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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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Nikkei Shimbun: China’s 2023 GDP Growth Was Actually Negative

Japan’s Nikkei Shimbun ran an article saying that China’s 2023 GDP numbers reported by the communist regime are likely fake. Given suspicions of data tampering by both local and central party apparatuses in China, Nikkei Shimbun put together a rough alternative estimate using three data points that have a significant impact on GDP: real estate investment, net exports, and household consumption.

  • Real estate investment accounts for about 10 percent of GDP. Adding in Chinese consumer spending on electrical products, the sum accounts for about 30 percent of GDP. In 2023, China’s real estate investment decreased by 16.7 percent compared to 2022, which could lead to a decrease of 5 percent in GDP.
  • China’s net exports (i.e. the difference between imports and exports) historically accounts for about 3 percent of China’s GDP. However, from January to November 2023, net exports decreased by 32.3 percent compared to the same period in 2022, resulting in an estimated reduction in 2023 GDP of about 1 percent.
  • Chinese officials have not publicly disclosed household consumption data, which accounts for about 40 percent of China’s GDP. Nikkei estimated this data using total retail sales to consumers, a figure which increased by 7.2 percent in 2023 compared to 2022, impacting GDP positively by about 2.8 percent.

Adding these three numbers together, the resulting estimated true change in GDP is negative 3.2 percent. Even accounting for the impact of inflation, the change in GDP should be at least negative 2 percent, significantly below the positive 5.2 percent change in GDP published by the Chinese government.

The Nikkei report urged Japanese investors in China to withdraw their funds as soon as possible.

Source: New Talk (Taiwan), January 31, 2024
https://newtalk.tw/news/view/2024-01-31/907283

Briefings | | |   @CS Economy/Resources Government/Politics

Chinese Scholar: Four Aspects of The US Global Strategy

On January 9, 2024, Xinhua News Agency hosted its 14th “Discussing World Affairs” international seminar with the theme “The Accelerating Evolution of Global Changes: Navigating China’s Diplomacy.” Wang Honggang, the Deputy Dean of the Institute of Modern International Relations of China, delivered a speech titled “Watch Out Four Aspects of the United States’ Global Strategy.” Xinhua released a 4-minutes-and-23-seconds-long video clip of his speech. Below are some translated excerpts from the speech.

“The first aspect is related to industrial policies. The Biden administration focused on the economy last year and will continue to do so this year. The U.S. economy is a hegemonic economy. Domestically, it needs to transform its industries, which means, externally, it will engage in more intense industrial competition with other countries. In the first three years, its actions were defensive, but in the fourth year, it may take more aggressive actions, such as challenging other countries’ external circulation (export) systems.

“The second change involves Russia and Ukraine, and Israel and Palestine. The U.S. politics is most afraid of being looked down by other countries. These two wars are likely to stimulate the U.S. to significantly expand its defense industry’s capacity and maybe even substantially update its military doctrine.

“The third feature is the coordination between geopolitical focal points and geopolitical hotspots. For the United States, both Eurasia and the Middle East are geopolitical hotspots, but not its geopolitical focal points. The Asia-Pacific, or the “Indo-Pacific,” is its true focus. Regarding the Northeast Asia (the Korean Peninsula) issue, the Taiwan issue, the South China Sea issue, and even the Sino-Indian relations, what strategy will the United States adopt? Will it pursue a strategy of letting it get into chaos first and then getting it under control?

“The fourth change is the cognitive warfare. With fewer resources, how can the U.S. achieve its goals? It certainly involves more covert and cost-effective operations: cognitive warfare. Through information manipulation, shaping external perceptions, disrupting opponents, and shaping favorable situations for oneself.”

Source: Xinhua, February 2, 2024
http://www.news.cn/world/20240202/6750fd70be4e462fa8821a32b318703c/c.html

Briefings | | |   Government/Politics US-China Relations

Xinhua: US Defense Companies Profit from Israel-Hamas War

Chinese state news outlet Xinhua published an article about how U.S. defense companies have benefited from the Israel-Hamas War.

“As of January 30th, Israel’s military operations in the Gaza Strip have resulted in over 26,700 deaths and more than 65,000 injuries on the Palestinian side. Additionally, around 1.9 million people have been displaced, accounting for approximately 85 percent of the total population in Gaza.

“On the other side of the world, major U.S. defense contractors released outstanding financial reports for the fourth quarter and the full year of 2023. Raytheon Technologies reported sales of nearly $20 billion in the fourth quarter, with a 10 percent increase from the same period last year. Lockheed Martin also performed exceptionally well, with net sales in the fourth quarter of 2023 far exceeding market expectations, reaching $18.9 billion, an increase of $2 billion from the previous quarter. Moreover, Lockheed Martin, Raytheon, and General Dynamics all indicate record levels of unfilled orders, suggesting strong growth potential in the near future.

