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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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Lianhe Zaobao: China Further Restricts Export of Graphite Products

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that Beijing has expanded the list of Chinese-made graphite-based materials that are subject to export controls. Such products are used in the production of electric vehicle batteries, and may not be exported from China without permission.

The updated graphite export controls were published by the Chinese Ministry of Commerce and the General Administration of Customs of China. The measures “optimize and adjust the temporary export control of certain graphite products.” The controls newly included three “highly sensitive” graphite products in a dual-use export control checklist.

Spheroidized graphite, which was previously subject to temporary controls, was included in the updated list. Graphite products subject to export controls now include artificial graphite materials of high purity (99.9+ percent purity), high strength (flexural strength 30Mpa), and high density (1.73 grams per cubic centimeter), as well as derivative products of these materials. Also restricted is natural flake graphite and its derivatives (including spheroidized graphite, expanded graphite etc.).

According to the U.S. Geological Survey, China is currently the world’s largest producer of graphite, accounting for 67 percent of the world’s natural graphite supply. A spokesperson for China’s Ministry of Commerce said that “China, as the world’s largest producer and exporter of graphite, has long firmly fulfilled its non-proliferation and other international obligations and implemented export controls on specific graphite items in accordance with the need to safeguard national security and interests.”

Source: Lianhe Zaobao, October 20, 2023
https://www.zaobao.com.sg/realtime/china/story20231020-1444412

Briefings | | |   Economy/Resources Geo-Strategic Trend

China Rushing to Buy Up Wheat Via Foreign Trade

Chinese stock market news site Stock Star recently reported that China is scouring the world for wheat, with annual imports on track to hit a record high as recent heavy rains have damaged domestic crops. Wheat traders say that China has ordered large quantities of wheat in October, buying from a number of major exporters including the United States, Canada and France. The current buying spree follows high-volume wheat purchases from Australia earlier this year.

Growing wheat demand from China is adding uncertainty to supply chains that are increasingly vulnerable to war and protectionist trade policies. Chinese imports totaled a record 9.96 million tons last year as the agricultural sector shifted to use more wheat as animal feed and Chinese citizens ate more bread. China is currently competing with Egypt to become the world’s largest Wheat importer. Chinese overseas procurement volume in the first eight months of 2023 has reached 9.56 million tons, of which more than 60 percent came from Australia.

China’s summer wheat output fell by 0.9 percent this year to 134.53 million tons, the first decline in seven years. Continued rains have caused the quality of 30 million to 40 million tons of wheat to deteriorate as this year’s crops near harvest, making the grains suitable for livestock feed but unsuitable for human consumption. Much of China’s recent buying activity has resulted from these weather problems.

Source: Stock Star, October 12, 2023
https://wap.stockstar.com/detail/IG2023101300008165

Briefings | | |   Economy/Resources Geo-Strategic Trend

HKET: China Bans Mainland Chinese Investors from Opening Foreign Trading Accounts

The Hong Kong Economic Times (HKET) reported that the Shanghai Supervision Bureau of the China Securities Regulatory Commission issued a notice on September 28 requiring Chinese securities firms to stop providing new investors from Mainland China with securities trading services via Hong Kong accounts and other offshore accounts. Existing accounts held by Mainland Chinese are to be strictly monitored so as to prevent investors from bypassing China’s foreign exchange regulatory rules. This is the first time that China has explicitly limited Mainland Chinese investors ability to use foreign trading accounts.

The move serves to limit capital outflows and to support the RMB, which is facing downward pressure. The targeted offshore accounts are relatively more difficult for the authorities to control. This contrasts with cross-border trading through formally-sanctioned channels such as Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, where the authorities are better able to ensure that Mainland investors’ funds will be managed in a “closed loop,” that is, when securities are sold, the funds will immediately flow back into the RMB instead of into another currency. When Chinese investors use offshore investment accounts to invest abroad, it is more difficult for the Chinese authorities to manage the use currencies other than the RMB.

Although the new instruction does not clearly specify the implementation date, sources said that the regulatory agency’s intention is for the regulation to take effect immediately. Brokerages will need to remove apps or websites that attract Mainland customers by the end of October.

