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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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The CCP’s Performing Arts Troupes in the U.S.

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UDN: China Sanctioned Lockheed Martin Again

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, after the United States sold a batch of F-16 fighter jet components to Taiwan, the Chinese Ministry of Foreign Affairs announced that it would take countermeasures against three senior executives of Lockheed Martin and three of its units. China has previously countered arms sales to Taiwan and has repeatedly sanctioned the U.S. arms dealer and its affiliated organizations. The Ministry stated that the United States has recently announced the sale of arms to Taiwan again, seriously interferes in China’s internal affairs, and seriously damages China’s sovereignty and territorial integrity. In accordance with the relevant provisions of China’s “Anti-Foreign Sanctions Law”, it was decided to impose sanctions on Lockheed Martin Missile System Integration Lab, Lockheed Martin Advanced Technology Laboratories, and Lockheed Martin Ventures. Also sanctioned were Lockheed Martin Chairman and CEO, COO as well as CFO. The U.S. Defense Security Cooperation Agency recently announced arms sales to Taiwan, with a total price of US$300 million, including standard spare and repair parts for F-16 fighter jets and related equipment. The F-16 is one of Lockheed Martin’s best-selling products.

Source: UDN, June 21, 2024
https://udn.com/news/story/7331/8046686

Briefings | | |   US-China Relations

Oriental Daily: Hong Kong Bankruptcy Petitions Surged by 35 Percent

Oriental Daily News, Hong Kong’s number one newspaper in circulation since 1976, recently reported that, although the Hong Kong government announced a complete withdrawal of the housing market, the decline in real estate prices has not stopped. Many Hong Kong residents’ assets have evaporated and they have fallen into the black hole of insolvency. Hong Kong’s Official Receiver’s Office just announced the latest bankruptcy and liquidation petition data for May. The number of bankruptcy petitions in May rose to 871, the highest in more than two years, an increase of more than 17 percent month-over-month, and a year-over-year surge of nearly 35 percent. In the first five months to May, a total of 3,797 bankruptcy petitions were filed, an increase of 25 percent from the same period last year. There were 61 compulsory liquidation petitions in May, up nearly 85 percent year-over-year. Experts pointed out that the unemployment rate in Hong Kong is currently at a low level, and the chance of bankruptcy due to unemployment is expected to be low. It is more likely that the increase in the number of bankruptcies may be related to the bank’s collection of loans. The borrowers went bankrupt due to temporary inability to repay.

Source: Oriental Daily, June 22, 2024
https://hk.on.cc/hk/bkn/cnt/news/20240622/bkn-20240622033026593-0622_00822_001.html

Briefings | | |   Economy/Resources

Discrepancies in China’s Trade Surplus Data with the U.S.

On June 20, the U.S. Treasury Department asked China to explain the discrepancy in its two sets of trade surplus data with the U.S.

Data reported by the Chinese customs office shows China’s trade surplus for 2023 being nearly $230 billion higher than the surplus reported by China’s State Administration of Foreign Exchange (SAFE). In prior years (going back to 2000), the average discrepancy between these two sources of trade surplus data was only $7 billion. The U.S. Treasury Department called on China to provide further quantitative evidence clarifying the issue.

One commentator on China affairs gave three possible explanations for the large discrepancy in 2023 trade surplus data:

  1. The Chinese customs office may have exaggerated the country’s export trade figures.
  2. A large number of export enterprises may have, in preparation for potential exit from China, kept their dollars overseas instead of taking them back to China (i.e. instead of converting them to RMB). This could have resulted in those businesses’ trade numbers being counted by the customs but not by SAFE.
  3. There may be an acceleration in people withdrawing money to flee China.

