Chinascope – Page 431

Retired General: Military Increases Spending Because China Feels Threatened

China announced that, from 2018 to 2019, its military spending will grow 7.6 percent to 1.19 trillion yuan (US$177 billion). The “Qiang Guo Internet Forum,” under People’s Daily invited Luo Yuan, a retired PLA admiral to comment on the increase in military spending. Luo said that China’s “limited defense spending” is to safeguard its national sovereignty. Some countries, who adopt a double standard, should not judge it as a “China threat.” The increase was rather because “China feels threatened.”

According to the Central News Agency, Luo said that whenever it is the time for the Lianghui (China’s “Two Sessions”), some western media stir up the “China Threat theory.” The military spending increase is solely for the purpose of safeguarding the country’s sovereignty, security, and territorial integrity and for implementing the settlement of retired military personnel and veterans; it will not pose a threat to other countries. Luo commented that the environment around China is not secure. U.S. military ships frequently enter and exit the South China Sea and the Taiwan Strait, which poses a provocation to China’s sustainable development interests. Luo said, “When some countries show off their military power at the doorstep of our family … Taiwan independence and other separatist forces are eager to move forward. … If, once the country needs it, we don’t make a few moves to win the battle, the PLA won’t live up to the ‘glorious title it has been given.” China’s military goal is to build the army into a “world-class army” but there are still gaps and pressures in these areas. China needs to have a sense of urgency and anxiety.

Source: Central News Agency, March 5, 2019
https://www.cna.com.tw/news/firstnews/201903050035.aspx

Briefings | | March 12, 2019 | Defense/Military

Largest Apple Supplier Foxconn Recorded Four Year Low on Revenue

Major Taiwanese newspaper, China Times, recently reported that Apple’s largest supplier, Foxconn, headquartered in Taiwan, just announced its February revenue numbers, which showed a month-over-month decline of 35.85 percent and a year-over-year decline of 4.39 percent. This is the lowest point in four and one-half years. Foxconn pointed out that the primary causes of the decline were the U.S.-China trade war and weak orders from Apple. According to the latest supplier list that Apple released, Foxconn remains the largest supplier with 35 manufacturing locations. Further looking into the February Foxconn report, the computing products category is still satisfactory, but consumer electronics and communications equipment were below expectations.

Source: China Times, March 8, 2019
https://www.chinatimes.com/realtimenews/20190308004618-260410

Briefings | | March 12, 2019 | Economy/Resources Geo-Strategic Trend Information/Technology

China February Exports Reached Three Year Low

BBC Chinese recently reported that China’s February total exports suffered a year-over-year decline of 20.7 percent. This is the lowest point in three years. China’s imports declined by 5.2 percent. These numbers brought down the Asian stock markets significantly. Some suggested that the numbers might be the result of the Chinese New Year. However, most economists expressed their belief that the general expectation was a decline of 4.8 percent. The reality was five times worse than the expectation. Even with the seasonal impact factored in, the official numbers were quite negative. Some researchers indicated that the U.S. Tariff is having an impact on exports to the U.S. globally. Although the U.S.-China trade talks are still on-going, yet the uncertainty kept bringing doubts to the market. Currently the global market demand is still weak. Even if President Trump and President Xi quickly reach an agreement, China’s export outlook remains very bleak.

In the meantime, according to the China Automobile Dealers Association (CADA), China’s February domestic passenger vehicle sales recorded a year-over-year decline of 18.5 percent and a month-over-month decline of 45.4 percent.

Sources:
1. BBC Chinese, March 8, 2019
https://www.bbc.com/zhongwen/simp/business-47495127
2. East Money, March 9, 2019
http://finance.eastmoney.com/a/201903091064544862.html

Briefings | | March 11, 2019 | Economy/Resources

Chinese Investment in Europe Fell Sharply

Chinese investments in EU countries are experiencing a sharp decline for the second year in a row. The combined value of completed Chinese FDI transactions in the EU fell to EUR 17.3 billion in 2018, down 40 percent from 2017 levels (EUR 29.1 billion). This represents the lowest investment level since 2014.

According to a report that the German think tank The Mercator Institute for China Studies (MERICS) and the U.S. consulting firm Rhodium Group jointly published on March 6, after the peak of EUR 37.2 billion in 2016, Chinese investments in the EU dropped to EUR 29.1 billion in 2017 and dropped further down to EUR 17.3 billion in 2018.

