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

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After Li Keqiang’s Death, Chinese Communist Party Bans Unofficial Memorial Activities

After the death of former Chinese Premier Li Keqiang, Chinese authorities have moved to prevent protests and unrest. Internet searches for Li Keqiang have been restricted to only return content from official news sources. Many universities received orders prohibiting gatherings and limiting memorial tributes. By the evening of Li’s death, some people had visited Li’s former residence to lay flowers.

The news of Li’s death was announced October 27 and quickly trended online. However, despite 2.24 billion reads on Weibo, only 609,000 comments remained on the Weibo post, showing self-censorship. Only condolences appeared in comments; other posts were deleted. Official accounts disabled comments. Foreign embassies’ condolences were also blocked. On WeChat and Baidu, only official media appeared in searches regarding Li Keqiang.

Messages showed several universities were ordered to ban student gatherings honoring Li. Notices from Shanghai Jiaotong and other schools ordered monitoring of memorial activities, banning gatherings, and reporting to authorities. The Hainan University Student Union was told student leaders could only repost the official obituary with the text “In Memory of the Former Premier.” Online or offline group memorial activities were prohibited.

When former leader Hu Yaobang died in 1989, gatherings to mourn him led to demands for democratic reforms and eventually the Tiananmen Square protests. Chinese authorities aim to prevent any similar unrest after Li Keqiang’s death through censorship and banning public memorials.

Source: Central News Agency (Taiwan), October 27, 2023
https://www.cna.com.tw/news/acn/202310270339.aspx

Briefings | | |   Social Stability

Sing Tao: Nomura Re-examines Its China Strategy

Primary Hong Kong news media Sing Tao News Group recently reported that leading Japanese securities firm Nomura is re-examining its Shanghai joint venture strategy as its business losses in China continue to worsen. The firm’s subsidiary Nomura Orient International Securities (NOIS) has followed the lead of Morgan Stanley and Goldman Sachs in terms of its shrinking footprint in China: management reorganization and layoffs have occurred, and many employees have resigned. In the meantime, Nomura has cut loose about 10 Hong Kong-based investment bankers, including some who focused on China-related deals. The Hong Kong layoffs were announced very recently and affected both junior and senior bankers, including managing directors and executive directors. Kenji Teshima, chairman of Nomura’s China Business Committee, said that now is a good time to review and re-evaluate the business.

China’s Zero Covid restrictions during the pandemic seriously affected the business’ expansion during that time. More recently, the market environment has undergone major changes that affect Nomura’s operation in China. The profitability of NOIS has continuously deteriorated since its establishment at the end of 2019.

According to available documents, the losses of NOIS more than doubled last year. Although the organization’s client list and assets under management continued to grow, successive years of losses have caused concerns among Nomura’s partners. Moreover, many department heads working for NOIS have resigned since the beginning of this year, including the heads of wealth management, compliance and risk management.

Source: Sing Tao, October 26, 2023
https://std.stheadline.com/realtime/article/1960012/

Briefings | | |   Economy/Resources Geo-Strategic Trend

China Quickly Removes the Word “Emigrate” from Search Rankings

According to a recent report by Taiwanese news site NewTalk, there was a recent surge of search volume for the word “emigrate” on China’s top social media network WeChat. Volume surged by 1,156 percent, with an astonishing 510 million searches in one day. A few days later, the term “emigrate” (移民, also translated as “migrate”) was directly deleted from the WeChat Index, demonstrating China’s authoritarian control and the fear it has of its own people.

WeChat’s search index, based on big data collected by the company, represents the change in popularity of a certain keywords on WeChat. As early as when China first implemented the Zero Covid policy, many people began searching for terms related to emmigration, and the keyword’s popularity in WeChat increased rapidly, exceeding 100 million searches. Later during the White Paper Protests near the end of 2022, people’s desire for physical mobility became even stronger, with the WeChat Index recording 116 million searches. China’s economic difficulties have led to more and more Chinese people being dissatisfied with their living conditions.

Although the Chinese authorities attempted to remove terms related to migration from the supported vocabulary of WeChat’s hot-search system, this amounts to nothing more than an act of self-deception; the population’s dissatisfaction with the government will not disappear just because the word “emigrate” has been deleted from the search index.

Source: Newtalk, October 25, 2023
https://newtalk.tw/news/view/2023-10-25/893847

Briefings | | |   Information/Technology Social Stability

China News: China National Data Bureau Open for Business

China News recently reported that the newly established China National Data Bureau officially opened for business on October 25. Below are some key excerpts from the article:

The main responsibilities of this ministry-level organization are to promote the construction of data infrastructure systems, to coordinate the integration, sharing, development and utilization of data resources, and to establish Digital China, Digital Economy, and Digital Society.

Data has been playing an increasingly important role in China’s national economic and social development. Data as a critical resource should be managed by a central ministry. At present, the scale of China’s digital economy has developed significantly. In 2022, it has reached RMB 50.2 trillion (US$6.86 trillion), accounting for more than 41 percent of the Chinese GDP, and the total volume ranked second in the world.

