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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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Siemens Terminates Partnership with Chinese Military Company Amidst International Concerns

Siemens has terminated its partnership with Beijing Transemic Technology (北京天圣华信息技术有限公司), a Chinese company accused of using Siemens technology to upgrade Chinese military equipment. The US placed Transemic on its sanction list on June 12 for its involvement in developing supersonic weapons as well as design and manufacturing of air-to-air missiles. It was also reported that Transemic resold Siemens software to China’s defense research universities linked to the Chinese military. Siemens was initially reluctant to terminate the partnership despite negative media coverage, but the company eventually decided to end all dealings with Transemic.

The European political sphere has become more sensitive to China’s military expansion, with the President of the EU Commission warning future relations with China in sensitive high-tech areas. Germany’s Foreign Minister has also advocated for stricter controls over exports to China,
particularly for “dual-use” products with both civilian and military applications.

Source: Deutsche Welle, July 17, 2023

https://www.dw.com/zh不卖了压力山大-西门子终止与中企合作/a-66253259

Briefings | | |   @CS Defense/Military Economy/Resources

China Passed Initiative to Develop “Dual-Use for Peace and Emergency” Infrastructure

On July 14, China’s State Council Standing Committee approved a guidance opinion aimed at actively promoting “dual-use for peace and emergency” public infrastructure in 21 large and extra-large cities. Such infrastructure, according to the National Development and Reform Commission (NDRC), refers to facilities that serve as tourist spots and rehabilitation centers during normal times but can be swiftly converted into quarantine and treatment centers during significant public emergencies.

On April 18, the NDRC held an on-site meeting in Pinggu District, Beijing, to promote such facilities. Many officials attended the meeting, including officials from seven government agencies such as the Ministry of Agriculture and Rural Affairs, the National Health Commission, and the National Development Bank, as well as officials from 21 large and extra-large cities including Guangzhou, Chengdu, and Xi’an.

Source: Central News Agency (Taiwan), July 14, 2023
https://www.cna.com.tw/news/acn/202307140361.aspx

Briefings | | |   Government/Politics

Beijing Commends Covert Front, Emphasizes National Security in Rare Conference

China held a rare nationwide commendation conference in Beijing to recognize the achievements of its national security system in safeguarding sovereignty and security. Chen Wenqing, Secretary of the Central Political and Legal Affairs Commission of the Chinese Communist Party, stressed the importance of the CCP’s “covert front” work in achieving these goals.

The conference highlighted the “covert front’s” involvement in significant events, including the 1997 Hong Kong sovereignty transfer, the 2008 Beijing Olympics, the 2019 Hong Kong anti-extradition law protests, the 2021 “Operation Fox Hunt,” and the arrest of the founder of the Taiwanese National Party, Yang Chih-yuan.

The conference event took place on the 40th anniversary of the Ministry of State Security’s establishment. The last such national conference commending the national security system took place in 2015. According to a U.S. Department of Justice document, China’s Ministry of Cstate Security functions as the country’s intelligence, security, and secret police agency, akin a combination of U.S’s CIA and FBI.

During the conference, Chen Wenqing emphasized the need to modernize the national security system and confront the increasingly complex security challenges facing China. He called for the implementation of President Xi Jinping’s rule of law and overall national security principles to protect the country’s sovereignty and security.

Recent reports suggest that new arrangements have been made regarding the “covert front” work. On July 1, a revised version of China’s Anti-Espionage law came into effect, marking the first specialized legislation pertaining national security since the 20th National Congress. This indicates that China’s commitment to strengthening its national security apparatus and addressing evolving security concerns is a top priority for the CCP.

Source: Central News Agency (Taiwan), July 17, 2023

https://www.cna.com.tw/news/acn/202307170205.aspx

Briefings | | |   Government/Politics

China’s Housing Market Continues Decline, Early Mortgage Repayment on the Rise

The Chinese real estate market, particularly the second-hand housing market, is experiencing a downward trend. The city of Shanghai is leading the decline in prices.

Out of 70 major cities surveyed, 63 saw a decrease in second-hand housing prices in June. New home prices in 31 cities increased slightly compared to the previous month, but the overall downward trend is evident when considering both new and second-hand homes in key cities like Beijing, Shanghai, Guangzhou, and Shenzhen.

A report by Chinese media outlet “The Paper” reveals that less than 30% of Cina’s top 100 real estate companies achieved year-on-year growth in monthly performance this June. Nearly 60% of the top 100 companies experienced a monthly performance decline exceeding 30%, indicating a challenging market situation. The construction industry is also affected, with a significant decrease in new housing construction area and real estate development investment.

The market experienced a rebound in March and April due to pent-up housing demand from the pandemic, but it cooled off quickly afterwards. Real estate companies usually increase supply in June to boost sales, but this year the supply was at a five-year low. The concept of “early repayment” has been gaining traction in the market, with individuals choosing to repay their housing loans early due to higher mortgage rates on existing loans from previous years as well as declining investment returns from financial products. Both the early loan repayment trend and falling housing prices indicate clear downward pressure on the Chinese real estate market.

Source: Deutsche Welle, July 15, 2023
https://p.dw.com/p/4Twun

Briefings | | |   Economy/Resources

Civil Servants in Guangdong Face 25% Pay Cut

In recent days there have been widespread reports on Chinese social media that the Guangdong provincial government has announced a 25% pay cut for civil servants, sparking online debate. Although officials have not publicly responded to the reports, sources in Guangdong and other provinces have revealed that civil servant pay cuts across China are now an undisputed fact. Many netizens have commented on the above reports, urging the government to clarify whether the 25% cut is real, but officials have remained silent.

