Blinken meets China’s Xi Jinping in effort to soothe tensions; Exclusive: Who Is Vice Chairman of CCP's Military Commission, Zhang Youxia
Blinken makes ‘baby steps’ in bid to revive US-China ties; Choose 'cooperation or conflict', China warns US; China’s New Premier Arrives in Germany for First Overseas Trip
Welcome to this issue of The China Brief. Today is June 19, 2023. 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.
Exclusive: Who Is Vice Chairman of CCP's Military Commission, Zhang Youxia
Zhang Youxia's father, Zhang Zongxun, and Xi Jinping's father, Xi Zhongxun, were both born in Weinan City, Shaanxi Province. During the Chinese Civil War, Zhang Zongxun and Xi Zhongxun served as military command partners. Due to the close relationship between their fathers, Zhang Youxia and Xi Jinping were childhood friends. Among the current members of the Politburo, Zhang Youxia is the earliest acquaintance of Xi Jinping.
Zhang Youxia, born in 1950, spent most of his life in frontline troops. He joined the army in 1968 and worked from the ground up, participating in the Sino-Vietnamese war from the late 1970s to the 1980s on the western front, distinguishing himself notably in the Battle of Laoshan. As a result of this battle experience, Zhang Youxia is one of the few senior generals with combat experience.
For more than a decade after the Sino-Vietnamese War, Zhang Youxia held positions in the Fourteenth Army and the Thirteenth Group Army stationed in Southwest China. In 2005, Zhang Youxia left Southwest China to take up the position of Deputy Commander of the Beijing Military Region and was promoted to Commander of the Shenyang Military Region two years later. In 2012, Zhang Youxia became the Minister of the General Equipment Department of the People's Liberation Army and was elected as a member of the Central Military Commission at the 18th CPC National Congress at the end of the year. At the 19th CPC National Congress in 2017, Zhang Youxia was elected as a member of the Politburo of the Communist Party of China and the second-ranking Vice Chairman of the Central Military Commission. At the 20th CPC National Congress in 2022, Zhang Youxia, at the age of 72, was exceptionally retained and was elected as a member of the Politburo of the Communist Party of China and the top-ranking Vice Chairman of the Central Military Commission, becoming the highest-ranking active duty military officer in both political and military roles.
Choose 'cooperation or conflict', China warns US
Telegraph
China's top foreign policy official, Wang Yi, has warned the US to choose between "cooperation or conflict". The statement came during talks with US Secretary of State Antony Blinken, who is on a two-day trip to China. Wang also stated that China had "no room to compromise or concede" on the issue of Taiwan. Relations between the US and China have deteriorated in recent years over trade, technology, and Taiwan. Blinken's visit is not expected to yield major breakthroughs, but is aimed at re-establishing high-level diplomatic contact between the two countries.
China’s New Premier Arrives in Germany for First Overseas Trip
Bloomberg
China’s No. 2 official Li Qiang landed in Germany on Sunday for his first overseas trip since becoming premier, as the world’s second-largest economy attempts to prevent ties with Europe deteriorating to lows reached with the US.
The Chinese premier will meet German President Frank-Walter Steinmeier, on Monday, according to the latter’s schedule. Li will also sit down with Chancellor Olaf Scholz, when he hosts the seventh China-Germany inter-governmental consultation.
Li will then head to France for talks with President Emmanuel Macron, according to China’s Ministry of Foreign Affairs. He could also have the opportunity to speak to US Treasury Secretary Janet Yellen during his time in Europe, as both are scheduled to attend a development finance summit in Paris this week.
The Chinese premier is accompanied in Europe by Zheng Shanjie, head of China’s economic planning agency, and Commerce Secretary Wang Wentao. Their absence from China may mean any announcement of expected economic stimulus is postponed until after Li’s scheduled return on Friday.
US’ ‘erroneous perception’ to blame for worsening ties, Wang tells Blinken
South China Morning Post
China's top diplomat, Wang Yi, has urged the US to "reflect deeply" and manage differences with Beijing, blaming worsening relations on Washington's "erroneous perception" of China. Wang called for the US to lift sanctions against China, stop suppressing China's technological development, and not interfere in Beijing's internal affairs. He stressed that safeguarding Taiwan's national unity is a core interest for China and there is "no room for compromise". Wang also called on the US not to misjudge China by assuming it is seeking dominance. Wang's comments came ahead of talks with US Secretary of State Antony Blinken.
Hong Kong's Cathay Pacific expands Mandarin-speaking staff
Nikkei Asia
Cathay Pacific plans to hire Mandarin-speaking cabin crew members from mainland China and increase the use of Mandarin on its flights to mainland China and international routes, according to an internal memo from CEO Ronald Lam. The move is aimed at increasing language coverage and diversity among the airline's crew community. The decision comes after three flight attendants were dismissed following a complaint from a customer whose English was ridiculed by the crew. Cathay Pacific aims to hire 3,000 new staff members this year and hopes to run flights at 70% capacity by the end of 2021.