The Bureau will focus on improving China’s data infrastructure, which is still “hard infrastructure” based on traditional information network infrastructure and digital infrastructure designs. However, based on the characteristics of the industrialization of data elements, the second “soft infrastructure” level should include well-coordinated standards, specifications, tools, etc. This is a key point in entering the data digitization stage. More importantly, for certain industries where the data scale is relatively large, the data quality is relatively high, and the data potential is relatively rich, a data space must be established to form a new data infrastructure from bottom to top, to support the industrialization of data use.

Source: China News, October 27, 2023
https://www.chinanews.com.cn/gn/2023/10-27/10101575.shtml

Briefings | | |   Government/Politics Information/Technology

Chinese Companies Stocked Up as US Chip Export Controls Tighten

On October 17th the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an announcement expanding the scope of controls on the export of advanced computer chips to China. This action directly affects semiconductor giant NVIDIA’s sale of “special edition” A800 and H800 chips to China and other regions. The expanded export controls also restricts Dutch ASML from exporting certain machine models to China. Additionally, it added Chinese companies Biren Technology and Moore Thread and their subsidiaries to the “Entity List” to restrict export to them.

Many Chinese Artificial Intelligence (AI) startups have already acted to stock up on chips prior to the ban. Through various channels such as service providers, middlemen, and foreign trade agents, these Chinese companies are trying to prevent their previous orders from being cancelled while exploring avenues for obtaining additional chips in the short term.

Market research firm Counterpoint estimated that Chinese companies are now lagging behind global counterparts by about 2.5 to 3 years in fields like generative AI. According to Counterpoint, chip acquisition is not the sole factor driving this lag. The gap between China and its global counterparts is expected to widen over the next few years.

Source: Central News Agency (Taiwan), October 23, 2023
https://www.cna.com.tw/news/acn/202310230203.aspx

Briefings | | |   Economy/Resources US-China Relations

Eighteen Provinces Issue Special Bonds Totaling 840.4 Billion Yuan Over Seventeen Days

China’s provincial governments have accelerated issuance of special refinancing bonds since the beginning of October. These special refinancing bonds are used to repay existing debt, including settlement of government arrears to businesses. Beijing gave the green light to issuance of such bonds so as to mitigate risks associated with local government debt.

On October 9th, Inner Mongolia became the first province to issue special bonds this year. According to local disclosure records regarding special bond issuance, the total issuance of local special bonds reached approximately 840.4 billion yuan (US$ 115 billion) within 17 days. Yunnan, Inner Mongolia, and Liaoning are the top three issuing provinces, with each issuing over 100 billion yuan in special bonds.

During the three years leading up to this wave of special bond issuance, there were two prior waves of special bond issuance by local governments. Both prior waves were longer in duration than the most recent 17-day wave. The first wave occurred over 10 months and amounted to about 627.8 billion yuan and the second one, 9 months in duration, totaled 504.2 billion yuan of issuance.

Source: Security Times (China), October 19, 2023
http://www.stcn.com/article/detail/1008629.html

Briefings | | |   Economy/Resources Government/Politics

Local Government Positions for Chinese Officials’ Children Educated Abroad?

Recently, many local governments have announced government positions hiring Chinese students who obtained degrees from certain qualifying foreign universities. For example, Beijing will selectively hire individuals who have obtained degrees between August 1, 2022, and July 31, 2024 from overseas universities ranked within the top 100 in the world (based on the 2023 Academic Ranking of World Universities by ShanghaiRanking).

Chinese college graduates have been facing a tough job market for years. Moreover, many local governments have struggled to pay their employees on time as they face big fiscal deficits. Chinese netizens have charged that these new government positions are intended to provide jobs to officials’ children who have studied overseas and then returned to China.

Source: Aboluo, October 22, 2023
https://www.aboluowang.com/2023/1022/1968901.html

Briefings | | |   Economy/Resources Government/Politics

Opinion: Chinese Youth Have No Opinions, They Just Follow CCTV Ideology

A a post on Chinese website Zhihu argued that Chinese youth do not have opinions of their own; their opinions are solely based on what the Chinese Communist Party’s mouthpiece China Central Television (CCTV) has taught them. The posting was removed by internet censors. The following translation is based on a copy of the post published to Twitter:

In the Russia-Ukraine War, why do most Chinese people support Russia? In the Israel-Hamas conflict, why do most support Hamas? In pandemic control, why did most people support the zero-COVID approach? The conclusion is the same in all cases: most people are “the New Youth” or “the CCTV Youth.” They believe whatever is said on CCTV. In reality, they don’t [really] support Russia, Palestine, or the zero-COVID approach; they’re simply supporting the CCTV’s news broadcast.

[Back in 2022] these people supported the zero-COVID policy and even had a full-scale online fight against those who suggested alternatives such as “coexistence with the virus.” But when CCTV announced that zero-COVID controls would be lifted and society would open up, what happened? Nothing! The zero-COVID policy supporters held no protests, they did not argue in favor of the policy, and they did not have any inclination to fight for it. There was no resistance at all. Those people did not dare to have an opinion [different from what was on CCTV]. So, in reality, China does not have pro-Russia camp, a pro-Hamas camp, or a zero-COVID camp; these positions are all temporary. The only dominant camp is the “CCTV Youth” camp.

Source: Twitter @zhanglifan, October 22, 2023

Briefings | | |   @CS Geo-Strategic Trend