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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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Experts Warn of Coming Collapse of China’s Population Growth

At a press conference on January 18, China’s National Bureau of Statistics postponed the release of 2020 birth data.

In an article on Caixin.com, Liang Jianzhang, the founder of the Trip.com Group and a professor at Peking University, quoted data from local governments and media. The number of births in Wenzhou city in 2020 was 19.01 percent lower than in 2019. Hefei city’s new births in 2020 dropped by 23 percent compared to 2019. The same measure in Taizhou City in 2020 saw a decrease of 32.6 percent. Liang suggested that the fertility rate can be fundamentally reversed only by implementing changes in family planning policies, reducing housing costs, and cutting taxes.

Yi Fuxian, a senior scientist at the University of Wisconsin-Madison and author of Big Country with an Empty Nest, recently tweeted that “today’s Northeast region is China’s tomorrow.”

Yi pointed out that the size of the economy in the northeast region as a percentage of the whole country shrank from 13.1 percent in 1980 to 9.1 percent in 2010 and 5.0 percent in 2020. A key contributor is the aging population.

Yi told Radio Free Asia, “(The central government) predicts that the economy will double by 2035 and that the annual growth rate will average 4.7 percent between 2021 and 2035. From the perspective of population, I think this possibility is very low. China’s economy may be able to maintain a growth rate of 4 percent or 5 percent by 2025, after which the growth rate will continuously decline.”

Data from the National Bureau of Statistics shows that the birth rate in the three northeastern provinces in 2019 was only 0.61 percent, even lower than the 0.68 percent birth rate in Japan, the world’s oldest country. The reasons for the decline in the fertility rate in Northeast China, according to Yi, include the high level of urbanization, a high proportion of the population working in the state sector, high compliance with the government’s family planning policy, a low marriage rate and a high divorce rate.

Source: Radio Free Asia, February 2, 2021
http://https://www.rfa.org/mandarin/yataibaodao/shehui/cm-02022021114604.html

Briefings | | |   Economy/Resources

Ukraine Issues Sanctions against Chinese Companies

According to the Ukraine’s official website, on January 29, Ukraine President Volodymyr Zelensky approved the decision of the National Security and Defense Council of the Ukraine (NSDC) to sanction the Chinese legal persons and individuals that invested in the Ukrainian aerospace company Motor Sich. The sanctions will take effect immediately.

Four Chinese companies — Skyrizon Aircraft Holdings Co., Ltd, Hong Kong Skyrizon Holdings Co., Ltd, Beijing Skyrizon Aviation Industry Investment Co., Ltd, Beijing Xinwei Technology Group Co., Ltd. — along with a Chinese citizen, Wang Jing, born on December 24, 1972, had restrictive measures imposed on them for a period of three years.

The sanctions on Wang also include freezing his assets and temporarily restricting the use, trade and disposal of his property. The order partially or completely suspended his assets from being transported across Ukrainian territory. Wang’s visa status is revoked, and there is a ban on his entering Ukrainian territory.

Skyrizon Aircraft is the company (legal person) that invested in Motor Sich.

At the end of last year, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added China’s Skyrizon Aircraft to a Military End-User (MEU) List over its ability to develop military products including aircraft engines. The list includes 58 Chinese and 45 Russian companies.

Source: Sputnik News, January 29, 2021
http://big5.sputniknews.cn/china/202101291032991427/

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: China’s Hong Kong Liaison Office Gets Massive Reorganization

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that news is breaking on an up-coming major reorganization of The Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (LOCPG). The LOCPG was established in 2000 as the replacement of the Xinhua News Agency (HK office). It was widely recognized as the unofficial representative of the Mainland government in Hong Kong. Anonymous insiders said this new reorganization does not intend to reduce the headcount. Instead, the plan is to overhaul the “ways of doing things” completely. The future LOCPG will no longer “just do PR work and cut the ribbons for grand openings.” Instead, more resources will be devoted to Hong Kong’s day-to-day operations like how to improve the local economy. The large-scale reorganization is expected to replace half of the current 480 LOCPG staff with new people, most of whom “barely understand the local dialect (Cantonese).”

Source: Lianhe Zaobao, January 28, 2021
https://www.zaobao.com.sg/realtime/china/story20210128-1119964

Briefings | | |   Geo-Strategic Trend

Global Times: India Permanently Banned 59 Chinese Apps

Global Times recently reported, based on Reuters and several Indian media reports, that the Ministry of Electronics and Information Technology in India officially announced the permanent ban of 59 Chinese apps, including massively popular apps like TikTok, Baidu, WeChat and UC Browser. The Indian authorities expressed dissatisfaction after they received the compliance plans from Chinese app vendors, especially in the areas of data collection and consumer privacy protection. This dissatisfaction is what triggered the permanent ban. Since June of last year, the Indian government has taken “unprecedented” actions on 267 Chinese apps over several rounds, citing national security concerns. The Chinese Ministry of Foreign Affairs issued a statement on the latest development expressing “serious concern.” China also accused India of violating market economy principles and WTO rules. The Chinese Embassy in India also showed a strong position against India’s action taken in the name of national security. After the news broke, some Chinese vendors like TikTok announced their Indian lay-off plans.

Source: Global Times, January 26, 2021
https://world.huanqiu.com/article/41faKzHUmX6

Briefings | | |   Geo-Strategic Trend Information/Technology

IBM China Research Laboratory Closed

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that IBM quietly closed its China Research Laboratory (CRL). The IBM CRL was the top one of the 12 IBM global research institutes and was the most influential. CRL was founded in 1995 and hatched numerous famous products like the leading artificial intelligence system Watson. This recent closure sent a shockwave throughout the Chinese technology communities, bringing an end to an era. The CRL was IBM’s first research center in developing countries, headquartered in Beijing. It created a branch in Shanghai in 2008. In the past quarter century, thousands of researchers have worked at IBM CRL. Most of them had doctors or master’s degrees from China’s or the world’s top universities. The CRL focused on research areas of networking, distributed computing and systems management, as well as next generation services. IBM CRL is just the latest exit of the large international high-tech firms. In 2015, Yahoo closed its Beijing Research Center. Amazon closed its centers in 2019, and Oracle closed its Chinese Research Center in the same year. The IBM CRL closure further confirmed the de-linking between China and the United States.

Source: Sina, January 24, 2021
https://finance.sina.com.cn/chanjing/gsnews/2021-01-24/doc-ikftpnny1265832.shtml

Briefings | | |   Information/Technology US-China Relations

Report: U.S. Leads in Global AI Race while China Is Closing the Gap

On January 25, The Information Technology and Innovation Foundation (ITIF), a Washington DC based think tank on technological innovation and public policy, issued a report titled, “Who Is Winning the AI Race: China, the EU, or the United States? — 2021 Update”

“This report examines the progress that China, the European Union, and the United States have made in AI relative to each other in recent years and provides an update on a report released on their comparative rankings from 2019. It found that the United States still holds a substantial overall lead, but that China has continued to reduce the gap in some important areas. In addition, the EU continues to fall behind.”

“This report measures the progress each region has since made in AI by using new data to update 15 of the metrics and it adds 1 new metric. It finds that the United States still leads, with 44.6 points, followed by China with 32.0 and the European Union with 23.3.”

The U.S. “has an unmatched number of AI start-ups, which received $8 billion more in venture capital and private equity funding than did China in 2019.” “In 2019, U.S. software and computer services firms still spent three times more on R&D than did China and the European Union combined. Furthermore, average U.S. research quality is still higher than that of China and the European Union. Lastly, despite China’s growing attempts to reduce its reliance on U.S. semiconductors, the United States is still the world leader in designing chips for AI systems.”

“China’s AI capabilities relative to the European Union and the United States have improved in several ways. First, China has surpassed the EU as the world leader in AI publication. Second, the quality of its AI research has generally trended upward year to year. Third, its software and computer services firms have increased their R&D spending. Fourth, China now has nearly twice as many supercomputers ranked in the top 500 for performance as the United States. The United States led in this indicator as recently as 2017. Finally, China likely continues to lead in the amount of data generated. Overall, however, China has not significantly reduced the gap in AI between itself and the United States, but its trend of consistent progress could eventually evaporate the U.S. lead.”

“The European Union has fallen further behind the United States in terms of the number of funding deals, the acquisition of AI firms, and AI firms that have raised at least $1 million in funding since our last report. In addition, EU software and computer services firms have failed to close the gap between themselves and U.S. firms in R&D spending. The United Kingdom’s departure from the bloc will also diminish EU AI capabilities, both in absolute terms and on a per-capita basis.”

Source: Information Technology and Innovation Foundation.
https://itif.org/publications/2021/01/25/who-winning-ai-race-china-eu-or-united-states-2021-update

Briefings | | |   Information/Technology

China Box Office Revenue Fell Sharply in 2020

China produced a number of patriotic movies last year, including the movies that commemorated the 70th anniversary of the Korean War. Box office revenue, however, still fell sharply due to COVID 19. Revenue was only at 30 percent of what it was in 2019. Among the 28 listed film making companies, only 6 of them had revenue and profit growth compared to 2019.

According to Securities Times, 294 movies were released in China in 2020, with a total box office revenue of 20.417 billion yuan (US$3.18 billion), of which box office revenue for domestically produced movies was 17.093 billion yuan (US$2.66 billion), accounting for about 83 percent of the total revenue. Meanwhile only five companies had stock price increases in 2020.

Even though China’s movie industry was hit hard by COVID 19 in 2020, it still surpassed North America and was the world’s largest movie market.

Source: Central News Agency. January 28, 2021
https://www.cna.com.tw/news/acn/202101280102.aspx

Briefings | | |   Economy/Resources

Ministry of National Defense: “Containing China Is a Mission Impossible”

Starting one week after Biden took office, he and several of his officials repeatedly expressed support for allies in the Indo-Pacific region. This has been interpreted as the Biden administration warning against China’s aggressive stance. On January 28, Wu Qian, director of the Information Bureau of the Ministry of National Defense of China, said during his regular press conference, that, if the United States wants to contain China, it is a “Mission Impossible.”

Wu said that the China and U.S. relationship encountered extreme hardships during the Trump administration. The militaries of both countries faced many risks and challenges. Facts have proven that it is an impossible task for the U.S. to contain China. In the end, the U.S. will only shoot itself in the foot. To Contain China is a Mission Impossible!

On the first weekend after taking office, Biden spoke with the leaders of many European countries, expressing the U.S. interest in working together on China. Many of his senior officials also reaffirmed their support for East Asian countries. In telephone calls with the foreign ministers of France, Germany, the United Kingdom, the Philippines, and Italy, the newly appointed Secretary of State Antony Blinken pledged to stand with them in the face of China. State Council Spokesperson Ned Price also criticized the Chinese military’s activities near Taiwan and said that, “the U.S. commitment to Taiwan is rock-solid and contributes to the maintenance of peace and stability across the Taiwan Strait and within the region.”

Sources:
1. Sina, January 28, 2021
https://news.sina.com.cn/c/2021-01-28/doc-ikftpnny2530128.shtml
2. Radio Free Asia, January 28, 2021
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/cm-01282021101704.html

Briefings | | |   US-China Relations