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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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China Establishes New Information Support Force, Dissolving Strategic Support Force

On April 19th, the Chinese Communist Party (CCP) dissolved the Strategic Support Force and established a new Chinese People’s Liberation Army Information Support Force. At the inauguration ceremony, CCP leader Xi Jinping stated that the Information Support Force is a brand new strategic military branch, emphasizing that it must resolutely follow the Party’s command.

According to state media reports, the inauguration ceremony began at 4pm. Xi Jinping awarded the military flag to the Information Support Force’s commander Bi Yi and to political commissar Li Wei. Xi extended congratulations from the CCP Central Committee and the CMC. Former commander Ju Qiansheng of the Strategic Support Force did not transfer to become commander of the new Information Support Force; his next move will be closely watched.

Xi Jinping instructed the new force to implement “military thought for the new era,” adhering to strategy of “building the military through politics, reform, science and technology, personnel, and rule of law.” He said that the force must focus on combat readiness, pursue system integration and full-domain support, and build a powerful modern Information Support Force.

Xi stressed absolute obedience to the Party’s command and comprehensive implementation of the Party’s absolute leadership over the military to ensure absolute loyalty, purity and reliability. He said that the force must “powerfully support operations through information dominance and joint victory.”

Li Wei vowed on behalf of the force to resolutely implement Xi’s instructions, obey the CCP Central Committee, CMC and Xi’s command, focus on combat preparedness, and loyally fulfill duties.

After the ceremony, Xi met with the Information Support Force’s leadership team.

Source: Central News Agency (Taiwan), April 19, 2024
https://www.cna.com.tw/news/acn/202404190314.aspx

Briefings | | |   Defense/Military

CNA: China’s First-Quarter FDI Fell Sharply

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, according to the latest data released by China’s Ministry of Commerce, China’s actual use of foreign direct investment (FDI) in the first quarter was 301.67 billion yuan (around US$42.5 billion), a year-over-year decrease of 26.1 percent.

{Editor’s note: The Ministry of Commerce press release mentioned several industries in China that saw year-over-year increases in FDI, as well as several foreign countries that increased their direct investment in the country. The release omitted data about which industries’ FDI contracted and which foreign countries decreased their FDI in China.} China’s accommodation and catering industry grew the fastest in terms of FDI in the first quarter, reaching 84.7 percent year-over-year growth, followed by the construction industry, which grew at 17.5 percent year-over-year. The actual use of foreign investment in the medical equipment and instrumentation manufacturing industry increased by 169.7 percent year-over-year. In the first quarter, German investment in China increased by 48 percent year-over-year. ASEAN investment in China increased by 5.8 percent year-over-year. The head of the Foreign Investment Management Department of the Chinese Ministry of Commerce explained that fluctuations in data are common. The official press release did not disclose investment figures for other countries.

Source: CNA, April 19, 2024
https://www.cna.com.tw/news/acn/202404190337.aspx

Briefings | | |   Economy/Resources Geo-Strategic Trend

China’s Three Largest Exchanges to Stop Disclosing Real-Time Trading Volume Data

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that China’s three major stock exchanges (the Shanghai Exchange, Shenzhen Exchange and Hong Kong Exchange) will stop disclosing real-time trading volume data starting in mid-May so as to reduce market volatility. The announcement has triggered concerns about downgraded data transparency in the market.

As part of the Chinese State Council’s recent market guidelines, a key effort is the tightening of control over high-frequency trading in mainland Chinese markets. The Shenzhen exchange regulator said that the move to cut real-time market data disclosures was aimed at “unifying investor practices” so as to ensure “fair access to information”.

The newly-announced exchange rules may further reduce foreign investability in China’s equity markets and restrict Hong Kong’s role as a gateway for investment into China. Since 2014, foreign investors have been allowed to invest in A-shares through the Shenzhen-Hong Kong Stock Connection and the Shanghai-Hong Kong Stock Connection. Real-time data is critical for fund managers, especially hedge funds, to measure liquidity and execute their trades in a timely fashion.

