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

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

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

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

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Local Government Called for the Central Governments to Take Over Their Debts

Some China’s local governments admitted that they could no longer handle their debts and called for central government’s help. The Research Center on Development, Guizhou Province said that Guizhou Province “is unable to effectively resolve the (local debt) problem on its own.” The center made the statement in a report “Study on the Resolution of Local Government Debt,” which pointed out that local debt is a significant and urgent problem, but it is extremely difficult for the local governments to resolve it due to their limited financial capability. The report is unavailable on the Internet now.

Some local governments in Yunnan Province also reported desperate debt situation. By end of 2022, Yongping County’s total debt reached 3.44 billion yuan (US$500 million). Its debt ratio reached 991 percent and fiscal self-sufficiency rate was only 15.66 percent. Tengchong City also claimed financial difficulty where its fiscal capability could just keep the government payroll going.

Source: China News Agency (Taiwan), April 28, 2023
https://www.cna.com.tw/news/acn/202304280110.aspx

Briefings | | |   @CS Economy/Resources Government/Politics

Report: China’s Cost of Childrearing the Second Highest in the World

According to a recent report from Chinese think tank Yicai Research, China ranks second only to South Korea as the most expensive country in the world to raise a child. The cost of raising a child in China to the age of 18 is 6.9 times the country’s per capita GDP, which is twice the cost in Germany and three times the cost in France. China’s low birth rate and the now-abandoned one-child policy have resulted in an impending demographic crisis, with India poised to overtake China as the world’s most populous country this year.

The report recommends that China provides more support to families to improve the country’s low birth rate. The measures suggested include cash and tax subsidies, housing subsidies, increasing the number of daycare centers, offering equal maternity leave for men and women, introducing foreign nannies, promoting flexible work arrangements, protecting the reproductive rights of single women, allowing assisted reproductive technologies, and reforming the school and examination system.

A national survey conducted by the National Health and Family Planning Commission in China in 2017 found that 77.4 percent of women of childbearing age felt that the “economic burden is too heavy” is the primary reason for not wanting to have children, except for “being too old” or “having no one to take care of the child.”

Source: Deutsche Welle, May 1, 2023
https://p.dw.com/p/4QjpI

Briefings | | |   Economy/Resources

China Implements New Conscription Regulations

China implemented a revised conscription law as of May 1. It allows for the re-enlistment of retired soldiers and for the conscription of students with high-tech training. According to experts, China’s long-term military preparation is necessary to counter the declining birth rate and prepare for a potential high-tech war. Chen Shih-min, an associate professor at National Taiwan University’s Department of Political Science, stated that manpower is one of the essential resources in warfare. China’s previous one-child policy practice and the high cost of raising children put China into a negative population growth. Facing the conscription difficulty, Beijing tried to revise the relevant laws to bring back retired soldiers. Chen added that a high-tech war requires specialized talent in the field of AI, robotics, and other high-tech areas. Also, conscription should prioritize students with such training. Overall, China is in a state of long-term military preparedness, and any military mobilization serves as a reminder for Taiwan. The Nikkei Asia report directly pointed out that the new conscription law is aimed at the Taiwan Strait conflict.

Source: Central News Agency (Taiwan), May 2, 2023
https://www.cna.com.tw/news/acn/202305020296.aspx

Briefings | | |   Defense/Military

South Korea’s Q1 Exports to China Drop by 28 Percent as Trade Cools Down Between the Two Countries

South Korea’s trade with China has shifted from a surplus to a deficit, drawing attention from various parties. According to the Chinese General Administration of Customs, in the first quarter of this year, South Korea’s exports to China were $38.2 billion, down 28.2% from the same period last year, the largest decline among its major trading partners. The report cites a Bank of Korea (BOK) report, which states that the positive effects of reopening of China’s economy are limited, and the pace of domestic demand recovery has not accelerated, particularly for durable goods such as mobile phones and cars, which have impacted South Korea’s exports.