“According to data from the US State Department, the amount of military equipment sold by the United States overseas increased by 16 percent in the 2023 fiscal year, reaching a record $238 billion.

“Behind this stark contrast lies the blood-stained profit chain of the U.S. military-industrial complex: defense contractors funding congressional members to achieve personal political goals; lawmakers approving massive military spending to reciprocate and profit; high-ranking officials at the Department of Defense providing a steady stream of arms contracts, profiting through the revolving door between politics and business. Research data shows that over the past decade, 55% of US military spending has ultimately flowed to defense contractors. A US think tank revealed that in 2022, US taxpayers paid an average of $1,087 per person for Pentagon contractors, while the average per capita tax expenditure for U.S. basic education was only $270.”

Source: Xinhua, February 1, 2024
https://app.xinhuanet.com/news/article.html?articleId=cc059649d832d8b766aad7d1bb90d631

Briefings | | |   @CS Defense/Military US-China Relations

Israel Changed from Pro-China to Anti-China During the Israel-Hamas War

Israel had a good relationship with Beijing for the past several decades. It provided many advanced technologies to China, and it seldom criticized the Chinese Communist Party (CCP) for its human rights crimes. For example, Israel provided China with military drone technology and air-to-air missiles. It also shared its fighter jet IAI Lavi with China, leading to the development of China’s own J-10 fighter jet.

However, Beijing decided to take a pro-Hamas position in the Israel-Hamas War, keeping to its anti-U.S. ideology. In doing so, Beijing alienated Israel.

On January 23, when the United Nations reviewed China’s human rights record, Israel’s representative stated that the Israeli government is watching developments in Xinjiang and is monitoring the Uyghur human rights situation there. The representative called for China to take measures to improve its human rights record.

Xinhua followed up by publishing an article to counter Israel, saying that “calling attention to China’s human rights record is ridiculous and a ‘double-standard'” since Israel has been killing civilians and creating a humanitarian disaster in the Gaza Strip.

Source: Epoch Times, February 2, 2024
https://www.epochtimes.com/gb/24/2/1/n14171594.htm

Briefings | | |   @CS Defense/Military Geo-Strategic Trend

China Hacks and Leaks Confidential Japanese Diplomatic Cables

Japan’s Kyodo News reported that in 2020 China conducted a cyberattack on the Japanese Ministry of Foreign Affairs’ system for exchanging diplomatic messages with foreign embassies, resulting in classified information being leaked. The messaging system, called the “International IPVPN,” operates on a virtual private network separate from the general internet. Leaks of confidential diplomatic communications are extremely rare.

At a press conference, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said he could not answer questions about the cyberattack due to information security issues. He also said that he was unaware of any classified information from Japan’s Ministry of Foreign Affairs having been leaked.

The compromised diplomatic messages include sensitive reports and instructions exchanged between the Ministry’s headquarters and embassies abroad. They may have also contained private information that Japan collected regarding foreign governments. The Japanese government has not disclosed the extent of the leak, the specific contents of the messages, or how the attack was discovered.

The hacking demonstrates the increasing importance of cyberspace as a theater for espionage and geopolitical confrontation. Japan’s diplomatic communications likely contain valuable intelligence for other countries seeking greater influence in the region. The Japanese government’s lack of transparency around the attack makes it difficult to assess the full implications of the incident, however. Going forward, Japan’s government plans to make a top priority of bolstering cybersecurity in its confidential diplomatic relations with strategic partners.

Source: Kyodo News, February 5, 2024
https://china.kyodonews.net/news/2024/02/5147b37c47db–.html

Briefings | | |   Geo-Strategic Trend

Chinese Commercial Spaceflight Industry Poised for Liftoff Despite Lagging 10 Years Behind SpaceX

China’s official state news agency Xinhua has published a long article on the country’s commercial spaceflight industry.

The Chinese rocket industry saw significant growth in 2023. Twelve out of thirteen rocket launches by private companies reached orbit successfully, a record among the 8 years that private rocket companies have been operating in China. However, there still remains a gap between these Chinese companies and SpaceX, which launched 96 times in 2023. SpaceX also dominates in terms of launch mass, accounting for 80% of the 2022 global total. Experts estimate China’s commercial space industry lags SpaceX by about 10 years.