The Shanghai and Shenzhen exchanges are China’s two primary mainland stock exchanges. As of Monday, the A-shares market value on these exchanges was 71.21 trillion RMB (about US$9.84 trillion). A-shares are RMB-denominated shares of mainland Chinese companies, generally only available to trade by domestic investors and certain qualified foreign institutional investors.

Source: Sina, April 19, 2024
https://portal.sina.com.hk/finance/marketdigest/2024/04/19/814828/

Briefings | | |   Economy/Resources

BBC Chinese: New U.S. Land-Based Missile System Deployed in Philippines

BBC Chinese Edition reported on April 19th that the U.S. Army’s new land-based missile launch system, the Typhon Weapon System, was recently deployed in the northern Philippines. This is the first time this new land-based missile system has appeared in the “First Island Chain.” Medium-range missiles have a range of more than 2,000 kilometers. This means the Typhon System is able to reach China’s southeastern coastal areas, the South China Sea, and the Taiwan Strait.

Experts view this development as a warning to China and a message about the United States’ military capabilities in the Indo-Pacific region. In response to the U.S. move, Beijing immediately released a high-profile counter-signal, announcing military dialogue with Cuban military leaders.

The Typhon System has mobile combat capabilities and can be mounted on heavy transport aircraft for quick deployment. The Tomahawk missiles launched by the Typhon system have medium-range strike capabilities. This means it is capable of long-distance deep strikes against high-value targets such as command and control centers, ammunition depots, and airports. The Typhon System has a longer range than the U.S.’s Army Tactical Missile System (ATACMS).

The war in Ukraine has shown how difficult it is to attack a mobile system such as the Typhon. The system can also launch the RIM-174B Standard Extended Range Active Missile, which is able to attack both land and sea targets. This latest deployment appears to serve as a verification that the United States can quickly deploy the system to overseas military theaters.

Source: BBC Chinese, April 19, 2024
https://www.bbc.com/zhongwen/simp/world-68853532

Briefings | | |   Defense/Military Geo-Strategic Trend

China Launches Ambitious Plan to Upgrade Domestic Equipment and Boost Recycling

China is launching a large-scale initiative to promote equipment upgrades as well as the recycling of consumer goods. The government’s goal is that, by 2027, investment in 7 key industrial sectors should increase by over 25% compared with 2023 levels. The government milestones include doubling the recycling of scrapped vehicles as well as a 30% increase in recycling of used home appliances.

Officials say this push is about transitioning from foreign to domestic products.

The initiative, titled “Action Plan to Promote Large-Scale Equipment Renewal and Consumer Goods Replacement” (“推动大规模设备更新和消费品以旧换新行动方案”), was announced by the Information Office of China’s State Council on April 11th. The government will provide funding support for the initiative, but the exact amount is unclear.

China currently faces overcapacity issues, with exports accounting for much of the country’s economic growth. Shifting to domestic consumption through equipment upgrades and recycling is a potential path to addressing these issues.

The quality of Chinese-made products remains a challenge to adoption. Many Chinese companies prefer to use more expensive imported equipment; domestic products often require more maintenance and repairs, raising production costs. Some industries such as smart tech and precision machinery are still heavily reliant on foreign technology.

Currently, China has over 39 trillion RMB in fixed assets, with 28 trillion RMB comprising industrial equipment. The new action plan aims to spur economic growth through massive replacement of such fixed assets, promoting self-sufficiency and reducing reliance on foreign goods. Feasibility and efficacy of this approach remain to be seen.

Source: Radio Free Asia, April 12, 2024
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-04122024072046.html

Briefings | | |   Economy/Resources

China’s Gallium Export Restriction Sends Prices Soaring, Heightens Strategic Concerns

The price of gallium has more than doubled since China restricted exports of the metal last summer. The export controls, first announced in July 2023, were to “safeguard national security and national interests.” Demand for gallium has not fallen, as gallium is of strategic importance to the semiconductor industry.

