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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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Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

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The CCP’s Performing Arts Troupes in the U.S.

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European Airlines Suspend China Flights Amid Rising Competition from Chinese Carriers

In mid-October, Lufthansa, Scandinavian Airlines, and LOT Polish Airlines successively announced the suspension of their flight operations to Beijing and Shanghai. This news comes after earlier suspension of flights to and from China by British Airways and Virgin Atlantic.

The reported reason was that Chinese airlines have a unique advantage due to the Russia-Ukraine War. Since the start of the war, Russia has closed its airspace to 36 countries and regions, including Europe, forcing European airlines to take longer detours when flying to China. However, China has a special relationship with Russia and thus Chinese airlines can continue flying over Russian airspace as usual. This allows Chinese airlines to have shorter flight times, less fuel consumption, and potentially lower ticket prices. Chinese airlines are expanding while the European airlines are retreating. Air China, China Eastern Airlines, China Southern Airlines, and Hainan Airlines have all added new routes from China to Europe. (Note: this situation didn’t happen between the U.S. and China, since the U.S. insisted on the reciprocal rule: that Chinese airlines need to match the U.S. airlines’ operations.)

Some European airlines are dissatisfied with the situation and are asking their governments to take “non-market” special measures to curb Chinese competitors. In July of this year, Austria rejected China Eastern Airlines’ proposal to launch a Shanghai-Vienna route, saying that “Russia’s current airspace restrictions and China Eastern’s competitive advantage over the local Austrian Airlines would be against the overall economic interests.” Air France-KLM and Lufthansa are actively lobbying their governments to take action to address the imbalance in competition on China-Europe routes.

Source: Creaders.net, October 19, 2024
https://finance.creaders.net/2024/10/19/2786525.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

Xinhua Commentary: War Will Continue Between Hamas and Israel Though Israel Killed Sinwar

Xinhua News Agency published a commentary on Israel’s killing of Hamas Chief Yahya Sinwar, who planned and executed the Hamas attack on Israel on October 7, 2023. It quoted several analysts who all predicted that the war between Hamas and Israel will continue. “Analysts believe that Sinwar’s death is unlikely to mark a turning point for peace in Gaza, and the Israeli-Palestinian conflict will continue, with the regional situation possibly worsening further.”

Yonatan Freeman, an international relations scholar at Hebrew University in Jerusalem, said that Sinwar’s death might weaken the fighting resolve of some Hamas militants, but Hamas as a whole will continue to fight against Israel.

Mohamed Elmasry, an expert from Doha Institute in Qatar, stated that unless the root causes of the Gaza war are addressed, the cycle of violence may persist. “As for the root causes, they are well known, including Israel’s illegal occupation of Palestinian land, the apartheid system established by Israel, and the blockade of Gaza, among others.”

A new bulletin jointly released by the International Labor Organization and the Palestinian Central Bureau of Statistics on October 17th shows that since the new round of the Israeli-Palestinian conflict began a year ago, the poverty rate in Gaza has reached nearly 100 percent. Ruba Jaradat, Regional Director of the ILO for Arab States, stated that the losses caused by the war in Gaza are not limited to casualties, severe humanitarian disasters, and material destruction, but have fundamentally altered Gaza’s socioeconomic structure, while also severely impacting the economy and labor market of the West Bank.

Source: Xinhua, October 18, 2024
http://www.news.cn/world/20241018/8f566136a685418ca20082323b268eb5/c.html

Briefings | | |   Geo-Strategic Trend Government/Politics

CCP Leverages U.S. Legal System to Counter U.S. – Trying to Stop Sanctions and Criticism

Voice of America (VOA) reported that the Chinese Communist Party (CCP) is leveraging the U.S. legal system, using the law as “both a sword to attack opponents and a shield to protect its interests.”

Chinese drone manufacturer DJI filed a lawsuit against the U.S. Department of Defense (DOD) on October 18, alleging that DOD’s inclusion of the company on the list of companies cooperating with Beijing’s military was erroneous and had caused significant financial losses. China’s semiconductor firm, AMEC, filed a similar lawsuit in the U.S. on August 16. Previously, Chinese companies Xiaomi and Hesai successfully removed themselves from the list by suing DOD. Analysts told VOA that these Chinese companies’ success was not due to a lack of military involvement, but because they exploited loopholes in the U.S. Administrative Procedure Act.

In addition, the CCP can use its state power and resources to hire top-tier U.S. law firms to start legal battles to coerce or even silence organizations or individuals from criticizing it.

