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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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Guangming Daily: The Importance of Training Legal Talents in Foreign Security Law

Chinese newspaper Guangming Daily recently published an article on the importance of training Chinese talent in foreign security law. The below is a partial translation of the article.

Foreign security (the security in other countries of the assets of a nation or of that nation’s companies) plays a vital role in [China’s] overall national security framework. With the increasing frequency of Chinese enterprises investing overseas, China possesses more and more assets abroad. Facing the turbulent international situation, we need to use legal tools to protect our country’s overseas interests. At the same time, certain Western countries have frequently imposed sanctions and caused interference, strengthened “export controls,” and promoted “decoupling” through a series of bills related to Taiwan, Hong Kong, and Xinjiang. This has challenged the bottom line of our national security and sovereignty.

Thus, the training of legal talents in foreign security law is critical.

Regarding the content of training, we need to enhance the ability to apply international rules. Through globalized curriculum teaching, academic exchanges abroad, etc., students should develop an international perspective and global strategic thinking. They should enhance their ability to propose valuable countermeasure suggestions regarding global security issues and foreign security affairs. We need to get our foreign security legal talents to actively participate in global governance as well as in the formulation of international rules via international organizations.

Regarding the training path, on the one hand, we need to cooperate on joint practical education platforms with international organizations, overseas institutions and companies, multinational corporations, foreign law firms, arbitration institutions, etc. We need to jointly develop core courses, and compile high-quality teaching materials. On the other hand, we need to accelerate the “bringing-in” of top-notch faculty from overseas and at the same time create opportunities to send more of our outstanding students abroad.

Source: Guangming Daily, May 11, 2024
https://news.gmw.cn/2024-05/11/content_37315947.htm

Briefings | | |   Economy/Resources Geo-Strategic Trend

China Reports Technology Breakthrough on Communication Within Drone Swarms

People’s Daily recently reported on a technological advancement in using light (rather than wireless communication) to convey information among drones within a drone swarm.

To achieve efficient collaborative work, drones in a cluster (or swarm) need to be able to “communicate” closely. However, current drone swarms rely mainly on wireless communication, which has obvious electromagnetic characteristics. This makes drone swarms easy to identify and susceptible to electromagnetic interference.

A research team at the Northwestern Polytechnical University reported a technological breakthrough by imitating the communication method of fireflies. They utilized lighting equipment on one drone to emit light signals and employed photodetectors on another drone to capture these signals and perform intelligent analysis. This enables collaborative flight among drones. The transmission of light signals is not affected by electromagnetic interference. Additionally, the energy requirement to emit light is low and generates almost no heat, making it suitable for small drones that have limited amounts of energy.

Source: People’s Daily, May 15, 2024
http://finance.people.com.cn/n1/2024/0515/c1004-40236280.html

Briefings | | |   Information/Technology

PLA Social Media Photo Reveals Taiwan Invasion Training Tactic

A photo posted on Weibo  by the Eastern Theater Command of the People’s Liberation Army (PLA) began circulating on the Internet around March 23rd. The photo showed the reunion of the 12 PLA model units of after a 60-year hiatus. A sharp-eyed netizen found that, in one corner of the photo, there was a sign for a “Juguang Taekwondo Gym (莒光跆拳道館).” It was a training site set at the “Gaolinshan Tactical Training Base” of the 72nd Group Army of the PLA in Jurong, Jiangsu Province. This site completely simulates Taiwan’s “Shangtian Juguang Taekwondo Gym” at No. 18, Section 4, Yangxin Road, Yangmei, Taoyuan. It reveals that the PLA has been conducting exercises with its elite forces to launch a surprise attack on Taiwan, occupying key areas in the Yangmei area for urban warfare and blocking the northward advancement of the Hukou armored division.

The Shangtian Juguang Taekwondo Gym is located at the intersection of County Road 115 and Township Road 81, controlling the bridge over the Shizi River. Less than 700 meters to the west, within the range of a machine gun, is the intersection of Provincial Highway 31 and County Road 115, with Provincial Highway 31 being a vital road built along the high-speed rail that connects Taoyuan and Hsinchu. It is also the critical route for tanks and armored vehicles heading north.