Analysts attribute these pay cuts to the collapse of local government income, which depends on revenue land sales. Government land sales have plummeted in the current recessionary environment, even falling as low as zero in some areas.

According to unconfirmed reports, the Guangdong provincial government recently held a press conference announcing the decision regarding pay cuts, confirming earlier speculation. Prior to this, several other provinces had already lowered civil service wages, including a 25% reduction in Zhejiang, 15% in Jiangsu, and 20% in Fujian. With the Guangdong news, broader civil service pay cuts seem imminent.

During more prosperous years, civil servants in economically vibrant regions enjoyed higher salaries. Some areas in Shandong have gone months without disbursing wages.

Source: Radio Free Asia, July 11, 2023
https://www.rfa.org/mandarin/yataibaodao/jingmao/gt2-07112023083235.html

Briefings | | |   Economy/Resources

UDN: Shanghai’s “City Code” to replace “Covid Health Code”

According to a recent report by United Daily News (UDN), one of Taiwan’s primary news groups, local governments across China adopted “Health Codes” to control travel during the three-year period of China’s Zero-Covid control. Although that the Chinese government’s Zero-Covid controls have now been largely lifted, the Health Code platform remains in place. Shanghai now intends to transform its city Health Code to a “City Code,” which will be integrated with public life in all aspects and become one of the region’s “social governance” tools. This move has been widely viewed by the public as strengthening the means of monitoring and controlling the flow of people.

The new City Code is critical in creating a comprehensive urban service and governance system that envisions “One person, one code,” “One company, one code,” and “One object, one code.” In Shanghai’s plan for individuals, the tracking includes monitoring of offline government services like medical treatments, rides on public transportation, visits to public tourist spots, public library visits, etc. For companies, the City Code serves will factor into scenarios such as company information disclosure, production safety, government service recommendations, government policy delivery and comprehensive supervision, etc. The City Code will combined geographic information as well as block-chain technology.

Social affairs analysts expressed the view that Shanghai’s City Code is a major expansion of the Health Code for Covid prevention, and that it is undoubtedly the authorities’ intention to strengthen the control over all aspects of people’s life. Some netizens worry that the City Code could be abused by criminals. In addition to the infringement of citizens’ privacy, people may also suffer economic losses.

Source: UDN, July 11, 2023
https://udn.com/news/story/7332/7292645

Briefings | | |   Government/Politics Information/Technology

China’s June Export Numbers Continue to Decline

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the data just released by the General Administration of Customs, the country’s export value in June 2023 decreased by 12.4 percent year-over-year in US dollar terms. Meanwhile, import value in June decreased by 6.8% year-over-year.

The June export numbers were lower than market expectations, showing the biggest drop in exports in three years. There are three main reasons behind the drop. First, the global economic downturn further weakened external demand for Chinese goods. Second, last year’s June export growth rate baseline had a sharp rise. Finally, China’s exports to the United States have declined rapidly. Analysts expect that exports in the third quarter will continue the negative growth trend.

In June, China’s exports to the United States fell by 23.7 percent year-over-year, a decline 5.5 percent larger than that of the previous month. Chinese exports to U.S. have been declining for 11 straight months. June exports to the EU fell by 12.9 percent year-over-year, a rate of decline 5.9 percentage points greater than the previous month. June exports to Japan fell by 15.6 percent year-over-year, a decline 2.3 percentage points greater than previous month. It is especially worth noting that, in June, China’s exports to the Association of Southeast Asian Nations (ASEAN), the country’s largest trading partner, fell by 16.9 percent year-over-year, an expanded decline of 1 percent from May. Meanwhile, Chinese exports to Russia grew by 90.9 percent year-over-year, with a high growth rate for four consecutive months.

Source: Sina, July 13, 2023
http://stock.finance.sina.com.cn/stock/go.php/vReport_Show/kind/lastest/rptid/742588141245/index.phtml

Briefings | | |   Economy/Resources

India Considers Banning 80 Percent of Rice Exports

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that India, the world’s largest exporter of rice, is considering a ban on all non-Basmati rice — the vast majority of the country’s rice exports. The proposed ban comes as domestic prices rise and the government wants to avoid the risk of higher inflation.

Rice prices in Asia now at 2.5-year high due to El Nino. The Indian government’s move could send already high rice prices soaring further. India’s possible export ban is expected to lower domestic rice prices, but could lead to higher global prices. Rice importers have reacted by starting to aggressively build inventories. Shares of Indian rice mills edged lower on this news.

Rice is the staple food for about half the world’s population, with Asia consuming about 90 percent of the global supply. India accounts for about 40 percent of the global rice trade. India supplies rice to more than 100 countries. Benin, China, Senegal, Côte d’Ivoire, and Togo are India’s largest buyers. According to India’s Food Ministry, rice prices in Delhi have risen about 15 percent this year and the national average price of rice has risen about 8 percent. Vietnam expects rice exports to climb to their highest level in about a decade this year, with big increases to the Philippines, China and Indonesia.

Source: NetEase, July 14, 2023
https://www.163.com/dy/article/I9J9CLEU05198NMR.html

Briefings | | |   Geo-Strategic Trend