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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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Beijing Gives Ukrainian Foreign Minister Cold Reception

Ukraine’s Foreign Minister Dmytro Kuleba visited China recently, marking the first visit by a high-level Ukrainian official since the Russia-Ukraine war. BBC Chinese reported, according to several scholars, Kuleba’s itinerary reflected China’s cold attitude toward Ukraine. The scholars noted that the talks held with Kuleba yielded no substantial results and that they enabled the Chinese government to gather information in advance of the U.S. Presidential elections in November.

It seemed that China didn’t allow Kuleba to go visit Beijing. There was no official disclosure on the time and place of Kuleba’s arrival in China on July 23. On the day after Kuleba’s arrival there was an official announcement from Beijing saying that he would meet with Wang Yi in the southern city of Guangzhou. On July 25, Kuleba appeared in Hong Kong to meet with Hong Kong Chief Executive John Lee. He left China on July 26. Throughout the trip, there was no indication that he had been to Beijing. In China’s diplomatic tradition, this kind of arrangement is rarely coincidental. The government might intentionally arrange meetings to be held outside of Beijing so as to symbolically lower the level of the meetings. Beijing may also want to avoid direct comparisons between China and Ukraine. China’s treatment of Kuleba contrasted with that of Russian Foreign Minister Sergei Lavrov, who visited Beijing for two days in April, met with China’s Foreign Minister Wang Yi, and was received by Xi Jinping at China’s Great Hall of the People.

Kuleba’s Hong Kong visit was also intriguing. The Ukrainian Ministry of Foreign Affairs released detailed reports and photos of Kuleba meeting with Hong Kong’s chief executive John Lee, where Kuleba urged Hong Kong not to support Russia’s evasion of sanctions. The Hong Kong government did not mention the meeting until it was pressed to do so by the media. The BBC noted that John Lee would not be able to deliver support for Ukraine even if asked, as it is Zhongnanhai and not John Lee who makes such decisions.

At the same time as Kuleba’s visit, China hosted representatives of 14 Palestinian factions, including Fatah and Hamas, in Beijing and brokered their signature of a “Beijing Declaration on Ending Division and Enhancing Palestinian National Unity” on July 23. Wang Yi attended the closing ceremony following the signing of the declaration. After talking with Kuleba in Guangzhou, Wang Yi went to Laos on the next day (July 25) to attend the ASEAN Foreign Ministers’ Meeting and to meet with Russian Foreign Minister Lavrov.

Source: BBC, July 29, 2024
https://www.bbc.com/zhongwen/simp/world-69219882

Briefings | | |   @CS Geo-Strategic Trend

Beijing Further Boosts Rare Earth Metal Production with Quotas, Hurts Producers’ Bottom Line

On June 29, China announced “Rare Earth Management Regulations” which stipulate comprehensive state supervision and control over the production and sales of rare earth products. China is currently the world’s leading manufacturer of rare earth metals, holding about 70 percent of the global reserves.

Beijing issued a production quota for Chinese companies – 135,000 tons in the first half of 2024, a 12.5 percent year-on-year increase. Market demand for rare earths did not go up as Beijing expected, however, and price dropped dramatically as a result of the government-mandated increase in rare earth production. The rare earth price index published by the China Rare Earth Industry Association on July 18 dropped by about 20 percent compared to late July 2023.

As a result of oversupply in the rare earth markets, all major Chinese rare earth producers saw significant declines in their profits, in the first quarter of this year. Northern Rare Earth’s net profit fell by 94 percent year-on-year, China Rare Earth reported a loss of approximately 289 million yuan (US$ 40 million), Guangdong Rising Nonferrous Metals a loss of 304 million yuan, and Shenghe Resources a loss of 216 million yuan.

