Suddenly, Chinese Spies Seem to Be Popping Up All Over Europe; Xi shakes up China’s military in rethink of how to ‘fight and win’ future wars
The US and China talk past each other on most issues, but at least they’re still talking
Welcome to this issue of The China Brief. Today is April 27, 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.
The US and China talk past each other on most issues, but at least they’re still talking
Associated Press
US Secretary of State Antony Blinken has concluded his visit to China, having purchased albums by Taylor Swift and Chinese rocker Dou Wei at a Beijing record store. Blinken visited China in order to promote cross-cultural exchanges and understanding between the two countries, but acknowledged the divisions that exist. He warned China over issues such as overproduction of electric vehicles and support for Russia’s defence industry, while Chinese officials criticised US “meddling” in human rights and trade.
Xi shakes up China’s military in rethink of how to ‘fight and win’ future wars
CNN
China has unveiled a new military branch called the Information Support Force (ISF), as part of a major military restructuring initiative. The ISF will replace the Strategic Support Force (SSF), a branch created in 2015 to combine the Chinese military’s cyber, space, electronic and psychological warfare capabilities. The ISF will also work closely with the Cyberspace Force and Aerospace Force. The restructuring is intended to enhance President Xi Jinping’s control over the People’s Liberation Army’s strategic capabilities and to help China better utilise artificial intelligence and other new technologies for future conflicts. This announcement follows President Xi’s anti-corruption crackdown on the PLA last year. The reorganisation is expected to enhance the visibility of functions such as space, cyber and network management. The SSF was seen as an ineffective organisational format. Commentators have suggested that the ISF may be responsible for communications and network defence for the PLA.
Suddenly, Chinese Spies Seem to Be Popping Up All Over Europe
NY Times
This article discusses the recent cases of espionage on behalf of China in Europe and the growing pushback against Chinese influence in politics and commerce. Six people have been charged this week in Europe with spying for China, with two cases in Britain and four in Germany. These cases mark a significant shift in Europe's relationship with China, as both countries have historically had warm relations with Beijing. The article also mentions that the U.S. Secretary of State, Antony J. Blinken, met with China's leader, Xi Jinping, in an effort to maintain communication between the two rivals amidst escalating disputes.
Daigou were once ‘make-or-break’ for Australian brands in China – where are they now?
South China Morning Post
Daigou, or personal shoppers for Chinese consumers, have played a crucial role in helping New Zealand's a2 Milk company succeed in the Chinese market. Daigou, mainly consisting of Chinese students, tourists, and migrants, would purchase baby milk formula from Australian and New Zealand supermarkets to send to friends and family in China. However, the daigou phenomenon took a hit due to crackdowns on import tax evasion and the COVID-19 pandemic. Chinese e-commerce expanding into Western markets also impacted the daigou industry. Nevertheless, daigou have evolved into a more refined retail ecosystem, partnering with Australian and New Zealand brands to directly connect with Chinese consumers through platforms like Tmall and Douyin. Daigou were tech-savvy entrepreneurs who acted as marketing representatives and consultants for Australian brands, playing a significant role in bringing these brands into China. However, the decline in daigou has resulted in a loss of marketing power for Australian brands in China.
Former daigou have adopted various strategies to adapt to changing circumstances. Some have turned to digital-marketing consultancies to help them with product purchases, logistics, and selling events. Others have become independent "key opinion leaders" promoting products and e-commerce stores to their network of Chinese customers. As daigou fade away, New Zealand exporters are advised to consider establishing a physical presence in China rather than relying solely on e-commerce. Trade consultants suggest that having a physical presence in China allows for the development of valuable relationships and obtaining information about consumer preferences, which is vital for building brand awareness.
South China Morning Post
China has said that it will cooperate with an independent investigation into the events that led to 23 Chinese swimmers avoiding sanctions after testing positive for a banned substance. The World Anti-Doping Agency (Wada) said on Thursday it would launch an independent review led by Swiss prosecutor Eric Cottier. It would also send a compliance audit team to China to assess the nation’s anti-doping programme. Calls for an independent investigation have grown since The New York Times reported that 23 Chinese swimmers tested positive for trimetazidine (TMZ), a medication used to treat angina.