South Korea remained the second-largest trading partner in China’s import trade for the entire year of 2022. However, in the first quarter of this year, South Korea dropped to fifth place in terms of import trade, following the United States, Taiwan, Australia, and Japan. At the same time, South Korea’s imports from China in the first quarter of this year also fell by 7.1 percent compared to the same period last year.

The BOK report suggests that South Korea’s significant decline in exports to China is largely due to the slump in semiconductor exports. Due to the global decline in semiconductor demand and a sharp drop in memory chips prices, South Korea’s overall semiconductor exports in the first quarter of this year fell by 40 percent compared to the same period last year. In particular to China, South Korea’s semiconductor exports saw a decline of 31.7 percent in the fourth quarter of 2022 and 44.5 percent in the first quarter of this year.

Source: Central News Agency (Taiwan), April 30, 2023
https://www.cna.com.tw/news/acn/202304300200.aspx

Briefings | | |   Geo-Strategic Trend

Australia Announced Large-scale Military Reform

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Australian Prime Minister Albanese released the final assessment of the Defense Report in the House of Parliament . In November last year, the Australian government decided to conduct a comprehensive evaluation of the  defense capabilities of the Australian military. The final results will be summarized into a new strategy that will help strengthen the national military-industrial complex and ensure that the military has the necessary defensive resources. The national defense strategy that once focused on territorial defense can no longer satisfy Australia’s ambitions. Looking at China from a distance, “Australia must deter potential enemies before they reach the coastline, whether it is at sea, in the air or on the Internet.” According to Australian Defense Minister Richard Marles, this is the first time in 35 years that Australia has redefined the mission of its military. The Defense Report identified the US-UK-Australia Trilateral Security Partnership (AUKUS) as a key priority which aims to help Australia acquire nuclear-powered submarines to strengthen its security and military deterrence in the Indo-Pacific region. The Report also laid out a large-scale reform of the Ministry of Defense and related agencies. It will be carried out in order to  plan the development of the military-industrial complex more accurately and systematically. Another priority is to increase long-range precision strike capabilities. The Australian Army will be the first to have missiles with a maximum range of 300 kilometers. Later it will reach the range of more than 500 kilometers through acquiring precision-guided missiles. The current Army missile range is only 40 kilometers. Australia will also strengthen cooperation with Japan, India and other Pacific and Southeast Asian countries. The Report mentioned China nine times, although the final public version did not list China as a direct military threat to Australia. The Report repeatedly cited China’s military spending and military actions as one of the reasons for Australia’s defense reform.

Source: Sina, April 25, 2023
https://news.sina.com.cn/c/2023-04-25/doc-imyrpwqv4527208.shtml

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: Italy Tends to Withdraw from China’s Belt and Road Initiative

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to people familiar with the matter, Italian officials have hinted in private meetings with Taiwanese officials that they may be willing to withdraw from China’s Belt and Road program in order to strengthen semiconductor cooperation with Taiwan. Officials from the Italian Ministry of Industry recently discussed plans on semiconductor production and exports with Taiwanese officials in Taipei. Relevant decisions will have to be made by Prime Minister Giorgia Meloni, but she has not made her final position public yet. Italy is the only member of the G7 countries participating in China’s Belt and Road Initiative. Although the participation agreement has had little practical impact ever since it was signed by then-Prime Minister Giuseppe Conte in early 2019, it is highly symbolic for Beijing amid tensions between China and the United States and its Western allies. The deal will automatically renew in 2024 unless Italy chooses to abandon it. A spokesperson for the Italian Ministry of Industry declined to comment on the above news. According to Taiwan media reports, Taiwan will open its second representative office in Italy in Milan this coming summer.

