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China’s Reaction to Trump’s Election Win

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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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CNA: German Government Plans to Reject Chinese Investment in Port of Hamburg

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, in order to avoid increasing its dependence on China, the German government intends to veto the Chinese shipping giant China Ocean Shipping Company (COSCO’s) stake in the container terminal of Hamburg, Germany’s largest port. Hamburg is an important trans-shipment station for European and Chinese sea routes. Currently, one third of the containers handled by the Port of Hamburg come from or are about to be shipped to China. A year ago, Hamburg Hafen & Logistics (HHLA), which operates the Port of Hamburg, confirmed that Chinese state-owned  COSCO planned to buy a 35 percent stake in the Tollerort container terminal. German Economy Minister Robert Habeck intends to veto the deal, fearing that COSCO’s stake will increase its reliance on China. In recent years, Germany has become cautious about economic cooperation with China. Political circles generally have doubts about COSCO taking a stake in the Port of Hamburg terminal, and are unwilling to let the terminal and other infrastructure construction fall into the hands of China. The German government that came to power at the end of last year has set a policy goal of reducing its dependence on China. It is expected to announce a new China strategy early next year, reflecting its tough stance on China.

Source: CNA, August 23, 2022
https://www.cna.com.tw/news/aopl/202208230378.aspx

Briefings | | |   Geo-Strategic Trend

The U. S. will Appoint Its First Arctic Ambassador

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the United States is worried about increased Russian military activity in the Arctic. Therefore, the U.S. plans to appoint its first Arctic Ambassador to drive U.S. policy and strengthen diplomacy in the Arctic. The U.S. State Department chief deputy spokesman Vedant Patel said that Secretary of State Blinken will soon appoint an ambassador-at-large for the Arctic who will engage with Arctic countries and indigenous peoples. Peace and stability in the Arctic is of critical strategic importance to the United States. Media reports also point out that the U.S. move reflects the growing importance of the Arctic region in terms of strategy, commerce and resources. NATO Secretary-General Stoltenberg said NATO will strengthen its presence in the Arctic. He pointed out that due to climate change, melting ice will make high latitudes more accessible, and high latitudes will become increasingly important in the future. Stoltenberg also called Russia’s capabilities in the Arctic a “strategic challenge” to NATO, warning that “the shortest path for Russian missiles and bombers to reach North America is to fly over the North Pole.” It is worth noting that, if Finland and Sweden formally join NATO, seven of the eight countries in the Arctic Circle will be NATO members. In March this year, the U.S. military conducted the first air defense integrated operations exercise in the Arctic. In addition, in August, the Russian Northern Fleet announced that it would start military training in the Arctic.

Source: Sina, August 28, 2022
https://news.sina.com.cn/w/2022-08-28/doc-imizmscv8069243.shtml

Briefings | | |   Geo-Strategic Trend

China Will Attend Russia’s Military Exercises

Despite the Western world’s sanctioning of Russia for invading Ukraine, China maintains closer ties with Russia. One of its recent actions is to plan to join Russia’s military exercise.

China’s Ministry of Defense announced on August 17 that it will send troops to join Russia’s military exercise “Vostok” (East) exercises from August 30 to September 5.

The announcement stated, “China’s participation in the exercise is aimed at deepening practical and friendly cooperation with the armies of the participating countries, improving strategic collaboration, strengthening the ability to respond to various security threats, and has nothing to do with the current international and regional situation.”

Russia rotates its military exercises among its military theaters every year. It held the military drill in its west theater in September last year. Belarus, India, Pakistan, Mongolia, Kazakhstan, Kyrgyzstan, Armenia and Sri Lanka participated in it.

Source:
1. China Government Ministry of Defense Website, August 17, 2022
http://www.mod.gov.cn/topnews/2022-08/17/content_4918561.htm?yikikata=7593b487-e571aa197f9a58947e98a2458a2124be
2. Net Ease, July 28, 2022
https://www.163.com/dy/article/HDBIKM3H0514R9OJ.html

Briefings | | |   Defense/Military Geo-Strategic Trend

Discrepancy in China-Europe Railway Express Statistics Shows Heavy Shipping from China to Russia

Epoch Times found that the shipping data of the China-Europe Railway Express revealed that China has increased its shipping on the railways, mainly to Russia, but not to other European counties.

