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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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China Revises Cybersecurity Review Measures

The Cyber Administration of China (CAC) announced on its website on January 4 that the agency, as well as 12 other government bodies, including the Ministry of Public Security and the Ministry of State Security, have revised the “Cybersecurity Review Measures.”

The original regulation already took effect in June 2020. CAC pointed out that the revision is due to the implementation of the “Data Security Law” in September 2021, which requires that the state establish a data security review system.

After the revision, article 7 of the Measures stipulates that online platform operators that possess personal information about more than 1 million users must report to the Office of Cybersecurity Review when they go public abroad.

The Measure also specifies that operators of “critical information infrastructures” such as transportation, communications, and finance must also apply for security a review when purchasing network products and services that may affect national security.

It also lists key national security risk factors, including illegal control, the interference or disruption of “critical information infrastructure, possible disruption of product services due to political, diplomatic and trade factors, and the possibility of core data or substantial personal data being influenced, controlled and maliciously used by “foreign governments.”

The revised regulation is to be effective on February 15. It also adds the China Securities Regulatory Commission (CSRC) to the cybersecurity review mechanism.

Source: Cyber Administration of China, January 4, 2021
http://www.cac.gov.cn/2022-01/04/c_1642894602144070.htm

Briefings | | |   Geo-Strategic Trend

Qiushi Publishes Xi’s Speech at CCP Plenary Session

Qiushi, the flagship publication of the Chinese Communist Party’s (CCP’s) central committee, recently released a talk that Xi Jinping gave at a meeting of the sixth plenary session of the 19th CCP Central Committee that took place in November 2021. Xi demanded that the all CCP members be loyal to the Party and that those who “run political gangs and interest groups inside the Party” should be disciplined without mercy.

Xi Jinping said that the “historical resolution” passed by the sixth plenary session emphasized the importance of the “centralized and unified leadership of the Party” which “requires the entire body of CCP members unite under the Party’s banner into ‘a piece of solid steel’ and move forward in unison.”

Xi added that the risks and challenges facing the CCP on its “new journey” will only become more and more complex and will even include unimaginable shock waves. “Different struggles . . . will accompany the whole process of achieving the ‘second century’ goal.” The second centenary goal is Xi’s ambition to build China into “a great modern socialist country in all respects” by 2049. That date is 100 years from the time of the 1949 revolution that put the CCP in power. The related first century goal, which was to double the 2010 GDP and double the 2010 income of both urban and rural residents by 2020 is about 100 years from the date of the founding of the CCP in 1921.

Xi concluded by saying that, at the centennial year of the Party, it is important to be vigilant, to look out for danger in times of peace, and to be on guard at all times against the possibility of the CCP becoming old and sick. “It should neither be slow to react to its own problems, nor be soft to fix them. Otherwise eventually the policies will die as the person-in-charge dies.”

Source: Qiushi, January 1, 2022
http://www.qstheory.cn/dukan/qs/2022-01/01/c_1128219233.htm

Briefings | | |   Government/Politics

Chinese Student Wanted for Acquiring Japanese Security Software under False Identity

Japanese media including NHK and Yomiuri News reported on December 28 that Japanese police have identified a Chinese student who entered Japan and was suspected of attempting to  purchase Japanese high-tech security software illegally. He was apparently under the command of a Chinese People’s Liberation Army (PLA) officer. The Japanese Police Department has obtained an arrest warrant for the student and will soon issue an international warrant.

Police investigators say the Chinese student, in his 30s, is suspected of having attempted the purchase used the name of a fictitious Japanese company and the person who was in charge in November 2016. The PLA officer who contacted him belonged to China’s “61419th Army,” a unit believed to be the Chinese hacking group Tick, which is responsible for cyberattacks on Japanese companies and research institutions.

Fortunately, the transaction was not concluded because the software company found it suspicious. As the Chinese student has returned to China, Japanese police have received permission to arrest him on suspicion of fraud. They will soon issue an international warrant through Interpol. The Japanese police believe that China is trying to buy Japanese high-tech security software to analyze the weaknesses of Japanese companies’ systems and collect intelligence to carry out cyberattacks.

Source: Radio Free Asia, December 28, 2021
https://www.rfa.org/cantonese/news/japan-12282021094647.html

Briefings | | |   Geo-Strategic Trend

Reference News: China and Japan Agreed to Establish a Defense Hotline

Reference News, a well-known branch of Xinhua News, recently reported that, on the December 27, Chinese State Councilor and Defense Minister Wei Fenghe held a video conference with the Japanese Defense Minister Nobuo Kishi. The call took about two hours, which exceeded the original scheduled time. The two defense ministers agreed to strengthen bilateral strategic communication and manage risks to prevent conflicts from escalating. Also, they agreed that a defense hotline will be established in 2022. The Japanese Cabinet recently approved a preliminary budget for 2022. The annual increase in the defense budget was 1.1 percent. It not only marks the tenth consecutive year of growth in Japan’s defense budget, but also breaks Japan’s long-standing rule of capping the increase in the defense budget at under one percent of the nation’s GDP. Singapore’s primary Chinese language newspaper Lianhe Zaobao also reported on this news and indicated that, during the call, Nobuo Kishi emphasized the importance of maintaining stability in the Taiwan Strait. This point was left out in the Reference News report.

