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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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SMIC May Have Developed 5nm DUV Process

CNBeta, one of China’s largest technology news sites and a member of Microsoft Chinese Technology Cooperation Network, recently republished an article by Hankyung (The Korea Economic Daily, South Korea’s largest business newspaper by revenue), suggesting that China’s largest semiconductor manufacturer, Semiconductor Manufacturing International Corporation (SMIC), has achieved a new milestone in the use of Deep Ultraviolet Lithography (DUV) technology to manufacture computer chips without the use of more advanced Extreme Ultraviolet Lithography (EUV) equipment. The news claimed that the new 5nm process, which uses legacy DUV equipment, has been completed and SMIC is ready to mass produce a first batch of wafers.

In the meantime, Huawei has also announced that its next-generation Kirin SoC chip will appear in the upcoming Mate 70 series mobile phone this October. There is no word yet on production volumes, but SMIC’s 5nm process has previously been considered expensive to produce due to the lack of next-generation equipment. A current U.S. trade ban prohibits companies like the Netherlands’ ASML from supplying cutting-edge EUV equipment to any Chinese company.

It is estimated that the cost of SMIC’s 5nm chips will be 50 percent higher than Taiwanese TSMC’s chips. Also, Huawei’s HarmonyOS Next operating system will be unveiled with the new Mate 70 mobile phone, aiming to compete head-to-head against Google’s Android platform.

Source: CNBeta, May 15, 2024
https://www.cnbeta.com.tw/articles/tech/1431027.htm
https://www.hankyung.com/amp/2024051366751

Briefings | | |   Information/Technology

CNA: Large Japanese Parliamentary Delegation to Attend Taiwanese Presidential Inauguration

Primary Taiwanese news agency Central News Agency (CNA) recently reported that 35 cross-party members of the Japanese-Taiwanese Parliamentarian Symposium will visit Taiwan to attend the inauguration ceremony for Taiwanese President-elect Lai Ching-te on May 20th. This will be the largest Japanese delegation in history.

Japanese Representative Kishi Nobu Chiyo, the nephew of former Japanese Prime Minister Shinzo Abe, will be among the visiting Japanese delegates. Akie Abe, the widow of Shinzo Abe, will also make a special trip to Taiwan to attend the inauguration ceremony.

CNA reported that president-elect Lai Ching-te has a profound friendship with the Abe family. Immediately after Shinzo Abe’s assassination, then Vice President Lai Ching-te went to Japan to express his condolences to Abe’s family members and friends. At the time, Lai Ching-te was at the highest-level Taiwanese government official to visit Japan since 1972.

When China banned imports of Taiwanese pineapples, Shinzo Abe made a video of himself eating pineapples, calling on the Japanese people to purchase more of the fruit from Taiwan. The fact Japan is now sending its largest delegation in history to attend the Taiwanese inauguration symbolizes the continued warming of Taiwan-Japan relations. After Lai Ching-te takes office, he is expected to continue supporting Taiwan-Japan friendship, with the hope that the two countries can work together to maintain peace and stability in the Indo-Pacific region.

Source: CNA, May 14, 2024
https://www.cna.com.tw/news/aipl/202405140249.aspx

Briefings | | |   Geo-Strategic Trend

China’s Automobile Industry Sees Strong Q1 2024 Growth in Production and Sales

On April 10th, the China Association of Automobile Manufacturers released automobile production and sales data from January to March 2024. China’s production and sales reached 6.606 million and 6.72 million units, respectively, with year-on-year increases of 6.4 percent and 10.6 percent, respectively. These were the highest quarterly production and sales figures seen since 2019.

Automobile exports for Q1 totaled 1.324 million units, up 33.2 percent year-on-year. In terms of new energy vehicles (electric cars), production and sales during this period were 2.115 million and 2.09 million, respectively, representing year-on-year increases of 28.2 percent and 31.8 percent, respectively.

In the month of March alone, automobile production and sales reached 2.687 million and 2.694 million units, respectively, up 78.4 percent and 70.2 percent month-on-month, and up 4 percent and 9.9 percent year-on-year, respectively. Among these, new energy vehicle production and sales reached 863,000 and 883,000 units, respectively, up 28.1 percent and 35.3 percent year-on-year.

Source: People’s Daily, April 10, 2024
http://finance.people.com.cn/n1/2024/0410/c1004-40213186.html

Briefings | | |   Economy/Resources

Xinhua: U.S. is the Real Creator and Exacerbator of Ukraine Crisis

On May 11, Xinhua published a critical commentary saying that the U.S. is the creator and exacerbator of the Ukraine crisis and declaring that China is innocent on the matter. The below is a partial translation of the article.