Xinhua News reported that, by August 21, in China 10,000 trains had departed on the China-Europe Railway Express, the railway connecting China to Europe through Russia. It took China ten more days last year to reach this target. China shipped out 972,000 standard containers this year, a 5 percent increase over last year.

However, Deutsche Welle reported on July 20 that European countries (excluding Russia and Ukraine) only received 25 percent of the shipping capacity this year as compared to last year’s level, quoting the supply change report from the internally renowned accounting firm Price Waterhouse Coopers. The report said that there were 15,000 trains with 1.5 million standard containers on this railway last year, averaging 27,500 containers per week. However, since Russia’s invasion of Ukraine,  out of the concern for sanctions and merchandise being confiscated, European countries have stopped shipping from Russia over this train line, though is still in operation.

The China-Europe Railway Express has two routes. The northern route goes through Russia. The southern route goes through Kazakhstan and then to Russia. European countries used the first part of the southern route and then after arriving in Kazakhstan, they transit goods through Asabaijan, Georgia, and Turkey, or to the Caspian Sea via Baku, Azerbaijan. The new router can only ship 6,000 containers per week, less than 25 percent of last year’s capacity on the China-Europe Railway Express.

Economist Davy Jun Huang explained that the discrepancy in shipping data is between the starting point and the receiving point. Beijing has an increase in shipping but Europe (excluded Russia and Ukraine) receives less than 25 percent of the shipping capacity, meaning the majority of shipping ends in Russia.

Xinhua News also reported the returning shipping is about 88 percent of the departing shipping, indicating Russia might have exported a large quantity of agricultural products to China. That ratio was 50.6 percent in 2016.

Source: Epoch Times, August 22, 2022
https://www.epochtimes.com/gb/22/8/22/n13807912.htm

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

China’s Military Recruiting Targets Science and Technology College Graduates

China’s Ministry of Defense announced that it will recruit more college graduates into the armed forces to boost its education quality.

At a Ministry of Defense press conference on August 25, Senior Colonel Tan Kefei, the military spokesperson, talked about China’s new military recruiting this year, “According to the recruitment order issued by the State Council and (the Chinese Communist Party’s) Central Military Commissions, the military will recruit soldiers twice this year. The second half-year recruitment started on August 15 and will end by September 30. The recruitment is targeting college students, focusing on college graduates at all levels, with priority given to science and technology students and skilled personnel who are needed to prepare for war. … The age limit for masters’ graduates and college students has been raised to under 26 years old (it used to be 24 years). To encourage high-quality youth actively and enthusiastically to apply for enlistment, the relevant departments of the military continue to implement a series of preferential policies for enlisted college students to retain their schooling or school enrollment status, receive state education subsidies, be able to switch their college major after retiring from the military (some colleges have restrictions on students switching their major), exempt from tertiary school to college entrance exam, and receive extra points in graduate study entrance exam.”

Some commentators said that Beijing did this as part of improving its military quality and part of releasing the unemployment stress for college graduates. China’s National Statistics Bureau reported the unemployment rate as 19.9 percent for youth who are between the age of 16 and 24.

Source:
1. Net Ease, August 26, 2022
https://www.163.com/dy/article/HFN1FSVN0530SFP3.html
2. People’s Daily, August 15, 2022
http://finance.people.com.cn/n1/2022/0815/c1004-32502731.html

Briefings | | |   Defense/Military

China’s Local Officials’ Unconventional Tricks to Boost Home Buying

Ming Pao, a Hong Kong based daily Chinese-language newspaper, recently reported a viral online video of a Chinese official’s speech on promoting home purchasing. Deng Bibo, head of Chinese Communist Party (CCP) committee in Shimen County of Changde City, Hunan Province, called on CCP cadres at a local real estate trade show to spearhead efforts to buy properties. “I hope that at today’s meeting, we, comrades and leaders, will take the lead in buying properties. After buying one unit, buy a second, third and fourth unit.”

Deng’s remark was not an isolated incident. According to the mainland Chinese media, the government of Si County in Suzhou City, Anhui Province, also issued an “Initiative on creating prosperity for the real estate industry,” calling on civil servants to mobilize their friends and relatives to participate in the home buying campaign.