Source: Lianhe Zaobao, April 20, 2023
https://www.zaobao.com.sg/realtime/china/story20230420-1385160

Briefings | | |   Geo-Strategic Trend

The U.S. May Introduce Unprecedented Investment Restrictions on China

Well-known Chinese news site Tencent News recently reported that, since February 2023, multiple major U.S. media outlets have successively quoted U.S. officials in their reports, stating that the White House intends to prohibit U.S. companies from investing overseas in some advanced technology-related industries that may threaten national security. Although these reports did not mention any country,  people familiar with the matter broke the news that the new regulations formulated by the White House mainly involve U.S. investment in China. Earlier, the outside world generally believed that, as the world’s two largest economies, China and the United States are deeply connected in the economic field and Washington does not intend to turn its face away completely. Now it appears that the Biden Administration seems to be preparing for a complete showdown. The U.S. media revealed that the White House is preparing to introduce a comprehensive policy to contain China. Bloomberg did suggest that the U.S. government’s investment restrictions on U.S. companies may be too strict. They may cause companies to move their business from the U.S. to other countries. The new restrictions may end up having little benefit to national security and will further weaken America’s global competitiveness. It is worth mentioning that the U.S. media used the word “unprecedented” to describe the new regulations formulated by the White House. Therefore, for the time being, it can be regarded as a comprehensive policy of containing China. One report also showed that a U.S. official confirmed that the government has begun briefing groups such as industry organizations in the U.S. and the American Chamber of Commerce in China on the outline of the regulations. However, some details of the new policy are yet to be finalized.

Source: Tencent News, April 24, 2023
https://new.qq.com/rain/a/20230424A02N1600

Briefings | | |   US-China Relations

Fact Check: Beijing Gave Money to Attract Countries to Switch Diplomatic Ties from Taiwan to Itself

On March 27, China’s Foreign Ministry spokesperson Mao Ning claimed that China didn’t use money to influence or, in fact, to buy diplomatic relations with Honduras. Honduras cut its ties with Taiwan (the Republic of China) and established relations with Beijing (the People’s Republic of China) on March 26. Mao further claimed that there were no preconditions for Panama or any other country when they established relations with China in the past few years.

Radio Free Asia, however, did a fact check and found that Beijng’s claim was false. RFA concluded, “The People’s Republic of China has indeed set preconditions for establishing diplomatic relations with China and has provided a large amount of economic and non-economic assistance and incentives to attract countries if they would break off diplomatic relations with Taiwan.”

For example, Costa Rica established relations with Beijing in 2007. China committed to provide US$30 million in cash within two years of the establishment of diplomatic relations and an additional US$100 million to be delivered through China’s regular “turn-key” program.

Panama established relations with Beijing in 2017. Since then, China has provided US$1.86 billion in infrastructure and other investments to Panama. Beijing also donated US$143 million to Panama after establishing their relationship. It didn’t disclose the donation because it didn’t want to give the impression that “they pay a price (for countries) to break off from Taiwan.”

The Dominic Republic established relations with Beijing in 2018. From 2019 to now, China has provided US$490 million in infrastructure and other investments to the Dominic Republic. The research estimated that Beijing provided US$3 billion in financial aid to the country. China also donated US$30 million in 2021.

During the year when El Salvador established diplomatic relations with Beijing in 2018, Beijing provided El Salvador more than 3,000 tons of rice and pledged US$150 million in aid.

Immediately after the establishment of diplomatic relations in 2021, China pledged to donate one million doses of COVID vaccine to Nicaragua. In addition, Beijing reportedly provided an unspecified amount of supplies to the Nicaraguan police riot squad, where the Nicaraguan police force is led by the father-in-law of Daniel Ortega, the dictatorial President of the country.

It is not clear how much Beijing provided to Honduras to get it to switch sides. Reuters reported that before switching to Beijing, Honduras asked Taiwan for US$2.5 billion in aid which its Foreign Minister Eduardo Enrique Reina called “not financial aid” but a “negotiated refinancing mechanism.”

Source: Radio Free Asia, April 21, 2023
https://www.rfa.org/cantonese/news/factcheck/internationalrelations-04212023141728.html

Briefings | | |   @CS Economy/Resources Geo-Strategic Trend