Nikkei Asia pointed out that, in recent years, the CCP has continuously increased the production quotas for rare earth metals. In 2023, Beijing increased the quotas threefold, bringing the annual total to 255,000 tons, a 21 percent increase compared to 2022. Many believe this year’s quotas will go even higher. It seems that Beijing wants to use such increasing quotes to maintain its dominant position in rare earth production and export volume so that it can use rare earths as a bargaining chip in diplomatic negotiations.

Meanwhile, other countries are trying to reduce the reliance on China’s production of rare earths. The United States has expanded domestic rare earth production, and many countries have intensified local efforts to identify domestic rare earth deposits.

Source: Epoch Times, July 19, 2024
https://www.epochtimes.com/gb/24/7/19/n14293824.htm

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

Malaysia Applies to Join BRICS, China Responds With Open Arms

On July 28, the Malaysian Prime Minister’s Office issued a statement announcing that Malaysia has submitted a letter to Russia, the current chair of the BRICS nations, applying to join the BRICS cooperation mechanism. Lin Jian, Chinese Foreign Ministry spokesperson, stated at a regular press conference that “China welcomes more like-minded partners to participate in cooperation with BRICS, jointly promoting the development of the international order in a more just and reasonable direction.”

Source: China Youth Daily, July 29, 2024
http://m.cyol.com/gb/articles/2024-07/29/content_wdpQgohRMA.html

Briefings | | |   Geo-Strategic Trend

PLA Struggles with Redundant Grassroots Officers

A People’s Daily article revealed that the People’s Liberation Army (PLA) is overloaded with “grassroots officers” (i.e. low-level officers).

The article described the story of Liu Ziyao, a Platoon Leader at a certain Air Force unit. After graduating from a military academy, Liu started as a platoon leader and led his platoon to win a collective third-class merit. Four years ago, Liu met the requirements for promotion, but all positions at the next level – Deputy Company Commander – were fully staffed. Thus, Liu had to stay at the level of platoon leader. Soon, a new platoon leader was assigned to his platoon; the platoon now has has two platoon leaders managing the twenty-some members. This led to internal friction [within the platoon].

Some long-time platoon leaders eventually lose their sense of initiative and enthusiasm for their work, the article said.

Last year, the Chinese Air Force implemented measures to develop its “grassroots officers.” The most important adjustment was the recommendation of outstanding platoon leaders for internships related to other positions such as Company Political Instructor (指导员) or Battalion Staff Officer (营参谋). Liu Ziyao has become an “intern Political Instructor” for a company was able to gain experience in that position.

Another “grassroots” platoon leader interned as a battalion staff officer, then later interned at a staff position in the headquarters, and eventually becoming a full-fledged staff officer.

Source: People’s Daily, July 26, 2024
http://military.people.com.cn/n1/2024/0726/c1011-40286059.html

Briefings | | |   Defense/Military

Nikkei Chinese: Honda Scales Back in China

Nikkei Chinese Edition recently reported that Honda plans to cut 30 percent of gasoline vehicle production capacity in China, the world’s largest auto market. The company will reduce capacity by about 500,000 vehicles, equivalent to 10 percent of Honda’s global production, through plant closures and other measures.

In China, there is currently an excess supply capacity as production capacity by domestic automobile companies has expanded faster than demand. Moreover, there has been a large flow of very low-priced Chinese into the Southeast Asian market, where Japan has an advantage; sales competition has become increasingly fierce.

Honda had been increasing its investment in China since the 1990s. China thus became Honda’s its largest production base worldwide. Now, Japanese automakers have reached a turning point in their confrontation with China over dumping of low-priced cars, and Honda is reducing its scale in China for the first time.

According to Nikkei, all Japanese automakers and suppliers have followed the trend of “adjusting” their businesses in China. Nissan closed its gasoline vehicle plant in Jiangsu Province in June, reducing annual production capacity in China by 10 percent, with further closures of factories under consideration. Hino Motors is exiting its engine production business in China. Meanwhile, Nippon Steel is also planning a significant reduction in its production capacity within China.