Li Rui, Mao Zedong’s former secretary and a senior member of the CCP, left behind diaries detailing the inner workings of the party and his own views. According to his wishes, his daughter, Li Nanyang, handed over the diaries to the Hoover Institution at Stanford University in California. However, Li Rui’s widow, Zhang Yuzhen, filed a lawsuit in Beijing in April 2019 to reclaim the diaries (so that she could take them back to China) and won the case. Stanford University filed a countersuit in the U.S. This ongoing legal battle has lasted for over five years and required Stanford, Li Nanyang, and her attorney’s law firm to spend thousands of hours. Zhang Yuzhen hired four different law firms, three of which are among the largest in the U.S. Li Nanyang’s attorney pointed out that Zhang would not be able to hire those U.S. attorneys on her own, which Zhang neither confirmed nor denied.

Anna Puglisi, a former senior fellow at Georgetown University’s Center for Security and Emerging Technology, published a scholarly paper in May 2024 titled “How China’s Hybrid Economy Distorts Competition.” The paper highlighted the CCP’s direct or indirect relationship with companies like BGI Genomics and MGI Tech, and how China uses market access to protect its own global companies and undermine other global players. In June and July of this year, Puglisi received letters from prominent U.S. law firms hired by BGI and MGI, accusing her of defamation and demanding that she and Georgetown University retract the paper and cease related analysis.

In May 2019, Scott Paul, president of the Alliance for American Manufacturing (AAM), a nonprofit based in Washington, testified during a congressional hearing on transportation and infrastructure, stating that BYD and CRRC, two Chinese companies, are state-owned and state-supported, and had begun securing lucrative contracts funded by U.S. taxpayers to provide rail transit vehicles and electric buses for major U.S. cities. He warned that this trend would systematically undermine the competitive landscape of the U.S. locomotive and vehicle manufacturing industries. BYD filed a defamation lawsuit against AAM and several of its employees. The lawsuit dragged on for nearly two years, with several dismissals and unsuccessful appeals, until October 2022, when the Supreme Court refused to hear BYD’s appeal, ruling that BYD failed to prove that AAM’s statements were defamatory. However, the chilling effect of the lawsuit became apparent when AAM’s insurance company, Hartford, partially canceled AAM’s insurance in April 2021.

Source: VOA, October 23, 2024
https://www.voachinese.com/a/ccp-us-law-repression-20241020/7817608.html

Briefings | | |   @CS US-China Relations

China’s Income Distribution as Derived From State Taxation Administration’s Numbers

The State Taxation Administration released the 2023 Individual Income Tax Settlement and Payment Report. An individual analyzed the data to derive the Chinese people’s income level breakdown.

According to the official data:

  • After raising the minimum income level for taxation from 3,500 yuan to 5,000 yuan per month, the number of people filing income tax dropped from 157 million to 65 million in 2022.
  • Among the income tax-filing people, less than 30 percent paid tax.
  • Among those who paid income tax, 60 percent were in the 3 percent tax rate bracket (5,000 – 8,000 yuan/month).
  • 1 percent of the income tax-filing people have income above 1 million yuan.
  • People with annual income less than 100,000 yuan usually do not need to pay income tax (due to various deductibles).

The author thus deduced:

  • Income between 3,500 yuan and 5,000 yuan per month: Near 100 million people (between 65 million and 157 million).
  • Income above 5,000 yuan per month: 65 million people.
  • Income between 5,000 and 10,000 yuan per month: 45 million people (only 30 percent of the 65 million paid taxes).
  • Income above 100,000 yuan per year: 20 million people (only 30 percent of 65 million paid taxes).
  • Income between 100,000 and 150,000 yuan per year: 12 million people (60 percent paying at the 3 percent tax rate).
  • Income between 150,000 and 1 million yuan per year: 7.3 million people (8 million minus 700,000 whose income is above 1 million yuan).
  • Income above 1 million yuan per year: 700,000 (around 650,000) people.

Source: Aboluo, October 16, 2024
https://www.aboluowang.com/2024/1016/2116093.html

Briefings | | |   Economy/Resources

Chinese Government Spokesperson Defends Possible Further Chinese Trade Barriers Against Taiwan

Chinese state media outlet People’s Daily recently reported on comments made by a government spokesperson on the topic of measures that Beijing has taken to restrict trade with Taiwan. The below is from the People’s Daily report:

At the regular press conference of the Taiwan Affairs Office of the State Council (mainland China) on October 16th, a reporter asked: “The Ministry of Commerce recently announced that it would consider taking further measures based on the conclusions of the investigation into trade barriers with Taiwan. The Taiwan Mainland Affairs Council stated that ‘the mainland is using economic and trade relations as a political weapon to coerce Taiwan into complying with its political demands.’ What is your response to this?”

