Chinascope – Page 297

LTN: Huawei Came up with New Method to Avoid U.S. Sanctions

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, with the United Stated continuously tightening up sanctions against Huawei in order to cut off its chip-making capabilities, leading U.S. Electronic Design Automation (EDA) vendor Synopsys saw strong growth. The source of the growth came mainly from China. Many integrated Circuit (IC) companies in China suddenly started purchasing chip design software on a large scale. This type of software is on the Huawei sanction list, so Huawei can no long purchase licenses. Synopsys, along with two other U.S. companies Cadence and ANSYS, plus the German vendor Siemens, control over ninety percent of the global chip design software market. Chinese local governments were also found to be purchasing U.S. EDA software. IT Experts from Japan expressed the belief that it is highly likely Huawei can use Chinese chip design firms to perform the design work previously done by its own branch named HiSilicon. All it takes is for HiSilicon to send a group of semiconductor engineers to a small local firm to bypass U.S. sanctions on software completely.

Source: LTN, August 21, 2020
https://ec.ltn.com.tw/article/breakingnews/3267514

Briefings | | August 26, 2020 | Information/Technology US-China Relations

$50 Billion Worth of Cryptocurrency Left China within 12 Months

According to a report from the blockchain analytics firm Chainalysis, over the past 12 months, over $50 billion worth of cryptocurrency has left China. Analysts claim that the yuan’s fluctuating valuation over this year and tensions amid the ongoing U.S.–China trade war could be spurring local investors to evade capital controls. Beijing bars citizens from moving more than the equivalent of $50,000 out of the country each year.

Tether (USDT) in particular — could be playing a key role. Since Beijing’s 2017 ban on the direct conversions of the yuan to cryptocurrency, the U.S. dollar-pegged stablecoin Tether has served as a popular stand-in for fiat for traders in the Chinese market. In the East Asian market, over $18 billion worth of Tether was moved to addresses based in foreign jurisdictions over the past year. How much of this reflects capital flight remains difficult to establish conclusively.

While yuan-USDT trades are, strictly speaking, also prohibited, OTC (over the counter) brokers continue to sell the stablecoin to enable traders to lock in their gains from crypto trades without worrying about price volatility. In June of this year, Tether outflanked Bitcoin to become the digital asset that East Asian addresses received the most.

The government has meanwhile cracked down on routes for offshoring capital via foreign real estate investments and other assets, leaving cryptocurrency as a possible alternative.

Other contributing factors include uncertainty as to how Beijing’s forthcoming national cryptocurrency will impact the private digital asset market. Chainalysis suggests that this may be driving China’s cryptocurrency community “to move portions of their holdings overseas.”

Source: Central News Agency, August 22, 2020
https://www.cna.com.tw/news/acn/202008220203.aspx

Briefings | | August 25, 2020 | Economy/Resources

Prime Minister Li Keqiang’s Visit to Flood Zone Drew Late Official Coverage

On August 20, Li Keqiang visited Chongqing, a heavily flooded area. The People’s Daily, CCTV, and Xinhua did not report any coverage of his visit until August 23, which is quite unusual. The Chinese government website (www.gov.cn) was the only site that covered Li’s visit on August 20. Meanwhile, Xi Jinping’s visit to Anhui province on August 18 through the 20th was among the top news in Chinese media.

In the videos and photos that the government website released, it showed that Li Keqiang wore rain boots and was walking in the mud. He inquired about the disaster and was concerned about the harvest and the lives of the victims. Mainland netizens highly praised Li, calling him “the prime minister of the people.”

In contrast, Xi Jinping was seen wearing leather shoes to visit the fields in Anhui that were once a heavily flooded zone but had since been recovering. People also discovered that in one picture, Xi was speaking to a woman holding a child, but the woman was suspected of being the deputy chief of the local Public Security Bureau. On Wednesday, August 19, Xi visited the Baowu Masteel Group. People said that those who Xi Jinping met were background actors who the officials had vetted, a common practice among CCP officials.