Chinese cornerstone investors are new pillars of Hong Kong IPOs and it’s not all good news
South China Morning Post
Chinese local government entities are playing a significant role in Hong Kong's stock market by acting as cornerstone investors in IPOs, according to data compiled by the South China Morning Post. Between 2023 and March 2023, government-related entities were cornerstone investors in a third of the 78 IPOs in Hong Kong, contributing 34% to the total IPO proceeds. However, some experts believe their growing presence and potential losses could be detrimental to the market. The decline in foreign institutional buyers in Hong Kong's stock market has only magnified the role of these local government entities, as they have become a pillar of strength amid the economic downturn.
China Industrial Profits Drop as Demand From Overseas Stalls
Bloomberg
Industrial profits at large-scale Chinese companies declined 3.5% in March compared to the previous year, according to data from the National Bureau of Statistics. This decline ends seven consecutive months of profit increases and suggests that the economy's stronger-than-expected growth may be difficult to sustain. Falling factory-gate prices and weak domestic demand have squeezed profit margins, leading industrial firms to focus on foreign markets. However, mounting geopolitical risks, including probes into industries such as electric vehicles and shipbuilding, could make this strategy more challenging. To counteract these challenges, authorities are under pressure to provide more fiscal and monetary stimulus. The central bank is expected to cut interest rates, and the government has announced subsidies to boost consumer spending on cars and household appliances.
South China Morning Post
China's video gaming regulator, the National Press and Publication Administration (NPPA), has approved 95 new video game titles for domestic release, including Lost Soul Aside from Sony Interactive Entertainment and Broken Land from NetEase. This is the smallest batch of titles approved by the NPPA so far in 2024, with previous months seeing 107, 111, and 115 games approved. This year, the NPPA has approved 428 domestic games and 46 foreign titles. The regulator has been stepping up the pace of approvals in an effort to restore confidence in the industry after a draft proposal in December caused a significant drop in the market value of Chinese gaming stocks.
Taiwan reports Chinese military activity after Blinken left Beijing
Nikkei Asia
China has increased military pressure on Taiwan, with 12 aircraft crossing the sensitive median line of the Taiwan Strait. The United States, Taiwan's most important international supporter and arms supplier, has stressed the importance of maintaining peace and stability across the strait. Taiwan's defence ministry said that 22 Chinese military aircraft were detected, with 12 crossing the median line to Taiwan's north and centre. China's defence ministry did not respond to calls seeking comment. Taiwan's armed forces are dwarfed by those of China's, which respond almost daily to Chinese missions. China considers Taiwan the most important issue in its relations with the United States.
How will China respond to US Navy’s shipbuilding push with South Korea, Japan?
South China Morning Post
The US Navy's plans to engage in co-production of warships with South Korea and Japan could heighten China's "wariness" over the trilateral partnership, analysts have said. US Navy Secretary Carlos Del Toro recently expressed his openness to having shipyards in South Korea and Japan assemble certain warships to boost domestic production rates. This comes as China continues to strive for global shipbuilding dominance and the US Navy seeks to collaborate with allies in order to enhance its commercial and military shipbuilding capabilities.
China-US relations: giant panda pair to take up residence in San Diego
South China Morning Post
China's giant panda diplomacy program has added two new members to its ranks, with male Yun Chuan and female Xin Bao set to be sent to San Diego under a 10-year lease. The announcement was made soon after President Xi Jinping met with US Secretary of State Antony Blinken in Beijing. The move is part of a resurgence in "panda diplomacy" between the two countries, with a similar lease signed with a zoo in San Francisco this year and talks reportedly underway with a center in Washington. China has used giant pandas as a diplomacy tool since the 1950s to strengthen ties with other countries.
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