domestic agencies, organizations, or individuals in collusion with them, to steal, spy, buy, illegally possess state secrets, intelligence, as well as documents, data, information, and items related to national security and interests, or to instigate, induce, coerce, or buy state employees to mutiny.” This opens the door for the government to claim any foreign organization, company, or individual’s action as spy work.

Article 14 defined “No individual or organization may illegally obtain or hold documents, data, information, or items that are state secrets.” Article 38 defines the authority to interpret “state secrets” is vested in the “confidential department of the state, or the confidential departments of a province, autonomous region, or municipality directly under the Central Government.”

The law also gives the law enforcement agency great power in searching and investigation. Article 24 defined that “State security organs when carrying out the counter-espionage task can show their identify card, and then check the identity card of Chinese citizens or foreign personnel, inquire the relevant individuals and organizations, and inspect the accompanying items of any identity-unknown or suspected individual.” Also, Article 26 and 27 defined that with a district-level (lower than a city) approval, the security staff can search individual’s or organization’s electronic equipment, documents, data, materials, and items.

Sources:
1. China’s government site, April 27, 2023
http://www.gov.cn/yaowen/2023-04/27/content_5753385.htm
2. Epoch Times, May 1, 2023
https://www.epochtimes.com/gb/23/5/1/n13985487.htm

Briefings | | May 5, 2023 | Government/Politics

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”