China preps for clampdown on financial crimes with new version of anti-money-laundering law;Nuctech raids leave Chinese businesses reeling as new EU foreign subsidies regulation shows its teeth
Joe Biden’s re-election campaign won’t stop using TikTok, despite US divestment-or-ban bill
Welcome to this issue of The China Brief. Today is April 25, 2024. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China preps for clampdown on financial crimes with new version of anti-money-laundering law
South China Morning Post
China is revising its anti-money laundering law to crack down on illegal activities such as cross-border gambling and underground banks. The revision will also bring China's practices in line with global standards as it faces stricter international scrutiny. The draft revision is currently under review by the Standing Committee of the National People's Congress. The revision will require financial institutions to establish internal control mechanisms for money laundering, carry out customer due diligence, and enhance supervision and management of anti-money laundering operations. The Financial Action Task Force will conduct its fifth review of China's anti-money laundering efforts.
Blinken's Shanghai visit sets friendly tone amid U.S.-China strains
Nikkei Asia
US Secretary of State Antony Blinken has begun a three-day visit to China to discuss issues including the country's indirect support for Russian military production and Chinese industrial "overcapacity". Blinken has emphasised the importance of people-to-people exchanges to avoid misunderstandings and improve the relationship. Differences between the two countries are expected to be highlighted during Blinken's meetings with Chinese Foreign Minister Wang Yi and possibly President Xi Jinping. China's state news agency, Xinhua, published a commentary ahead of Blinken's visit criticising American politicians' "deeply flawed" perceptions of China and US support for Taiwan.
South China Morning Post
The European Commission has conducted unannounced inspections at the offices of Nuctech, a Chinese manufacturer of airport scanning machines. The inspections were reportedly aimed at investigating whether the Chinese government provided financial assistance to Nuctech, which could have distorted the internal market. Such inspections are part of a new regulation aimed at cracking down on foreign subsidies. The Foreign Subsidies Regulation (FSR) was adopted in 2021 and has been used four times since then, with each instance involving Chinese companies. The FSR requires non-European entities to be transparent about the subsidies they receive, as European firms are subject to strict state aid disclosure rules. The European Commission can trigger the FSR during procurement processes or merger and acquisition activity, or it can investigate companies suspected of receiving state subsidies. The inspections at Nuctech have raised concerns among Chinese businesses operating in Europe, and some experts suggest that the FSR could effectively ban certain Chinese companies from the single market.
Joe Biden’s re-election campaign won’t stop using TikTok, despite US divestment-or-ban bill
South China Morning Post
US President Joe Biden's re-election campaign plans to continue using TikTok despite the president signing into law a bill that could ban the app if its Chinese owner fails to divest it. Biden's campaign will use "enhanced security measures" while using TikTok, according to a campaign official. TikTok is set to challenge the bill on First Amendment grounds.
South China Morning Post
China Investment Corp (CIC), China's sovereign wealth fund, has partnered with Bahrain-based Investcorp Holdings to establish a $1bn fund to invest in companies in the Gulf Cooperation Council (GCC) and China. The Golden Horizon Fund is the first investment by CIC in the Middle East and marks a strengthening of economic relationships between China and the GCC countries. The fund will target companies with high growth potential in sectors including consumer, healthcare, logistics and business services. The partnership was announced at Investcorp's China-GCC Investment and Business Cooperation Summit in Riyadh.
Britain and Australia call for WADA review amid China scandal
Japan Times
The anti-doping authorities of Britain and Australia are calling for a review of the World Anti-Doping Agency's (WADA) processes following its handling of failed drug tests in Chinese swimming. WADA confirmed that 23 Chinese swimmers tested positive for the banned substance trimetazidine (TMZ) before the Tokyo Games. China's anti-doping agency cleared the swimmers of wrongdoing, claiming that they had been exposed to the substance through contamination in the hotel kitchen where they were staying.
Hong Kong Dealmakers Find That Life After Banking Isn’t So Bad
Bloomberg
Hong Kong bankers who have been made redundant are reinventing themselves, with some finding new roles in the Middle East, where hiring has been strong in the past 6-18 months. Mandarin speakers have moved to Dubai and Doha, with a good understanding of deal-making in China helping those looking for work in the Gulf, said Sid Sibal, Hong Kong head of recruiting firm Hudson. Others have returned to the mainland to join retail or commercial banks. Some bankers have invested in restaurants and bubble-tea shops. Another ex-senior banker became a contractor to renovate his friends' properties. When bankers lose their jobs, some look at offers from the financial industry but are ultimately swayed by friends who urge them to take on a corporate role, said Denise Wee, a CFO of a company. Herman van den Wall Bake, a former investment banker, wanted to be his own boss and do projects that would have a positive impact. He started an eco-friendly resort in the Peruvian Andes.
Images show China harboring ship tied to Russian arms transfers
Japan Times
China is allowing a Russian cargo ship, which has been implicated in North Korean arms transfers, to anchor at a Chinese shipyard in eastern Zhejiang province. The ship, Angara, has been moving containers believed to contain North Korean munitions to Russian ports since August 2023. This development raises concerns for the United States and its allies as they attempt to cut off military and economic support for Russia.
South China Morning Post
China has urged Hungary to adopt a "more pragmatic China policy" in the European Union (EU) after it takes over the rotating presidency of the bloc in July. Chinese Foreign Minister Wang Yi made the request during a meeting with Hungary's Minister of Foreign Affairs and Trade, Peter Szijjarto. The meeting followed China's move to expand its role in maintaining peace and stability globally and Hungary's opposition to "decoupling" from China. The EU has accused China of overcapacity in green industries and has embarked on a de-risking drive targeting China's supply chain and hi-tech industries.
Chinese student jailed in US for threatening to ‘cut off hands’ of activist
Al Jazeera
A Chinese music student has been sentenced to nine months in jail in the US for threatening a fellow student at Berklee College of Music in Boston after she posted pro-democracy fliers on campus. Xiaolei Wu, 26, was found guilty of cyberstalking and threatening behavior after making a series of threats to the victim, including a promise to "chop your hands off." Prosecutors had called for a three-year sentence to send a message to Beijing that the US would not tolerate attempts by the Chinese government to silence people of Chinese descent who hold differing opinions to Beijing. Wu will be deported after completing his sentence.
China Car Show Latest: Cut-Throat Market, Expansion Plans
Bloomberg
The Auto China show in Beijing will focus on slowing electric vehicle (EV) demand, trade tensions and whether Western legacy automakers can interest Chinese consumers. Foreign companies are trying to win back market share from Chinese manufacturers, who offer tech and gadget-laden vehicles with voice commands and social media links. The stakes are high, as China is the largest car market in the world and growth is slowing. The EV industry is at the heart of growing trade tensions with the US and Europe, making the home market even more important for domestic manufacturers. Bill Russo, founder and CEO of advisory firm Automobility, said foreign automakers are not set up to compete in China's EV market. Instead, the market for gas vehicles has shrunk by 10 million units in just a few years. Chinese manufacturers such as Aion and Great Wall, the maker of Haval SUVs, are targeting Europe and other overseas markets for growth.
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