Sources:
1. Radio France Internationale, June 21, 2024
https://www.rfi.fr/cn/美国/20240621-美财政部吁中国提高汇率透明度-并澄清贸易顺差数据出现巨额落差
2. Epoch Times, June 22, 2024
https://www.epochtimes.com/gb/24/6/22/n14275135.htm

Briefings | | |   Economy/Resources US-China Relations

China Publishes Tough Law on ‘Taiwan Independence Elements,’ Including Death Penalty

On May 26, 2024, China’s Supreme People’s Court, Supreme People’s Procuratorate, Ministry of Public Security, Ministry of State Security, and Ministry of Justice jointly issued a document titled “Opinions on Lawfully Punishing Stubborn ‘Taiwan Independence’ Elements for Crimes of Splitting the State and Incitement of Splitting the State.”

The document defines ‘the crime of splitting the state’ as:

(1) Initiating or establishing “Taiwan Independence” separatist organizations, planning or formulating “Taiwan Independence” separatist action programs, plans, or schemes, or directing members of “Taiwan Independence” separatist organizations or other individuals to engage in activities that split the state or undermine national unity.

(2) Formulating, amending, interpreting, or repealing relevant regulations in the Taiwan region or through “referendums”, in attempt to change the legal status of Taiwan as part of China.

(3) Attempting to create “two Chinas,” “one China, one Taiwan,” or “Taiwan independence” in the international community by promoting Taiwan’s membership in international organizations whose members are limited to sovereign states or through official exchanges or military contacts.

(4) Abusing authority power to extensively distort or falsify the fact that Taiwan is part of China in the fields of education, culture, history, or news media, or suppressing parties, groups, or individuals that support the peaceful development of cross-strait relations and national unity.

(5) Other actions attempting to separate Taiwan from China.

It defines the principal offenders or those with particularly serious crimes shall be sentenced to life imprisonment or fixed-term imprisonment of more than ten years. Among them, those causing particularly serious harm to the state and the people, as well as those with particularly heinous circumstances, may be sentenced to death. Active participants shall be sentenced to fixed-term imprisonment of more than three years but less than ten years. Other participants shall be sentenced to fixed-term imprisonment of less than three years, detention, control, or deprivation of political rights.

Source: China Review News, June 21, 2024
https://bj.crntt.com/doc/1069/4/6/0/106946098.html?coluid=7&kindid=0&docid=106946098&mdate=0621155631

Briefings | | |   @CS Geo-Strategic Trend Government/Politics

Central Military Commission Tells PLA to Tighten Budget

Due to the sliding economy, Beijing has been asking local governments to keep tight budgets. Now it has also asked the People’s Liberation Army (PLA) to do the same.

China’s Central Military Commission recently issued a document titled “Measures on Building the Military with Hard Work and in Thrifty Way, to Improve the Military’s Quality and Efficiency.” The document states that “building the military with hard work and in a thrifty way is the fine tradition of the communist party and military,” and “must not be abandoned at any time or under any circumstances.” It urged the military to “firmly establish the mindset of living with a tight budget, meticulously calculate and manage all endeavors with thrift.” According to the website of China’s Ministry of Veterans Affairs, the document emphasizes the need to “adopt concepts such as resource constraints, cost-effectiveness, integration of support, performance management, and systematic governance, to enhance the operational efficiency of military systems and the utilization efficiency of defense resources.”

Source: China’s Ministry of Veterans Affairs website, June 20, 2024
https://www.mva.gov.cn/sy/xx/gfxx/202406/t20240621_425230.html

Briefings | | |   Defense/Military

2024 “Praise China” Online Commentary Conference Held in Changsha, Hunan Province

On June 14, 2024, the “Praise China” Online Commentary Innovation Conference was held in Changsha, Hunan Province. Representatives of outstanding authors from the “Praise China” Online Commentary Contest, along with experts, scholars, and media representatives, gathered to discuss and promote innovative methods for the production and dissemination of online commentary that “amplifies China’s positive voice.” The conference was organized by the Cyberspace Administration of China (中央网络安全和信息化委员会办公室) and a few other government agencies.