Xi’s visit to Anhui came after the floods in Anhui province had subsided. This was Xi’s first public appearance after the Beidaihe summit. Xi’s last public appearance was on July 31 when he attended the opening ceremony of the Beidou-3 global satellite navigation system. Xi was also criticized for not visiting the flood zone during the peak of the flooding time.

The rumors of infighting between Xi Jinping and his Prime Minister Li Keqiang have surfaced again. In recent months, Li Keqiang was seen to have different views and actions from Xi Jinping on a number of issues. There is speculation that Li knows that he is unable to take down Xi Jinping. Therefore, he is preparing for his departure in 2023; however, he can only use the Chinese government website to highlight his achievements so as to prevent future retaliation.

Source:
1.Radio Free Asia, August 19, 2020
https://www.rfa.org/mandarin/yataibaodao/zhengzhi/ql1-08192020061755.html
2. Central News Agency, August 20, 2020
https://www.cna.com.tw/news/firstnews/202008220085.aspx
3. Secret China, August 24, 2020
https://www.secretchina.com/news/b5/2020/08/24/944016.html

Briefings | | August 25, 2020 | Government/Politics

European and American Alumni Associations Serve the Party

Documents that The Epoch Times recently obtained show how the CCP strictly controls the Chinese students who have returned from studying abroad. The CCP uses the “European and American Alumni Associations” in a number of cities and provinces in China and has the students serve the CCP’s Belt and Road initiatives and civil diplomacy.

The European and American Alumni Association is an organization that consists of overseas students. The Central Committee leads it and the United Front Work Department manages it. The official website shows that the European and American Alumni Association currently has 42 local organizations, 15 national and regional branches, and 220,000 members. There are seven special working committees and seven professional committees.

In the document that The Epoch Times obtained, Liu Shuhua, a member of the Standing Committee of the Henan Nanyang Municipal Party Committee and Minister of the United Front Work Department spoke at the inaugural meeting of Nanyang European and American Students Association held on October 27, 2019. Liu stated that the association should “… continue to expand its membership … further establish contacts with overseas students, experts, scholars, entrepreneurs and people from all walks of life, … attract more overseas students to return to China to start businesses in Henan province, … implement the decisions from the central, provincial, and municipal party committees, and take the work of overseas students as a new focus for united front work.”

In August 2016, the General Office of the Central Committee issued the “Opinions on Strengthening the Development of the European and American Alumni Association.” The “Opinions” show that the first major role of the European and American Alumni Association is to “establish a database of returned overseas students and receive timely updates about the returned overseas students.” Then it is to “create a think tank including the overseas students. Finally it is to use these people to carry out civil diplomacy and serve the Belt and Road initiatives.

A separate document that The Epoch Times obtained contains a list of 343 returned overseas students in Nanyang city of Henan province. They are currently working in colleges and universities, scientific research institutes, medical institutions, party and government agencies, financial institutions, and private enterprises. The list contains detailed information including their names, current employment and positions, date of birth, ethnicity, hometown, academic degree, political status, number of years on the job, countries where they have studied, institutions and majors, years of study, the year of their return to China, their social position, home address, contact information, and more. Also, among the 343 names, 129 are Communist Party Members.

Source: The Epoch Times, August 14, 2020
https://www.epochtimes.com/gb/20/8/14/n12330248.htm

Briefings | | August 24, 2020 | Government/Politics

China State Media Says Military Exercise over Taiwan not Impossible

On August 18, 2020, the Chinese Communist Party mouthpiece China Central TV reported that, at the end of U.S. Secretary of Health Azar’s visit to Taiwan, the Eastern Theater District of the People’s Liberation Army (PLA) announced that it had organized actual combat exercises in the Taiwan Strait and on the northern and southern sides of the Taiwan Strait and made it clear that it was a necessary action for the current security situation across the Taiwan Strait and the maintenance of national sovereignty.

The state media claimed that, as a result of the China military “showing its muscles,” the United States immediately announced the withdrawal of the USS Ronald Reagan from the East China Sea.