The article by HKET, which is Hong Kong’s leading financial daily paper, cited Reuters, which in turn cited four anonymous sources.

Sources:
HKET, October 12, 2023
https://tinyurl.com/55k8dwyr

Yahoo Finance Hong Kong, October 12, 2023
https://tinyurl.com/muy2tsvz

Briefings | | |   Economy/Resources Geo-Strategic Trend

Chinese Warplanes Aggressive Maneuver Near Canadian and U.S. Planes

On October 17 a Chinese military aircraft provocatively intercepted a Canadian Armed Forces Aurora aircraft in international airspace near China’s territorial waters. At the time, the Canadian aircraft was in an operation to enforce United Nations sanctions that prevent illegal transportation of oil to North Korea. The Canadian crew had identified a “suspicious vessel” that was on a watchlist.

During its eight hours of flight, the Canadian aircraft was intercepted by at least two Chinese fighter jets who flew with the Canadian plane for several hours. Chinese jet aircraft at one point came as close as 15 feet from the Canadian aircraft. The Chinese aircraft also launched multiple illumination flares in the vicinity of the Canadian aircraft.

The Washington Post reported that in the past few years Beijing has intensified these kinds of dangerous maneuvers targeting planes of the U.S. and its allies and partners. The total number of such encounters is now near 300. On October 17, Pentagon released videos and photos of some incidents, including an incident in January 2023 where a Chinese J-11 fighter jet flew about 30 feet from an American RC-135 plane and lingered for 15 minutes, and an incident in May 2022 where a Chinese fighter jet flew 15 feet laterally below a US Navy EP-3 plane.

Sources:
1. Radio France International, October 17, 2023
https://www.rfi.fr/cn/国际/20231017-加媒-中国战机以-挑衅方式-拦截加拿大军机
2. Washington Post, October 17, 2023
https://www.washingtonpost.com/national-security/2023/10/17/china-fighter-jet-dangerous-maneuvers/

Briefings | | |   @CS Defense/Military Geo-Strategic Trend US-China Relations

CCP Reduces Functions of China’s Central Bank

China’s State Council recently announced an adjustment to the structure and responsibilities of China’s central bank, the People’s Bank of China:

  1. The State Council Financial Stability and Development Committee and its office will no longer be retained. Its responsibilities will be transferred to the office of the Chinese Communist Party’s (CCP’s) Central Financial Committee. The Secretariat of the State Council Financial Stability and Development Committee, previously located within the People’s Bank of China, will be transferred to the office of the CCP’s Central Financial Committee.
  2. The daily supervisory responsibilities for financial holding companies and other financial groups will be transferred to the China Banking and Insurance Regulatory Commission.
  3. The responsibilities for establishing and improving the basic system for the protection of financial consumers will be transferred to the China Banking and Insurance Regulatory Commission.

The People’s Bank of China will reduce 30 administrative positions and 6 leadership positions at the bureau level. After these adjustments, the People’s Bank of China will have 20 internal institutions, with 714 administrative positions and 87 leadership positions at the bureau level.

Chinese news website Aboluo published an article saying that analysts believe this move reflects Xi Jinping’s increasing centralization of power in the CCP’s Central Committee over the State Council, diminishing the role of Premier Li Qiang. Also, the China Banking and Insurance Regulatory Commission is believed to be under the control of Xi’s confidant He Lifeng.

Sources:
1. China Government website, October 13, 2023
https://www.gov.cn/zhengce/202310/content_6908743.htm
2. Aboluo, October 14, 2023
https://www.aboluowang.com/2023/1014/1965621.html

Briefings | | |   Economy/Resources Government/Politics

Xi Jinping Might Have Ended the CCP’s Central Civilization Committee

New Tang Dynasty TV reported that the Chinese Communist Party’s (CCP’s) Central Civilization Committee (中央精神文明建设指导委员会), established in April 1997, has quietly disappeared. This organization was founded during the era of former CCP head Jiang Zemin. On paper, it served as a policy-making body to oversee the nation’s “spiritual and ideological development.” Its actual role was to direct ideological messaging and propaganda within the country. One of its major functions was to suppress Falun Gong, a practice of mind-and-body Buddhist-based exercises.