Blinken makes ‘baby steps’ in bid to revive US-China ties
Al Jazeera
US Secretary of State Antony Blinken met with China's top diplomat, Wang Yi, in Beijing as the two countries work to improve their strained relationship. The meeting followed a similar discussion between Blinken and Chinese Foreign Minister Qin Gang, which the US State Department described as "candid, substantive, and constructive." Talks between Blinken and Wang Yi focused on increasing commercial flights between the US and China and promoting people-to-people exchanges. While the meeting is largely seen as symbolic, it is considered a positive step given the low expectations. Blinken's trip is the most senior by a US official to China since 2019 and comes after months of increased contact between US and Chinese officials. US President Joe Biden has expressed his hope to meet with Chinese President Xi Jinping in the coming months.
Goldman, UBS cut China GDP forecasts on limited room for stimulus
South China Morning Post
Goldman Sachs and UBS have cut their growth forecasts for China's economy, indicating that a large-scale stimulus is unlikely. Goldman has lowered its 2023 growth projection to 5.4% from 6%, while UBS predicts that China's economy will expand by 5.2% this year, compared to its previous forecast of 5.7%. The revisions come after China's key economic data fell short of expectations last month and the central bank unexpectedly cut two policy rates. Analysts say that more stimulus measures are needed to sustain a positive impact and restore investor confidence.
Chinese Premier visits Germany to solidify ties amid ‘chaos and changes’
South China Morning Post
Chinese Premier Li Qiang has arrived in Berlin for a state visit aimed at strengthening ties between China and Germany. Li will meet with German Chancellor Olaf Scholz and President Frank-Walter Steinmeier, as well as attending business talks and visiting companies in Bavaria. The visit comes after a meeting between Chinese President Xi Jinping and Scholz in November, during which the two leaders agreed to extend bilateral cooperation into emerging fields such as new energy and artificial intelligence. Germany recently released its first-ever national security strategy, which called China a "systemic rival".
India and the U.S. are ready to be more than just friends
Nikkei Asia
The US and India have the potential to come together and form a stronger alliance, according to Karan Mehrishi, author of "The India Collective: What India is Really All About". Mehrishi argues that India can be a gateway for the US to re-engage with the Global South and demonstrate that democracy is still relevant and worth emulating. He suggests that India needs a stable and dependable partner to enhance its security against aggression from China, and that the US can benefit from aligning closer with India and gaining support from other democratic allies.
China’s C919, large cruise liner underline China’s advanced manufacturing progress
South China Morning Post
China has made significant progress in advanced manufacturing, with the development of its first domestically produced passenger jet and cruise ship. The C919, a narrow-body passenger jet, made its maiden commercial flight at the end of May, while the Adora Magic City, a large cruise ship, left its dock in Shanghai on 6 June. These achievements are part of China's efforts to be more self-reliant in high-value-added industrial chains and gain an upper hand in the tech war with the US. However, the C919 and Adora Magic City rely on international cooperation. The C919 is composed of more than 4 million parts, many of which are sourced from overseas. Some components are subject to licences granted by the US Department of Commerce, which could put production at risk if Washington tightens export controls against China. The Adora Magic City requires a large number of parts, most of which had to be imported due to a lack of domestic experience.
Five Tools Europe Will Use to Counter China’s Geopolitical Rise
Bloomberg
The European Union (EU) is preparing to unveil its economic security strategy, which aims to protect the bloc from economic coercion by countries such as China and Russia. The strategy will outline business and security risks to the EU, policy measures to combat those risks, and options for new protective measures. The EU has been slow to realise its dependence on Russia, and when the Kremlin invaded Ukraine last year, Europe faced record inflation and an economic catastrophe. However, member states are hesitant to start a trade war with China, which is a major commercial partner for several EU countries. The EU has implemented or is considering several tools to ensure its economic security, including an anti-coercion instrument, outbound and inbound investment screening, a port strategy, and a push for trade agreements.
New Zealand PM Hipkins to visit China, meet President Xi Jinping
Reuters
New Zealand Prime Minister Chris Hipkins has announced that he will visit China from June 25 to 30. He will lead a trade delegation including some of the country's largest companies. During his visit, Hipkins will meet with Chinese President Xi Jinping, Premier Li Qiang, and the chairman of the standing committee of the National People's Congress, Zhao Leji. The discussions will cover topics such as climate change, economic stability, regional and global security, human rights, and the war in Ukraine.
24 Hong Kong-listed stocks start transactions in dollars and yuan
South China Morning Post
Hong Kong and international investors have begun using offshore yuan funds to trade yuan-denominated shares of 24 listed companies in the city, a major milestone in the internationalisation of the Chinese currency. The dual counter model allows these firms to have yuan share trading counters in addition to their Hong Kong dollar counters. The companies' shares make up 35% of the total value on the Hong Kong exchange and account for 40% of total turnover. Initially, only Hong Kong or international investors can trade the yuan shares, but mainland investors will be allowed to trade via the southbound stock connect scheme in the future.
Intel to expand in Israel with new wafer fab as it diversifies supply chain
South China Morning Post
Intel has agreed to build a new manufacturing facility in Israel, part of the US semiconductor company's efforts to diversify its production sources. The preliminary deal, which was announced by Israel's finance ministry and Prime Minister Benjamin Netanyahu, will see Intel expand its manufacturing capacity in the country. The facility will be for wafer fabrication, a segment in which Israel is already one of Intel's major providers. The new plant is expected to begin operations by 2027 and add thousands of jobs to Intel's current workforce in Israel.
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