Source: Nikkei Chinese, July 25, 2024
https://cn.nikkei.com/industry/icar/56235-2024-07-25-09-31-44.html

Briefings | | |   Geo-Strategic Trend

Vietnam Proposes South China Sea Continental Shelf Delimitation to UN

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the Ministry of Foreign Affairs of Vietnam, Vietnam has submitted a proposal to the United Nations Commission regarding delimitation of territory within the South China Sea, proposing use of suboceanic continental shelf limits as the delimitation.

The Chinese Ministry of Foreign Affairs Spokesperson said in a press conference that “Vietnam submitted the proposal to the UN Commission unilaterally,” and “its relevant claims cover parts of China’s Nansha Islands and infringe on China’s territorial sovereignty and maritime rights and interests. China firmly opposes this move and has lodged stern representations with Vietnam. According to the rules of the UN Commission on Limits of Continental Shelf, if there is a dispute, then no consideration will be given. So the UN Commission will not review or determine the cases filed by Vietnam. Such actions are in fact meaningless and will only intensify conflicts.”

In the meantime, Vietnam also submitted a note of objection to the United Nations in response to the Philippines’ submission on the outer continental shelf delimitation of the South China Sea. China has also opposed the Philippines’ proposal.

Source: Sina, July 18, 2024
https://finance.sina.com.cn/jjxw/2024-07-18/doc-incepxfy8687524.shtml

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: Malaysia and Thailand Apply to Join BRICS

Singapore’s primary Chinese language newspaper Lianhe Zaobao reported that Malaysia and Thailand have recently expressed interest in joining the BRICS group of nations, led by Russia and China.

Last month, the Malaysian government stated that it would start the application process to join BRICS. Since the other BRICS members are very different from Malaysia, the Malaysian government’s decision to apply to join BRICS has led to heated debate among Malaysia’s political parties, with some questioning whether joining the BRICS would bring meaningful benefits to the country. Malaysia’s Prime Minister later stated to Congress that the primary benefit of joining BRICS would be expansion of Malaysia’s economic and trade network.

Thailand formally submitted its application to join BRICS last month. It is worth noting that Thailand is also in the process of applying to join the Organization for Economic Cooperation and Development (OECD) led by the United States and European countries.

In addition to Malaysia and Thailand, Indonesia and Vietnam are also considering joining BRICS.

BRICS is a cooperation mechanism established by Brazil, Russia, India and China in 2009. South Africa joined the group in April 2011. In January this year, the BRICS expanded to include Egypt, Iran, the United Arab Emirates and Ethiopia. There are more than 40 other countries who also intend to join.

Source: Lianhe Zaobao, July 25, 2024
https://www.zaobao.com.sg/news/sea/story20240725-4360331

Briefings | | |   Geo-Strategic Trend

Insider Explains Why Long Article Praising Xi Was Removed

During the Third Plenary Session of the 20th Chinese Communist Party (CCP) Congress, Xinhua News Agency published an article titled “Reformer Xi Jinping.” The article was over ten thousand words in length. After publication, the article was quickly taken down, even before the end of the plenary session (see Chinascope’s briefing on the matter here). There are some unofficial reports suggesting that the article was seen as subtly critical of Xi Jinping and that Li Shulei, the Minister of the CCP Central Propaganda Department, had ordered its removal. Insiders said that the article referenced Deng Xiaoping throughout, portraying Xi as following in Deng’s path to further deepen Deng’s reforms. Critics said that the article’s author was subtly promoting Deng as the “sole legitimate” figure who drove China’s “reform and opening up,” with Xi being merely a follower. Xi, however, views himself as a great leader, with stature similar to that of Mao Zedong and higher than that of any other CCP leader.

Articles praising Xi or promoting “Xi Jinping thought” still dominate the top spots on CCP-controlled state media platforms.

Source: Epoch Times, July 26, 2024
https://www.epochtimes.com/gb/24/7/26/n14299045.htm

Briefings | | |   Government/Politics