Chen Binhua, spokesperson for the Taiwan Affairs Office of the State Council, responded that the Democratic Progressive Party (DPP) authorities in Taiwan have long unilaterally restricted a large number of products from the mainland, harming the interests of relevant industries and enterprises in the mainland. Since the final conclusions of the investigation into Taiwan’s trade barriers were released, the DPP authorities have not taken any actual steps to lift trade restrictions on the mainland. Instead, they have intensified efforts to obstruct normal economic and trade exchanges and cooperation across the Taiwan Strait, harming the interests of mainland enterprises and the well-being of the people. The further measures being considered, based on the conclusions of the investigation into Taiwan’s trade barriers, are necessary actions in response to the DPP authorities’ obstinate and unrepentant behavior.

Chen Binhua further noted that the DPP authorities and “Taiwan independence” forces often label the mainland’s policies benefiting Taiwan as “United Front actions.” He emphasized that the united front has always been an important strategy of the Chinese Communist Party to win hearts and gather strength. In the new era, the CCP’s main task of the united front is to uphold broad unity and solidarity, continuously consolidate and develop the most extensive patriotic united front.

Source: People’s Daily, October 16, 2024
http://tw.people.com.cn/n1/2024/1016/c14657-40340652.html

Briefings | | |   @CS Geo-Strategic Trend

China Strengthens Cultural Ties with Indonesia’s Muslims to Change Their Views on Xinjiang

Via its program of “cultural exchange and collaboration,” Beijing has made progress in reshaping the view of Indonesia’s Muslims on Xinjiang .

China has established free Chinese language courses at the Istiqlal Mosque in Indonesia, the largest mosque in Southeast Asia. In addition, the Chinese Embassy in Jakarta invited staff at the mosque to visit Xinjiang last year. The Chinese government covered all their expenses, including airfare and accommodation, and arranged and accompanied them for all visits. This trip gave the staff a completely different perspective on Xinjiang: In their view, Xinjiang has developed much better than what the media reports, and China has granted religious freedom to the people of Xinjiang.

In 2018, Muhammadiyah and the Nahdlatul Ulama (NU), two of Indonesia’s largest Islamic organizations, publicly condemned China’s actions against the Xinjiang Uyghurs and demanded an explanation from the Chinese government. In recent years, China has actively worked with these two organizations to gain their trust. In October 2022, Indonesia, the world’s most populous Muslim-majority country, voted against having a debate on Xinjiang’s human rights issues at the United Nations Human Rights Council.

Source: VOA, October 16, 2024
https://www.voachinese.com/a/china-cultural-outreach-to-muslims-in-indonesia/7823041.html

Briefings | | |   @CS Geo-Strategic Trend Government/Politics

China’s Top 500 Enterprises Cut 314,600 Jobs in 2023

On October 15, the Hong Kong-based South China Morning Post reported that All-China Federation of Industry and Commerce, a semi-official institution, released a report stating that China’s top 500 enterprises generally have strong risk resilience. However, by end of 2023, these companies employed 10.66 million people, cutting 314,600 jobs from the previous year.

The job cutting trended continued in this year. In May, several leading companies announced layoffs. Alibaba’s mid-May financial report revealed a reduction of over 14,000 employees. JD.com laid off 12,000 employees on May 21. Lenovo Group’s financial report indicated a reduction of 7,500 employees. Li Auto reduced its workforce by 18%, amounting to at least 5,600 employees.

Source: Sound of Hope, October 15, 2024
https://www.soundofhope.org/post/845372

Briefings | | |   Economy/Resources

Xinhua Commentary: US Struggles in Rebuilding Its Manufacturing Industry

Xinhua News Agency published a commentary on the U.S.’ failing to integrate global warming efforts in bringing manufacture businesses back to China.

Recently, Boeing announced plans to cut approximately 17,000 jobs globally, which stands in stark contrast to the high demand for global aviation manufacturing. This incident reflects several issues within American manufacturing: high labor costs, a shortage of skilled technical workers, and supply chain disruptions.

Since the 1960s, the offshoring of U.S. manufacturing has sparked widespread discussion about America’s “deindustrialization.” To address this problem, following the 2008 global financial crisis, various policies were introduced to revitalize the manufacturing industry, from Obama’s “reindustrialization” to Trump’s “America First” and now Biden’s “supply chain resilience” policy.

During this process, the U.S. has pursued protectionist trade policies and “long-arm jurisdiction” measures to forcibly bring manufacturing back. These actions have led to rising production costs, pressure on fiscal expenditure, high inflation, and damage to the supply chain, resulting in further decline of already hollowed-out industries.

According to a recent survey by the Financial Times, over two years into the Biden administration’s ambitious plan to reshore manufacturing, many projects, particularly in the clean technology and semiconductor sectors, are struggling to get off the ground.

Source: Xinhua, October 17, 2024
http://www.xinhuanet.com/20241017/b99368fad2d74d4b856b4e647b3bbaff/c.html

Briefings | | |   US-China Relations