About 4 kilometers east of the gym, across the Yangmei urban area, there is an abandoned mountaintop camp. Retired General Li Zhengjie explained that occupying this high point would cut off National Highway 1, which is 1 kilometer further east. Following this pattern, the PLA’s intention seems to be to set up defense lines along County Road 114 and County Road 115, cutting off all traffic arteries from Yong’an Fishing Port to National Highway 3.

On the southern front is the Shizi River; by guarding the bridges across the Shizi River, the PLA could block the northward support of the Hukou armored brigade to Taoyuan Airport.

Source: Up Media (Taiwan), March 26, 2024

 

Briefings | | |   Defense/Military

China to Boost Zimbabwe’s Railway, Targeting Commodities Export Capacity

Sputnik News reported that Zimbabwe plans to modernize its state-owned railways with China’s experience and financial support. Before the end of June, both sides will assess the railway transportation needs and reach a consensus on the engineering workload required for reconstruction. China Railway recently signed an MOU with Zimbabwe to conduct a feasibility study on the project within this timeframe.

China’s assistance will bring Zimbabwe increased opportunities to enter the global commodity market, and infrastructure cooperation between China and Zimbabwe will undoubtedly have an impact on the economies of other African countries as well.

Zimbabwe estimates that the total railway reconstruction cost will be around $533 million, and it hopes to receive funding support from China. Zimbabwe has been unable to borrow from multilateral lending institutions due to its over 20 years of debt; the country’s external debt had reached $12.7 billion by September 2023. China recently wrote off Zimbabwe’s interest-free loans but did not disclose the amount, while still promising to help Zimbabwe find a way out of its long-standing debt crisis.

According to experts cited by Sputnik News, modernizing Zimbabwe’s railways will create favorable conditions for exporting Zimbabwe’s abundant lithium, coal, chrome, granite and other resources to world markets by enhancing the carrying capacity and speed of the nearest ports on the Atlantic and Indian Oceans. The planned joint project “is an extremely reasonable and forward-looking move within the framework of China’s ‘railway diplomacy.'”

The project is expected to facilitate China-Zimbabwe mineral resource cooperation and bilateral trade. With improved infrastructure and logistics efficiency, it will attract more Chinese investment in Zimbabwe across various sectors and promote higher-quality Belt and Road cooperation between the two countries.

Source: Sputnik News, May 21, 2024
https://sputniknews.cn/20240521/1059242414.html

Briefings | | |   Geo-Strategic Trend

China’s Sovereign Wealth Fund Targets Japanese Small and Medium Enterprises and Services

China’s sovereign wealth fund, China Investment Corporation (CIC), with assets totaling $1.2399 trillion, is targeting Japan’s small- and medium-sized enterprises. The plan is to allow Japanese companies with high-quality services and undervalued corporate value to thrive in China’s massive consumer market. While information disclosed is limited, this move by Beijing could trigger discussions in Japan and abroad around economic security.

In Shenzhen, the Japanese massage parlor “KA·RA·DAfactory” has attracted many Chinese customers seeking out high-quality Japanese services. Priced at 688 yuan for 60 minutes, about 1.7 times higher than in Japan, the parlor requires around 100 hours of training for its therapists to provide consistent, high-quality services. Japanese quality services, honed in years of deflation, are now praised even in the birthplace of massage – China. In the first year since the parlor’s March 2023 opening, around 60% of customers have become regulars, including many customers from Hong Kong who were attracted by the Japanese brand. The company operating the massage parlor is Factory Japan Group, which was 100% acquired by CIC’s Japan-China investment fund in 2022 in partnership with the Nomura and Daiwa Securities groups. Factory Japan Group plans to expand through franchising in China, targeting 53 outlets by 2026 leveraging CIC’s huge influence.

CIC’s Japan fund primarily targets unlisted medium and small enterprises, or businesses that can increase value through joint Chinese-Japanese operations. In April, CIC invested in a Japanese language education institute catering to students aspiring to study in Japan.

