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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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China Times: Foxconn Plans $700 Million New Investment in India

Major Taiwanese newspaper China Times recently reported that top Apple supplier Foxconn, after setting up a foundry in India, developed recent plans to invest an additional US$700 million to build a new factory in India. The new production line is expected to be used to take over the iPhone production capacity transferred from Mainland China. Indian officials said that Apple wants to shift 25 percent of its iPhone production capacity to India due to concerns over the Chinese supply chain risks. The factory covers an area of about 1.2 square kilometers. In addition to the production of iPhones, the factory may also be used for electric vehicle parts. The new factory is expected to employ 100,000 workers. This investment is one of Foxconn’s largest single investments in India so far. In the future, China may face the risk of losing its status as the world’s largest producer of consumer electronics . Foxconn’s Zhengzhou (China) factory output dropped sharply due to the Chinese government Zero Covid lockdown at the end of last year, making Apple re-examine its supply chain in China. Foxconn’s investment in India may be a move to stay in line with Apple’s policies. Some reports indicated that the Apple iPhone 14 series 2022 production slipped by nearly 6 million units.

Source: China Times, March 3, 2023
https://www.chinatimes.com/cn/realtimenews/20230303005016-260409?chdtv

Briefings | | |   Geo-Strategic Trend Information/Technology

The U.S. Added More Chinese Tech Companies to the Entity List

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that the U.S. Department of Commerce has included an additional 28 Chinese companies and research institutions in the so-called Entity List on the grounds of national security and foreign policy interests. The Chinese companies added this time include Inspur Group (a Server hardware supplier), Loongson Technology (a leader in the CPU design field), 4Paradigm Technology (an artificial intelligence provider), BGI Research (genetic research), Suzhou Centec Communications (an Ethernet exchange chip designer), and a number of others. According to the regulations of the U.S. Department of Commerce, companies included in the Entity List must obtain authorization from the U.S. government to obtain U.S. products and technologies. Inspur Group, is a major player in China’s cloud computing, big data, hosting, and the artificial intelligence market. It depends heavily on Intel’s technology for its services. When contacted by reporters for comment, several companies said they were still assessing the situation and impact . A Chinese Foreign Ministry spokesperson commented earlier that the United States has repeatedly generalized the concept of national security, abused export control measures, adopted discriminatory and unfair practices against companies from other countries, and politicized and weaponized economic, trade and technological issues.

Source: Sina, March 3, 2023
https://news.sina.cn/2023-03-03/detail-imyiqnky4786782.d.htmlW

Briefings | | |   Information/Technology US-China Relations

China’s Development and Reform Commission Manages National Defense Mobilization

China’s National Development and Reform Commission (NDRC), a macroeconomic management agency under the State Council, is managing the country’s defense mobilization efforts. Several Chinese provinces and cities have listed their defense mobilization offices under the NDRC’s management, including Shanghai and Fujian.

According to scholars, military operations require economic mobilization and resource dispatch, which is one of the main responsibilities of the NDRC. In addition to managing economic construction, the NDRC works with relevant authorities to formulate strategies to promote the coordinated development of economic and national defense construction and undertakes specific work related to the National Defense Mobilization Commission.

Chen Shimin, an associate professor of the Department of Political Science at National Taiwan University, explained that national defense mobilization involves the overall economy, resource allocation, and scheduling. For example, in the event of a military operation, it is necessary to get manpower to the battlefield, which requires the coordination of the production of materials by the NDRC and other related operations.

China Defense News, the official outlet for the People’s Liberation Army, notes that the new round of national defense mobilization system reform is characterized by the establishment of national defense mobilization offices in a number of places and transferring the functions of coordination and management from the provincial military districts to the local governments. This change aims to address the situation of military organs doing everything and to organize and deploy resources in a better manner so as to form an overall joint force to deal with war or emergencies.

Overall, the management of national defense mobilization by the NDRC highlights the importance of coordination between economic and defense efforts in China. With the establishment of national defense mobilization offices in various places, the country can better prepare for potential emergencies and respond more effectively to military operations.

Source: Central News Agency (Taiwan), February 28, 2023
https://www.cna.com.tw/news/acn/202302280193.aspx

Briefings | | |   Defense/Military

Global Times: European Commission Asked Staff to Uninstall TikTok

Global Times recently reported that, due to so-called data protection considerations, the European Commission has asked the agency’s staff to uninstall TikTok from work devices and personal devices using work applications. The Commission’s staff members were asked to delete TikTok no later than March 15. For those who do not comply by the deadline, work applications will no longer be available on the relevant device. This is the first time the agency has suspended its staff from using an app. A spokesman for the European Commission said it was the result of a “careful analysis,” but declined to disclose the information that led them to conclude that the app posed a significant cybersecurity and data risk to the Commission. The European Parliament also said that it was monitoring and evaluating all possible data breaches related to the app and would consider the European Commission’s assessment before making recommendations. A TikTok spokesperson expressed disappointment in this decision. For some time, the United States has been at the forefront of suppressing TikTok. Politicians in the U.S. frequently use “national security” as an excuse to request restrictions on the use of the app. In December last year, the United States banned the use of TikTok on all federal government devices. Although no EU government has followed the example of the United States, yet some countries, including the Netherlands, are evaluating whether to impose restrictions on the use of TikTok by government staff.

Source: Global Times, February 23, 2023
https://world.huanqiu.com/article/4BpFVNteESh

Briefings | | |   Geo-Strategic Trend Information/Technology

RTI: Zero-Covid Government PR Content Disappeared from Chinese Search Engine

Radio Taiwan International (RTI) recently reported that Chinese Communist Party leader Xi Jinping set the tone at the Politburo Standing Committee held recently, when he pointed out, “China has achieved a decisive victory in the three-year fight against Covid-19, creating a miracle in the history of human civilization.” During the pandemic period, the Chinese government vigorously promoted slogans such as “Insist on the unshakable Zero-Covid policy.” However, some Chinese netizens discovered that, those pictures of the slogans have mysteriously and swiftly disappeared in Baidu search results. The official celebration of the success performed in the Standing Committee meeting kept silent about the “master policy” of Zero-Covid as well. If the Communist Party has achieved a miracle in fighting the pandemic, how could this miracle be achieved without the guidance of the master policy? The fact is that, Zero-Covid caused a huge humanitarian disaster in China, because its basic means are isolation, blockade, city closure, district closure, and even province closure. People also found that, the shelter hospitals and countless Covid testing stations that played an important role in creating these “miracles” were also instantly abandoned. Baidu is China’s largest search engine and Google is banned in China. Without political intervention or orders “from above,” do tech companies like Baidu have the guts to remove the traces of government’s master policy which led to a major success? What is the reason for clearing these government promotional images from China’s domestic Internet?

Source: RTI, February 20, 2023
https://www.rti.org.tw/news/view/id/2159664

Briefings | | |   Government/Politics Social Stability

Over 5,700 Chinese Chip Companies Disappeared in 2022

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that China’s “chip gold rush” is now showing signs that the tide is ebbing. Based on the latest statistics, in 2022, China revoked and cancelled the registration of 5,746 chip-related companies, far exceeding previous years. This represented an increase of 68 percent from 3,420 in 2021. Data further showed, in the four months from September to December last year, more than 2,300 chip companies were suspended or deregistered in China. This means that on average, more than 15 chip companies dropped out of the industry. With the U.S. Federal Reserve raising interest rates, inflation, the US-China decoupling, and the global semiconductor industry entering a downward cycle, it has been difficult for the domestic chip industry to remain untouched. The performance reports of the 49 domestic listed chip companies are seeing a year-over-year decline in net profit. These companies are suffering both on the performance side and on the side of the sale of stock prices. In addition, the United States continues to restrict semiconductor exports to China, which has also greatly affected the performance of the Chinese chip companies and industry confidence. China’s integrated circuit industry started and rose in the wave of globalization, and is accustomed to a global resource allocation. Now that the industrial development situation has changed, Chinese companies must adjust their strategies as soon as possible. The new mission is to find out how to reduce imports, increase local production, and strengthen the export of domestically produced chips while ensuring the safety of the supply chains. It is critical for China to form its own product family system and technical standards.

Source: Sina, February 16, 2023
https://cj.sina.com.cn/articles/view/2853016445/aa0d937d02000xqye

Briefings | | |   Information/Technology

Shanghai Lockdown Consequence: China’s Shipping Business Sank to the Bottom

Measured by the volume of goods shipped, China used to be the largest shipping country. It also had a large fleet of ships and sailors. However, its zero-COVID and lockdown policy has ruined this business completely.

On February 24, the Shanghai Shipping Exchange announced that the Shanghai export container price index was $946.68 per TEU (Twenty-foot Equivalent Unit), which has declined for 14 months, setting up the newest and latest low price since 2015. Online pictures showed that the Shanghai port has piled up a large number of empty, unwanted containers; so have the Shenzhen ports.

A veteran shipper said that China’s shipping is like a roller coaster ride. Right after the outbreak of COVID, the U.S. and Europe were trying to implement quarantines. The demand for China’s goods soared and the container price rose four or five times higher. However, since 2022, the U.S. and Europe returned to business as usual, but China has still been locking down, especially with the lockdown of Shanghai in April 2022. This dealt a fatal blowout to Chin’s shipping business.

Source: Radio Free Asia, February 27, 2023
https://www.rfa.org/cantonese/news/economy-02272023035140.html

Briefings | | |   Economy/Resources

Ex PBOC Chief Admits Deficiency of China’s Pension System

The former Governor of the People’s Bank of China, Zhou Xiaochuan, has acknowledged that China’s current pension system is facing challenges due to the country’s large and aging population. Zhou made these comments at the “5th Global Wealth Management Forum” hosted by Caijing Magazine on the 25th. According to Zhou, the expansion of the pension coverage in China has created a shortage of funds, making it difficult for the national pension arrangement to provide adequate coverage. He suggested that, in the future, personal pensions will play a crucial role in supplementing the national pension arrangement.

Zhou stated that China’s personal pension system is good in terms of social discussion, but the incentives are weak. The existing personal income tax has some flaws, as a large proportion of individuals in China do not fall within the scope of paying a personal income tax. Furthermore, Chinese enterprises are not anxious to cooperate with the personal pension system due to the high cost burden. This affects their competitiveness. Although the social security funds paid by Chinese enterprises have been adjusted down by 4 percentage points, at 16 percent, the rate of payment is still high, compared to the world.

Regarding the extension of the retirement age, Zhou believes that while there is room to extend the retirement age, it cannot be extended as many years as desired. This involves the average health level and productivity of the elderly, and companies must also take into account the costs involved.

Source: Central News Agency (Taiwan), February 26, 2023
https://www.cna.com.tw/news/acn/202302260106.aspx

Briefings | | |   Economy/Resources