In Huzhou city, Zhejiang Province, there is a “Notice on promoting the stable and healthy development of the real estate industry in our city.” The proposed measures include encouraging state-owned enterprises to acquire the unsold houses of real estate developers, and adjust the policy on the use of the “housing provident fund,” a mandatory contribution by employees and employers for the purpose of housing expenditures.

In the first seven months of this year, the total sales area of commercial properties in China dropped by a whopping 23.1 percent over the same period last year, and sales revenue by 28.8 percent. It is believed that sluggish consumer purchasing power is behind the downturn in the housing market.

In addition to traditional measures of stimulating the housing market, Beijing also passes political pressure onto local governments to “stabilize the property market.” That is why local officials, who generally look to the housing market for fiscal revenue, are coming up with unconventional tricks such as Deng’s remark and practices in other provinces.

Source: Ming Pao, August 18, 2022
https://news.mingpao.com/pns/%e4%b8%ad%e5%9c%8b/article/20220818/s00013/1660759572212

Briefings | | |   Economy/Resources

Asian Development Bank to Consider Ending New Loans to China

According to Masatsugu Asakawa, head of the Asian Development Bank (ADB), the organization will take up the issue of new loans to China as early as next year and discuss discontinuing future loans to China.

Analysts claim that because China, now the second-largest economy in the world, has a higher income level and offers financial aid to other Asian countries, it is no longer dependent on outside aid.

Following $9 billion between 2016 and 2020, the ADB intends to lend China up to $7.5 billion between 2021 and 2025. Next year, the bank will decide whether to stop extending new financing to China beyond 2025.

ADB offers loans to nations that meet specific requirements, such as having a gross national income of $7,455 or less per person, having trouble raising funds on the global market, and having economic development indicators that fall below a specified threshold. With a per capita GNI already above $7,455, China has no trouble obtaining financing on the global market.

China was the second-largest borrower after India at the end of 2021, with a balance of ADB loans totaling about $19.6 billion, or 14 percent of the bank’s total outstanding loans.

The ADB has 68 members, including Japan and the U.S., who each have 15.6 percent of the organization’s shares, followed by China coming in with 6.4 percent. To aid in the financing of infrastructure projects in the region, China also established the Asian Infrastructure Investment Bank.

Some nations contend that China shouldn’t keep getting loans as its influence in Asia’s infrastructure development grows. Singapore and South Korea are no longer recipients of the loans.

Source: Central News Agency (Taiwan), August 19, 2022
https://www.cna.com.tw/news/acn/202208190358.aspx percent

Briefings | | |   Geo-Strategic Trend

Top Fund Manager: The German Economy Must Change its Business Model

On Sunday, August 21, The German newspaper Munchner Merkur (Munich Mercury) published an interview with Kaldemorgen  who saw great danger because of the dependence of German companies on China and called for a realignment.

The dependence of the German economy on China has “reached levels that lead to major dependencies,” warned Kaldemorgen. “The mystification of globalization must come to an end now. … In the future, Germany will have to do a lot of things itself again.”

Kaldemorgen is considered the best-known German fund manager. With a volume of around 13.5 billion euros, the fund he manages, DWS Concept Kaldemorgen, is one of the largest investors in Germany.

Kaldemorgen told Munchner Merkur, “Anyone reading the latest signs correctly should recognize that we need to reduce  our dependence on China significantly, both for exports and imports.”

“The Russian attack on Ukraine has raised many questions, including how we intend to deal with the authoritarian regime in China in the future.”

“Volkswagen makes about 40 percent of its sales in China. BASF is planning a plant there for 10 billion euros. Isn’t there a much greater danger for the German economy here?”

“The German economy must therefore start changing its business model.”

“The USA and Europe are already moving closer together again. This is mutually beneficial. For example, Germany obtains LNG gas from the USA, and Intel is building a semiconductor plant near Magdeburg for 17 billion euros.”

Source: Radio Free Asia, August 22, 2022
https://www.rfa.org/cantonese/news/de-warn-08222022111914.html

Briefings | | |   Geo-Strategic Trend