An article from the Radio France Internationale (RFI) “Raw Materials” column notes that China’s decision to restrict gallium exports had immediate consequences. Chinese gallium exports nearly halted in August and September of 2023 before resuming at much lower volumes. In the first two months of 2024, China’s gallium exports were just over 2,700 kg, compared to over 8,800 kg in the same period during the previous year.

The supply disruptions have caused prices to skyrocket, doubling in just 8 months. In late March of 2024, gallium prices reached $575/kg in Rotterdam. Prices have spiked due to concerns over shortages and the need to replenish depleted inventories. Demand remains strong; there are no substitutes for gallium in many high-tech applications.

Currently, gallium supply remains heavily dependent on China. An IFRI (Institut Français des Relations Internationales) researcher noted that, while current prices make gallium production and refining more profitable, this may not fundamentally reshape the industry as the price surge is unlikely to be permanent.

Recognizing the strategic importance of gallium, a French working group has begun exploring Europe-based solutions. While Europe ceased primary gallium production in 2016, the BRGM analysis suggests that Europe still has the technical capabilities to address the current shortage.

Source: Radio France International, April 12, 2024
https://rfi.my/AVnv

Briefings | | |   Geo-Strategic Trend

Chinese Social Media Reaction: Overwhelming Support for Iran, Condemnation of Israel in Response to Iran’s Attacks

On Saturday, the Iranian Islamic Revolutionary Guard Corps launched missile and drone attacks against Israel. Major world powers condemned Iran’s attacks, but China only expressed “deep concern” over the escalating situation, without condemning Iran directly.

On Chinese social media, many netizens continued to express anger towards Israel and support for Iran. A Weibo post claiming “99% of Iran’s missiles and drones were intercepted” gained over 70 million views. Under a CCTV News Weibo post about the attacks, most comments opposed Israel, with some expressing doubts about the reported low numbers of casualties.

Many netizens directly expressed fury towards Israel and support for Iran. One commented “This proves that Iran is kind, humanitarian and conscientious.” Another post about Iran’s first-ever direct attack on Israel also gained over 100 million views. Comments under a Xinhua News post about the U.S. reaffirming support for Israel were overwhelmingly “anti-American” and “anti-Israel.” One user said “Keep attacking, the Chinese people support Iran.”

On less censored platforms like NetEase News, some netizens held “non-mainstream” views. One supported Israel, saying “Israel, keep winning every Middle East war! Destroy the false prophets!” Others took a neutral stance, with one saying “As China navigates global turmoil, it must focus on self-development and strengthening itself to withstand any potential crisis.”

Source: Voice of America, April 14, 2024
https://www.voachinese.com/a/china-iran-israel-attack-20240414/7569323.html

Briefings | | |   Geo-Strategic Trend

Xinhua: Establishment of Nationwide Party Committee Social Work Departments Completed

The Chinese Communist Party established a “Social Work Department” at the 20th National Party Congress. Xinhua News Agency reported that a “Conference of National Party Social Work Department Heads” was held in Beijing on February 22. According to the meeting’s announcement, all provinces have established “Party Committee’s Social Work Departments” and have begun to comprehensively fulfill their responsibilities.

A major responsibility of the Social Work Department is to “lead Party development at the grassroots governance level.” In 2024, “national social work” activities will focus on “developing and enhancing the grassroots-level governance.” It will also “ensure the Party’s comprehensive leadership over industry associations and chambers of commerce, and strengthen the Party work at national industry associations and chambers of commerce.” The plan is to make “solid progress on Party development in mixed-ownership enterprises, private enterprises, new economic organizations, new social organizations, and new employment groups,” and also to “improve the volunteer service system.”

Source: Xinhua, February 22, 2024
http://www.news.cn/politics/20240222/c7ec36396b7740acaaa8b3df2d356452/c.html

Briefings | | |   Government/Politics