Since 2017, CIC has launched overseas funds in collaboration with top financial institutions from the US, UK, Japan, Italy, France and Germany. By 2022-end, they had invested in over 20 companies in advanced manufacturing, healthcare, financial services and consumer sectors.

CIC views Japan’s unlisted medium and small enterprises as highly valuable acquisitions. However, Chinese investments could pose economic security risks for Japan. M&A deals with China as the buyer peaked around 2016 at around 20 annually.

As China enhances sanctions against advanced manufacturing like semiconductors, and as its market matures demanding quality goods and services, Japanese service and manufacturing sectors may become prime acquisition targets.

While CIC has an international advisory board displaying transparency, information on specific investments is limited. Improved transparency and accountability are crucial for CIC’s global acceptance as a trusted investor.

Source: Nikkei, May 15, 2024
https://zh.cn.nikkei.com/china/ccompany/55562-2024-05-16-05-00-14.html

Briefings | | |   Geo-Strategic Trend

Hong Kong Launches Digital Renminbi Wallet in Collaboration with China

On May 17th, the Hong Kong Monetary Authority (HKMA) announced a collaboration with the People’s Bank of China to expand the use of the digital renminbi wallet in Hong Kong, allowing all Hong Kong residents to open an account.

According to the announcement, Hong Kong residents can register and open a digital renminbi wallet on their mobile phones. After registration, they can use the popular local mobile payment app “Faster Payment System (FPS)” to top up their wallet and exchange for renminbi.

The HKMA stated that the digital renminbi wallet balance is capped at 10,000 yuan. Each payment cannot exceed 2,000 yuan, the cumulative daily payment amount cannot exceed 5,000 yuan, and the annual limit is 50,000 yuan. The wallet also has a function to exchange the digital yuan back into Hong Kong dollars.

In addition to using the digital renminbi wallet in various cities in the Greater Bay Area of Guangdong, Hong Kong residents can also use it in other pilot cities across mainland China.

Eddie Yue, Chief Executive of the HKMA, said Hong Kong is the first place outside mainland China to launch the digital renminbi wallet. The authorities will continue to work closely with the People’s Bank of China to gradually expand the application scope of the digital renminbi and promote acceptance by more retail merchants, facilitating cross-border retail payments for residents in both mainland China and Hong Kong.

The digital renminbi is a digital form of legal tender issued by the People’s Bank of China, exchangeable 1:1 with physical renminbi. It has been piloted in multiple major mainland Chinese cities since 2019.

Source: Central News Agency (Taiwan), May 17, 2024
https://www.cna.com.tw/news/acn/202405170225.aspx

Briefings | | |   Economy/Resources

2023 Annual Reports of 58 Listed Banks Raise Serious Concerns

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported a summary of the results from the 2023 annual report disclosure published by 58 listed Chinese banks.

In 2023, while China’s economy was broadly under pressure, the banking sector faced operation and development challenges of its own. Banks’ net interest income suffered a year-over-year decline for the first time since 2017. Also, the average net interest margin of listed banks was 1.69 percent, declining for the fourth consecutive year. Net fee and commission income decreased by 8.05 percent year-over-year, declining for two consecutive years. Listed banks achieved a total revenue of RMB 5.87 trillion yuan (around US$827.8 billion) in 2023, a year-over-year decrease of 0.98 percent.

Digital intelligence capabilities have become the core competitiveness of listed banks. It is worth noting that, in 2023, the banking industry paid a lot of attention to large data models, with more and more listed banks deploying large model technology. For example, in 2023, ICBC (Chinascope Editor’s Note: ICBC, the Industrial and Commercial Bank of China, is the largest bank in the world by total assets) established the industry’s first fully-independently-developed large-scale AI model, with hundreds of billions of parameters, deploying innovative applications to multiple financial business scenarios.

For some small and medium-sized banks, it may be difficult to find the resources required for digital transformation. This could lead to further intensified differentiation within the industry.

Source: Sina, May 15, 2024
https://cj.sina.com.cn/articles/view/2660807713/9e98b421001018rda

Briefings | | |   Economy/Resources