“Today it is an exercise in the Taiwan Strait and on the north/south sides of the Strait. Tomorrow it is not impossible to carry out a large exercise around Taiwan Island or even an exercise over the Taiwan Island. The strength, confidence, and determination of the People’s Liberation Army will determine that once the ‘reunification by force’ is triggered. ‘The first battle’ will be the ‘final battle.’”

Source: The Paper Times, August 18, 2020
https://m.thepaper.cn/wap/v3/jsp/newsDetail_forward_8779848

Briefings | | August 24, 2020 | Geo-Strategic Trend US-China Relations

China Reports Continued Growth of “Belt and Road” Projects

According to its state media People’s Daily, from January to July, China made 423.65 billion yuan (US$61.23 billion) in non-financial direct investments overseas, a year-over-year decrease of 2.1 percent. The value of newly signed foreign contracted projects was 855.67 billion yuan (US$123.66 billion), an increase of 4.3 percent. The completed business turnover was 491.26 billion yuan (US$71.0 billion), 10.5 percent lower than the same period last year. 159,000 workers were dispatched for foreign contracts. At the end of July, 644,000 Chinese workers were still abroad.

From January to July, China’s non-financial direct investment in “Belt and Road” countries totaled US$10.27 billion, a year-over-year increase of 28.9 percent, accounting for 17 percent of total outward investment in the same period. The contract value of newly signed projects in “Belt and Road” countries amounted to US$67.18 billion, and a completed turnover of US$40.43 billion.

Outward direct investment was sent mainly to leasing and business services, manufacturing, and wholesale and retail industries. Leasing and business services increased 18.1 percent and wholesale and retail investment 43.2 percent. The newly signed contracts in construction, petrochemical, and water conservancy construction projects have shown high growth.

Source: People’s Daily, August 21, 2020
http://paper.people.com.cn/rmrb/html/2020-08/21/nw.D110000renmrb_20200821_2-01.htm

Briefings | | August 24, 2020 | Geo-Strategic Trend

Scholars Believe China’s Digital Currency a Return to Planned Economy

China’s state-owned banks such as the Agricultural Bank of China and China Construction Bank are testing the operation of digital currencies. Scholars believe that the Chinese model of the digital currency actually enables the central government to exert full control over personal wealth, which means returning to the era of a planned economy.

Si Ling, a financial scholar from Shandong University told Radio Free Asia (RFA), “The purpose of China’s vigorous promotion of digital currency is to manage its fiscal revenue in a more organized manner. With the deterioration of Sino-US relations and China’s foreign trade situation, the government will focus on fiscal revenue. In the past, many people used cash transactions to evade tax collection.”

Si believes that, if the Chinese government fully implements digital currency, “transactions will be completely under government supervision, which is conducive to the growth of government revenue. If digital currency is implemented, it may be a public-private partnership in the 21st century. In other words, private wealth can become public owned overnight, if the government chooses to do so.”

Dong Yongqi, a businessman from Shanxi province, told RFA that once the Chinese people start to use digital currency, their personal interests and their privacy will be infringed upon. “For the common people, it will do more harm than good. Most people read the propaganda and don’t understand the invasion of personal privacy that occurs with digital currency. The digital currency is the preparation for returning to the planned economy.”

Dong discussed the fundamental difference between China’s digital currency and that of Western democracies. “The digital currency of a free country by nature uses the blockchain technology and is decentralized, but our country’s digital currency has been centralized. The central bank is in charge.”

Chinese economist Hu Xingdou told RFA that China’s so-called digital currency is not a digital currency in the real sense: “It should be called electronic currency. It is very different from digital currency in terms of privacy and traceability. In other words, digital currency protects personal privacy. Other people, even the government, control no information.”

Caijinglengyan, an overseas social media account, commented that China’s digital currency is to prepare for the planned economy! Its characteristic is the control over currency use and material distribution. One can consider digital currency such as food stamps, meat coupons, travel passes, transportation documents, and permits for big-ticket purchases in the digital age.

Source: Radio Free Asia, August 17, 2020
https://www.rfa.org/mandarin/yataibaodao/ql1-08172020060447.html

Briefings | | August 23, 2020 | Economy/Resources

China’s Reaction to Trump’s Election Win

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized