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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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HKET: Huawei Asked Chinese Government to Block Nvidia-ARM Merger

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that anonymous sources revealed that Huawei is leading several large Chinese technology companies in lobbying the Chinese government to block Nvidia’s acquisition of ARM. Nvidia (NASDAQ: NVDA) is one of the world’s largest chip makers headquartered in Silicon Valley. ARM is the British company whose chip architecture is the basis for nearly all commercial mobile CPUs (Central Processing Units). Along with other Chinese smart device manufacturers, ARM has also licensed Huawei’s mobile CPU chip design. If Nvidia, an American chip maker, acquires ARM, the U.S. government may require Nvidia to cut off supplying (and licensing) to its Chinese customers. Around 20 percent of ARM’s income comes from the Chinese market and around 95 percent (over 200 companies) of Chinese SoC (system on a chip) providers are based on ARM architecture. Huawei is urging the Chinese government to block this merger under the Chinese antitrust laws.

Source: HKET, October 22, 2020
https://bit.ly/2HzebMd

Briefings | | |   Information/Technology US-China Relations

Internal Log Shows How Authorities in Zhanjiang City Deal with over 100 Mass Incidents Each Year

The Epoch Times obtained a large number of internal documents which contain the weekly logs of social incidents that authorities in Zhanjiang city of Guangdong province track. The city also has direct orders that the city level officials provided on how to monitor incidents and guide public opinion. Zhanjiang city is a city with a population of 7.36 million in Guangdong province. According to the log, in the year and a half from January 2, 2019 to June 28, 2020, there were a total of 293 incidents including 117 mass incidents and 176 petitions submitted when the petitioners went to the municipal government and Beijing to appeal.

Below is a partial list from the activity log:
On November 1, 2019, a group of teachers from Leizhou city demanded transparency on the pension plan from the local social security bureau. A note from the head of the publicity department stated that the cyberspace administration needs to monitor the online clicks and be prepared to respond.

On June 8, 2019, a student from Zhenjiang Nongken Experimental Middle School died after falling off of a building. Notes from the Deputy Mayor of Zhenjiang City said that public opinion should be monitored to ensure stability.

The week of February 25 – March 3, 2019 was the week when the Two Sessions were taking place in Beijing. Close to 30 petitioners went to Beijing. Notes from the party secretary of Zhanjiang stated, “Take this as a political task and fight it as a tough battle. Punish the key personnel who are involved.”

In the morning of September 13, 2019, over 60 villagers from Su village of the town of Changqi, Wuchuan gathered to protest against the government acquiring their land. Notes from the city mayor said, “Do well in stability control and keep the incident from escalating.”

On October 2, 2019, a student from the Guangdong Institute of Arts and Sciences was arrested for posting a video with footage that insulted CCP leaders. Notes from the authorities said, “Conduct a thorough investigation. Control the dissemination of videos immediately. Increase surveillance on the Internet.”

In the week of December 2, 2019, one resident was spreading a video on Wechat showing conflicts between the police and the civilians at the Huazhou Funeral Home, Maoming City. The resident was forced to close his Wechat account and sign a guarantee statement. Notes from Deputy Mayor of Zhanjiang city stated that the public security bureau was to continue to follow up and make daily updates.

In the week of Feb 10 – 16, 2020, one Netizen accessed COVID information from Voice of America and Radio Free Asia through a VPN and posted the information on twitter and Wechat. The Netizen was detained for seven days for “spreading” a rumor. Notes from a city official stated that a severe punishment should be imposed.

On March 11, 2020, over 70 store owners in the Yifu International Plaza, Xiashan District, asked the plaza management to waive their rental payment for two months because of the spread of COVID. Notes from a city official stated, “Assess the risk to prevent it from growing into to a mass petition.”

Source: Epoch Times, October 22, 2020
https://www.epochtimes.com/gb/20/10/22/n12493565.htm

Briefings | | |   Social Stability

RFA: Xi Jinping’s Warning to the Western World Meant to Ensure Domestic Stability

On Friday, October 23, Xi Jinping spoke at a meeting commemorating the 70th anniversary of the Korean War [Editor’s note: The CCP calls the Korean War the war in which China resisted U.S. aggression and aided Korea (抗美援朝)]. Xi warned that “any bullying actions will come to a dead end.” He advised that if China’s national security, sovereignty, territory, and development interests are threatened, China will “take it head-on.” This is seen as the strongest political statement that the CCP has made in the past 40 years. Chinese Scholars believe that stabilizing internal affairs still remains as Xi Jinping’s first priority.

In his speech, Xi Jinping said that the Korean War shattered the myth of the invincibility of the U.S. military and demonstrated with solid facts that, no matter how powerful any country or military is, if one stands on the opposite side of the world’s development trend, bullies the weak and aggressively expands, one will definitely be crushed. He also said, “In today’s world, any unilateralism, protectionism, and extreme egoism will not work. Any extortion, blockade, or extreme pressure will not work. Any way of doing things on their own and acting on their own will not work. Any act of hegemony or bullying will never work at all. Not only will it not work at all, it will eventually be a dead end.” It is believed that Xi was referring to the U.S. in his speech. Xi Jinping also said, “Now that the Chinese people are mobilized, don’t provoke them or make them angry. Otherwise the situation will be difficult to handle. We will never stand by and watch the country’s sovereignty, security, and development interests suffer, and we will never allow anyone or any forces to invade and split the sacred territory of the motherland. Once such a serious situation occurs, the Chinese people will definitely attack it head-on.”

A former lecturer from Tsinghua University told Radio Free Asia that Xi gave the strongest speech in the past 40 years, but the fact that Beijing remains confrontational with a sense of uncertainty, just as it did during the Korean War, shows that it still lacks a reflection on history. It is dangerous for Beijing constantly to incite nationalism, xenophobia and confrontation among the Chinese people and to exaggerate the possibility that China could be on the edge of a war in the future. One dissident said that China didn’t win the Korean War. In fact, it paid a costly price and suffered a disastrous defeat. One scholar said that Xi Jinping wants to win a war with the U.S. to establish himself in China, but other scholars believe that the statement is a complete bluff. It was only for the need to incite populism and nationalism inside China. China is falling behind the U.S. in military power and it is not prepared to go to a war with the U.S.

In June 1950, when the Korean War broke out, the United Nations, led by the United States, sent troops to support South Korea to resist the invasion from North Korean. Starting in October 1950, China sent more than one million soldiers to the war to support the Kim Il Sung regime of North Korea. According to official Chinese statistics, nearly 200,000 soldiers were eventually killed in battle.

Source: Radio Free Asia, October 23, 2020
https://www.rfa.org/mandarin/yataibaodao/zhengzhi/QL-10232020030617.html

Briefings | | |   Government/Politics

Wang Qishan Warned against Risk of Financial Bubbles

According to Hong Kong Economic Times, China’s Vice president Wang Qishan gave a video speech at the Bund Summit 2020 held in Shanghai on October 24. Wang said, “The Financial sector, when separated from the real economy, is ‘water without a source and a tree without roots.’ The financial sector cannot take the crooked path of speculation and gambling, the wrong path of the self-circulation of financial bubbles, and the evil path of Ponzi schemes.”

Wang also emphasized that, among the three principles of safety, liquidity, and efficiency that the financial industry must follow, “safety always comes first.” He also maintained that the bottom line is that no systemic risks should be taken.

He added that, as new financial technologies have been widely used and new business models have emerged, financial risks are on the upsurge. It is necessary to strike a balance between encouraging financial innovation, expanding financial openness, and strengthening supervision over the industry.

Source: Hong Kong Economic Times, October 25, 2020
https://china.hket.com/article/2785682

Briefings | | |   Economy/Resources

Exporting Excess Capacity through “One Belt One Road”

An internal Chinese Communist Party (CCP) document that Jilin Province issued reveals that the purpose of China’s “One Belt One Road” strategy is to enable China to export excess capacity.

The document disclosed that one of the main tasks of China’s industrial transformation and upgrading is to “solve the excess capacity” problem through the “One Belt One Road” strategy.

According to the Jilin Provincial Government, “with the ‘One Belt One Road’ strategy leading us, our province should take the initiative to find the consumer market, digest excess capacity, adjust economic structure, promote industrial transformation, and promote product upgrading.” The document mentioned China’s first automobile manufacturing plant “FAW” located in Jilin Province, saying that “Changchun FAW and its supporting enterprises will usher in a rare opportunity.”

FAW has had a serious overcapacity problem. Its brands, Pentium, Red Flag, FAW Jilin, and FAW Tianjin have a combined total production capacity of 780,000 vehicles. In 2017, the sales volume was only 210,000 vehicles, and the capacity utilization rate was less than 30 percent.

According to statistics that the China Association of Automobile Manufacturers released, due to the continued decrease in sales and the continued increase in production capacity, the capacity utilization rate of passenger vehicles in China has dropped from 66.55 percent in 2017 to 53.74 percent in 2019.

Internal documents from Anhui Province also show that local governments are actively transferring excess production capacity through “One Belt One Road.”

