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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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Chinese Automobile Industry Under High Downward Pressure

Currently, China’s main strategy to boost its economy is to increase domestic consumption, with housing and automobiles being the two main drivers. However, a recent report on the well-known Chinese news site Sina painted a dismal picture of the country’s auto industry.

The report covered the newly published 2023 ranking of China’s Top 100 Auto Dealer Groups. It also included a 2022 report pointing out that China’s auto market is facing big changes. Auto dealer groups are facing the pressure of both transformation and the impact of channel changes. The 2022 report shows that the dealers’ annual profitability was disappointing due to factors including COVID, the decline in demand for transportation, loss of talent, and increased customer acquisition costs. Among all dealers, only 29.7 percent made a profit. This was almost half of the number when compared with the 53.8 percent which profited in 2021. Dealers suffering losses accounted for 45.2 percent, an increase of 27.7 percentage points compared to 2021. Only 25 percent of dealers broke even and three percent suffered a decrease when compared to a year ago. According to the 2022 financial report, out of 11 publicly listed dealer groups, only three have achieved a positive growth in revenue, only two had a positive growth in profit, and only one had both revenue and net profit growth. The downward pressure on the auto market is still great, and the signs of recovery have not yet appeared. Sluggish consumer spending has been the biggest sourced of downward pressure in the auto market. As for new energy automobiles, although the market size continues to grow, most new energy car companies are selling at a loss.

Source: Sina, May 29, 2023
https://finance.sina.com.cn/tech/roll/2023-05-29/doc-imyvnaav5155518.shtml

Briefings | | |   Economy/Resources

BBC Chinese: Mainland Poll on Taiwan Militarily Reunification

BBC Chinese recently reported that the well-known periodical Journal of Contemporary China published the results of a poll of nearly 1,800 Mainland Chinese citizens regarding the military reunification of Taiwan. According to the poll results, 55 percent of respondents expressed support for Beijing’s military reunification of Taiwan and 33 percent disagreed with the use of force. Only 1 percent expressed their desire to launch a war against Taiwan immediately. Studies of Mainland people’s views on cross-Taiwan-Strait issues, due to the political sensitivity of the topic, have been rare. The most important finding of this latest poll was that people in Mainland China are relatively willing to consider different means to solve the Taiwan issue besides military force.

The results of the study show that the military approach did not enjoy overwhelming support among the respondents. At the moment when the situation across the Taiwan Strait is tense and the relationship between the United States and China is not harmonious, the poll has aroused attention.

Some observers outside of China have raised some concern over the results of the survey. Consider that 55 percent, more than half of the respondents, support military action against Taiwan. Thus, even if China were to suddenly become a democracy, Taiwan might still be under threat. It is surprising that 22 percent of the respondents agreed that the two sides of the Taiwan Strait do not necessarily need to be unified. The poll also found that older, male, and highly educated respondents were more supportive of the use of drastic measures, including the military. This Research poll was conducted via an online opt-in panel. The sample respondents were from all across mainland China, ranging across different ages, incomes and genders. The survey was conducted between the end of 2020 and the beginning of 2021. A total of more than 2,000 questionnaires were collected.

Source: BBC Chinese, May 30, 2023
https://www.bbc.com/zhongwen/simp/chinese-news-65745337ight

Briefings | | |   Defense/Military Geo-Strategic Trend

Chinese Manufacturing PMI Continues Decline in May

Xinhua recently reported that the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing jointly released China’s May Manufacturing Purchasing Managers Index (PMI) data. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 percent typically reflects business contraction.

The May manufacturing PMI was 48.8 percent, down 0.4 percentage point from the previous month. Statistics show that both production and demand have slowed down. In May, the production index and new order index were 49.6 percent and 48.3 percent respectively, down 0.6 and 0.5 percentage point from the previous month. Chinese market demand for manufacturing is still short, and the release of production capacity is restrained. The raw material inventory index was 47.6 percent, a decrease of 0.3 percentage points from April, showing continued decline in the manufacturing industry’s main raw material inventory. The employment index was 48.4 percent, a decrease of 0.4 percentage point from April, indicating the end of the post-COVID employment boom in manufacturing enterprises. The PMI of large enterprises was 50 percent, 0.7 percentage point higher than the previous month. However, the PMIs of medium and small enterprises were 47.6 percent and 47.9 percent respectively, down 1.6 and 1.1 percentage points from the previous month — the prosperity of small and medium-sized enterprises was still weak.

Sources:
(1) Xinhua, May 31, 2023
http://www.news.cn/fortune/2023-05/31/c_1129658686.htm
(2) Chinese National Bureau of Statistics, May 31, 2023
http://www.stats.gov.cn/sj/zxfb/202305/t20230531_1940267.html

Briefings | | |   Economy/Resources

State Media: China Spearheads Four-Country Joint Patrol of Gulf Region

An article posted in Chinese media suggested that China is leading the efforts to form a new maritime patrol in the Persian Gulf.

The article stated:

China is leading the coordination on forming a new joint patrol in the Persian Gulf. Four countries – Iran, Saudi Arabia, the United Arab Emirates, and Oman – are in discussion to establish a mechanism to defend the safety of navigation in the region.

On contrary, the Combined Maritime Force (CMF), a 34-country patrol group that the US created in the region, is in limbo. The United Arab Emirates recently quit the group and joined the China-led group, as the UAE was disappointed with the US actions. Clearly, the Gulf countries place more value on China’s peace efforts than on those of the US.

If the four-country group works, the US CMF will collapse. The Gulf region is not a place to allow the US to keep messing things up.

