China Casts CIA as Villain in New Anti-Spying Push; China bans Japanese seafood over Fukushima nuclear waste water release
BRICS countries agree major expansion as six countries invited to join; Don’t be fooled by narrative of China deflation helping the world
Welcome to this issue of The China Brief. Today is August 24, 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.
China Casts CIA as Villain in New Anti-Spying Push
WSJ
China is intensifying its efforts to protect its secrets from foreign espionage, with the Ministry of State Security accusing two Chinese nationals of spying for the U.S. CIA. This move comes as tensions and distrust between the U.S. and China are on the rise, with both nations accusing each other of spying. The Chinese state-security ministry has taken to social media, urging citizens to help counter espionage and threats to national security. This campaign reflects the high priority that President Xi Jinping places on national security. China has historically been concerned about U.S. spying, with past incidents leading to the dismantling of American spy networks in the country. The recent accusations by China come in response to the arrest of U.S. Navy sailors who allegedly shared military secrets with China. The accused Chinese nationals were recruited by the CIA while studying abroad and allegedly provided sensitive information in exchange for rewards or fees. The Chinese ministry's social media posts emphasize the duty of citizens to protect national security.
China bans Japanese seafood over Fukushima nuclear waste water release
South China Morning Post
China has banned all Japanese aquatic products in response to Japan's plan to release wastewater from the Fukushima nuclear plant into the Pacific Ocean. China's General Administration of Customs said the ban was to "prevent risks from Japan's discharge of nuclear-contaminated waste water." China has been a critic of Japan's plan to release the water and demanded that Japan "stop the wrong act." The release of the water began on Thursday and Japan says it is necessary as rainwater continues to seep into the plant, filling up the storage area. The International Atomic Energy Agency has said that the release will have a "negligible" impact on the environment, but China has disputed this assessment.
Brics countries agree major expansion as six countries invited to join
The Independent
Saudi Arabia and five other countries have been invited to join the BRICS bloc of developing nations, according to South African President Cyril Ramaphosa. Argentina, Egypt, Ethiopia, Iran and the United Arab Emirates have also been asked to become full members of BRICS, which currently comprises Brazil, Russia, India, China and South Africa. The move has been welcomed by UAE President Sheikh Khalifa bin Zayed Al Nahyan. The BRICS summit, held in Johannesburg, also discussed plans to trade in local currencies rather than the US dollar.
Don’t be fooled by narrative of China deflation helping the world
South China Morning Post
Warnings earlier this year that China's post-pandemic recovery would lead to a surge in inflation have proven to be inaccurate. Instead, China is experiencing deflation, with consumer prices dipping into negative territory last month. Falling prices in China are seen as good news for global consumers and businesses, as they could help central banks in advanced economies bring down inflation. However, there are reasons to be cautious about the benefits of Chinese deflation, including the fact that deflation is not pervasive in China and that advanced economies have taken a protectionist turn, reducing their reliance on Chinese goods.
China looks forward to in-depth discussions with US on resolving trade issues
Reuters
China's Commerce Ministry spokesperson, Shu Jueting, has expressed China's willingness to engage in in-depth discussions with the US to resolve economic and trade issues. Shu made the statement in response to a question about US Commerce Secretary Gina Raimondo's upcoming visit to China. China is expected to state its position on the economic and trade issues of concern during the discussions.
Allianz Global Investors and Blackstone unit get China regulatory approvals
South China Morning Post
Chinese regulators have granted approval to Allianz Global Investors to set up an onshore fund management company and given Blackstone's newly established China unit approval to raise funds that will be invested overseas. Allianz GI committed CNY300m ($41.2m) to establish the unit, while Blackstone's unit has seven full-time employees, including five fund professionals. The approvals came as Beijing vowed to step up efforts to attract foreign companies amid sluggish economic growth.
How LinkedIn became a hotbed for spying
Telegraph
LinkedIn has been used by Chinese espionage agents to target and recruit British individuals, according to former UK Independence Party communications director Gawain Towler. Towler was approached by a Chinese businessman who offered him work as a consultant for a Chinese firm. On arrival at a hotel room to discuss the role, he was presented with a non-disclosure agreement and a phone through which he would share documents. Towler promptly left the room and alerted the authorities. LinkedIn accounts under the names of Robin Zhang, Eric Chen Yixi, Robin Cao, Lincoln Lam, John Lee and Eric Kim were all linked to the spying operation. The website is used by spies to identify potential targets, with many individuals sharing more information on their profiles than on other platforms. LinkedIn said it had deleted a number of fake accounts used by intelligence agencies.
China, Australia raise climate change, security at Pacific leaders summit
Reuters
Australia and China have pledged to provide more support to Pacific Islands in their fight against climate change. The announcement came as leaders from Papua New Guinea, Solomon Islands, Vanuatu, Fiji and New Caledonia's ruling FLNKS party met to discuss issues such as climate change, security and trade. The leaders are also considering a proposal to declare the region a "region of peace and neutrality" and create a new security framework. This move is seen as a way for China to increase its influence in the region, as it was previously rejected by the wider Pacific Islands Forum.
Can BRICS dethrone the US dollar? It’ll be an uphill climb, experts say
Al Jazeera
The process of de-dollarisation is "irreversible" and "gaining pace," according to Russian President Vladimir Putin. The dollar has been the world's principal reserve currency since the end of World War II, but recent geopolitical shifts and growing tensions between the West and Russia and China have led to calls for a global shift away from dollar dominance. Developing countries are seeking alternative currencies for trade, investment, and reserves to avoid the risks associated with the political use of the dollar. However, experts are sceptical about the creation of a separate BRICS currency, as the major differences between the five economies and the dominance of China would create risks and constraints that smaller countries may not be willing to accept. Instead, BRICS is likely to push for the greater use of local currencies to settle trade payments. However, this would require changes in capital controls and the creation of an alternative to the SWIFT banking system to allow the transfer of currencies between trade partners.
Taiwan proposes extra $3 bln spending on new weapons next year
Reuters
Taiwan is set to spend an additional T$94.3 billion ($2.97 billion) on weapons next year, including fighter jets, as it strengthens its defenses against China. China has been increasing military and political pressure on Taiwan in recent years, viewing the island as its own territory. The additional spending will be used to purchase fighter jets and bolster naval defenses. Taiwan President Tsai Ing-wen has overseen a military modernization program to enhance the country's armed forces. The defense budget for next year will amount to 2.5% of Taiwan's GDP.
Demand for used chip equipment surging since COVID: Moov CEO
Nikkei Asia
Demand for used chipmaking equipment has surged since the start of the pandemic and shows little sign of slowing, according to the CEO of Moov Technologies, an online platform for buying and selling secondhand chip gear. Chipmakers began turning to used equipment amid an unprecedented chip shortage because they were unable to secure enough new machines to keep pace with their expansion plans. National efforts to onshore production and build resilient supply chains added to the demand. At the peak of the global chip shortage in 2021 through 2022, delivery times for some semiconductor equipment went from between three and six months to as long as two years, Nikkei Asia first reported, while the price of such tools surged.
Plunging sales in China cast a pall over Hyundai’s blockbuster year
South China Morning Post
Hyundai Motor and its affiliate Kia Corp are facing challenges in the Chinese automobile market as their sales continue to decline. The companies' sales in China have dropped significantly due to a fierce price war and a rapid transition to electric vehicles. Hyundai has responded by cutting its manufacturing facilities in the country and reducing its line-up of vehicles. While Hyundai and Kia have been struggling in China for several years, the first seven months of 2023 were the worst in at least 15 years. The companies now need to make tough decisions about their future in the Chinese market.
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