The 2023 “Praise China” Online Commentary Contest received a total of 88,467 submissions including text, video, and comic commentaries. The content “covered a wide range of topics, including news and current affairs, rural development, economy, livelihood, internet civilization, education, culture, and sports.”

Source: China Daily, June 14, 2024
https://cn.chinadaily.com.cn/a/202406/14/WS666c0265a3107cd55d266f0a.html

Briefings | | |   Government/Politics

Huawei Hires TSMC Talents to Build Out Chinese Semiconductor Capabilities

Financial journalist Emmy Hu recently revealed on her Facebook account “Emmy’s Drama Watch Time” (“Emmy追劇時間”) that Huawei is poaching talents from Taiwan’s chipmaker TSMC so that Huawei can expand beyond the telecommunications business into chip manufacturing. Huawei establishes new legal entities for such poaching operations, making it hard for outsiders to connect the dots back to Huawei.

As early as 2022, a TSMC employee informed Emmy Hu that Huawei had been conducting a lot of interviews with TSMC staff. Huawei poached a star TSMC plant manager using a legal entity “Sheng Wei Xu (昇维旭)” which claimed to be manufacturing memory chips. The interview questions posed were all about integrated logic circuits (logic ICs), however, and all the interviewees were Huawei personnel. “Peng Xin Wei (鹏芯微)” is another company established by Huawei. This company moved even faster in purchasing equipment than “Sheng Wei Xu.” Emmy Hu was told that Huawei aimed to poach 300 mid-to-senior level employees at once because Beijing realized that poaching a single person, like Liang Mong Song (currently the CEO of SMIC), would result in slower progress (in terms of setting up manufacturing capabilities) than poaching a larger number of people. According to Emmy, Huawei’s goal is to bring in an entire factory management team to ramp up operations quickly.

Emmy Hu mentioned that two years ago SMIC (a Chinese chipmaker) attempted to produce 7nm chips supporting Huawei’s new Mate60 smartphone, but SMIC could not handle the task by itself. Huawei masterminded the effort, putting to work its resources recruited from Taiwan. Fujian Jinhua Integrated Circuits, an independent Chinese company, now follows Huawei’s direction; it used to produce memory chips but now has switched to producing logic ICs. There are now a total of seven such logic IC chip companies working with Huawei; they are refer to the “Seven Little Dragons.”

Source: Facebook, account “Emmy追劇時間,” June 5, 2024
https://www.facebook.com/story.php/?story_fbid=1005948894485371&id=100052108087251&_rdr

Briefings | | |   Economy/Resources Geo-Strategic Trend Information/Technology

Jiang Zemin’s Son Jiang Mianheng Demoted at ShanghaiTech University

On June 5, ShanghaiTech University’s website posted a message stating that Jiang Mianheng, son of the former Chinese Communist Party (CCP) leader Jiang Zemin, has been demoted. He stepped down from the position of President of the university and has now been appointed to the position of Dean of the university’s Administrative Committee. Feng Donglai, an Academic from the Chinese Academy of Sciences, has taken over as the new President.

{Editor’s Note: Jiang Mianheng is 73 years old. This demotion would be less controversial if he had simply retired from the position of President. Giving him a lower position at the same university after his stepping down from being president is fairly humiliating, however.}

Mianheng’s father Jiang Zemin held the top position as leader of the CCP for over a decade (until 2002). He died in November 2022. He was called the “Grand Master of Corruption in the CCP.” Jiang Zhicheng, Jiang Mianheng’s son who was born in 1986, manages the Jiang family’s assets of over 1 trillion yuan (US$140 billion) and is viewed as one of the world’s top hidden tycoon. There have been widespread rumors that Xi Jinping wants to single out the Jiang family as the biggest culprit spreading corruption in China.

Source: Epoch Times, June 5, 2024
https://www.epochtimes.com/gb/24/6/5/n14264595.htm

Briefings | | |   Government/Politics