The committee’s member organizations included several key bodies such as the CCP Central Discipline Inspection Commission, the Central Propaganda Department, the Central Organization Department, the Central Political and Legal Affairs Commission, and the State Council General Office. The first Director of this committee was Ding Guangen, a member of the CCP’s Politburo and head of the CCP Central Propaganda Department. Subsequent directors were all members of the Politburo, including prominent figures from the Jiang Zemin era such as Li Changchun, Liu Yunshan, and Wang Huning. Following the 20th National Congress, Xi Jinping’s confidant, Cai Qi, assumed the position of director.

On October 11 the Hong Kong newspaper Ming Pao reported changes to the official website of the Central Civilization Committee. The organization listed as owning the website changed from the Central Civilization Committee to the Central Propaganda Department and the Central Civilization Office. Additionally, the full name of the Central Civilization Office was changed from “Central Spiritual Civilization Development Steering Committee Office” to “Central Spiritual Civilization Development Office,” with the “Committee” part omitted. The article noted that Cai Qi has never publicly used the title of director of the Central Civilization Committee even though he was in charge of it.

The disappearance of this committee shows how Xi Jinping is moving away from Jiang Zemin’s legacy. The CCP’s National Propaganda and Cultural Work Conference, held in Beijing on October 7 and 8 introduced the concept of “Xi Jinping’s Cultural Ideology” for the first time. This marks a new approach in the CCP’s methodology for exercising influence over culture and ideology to control the minds of the Chinese people.

Source: NTDTV, October 11, 2023
https://www.ntdtv.com/gb/2023/10/11/a103803561.html

Briefings | | |   @CS Government/Politics

China’s “Panda Diplomacy”

The Epoch Times reported that the Chinese Communist Party (CCP) has been using giant pandas for its diplomacy agenda. As Sino-U.S. relations have soured, China plans to take back three pandas on loan to the U.S. National Zoo at Washington, DC. by end of this year. If the Atlanta Zoo cannot renew its panda contract with Beijing by next year, then the U.S. will have no panda for the first time in 50 years.

The CCP started its “Panda Diplomacy” with the West in 1972 when it gifted two giant pandas to the U.S. following Nixon’s visit to China.

Scholar Kathleen Buckingham published a research paper in 2013 outlining three phases of the CCP’s “Panda Diplomacy.”

  • The first phase, during Mao Zedong’s era, involved gifting giant pandas purely for political purposes.
  • In the second phase, under Deng Xiaoping, panda diplomacy aligned with economic reforms, with China adopting a capitalistic model to generate revenue by leasing the pandas.
  • In The third phase, starting in 2008, the leasing model has leaned towards countries with free trade agreements and technology transfer agreements with the CCP. For instance, Australia, France, and Canada have received pandas after agreeing to sell nuclear technology and uranium to China. Scotland received a pair of pandas in 2011 as part of an agreement to share offshore drilling technology and supply salmon to China. In 2013, the Netherlands received pandas as they agreed to provide advanced medical services.

To attract attention and as a means of leverage, the CCP now requires foreign heads of state to personally request pandas before deciding whether to lease them.

The CCP has also been recalling pandas as a punitive tool. In 2010, two days after Beijing warned President Obama not to meet the Dalai Lama, China called back the first batch of panda cubs born in the Atlanta Zoo and the Washington National Zoo. Amid the tensions over the U.S.-China trade war in 2019, Beijing retrieved pandas “Bai Yun” and her cub and “Little Gift” from the San Diego Zoo. This year, due to the Netherlands’ adherence to U.S. restrictions on the sale of advanced semiconductor processing equipment to China, Beijing recalled the three-year-old panda “Fan Xing” from a Dutch zoo.

Source: Epoch Times, October 10, 2023
https://www.epochtimes.com/gb/23/10/10/n14091930.htm

Briefings | | |   @CS Geo-Strategic Trend US-China Relations