The crisis in Ukraine, ongoing for over two years, is chiefly attributed to the United States’ geopolitical ambitions. Viewing NATO as a tool for hegemony, the US spearheaded NATO’s eastward expansion, disregarding Russia’s security concerns and pushing for Ukraine’s integration into NATO. By persistently exacerbating the crisis, the US aims to maintain its global dominance. Providing significant military aid to Ukraine, it has fostered a proxy war against Russia, leveraging the turmoil to bolster its geopolitical interests and its sales of natural gas and arms. However, the U.S.’s motivations lie not in concern for Ukrainian well-being or global stability, but in preserving the hegemonic status of the U.S. By crafting a “Ukraine trap,” it has sought to entangle Russia and assert control over Europe, ultimately reshaping the global geopolitical landscape to its advantage.

The U.S. is well aware of its role in the Ukrainian crisis. However, because of this, the guilt-ridden U.S. continually shifts blame and deflects attention regarding the crisis. Not only has it spread false information following the eruption of the crisis, blaming Russia on all counts, but the U.S. has also attempted to unfairly implicate China, which has no connection to the crisis. Recently, the U.S. has absurdly claimed that China helped Russia establish the Russian defense industry. Before U.S. Secretary of State Antony Blinken’s visit to China, the U.S. even threatened to sanction Chinese banks so as to hinder China’s ability to support Russian military production. China’s stance is clear: it is neither the creator of the Ukraine crisis, nor is it involved, and China has not engaged in any opportunistic behavior. China will not shoulder blame nor pay for others’ actions. The U.S. should stop smearing and pressuring China, and it should cease its unilateral sanctions on Chinese companies. Such irresponsible and deceitful behavior by the U.S. will only exacerbate the crisis, damage its own reputation, and backfire.

Source: Xinhua, May 11, 2024
http://www3.xinhuanet.com/world/20240511/2a8c6b098fa54506944831e7c1aaf29a/c.html

Briefings | | |   @CS US-China Relations

Fentanyl Exports to the US: Insights on Stance of Xi Jinping and the CCP

Professor Yuan Hongbing, a Chinese legal scholar who lives in Australia and often reveals insider information about the high-level Chinese Communist Party (CCP), recently told Secret China that the international community lacks a basic understanding of Xi Jinping’s mindset. In late April of this year, U.S. Secretary of State Blinken met with Wang Xiaohong, Xi Jinping’s confidant and Minister of Public Security, in Beijing, attempting to address the issue of China’s export of fentanyl to the U.S. The U.S. even considered this issue as an important topic for cooperation with the CCP.

However, according to CCP insiders, Xi Jinping gave an “important speech” on the fentanyl smuggling issue during a secret National Security Council meeting a year and a half ago. Xi mentioned the Opium Wars (Editor’s Note: China had two wars with the Western countries in the period 1839 – 1860 in attempts to stop them from selling Opium into China. China lost both wars) and stated that the U.S. becoming a country of drug abuse is “retribution.” He also said that the rampant drug problem in the U.S. is a basis for the CCP to declare “rising in the East and declining in the West.” He suggested that the U.S. should blame itself for its own moral decline due to rampant drug abuse rather than holding Beijing responsible for American drug addiction. He emphasized in particular that the U.S. demands for Beijing to limit fentanyl production and regulate the channels through which fentanyl enters the U.S. are attempts to “harm China’s development interests” and constitute “economic warfare,” which “we firmly oppose and absolutely cannot accept.”

As a result of Xi’s speech, after the 20th CCP National Congress, Wang Xiaohong was tasked with coordinating the support of relevant CCP departments to expand fentanyl production and expand the channels through which fentanyl is directly or indirectly imported into the U.S. Wang also said at an internal meeting of the Ministry of Public Security that this action should be regarded as “part of an overall strategic war and part of unrestricted warfare against the United States.”

Source: NTDTV, May 9, 2024
https://www.ntdtv.com/gb/2024/05/08/a103878495.html

Briefings | | |   Grapevine

Guangming Daily: the Importance of Chinese-Built International Communications Platforms

Guangming Daily published an article saying that it is important for China to build its own international communications platforms.

“With the advancement of technology, international communication now presents a new characteristic: “platformization.” It is transitioning from “individual content going overseas” to “communication platforms going overseas.” International communication is entering an era of platformization. The core of the success or failure of international communication in this era of platformization lies in the ability to control the communication platforms. However, current international communication platforms are in a state of monopoly [by Western powers] and opposition [to China]. Western countries (led by the U.S.) are monopolizing communication platforms through technological advantages and are thus able to wield so-called “hostile” communication platforms to gain advantages in political discourse. This puts other countries in a situation where they have no platforms to use. Thus, the creation of such communications platforms is an important facet of [China’s plan to] build international communications capabilities. [Such Chinese-built platforms] would provide an important means to break through Western platform monopolies and through opposition from Western platforms. It is evident that the enhancement of cultural soft power relies on the support of international communication platforms.”