Looking forward, China’s private rocket companies are poised to accelerate development. The central government’s fourteenth 5-year plan puts a strategic focus on commercial aerospace. Multiple commercial companies like i-Space and Blue Arrow are aiming to launch reusable liquid-fueled rockets capable of dramatic cost reductions by 2025. The future holds huge demand for satellite launches, with China Satellite Network Group Co planning a constellation of 13,000 satellites. Further policy and financial support for the industry is expected as well.

Financing remains a current bottleneck for the industry, as innovation within the industry requires costly continuous testing and design and iteration are required. Local governments are now the main investors in commercial spaceflight companies. The industry also hopes to tap public capital markets for funding.

China’s economic work conference specifically called out commercial space as a strategic emerging industry. Experts foresee strong momentum for China’s commercial space industry in the next few years as companies move toward mature reusable rocket technologies. Key players are concentrated in Beijing, which aims to build a strong base for the industry centered around China’s Economic Development Zone.

Source: Xinhua, January 24, 2023
http://www.xinhuanet.com/20240124/4dd09cfced3d4931aee94c0e0ca2ef44/c.html

Briefings | | |   Defense/Military

Chinese Tech Giants Ramp Up Lobbying in Face of US Government Scrutiny

Chinese tech companies like TikTok and SHEIN have rapidly increased their spending on lobbying efforts within the United States. TikTok’s parent company ByteDance spent $8.74 million on lobbying in 2023, a 77% increase over the previous year. SHEIN spent $2.12 million in 2023 on lobbying, a 760% increase. The moves come as the U.S. government ramps up scrutiny and rhetoric targeting the companies amid broader U.S.-China tensions. The statistics on lobbying expense come from mandatory disclosure reports that the companies filed with Congress. TikTok and SHEIN aim to expand in the massive U.S. consumer market as growth slows at home in China.

TikTok now has 170 million U.S. users, gaining popularity despite previous bans. An e-commerce feature was added to the platform in 2023. TikTok’s lobbying focuses on pushing back against bills in Congress that would restrict the company’s U.S. business or ban use on government devices. Starting after U.S. regulator discussion of a possible ban in 2020, TikTok has grown its lobbying staff to about 14 people. TikTok lobbying was likely successful in slowing momentum for a ban as public opposition fell.

SHEIN lobbies on apparel, e-commerce, and trade controls. The company reportedly hired a former U.S. Trade Representative employee to argue SHEIN’s economic benefits to Congress as the company plans a U.S. IPO. Some in Congress claim that SHEIN uses a customs loophole to sell goods that have been produced with forced labor.

Both companies aim to expand within the U.S. while facing more scrutiny over data and economic security.

Source: Nikkei, February 2, 2024
https://zh.cn.nikkei.com/china/ccompany/54759-2024-02-02-10-55-24.html

Briefings | | |   US-China Relations

Chinese Stock Investors Vent Frustration in Comments on US Embassy Weibo Posts

The Chinese stock market has been continuously declining since mid-2023, reaching new lows as the Shanghai Composite Index fell below 2,700 points on February 2nd. Many investors who suffered heavy losses flooded the comments section on the official Weibo account of the U.S. Embassy in China, venting their frustration or imploring the United States to take over the Chinese stock market. (Weibo is a Chinese social media platform)

A large number of pleas from Chinese stock investors flooded a U.S. Embassy post titled “Science and Technology Help Researchers Protect Giraffes by Increasing Awareness”:

  • “Do you want to protect me? Giraffes are life forms, but so am I.”
  • “Anyway, (the Chinese officials) eventually will take our money (from the stock market) away and immigrate to your country. How about we give you the money directly? Otherwise they will charge us processing fee (in addition).”
  • “We know they are lying, and they know they are lying. They know we know they are lying, and we know they know we know they are lying. But they still keep lying. Can you tell me which ‘glorious era’ this description refers to?”

On the same day, a post by the U.S. embassy titled “Joint Statement on the Third Anniversary of the Military Coup in Myanmar” was flooded with messages from Chinese stock investors asking for help from the U.S.:

  • “America, please come and rescue the hundreds of millions of A-share investors in deep trouble.”
  • “Save the poor Chinese stock investors. I love America.”
  • “I beg the United States to save A-shares.”
  • “America, the Earth needs you! It desperately needs you! God bless America.”
  • “Whoever treats us well, we will love them.”
  • “I love the United States of America.”
  • “The official media doesn’t let us speak. I come here to request rescue.”
  • “Before trading stocks, I was very patriotic.”
  • “Trading stocks has brought hatred to our country. It’s also tragic.”
  • “Get rid of the China Securities Regulatory Commission!”

Source: Epoch Times, February 3, 2024
https://www.epochtimes.com/gb/24/2/3/n14172430.htm

Briefings | | |   @CS Economy/Resources Social Stability