Sources:
(1) Reference News, December 29, 2021
http://www.cankaoxiaoxi.com/china/20211229/2464431_2.shtml
(2) Lianhe Zaobao, December 28, 2021
https://www.zaobao.com.sg/realtime/world/story20211228-1227197

Briefings | | |   Defense/Military Geo-Strategic Trend

Global Times: China Mobile Forced to Terminate Canadian Operations

Global Times recently reported that CMLink, a subsidiary of China Mobile Canada, announced on December 28, that, at the request of the Canadian Federal Government, the company will cease its operations on January 5, 2022. Users can apply for refunds from the same day. This is yet another example of the Canadian government’s use of “national security” to suppress Chinese companies. Radio Free Asia (RFA) Chinese Edition also reported that China Mobile landed in Canada in 2015 and got popular among users who travel frequently  between Canada and the China/Hong Kong region. At the beginning of 2021, the Canadian government began to review China Mobile Canada based on national security considerations. It issued an order on August 9 instructing the company to divest itself of its parent company’s shares or terminate its Canadian operations. The company filed in court against the government’s order. It lost the case. Analysts expressed the belief that China Mobile Canada’s refusal to draw a clear line with the parent company confirmed the fact that the so-called Chinese overseas subsidiaries can operate independently is nonsense.

Sources:
(1) Global Times, December 30, 2021
https://world.huanqiu.com/article/46C1aJ3bt55
(2) RFA Chinese, December 29, 2021
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/lf2-12292021123434.html

Briefings | | |   Geo-Strategic Trend

China Reiterated “Real Estate is a Pillar Industry”

Shanghai-based Chinese financial news site East Money recently reported that, at the 2021-2022 China Economics Annual Conference held on December 11, Ning Jizhe, deputy director of the National Development and Reform Commission and director of the National Bureau of Statistics, once again set the tone and emphasized “real estate is a pillar industry.” The Last time the same policy tone was set was in 2017. Based on the Central Economic Work Conference’s requirement on economic stability in 2022, this new signal is clear: economic stability requires real estate market stability. Analysts also pointed out that, as the pillar industry of the domestic economy, real estate needs to continue playing the role of the economic stabilizer. The reason is that real estate industry accounts for a relatively high proportion of the national economy and there are many related industries. Objectively speaking, real estate must develop stably and healthily. Otherwise it will have a greater impact on the industrial economy, the national economy, and macroeconomics. Usually after such tone-setting, it is expected that a series of local policies supporting real estate will be introduced.

Source: East Money, December 20, 2021
https://caifuhao.eastmoney.com/news/20211220183703403330760

Briefings | | |   Economy/Resources

Xi’An’s Pandemic Lockdown Impacted Global Chip Supply

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that globalization demonstrated its power when a critical supply chain like the one for chip supply got impacted by lockdown policies in the Chinese city of Xi’An. Samsung issued an announcement on December 29 that its Xi’An manufacturing factories’ schedule had to be adjusted for the protection of the health of the employees due to the breakout of Covid in the city. Samsung has two large scale 3D NAND factories in Xi’An, which hold 42.3 percent of Samsung’s capacity, or 15.3 percent of the global supply. Samsung warned about the significant reduction of its output and stopped offering NAND quotes. Samsung is the world’s largest NAND Flash provider with a global market share of 34 percent. At the same time, Xi’An also has Micron’s DRAM memory packaging and testing plant. Micron is the world’s third largest DRAM chip manufacturer. The company said the factory is seeing manufacturing delays due to a lack of labor; as a result, new supply arrangements may be delayed accordingly. The Micron factory is currently running at 40 to 50 percent of its capacity. All these will cause the global short-term supply of storage semiconductors to face uncertainty.

Source: Sohu, December 30, 2021
https://www.sohu.com/a/513328179_351305

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

China’s Banks Closed 2,500 Outlets in 2021

According to the 21st Century Business Herald, bank outlets in China have been shrinking rapidly. Based on the China Banking and Insurance Regulatory Commission’s statistics, as of December 24, 2021, a total of 2,459 bank outlets of commercial banking institutions ceased operations this year. On December 24, 2021 alone, 29 commercial bank outlets closed their doors. The 21st Century Business Herald attributed the closures to the rapid development of digital technology.

Statistics from the China Banking Association show that, from 2018 to 2020, the number of outlets in the Chinese banking industry declined for three consecutive years, and the number of outlets that closed last year also approached 3,000. These closures include many outlets that had been in business for more than 30 years.

Semi-annual reports of banks also show signs of the decline of outlets. In the first half of 2021 alone, the four major state-owned commercial banks, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the Construction Bank, reduced 187 outlets or branches.

Behind the dramatic reduction in outlets comes the downsizing of bank staff. Comparing the data from the 2021 semi-annual and 2020 annual reports, the number of employees in the four major state-owned commercial banks decreased by 22,355 in the first half of 2021.

The  21st Century Business Herald said that, along with the outlet closures, the ability of banks to absorb deposits has declined significantly. At the same time, office rent, labor, and IT hardware maintenance have also risen due to competition, adversely impacting the profitability of bank branches.

Source: 21st Century Business Herald, December 28, 2021
http://www.21jingji.com/article/20211228/herald/e21b20a3c9a0ddd996fe746271c5ab13.html

 

Briefings | | |   Economy/Resources