Source: Net Ease, June 2, 2023
https://www.163.com/dy/article/I67NK4BQ0515D8SH.html

Briefings | | |   @CS Geo-Strategic Trend

State Media: “As Expected, China Did not Indulge the US, It Rejected Meeting of Defense Ministers”

A Chinese media commented that China has rejected U.S. Secretary of Defense Lloyd Austin’s request to meet with China’s Defense Minister Li Shangfu as not to “spoil” the U.S. (as one might spoil a child).

The article stated:

Why did China reject the meeting request? The U.S. should reflect on itself. In the past year, the U.S. created many frictions and caused Sino-U.S. relations to hit rock bottom. The U.S. has maliciously speculated about China’s military threat to the U.S., continued to impose malicious sanctions on China, and even embarrassed China in the diplomatic field. It wants to restore high-level communication, especially on military matters, to avoid misjudgments by either side that might lead the two countries into military conflict. This is for the U.S.’s own interest – so that it can continue its military surveillance and border provocation and not to worry about getting its military into danger.

Not removing the sanction on Li Shangfu is another reason for China to reject the meeting.

Since 2021, China has rejected or not answered more than 10 requests initiated from the U.S. Department of Defense on key leadership contact. The U.S. should look at itself for reasons – it has unshirkable responsibility for damaging the relationship between China and the United States.

Source: Net Ease, May 30, 2023
https://www.163.com/dy/article/I5VL0HNG05562BTO.html

Briefings | | |   @CS US-China Relations

Chinese Marine Police May Begin Arresting Foreign “Offenders”

China passed the Provisions on Procedures for Marine Police Agencies to Handle Criminal Cases on May 15. The law will be in effect starting on June 15. There are concerns over whether China will use this law to arrest citizens of other countries in the disputed waters of the South China Sea.

Article 15 stated:

For maritime criminal cases occurring outside the territory of the People’s Republic of China (PRC), the jurisdiction shall be determined in accordance with the following principles:

(3) If a foreigner commits a crime against the state or a citizen of the PRC in waters other than the territorial waters of the PRC and is punishable under the Criminal Law of PRC, he is under the jurisdiction of the marine police agency of the place where the foreigner landed, entered, or resided after entering, the jurisdiction of the marine police agency of the place where the victim resided before leaving the country or currently resides, or the jurisdiction assigned by the Chinese Maritime Police Bureau if he has not entered the country and there is either no victim or the crime is against the state of PRC.

(4) For crimes under international treaties created or participated in by PRC and within the scope for the PRC to exercise criminal jurisdiction under the treaty obligations, the jurisdiction is the marine police agency of the place where the suspect was apprehended or the place he landed or entered.

Source:
1. Epoch Times, June 1, 2023
https://www.epochtimes.com/gb/23/6/1/n14007942.htm
2. Peking University Law Library, May 2023
https://law.pkulaw.com/chinalaw/bc12742e184847e1bdfb.html

Briefings | | |   Geo-Strategic Trend

The Wuhan Government Publicized Debtor Names in the Newspaper to Collect Debts

To collect money back from its debtors, on April 26, the Finance Bureau of Wuhan City, Hubei Province, published a full-page debt collection announcement in the Yangtze River Daily (the primary local newspaper in Wuhan).  The announcement listed 259 debtors and their unpaid balances as of the end of 2018. The debtor list included Finance Bureaus at the city’s districts, research institutes, state-owned enterprises, listed companies, and a few private enterprises. The amount each one owed ranged from ten thousand yuan to over ten million yuan, with the total exceeding 100 million yuan (US $14 million).

Wuhan city’s fiscal income in 2020 was 123 billion yuan, down 21.3 percent from 2019 (pre-COVID time). It recovered  158 billion yuan in 2021. The amount came down slightly to 151 billion yuan in 2022. Income in the first quarter this year was 50.8 billion yuan, down 8.5 percent from a year ago.

The debt that Wuhan city is publicly collecting is relatively small compared to Wuhan’s fiscal income, but the act of public debt collection revealed that the city is in such a poor financial situation that it had to resort to a harsh solution. Another issue was that China’s Ministry of Finance required each local government to clean (take back) all money it lent out prior to 2018.

Sources:
1. Central News Agency (Taiwan), May 30, 2023
https://www.cna.com.tw/news/acn/202305300260.aspx
2. China Digital Times, May 30, 2023
https://chinadigitaltimes.net/chinese/696630.html

Briefings | | |   Economy/Resources Government/Politics

China’s War Simulation: 24 Hypersonic Missiles Will Completely Annihilate the Ford Aircraft Carrier Strike Group

Both the South China Morning Post and China Finance Information reported the war simulation result published on the Journal of Testing Technology (测试技术学报). Cao Hongsong’s research team at North Central University conducted 20 rounds of digital war simulation exercises. In each round, China fired 24 hypersonic anti-ship missiles and was able to sink an average of five or six U.S. ships including the USS Ford aircraft carrier, effectively destroying the entire aircraft carrier strike group.

North Central University is a second-class national confidential unit. It is jointly owned by Shanxi Province, the Ministry of Industry and Information Technology, and the National Defense Science and Industry Bureau. The Journal of Testing Technology is a journal jointly run by the university and the China Military Industry Association.

The simulation fired two types of hypersonic missiles: Category A with 2,000 km range and Category B with 4,000 km range. China’s attack came in three waves from six launching bases. The first wave had 8 Class A missiles, mainly to deplete U.S. SM-3 interceptors. The second wave, the main attack wave, contained 8 Class B and 2 Class A missiles and sank the U.S. aircraft carrier and cruisers. The third wave consisted of six Class A missiles to sink the remaining U.S. ships.

Source: Sohu, May 26, 2023
https://www.sohu.com/a/679199532_121432636

Briefings | | |   @CS Defense/Military