In the documents, the CCP Chuzhou municipal government in Anhui Province encourages companies with excess capacity to invest in countries along the “One Belt One Road” and focus on supporting companies involving cement, glass and construction materials to establish production facilities along the route.

Source: Epoch Times, October 7, 2020
https://www.epochtimes.com/gb/20/10/6/n12458129.html

Briefings | | |   Geo-Strategic Trend Government/Politics

China Views U.S. Diplomatic Missions in China as Hostile Forces

An internal document that Epoch Times recently obtained shows that the Chinese Communist Party (CCP) regards the U.S. and other Western embassies and consulates in China as “hostile forces” “to contain and to block.”

The document that the Foreign Affairs Bureau of Leizhou City, Guangdong Province, issued on April 5, 2018, was titled, The “Working Plan for Guarding against and Combating Hostile Forces’ Infiltration and Destructive Activities in order to Maintain Political Security.”

The plan identifies the focus of “preventing and combating hostile forces” from the U.S. and other Western embassies and consulates in China and lists the details of the methods.

According to the internal documents, the priority is to “prevent the penetration of and destruction by the U.S. and other Western embassies and consulates in China.”

The “objective is to counteract the internalization, personalization, and agency of the U.S. and Western embassies and consulates in China in their infiltration activities and to block them effectively from communicating with key political persons, lawyers, ‘public intellectuals,’ ’rights defenders and specific interest groups,’ and to sever their ties and break their network, in order to compress their penetration space, reduce their penetration energy, and defeat their penetration scheme.”

The Leizhou Foreign Affairs Bureau listed several implementation measures. “Cut off any connections between the U.S. and other Western embassies and consulates in China and with key [Chinese] figures in the country. Strengthen intelligence and early warnings, find out about the infiltration activities of the U.S. and other Western consulates in Guangzhou in a timely manner and use various methods such as reminders, warnings, striking, and other methods to discourage relevant [Chinese] figures from participating in the activities to such an extent that the U.S. and other Western consulates in Guangzhou ‘cannot connect, cannot enter and cannot make things happen.’”

In addition to these measures, the Foreign Affairs Bureau also directed “to establish a database of key personnel of the U.S. and other Western embassies and consulates in China. Use big data to collect background information about activities and the whereabouts of relevant personnel [diplomats].”

Source: Epoch Times, October 16, 2020
https://www.epochtimes.com/gb/20/10/12/n12471193.htm

Briefings | | |   US-China Relations

Huawei Lost another Major EU Customer

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that French-owned telecommunications giant Orange Belgium officially announced it selected Nokia’s 5G technology to deploy its 5G network throughout Belgium. Orange decided to build its future 5G infrastructure on top of its current Ericsson network. Orange Belgium also operates in Luxembourg, where Nokia 5G technology will also be used. In the meantime, Orange Belgium’s competitor Proximus also announced the decision to use Nokia in its Belgium and Luxembourg networks. Belgium is the focal point of the United States on pushing out Huawei since the EU Executive Branch and the EU Parliament are located in Belgium’s capital, the City of Brussels. The U.S. sanction on Huawei brought the deep worry that Huawei may not be capable of keeping up with supply. Huawei commented on Orange’s decision, saying this is a loss in a fair bidding process, and Huawei respects fair play. Huawei has been serving the Belgium market for over ten years.

Source: Sohu, October 12, 2020
https://m.k.sohu.com/d/488169663?channelId=1&page=1

Briefings | | |   Geo-Strategic Trend

Chinese Student Visas to the U.S. Fell Dramatically

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the previous U.S. strategy of peacefully transforming China has apparently failed, so now the United States has started to worry that the Chinese scholars and students can be used as weapons against the U.S. As part of the Trump administration’s overall Chinese strategy, the U.S. government has been speeding up its radical process of delinking with China. Due to the pandemic and the change of Chinese students’ choice of destination, as well as the changes in U.S. policies, this June’s number of U.S. student visas granted to Chinese students was eight, and another eight Chinese applicants were granted visiting scholar visas. The same numbers in June of 2019 were 34,001 and 5,736, respectively. With the new restrictions imposed on the academic exchanges between China and the U.S., the opportunities for the United States to better understand the complex Chinese society will significantly decline. If Washington continues its policies, it will lose the capabilities to influence China in many areas like the economy, the financial system, public health, environmental protection, education and cultural exchanges.

Source: Sina, October 16, 2020
https://finance.sina.com.cn/wm/2020-10-16/doc-iiznctkc5875586.shtml

Briefings | | |   US-China Relations