Source: Guangming Daily, May 13, 2024
https://theory.gmw.cn/2024-05/13/content_37319725.htm

Briefings | | |   Geo-Strategic Trend Government/Politics

Chinese Ministry of Foreign Affairs on Increased US Tariffs

The Biden administration recently announced increased tariffs on Chinese electric vehicles and other products. On May 15, Wang Yi, China’s Acting Minister of Foreign Affairs, gave a harsh response to a reporter’s question on the topic.

“Everyone has seen that for some time now, the U.S. has frequently imposed unilateral sanctions on China, abused Section 301 tariffs, and almost madly suppressed China’s normal economic, trade, and technological activities. This is the most typical hegemonic bullying in the world today! It shows that some people in the U.S. have reached the point of losing their minds in order to maintain their one-sided hegemony. The U.S.’ suppression of China by any means does not demonstrate America’s strength, but instead exposes the U.S.’ lack of confidence and confusion; it cannot solve the problems inside the U.S., but will instead further disrupt the normal operation of the international production and supply chain; it cannot stop China’s development and revitalization, but will instead inspire the 1.4 billion Chinese people to work even harder.

“The World Trade Organization (WTO) has clearly concluded that the U.S. Section 301 tariffs violate WTO rules and are acts that violate international law. International trade professionals with basic common sense all believe that the U.S.’ actions are harmful to others while not offering any benefits to the U.S. itself. As one of the WTO founders, the U.S. not only refuses to set a good example but also leads the way in violating WTO rules. Instead of correcting its mistakes, the U.S. continues to compound them. How can the U.S. explain the idea of “fair competition” that it touts? How can it gain the trust of the international community?

“Unilateral actions and protectionism go against the current trend and will surely be crushed by the wheels of history. At this critical moment of global economic recovery, the international community needs to warn the U.S. against creating more troubles for the world going forward.”

Wang Wenbin, the spokesperson of the Ministry of Foreign Affairs gave a comparatively mild response at the news briefing on May 15:

“I want to emphasize that the U.S. is compounding its own mistakes by politicizing economic and trade issues via further increased tariffs on China. These actions will only result in significantly raised costs of imported goods, causing American businesses and consumers to bear more losses and imposing a greater burden on American consumers.

“We urge the U.S. to earnestly abide by the rules of the WTO and immediately lift the tariffs imposed on China. China will take all necessary measures to defend its own rights and interests.”

Sources:
1. Foreign Affairs Ministry website, May 15, 2024
https://www.mfa.gov.cn/wjbzhd/202405/t20240515_11305072.shtml
2. Xinhua, May 15, 2024
http://www.xinhuanet.com/20240515/89921f9e65e747398d9dd95ecec99cd5/c.html

Briefings | | |   US-China Relations

China’s Trade-in Plan to Promote Economic Growth

To create economic growth, Beijing has been carrying out a “Trade-in (以旧换新)” plan to encourage industries and consumers to replace their equipment and durable goods, even including cars. Two articles on the People’s Daily website on May 14 showed some examples.

Industry

In one example, the Tianjin Power Company plans to invest over 700 million yuan (around US$100 million) this year to replace its old equipment, aiming to enhance the power grid’s digital and smart-tech capabilities.

Chuan Cheng Pharmaceutical Co., Ltd., located in Liaocheng, Shandong Province, is currently updating its exhaust gas treatment equipment. The new equipment will reduce carbon emissions by 410.4 tons and is expected to increase the company’s revenue by 1.3 million yuan.

The Liaocheng Development Zone has established a special team to promote large-scale equipment updates as well as trade-ins of consumer goods. The team is focused on 54 project areas, including industrial equipment and recycling. The team has identified an investment demand of 22.47 billion yuan and an update demand of 9.09 billion yuan.

Consumer Goods

Companies are offering subsidies for home-appliance trade-ins and for services to dismantle and take away existing home appliances. Applicable large household appliances include refrigerators, TVs, and air conditioners. Local governments are offering automobile trade-in initiatives, issuing policies to create and regulate a market for used cars and to promote services for dismantling scrapped cars and reuse of old car parts.

Sources:
1. People’s Daily, May 14, 2024
http://finance.people.com.cn/n1/2024/0514/c1004-40235482.html
2. People’s Daily, May 14, 2024
http://env.people.com.cn/n1/2024/0514/c1010-40235221.html

Briefings | | |   Economy/Resources