“The lion’s share of Chinese investment in the EU’s 28 member countries continued to go to the three biggest economies in Europe—the UK (EUR 4.2 billion), Germany (EUR 2.1 billion) and France (EUR 1.6 billion)—which received 45 percent of China’s investments in Europe.”

Despite the decline in Europe, Chinese investment in Germany has risen. Compared with 2017, China’s investment in Germany in 2018 increased by EUR 400 million. This includes China Tiancheng Pharmacy Ltd.’s acquisition of German competitor Biotest, and Ningbo Jifeng Auto Parts’ purchase of German auto parts supplier Grammer.

An important reason for the overall decline in Chinese overseas M&A is that China has continued strict capital controls and tightened liquidity, making it difficult for companies to transfer funds abroad. That European countries have increasingly strict controls over acquisitions has also increased the difficulty for Chinese companies to complete acquisitions. European countries are expected to exert stricter controls over acquisitions.

However, in the near term, the recent expansion of the US investment screening regime and the continued US–China tensions, may also boost Chinese investment in Europe.

Source: Radio France International, March 6, 2019
http://rfi.my/3kdC.T

Briefings | | March 11, 2019 | Geo-Strategic Trend

The CCP’s Political Security Faces Nine Challenges

{Editor’s Note: Since taking office, the Trump administration has adopted a new approach to China. In 2018, the U.S. announced sweeping tariffs on imports from China, which triggered an escalation into a trade war, followed by ongoing trade negotiations. Continue reading →

Reports | | March 11, 2019 | Government/Politics Opinion Report

Global Times: Huawei Suing the U.S. Government Is a Righteous Counterattack

China’s state-rum media Global Times published an editorial to support Chinese telecommunication equipment maker Huawei because it is suing the U.S. government. The lawsuit claims that the ban on the use of Huawei products by all government agencies in the United States based on the U.S. “National Defense Authorization Act of 2019” (NDAA) is unconstitutional. Huawei said that the US government has been smearing Huawei, but has never provided any evidence to support its allegations that Huawei threatens cybersecurity.

The article stated, “This is a counterattack Huawei made because of the United States’ escalating pressure and persecution. … Because the U.S. harbors ulterior motives and has an obvious political purpose in suppressing Huawei, Huawei’s prosecution is not a radical move even from the Western perspective. It has a very solid reason.

The article continued, “As long as Huawei can prove that its equipment is indeed advanced and clean, and it has done its best to dispel people’s doubts. Then if it wins the lawsuit, it shows the failure of the US government; if it loses, the prestige of the US judicial system will be swept away.”

“We support Huawei in hiring the best and most famous lawyers in the Western world to form a “dream team” for justice. Through this lawsuit, the world will see how rude and vicious the U.S. government is in suppressing the Chinese companies Huawei, ZTE, and others. As everyone knows, the U.S. crackdown on these companies reflects Washington’s loss of rationality towards China’s rise.”

“American public media institutions have concealed the truth and acted in concert with the government’s persecution.”

Source: Global times, March 7, 2019
http://opinion.huanqiu.com/editorial/2019-03/14488999.html?agt=61

Briefings | | March 10, 2019 | US-China Relations

NJ Lawmakers Oppose Sale of Princeton’s Westminster Choir College to Beijing-Owned Company

The century-old, Princeton-based Westminster Choir College, a well-respected music school, may soon be sold to a Chinese government-owned company named “Beijing Kaiwen Education Technology,” a former a steel company with no track record of music education.

New Jersey State Assemblymen Hal Wirths and Parker Space introduced a resolution, ACR 222, which calls upon the state legislature to oppose the sale because it “could jeopardize the security of United States citizens.”

With the multitude of world-class scientists, researchers, and institutions located in Princeton, the law makers are concerned that the Chinese government may be using the guise of academia to infiltrate the choir college for nefarious purposes, including the collection of United States intelligence and intellectual property theft.

“The question is, do we want a hostile communist dictatorship gaining footholds in strategic academic and scientific areas of our country?” asked Wirths. “Absolutely not!”

On June 21, 2018, the Rider University Board of Trustees announced that it had signed a US$40 million purchase and sale agreement for the transfer of the choir college to Kaiwen Education.

Source: Oriental Daily News (online), March 5, 2019
https://hk.on.cc/hk/bkn/cnt/amenews/20190305/bkn-20190305134124433-0305_00972_001_cn.html

Briefings | | March 10, 2019 | US-China Relations

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

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