China Draws Lessons From Russia’s Losses in Ukraine, and Its Gains; Top US General Doubts a Kyiv Victory This Year
China and India battle for leadership of Global South; Charting the Global Economy: Recovery in China Gathers Pace
Welcome to this issue of The China Brief. Today is 2023-04-01. 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 Draws Lessons From Russia’s Losses in Ukraine, and Its Gains
NY Times
China is viewing the Russian military action in Ukraine as a proving ground for weapons, troop power, intelligence, and deterrence that can help it prepare for potential wars, specifically around Taiwan, which Beijing wants to absorb and the United States has at times pledged to defend. Chinese researchers have scrutinized the fighting for innovations and tactics that could help in a possible clash over Taiwan. China’s development of hypersonic missiles and satellites has been a focus of most research, along with the Russian military’s shortcomings in logistics and supplies and its intelligence failures.
More broadly, Russia’s troubles in Ukraine appear to have hardened official Chinese views that Beijing, like Moscow, is the focus of a United States-led campaign of “hybrid warfare” that includes economic sanctions, technological bans, information campaigns, and cyber-attacks. China was closely following the thousands of Stinger, Javelin, and other missiles (equipment and intelligence) that NATO countries have provided Ukraine to help fight Russian forces, and some speculated how this would impact Taiwan. Russian forces have been dogged by shortfalls of weapons and ammunition and failures in intelligence, resulting in stalled advances and the heavy loss of soldiers’ lives.
The focus of much of the research has been around the equipment and intelligence that NATO countries have provided; for instance, China was impressed by Ukraine's use of Starlink satellite links to coordinate attacks and circumvent Russian efforts to shut their communications. Starlink has helped Ukrainian forces maintain communications and direct attacks, even where digital infrastructure has been wiped out. Taiwanese forces have also begun studying the technology, and Chinese army engineering scientists suggested the US could use such technology in the conflict with China. In other words, ways to sabotage or destroy them.
Chinese research ships to regularly visit 33 spots from Pacific to Indian oceans
South China Morning Post
China has announced the areas, including disputed regions in the South China Sea and waters close to US Pacific bases, to be visited by its fleet of more than 60 ocean research vessels, according to the National Natural Science Foundation of China. The 33 locations will become the “reference sections” for vessels carrying out periodical research. Most of the studies will be conducted in waters close to China, including the Taiwan Strait. A total of eight overlapping sections will cover almost the entire South China Sea, including territories claimed by China's Southeast Asian neighbors. In the western Pacific, six of the six survey areas border US military bases.
Charting the Global Economy: Recovery in China Gathers Pace
Bloomberg
China's economy experienced a strong upturn in March 2022, while Europe saw the highest inflation rate since 2011. Chinese manufacturing, services, and construction industries were moving at a healthy pace, with predictions showing that the global economy would potentially experience further growth. On the other hand, analysts warn of signs of inflation beyond food and energy costs in Europe, which begs for more interest rate increases. However, some analysts believe the US may have more leeway on interest rates as it experiences a decrease in core price pressures in February. More broadly, most central banks across the globe, including in South Africa and Thailand, are hiking interest rates, though with some exceptions like Hungary resisting government pressure to initiate monetary easing. Finally, it is notable that South Korea is poised to move ahead of China in the upcoming year in terms of finance spent on chipmaking equipment - this is set to be amplified further as US export controls drive global changes in semiconductor supply chains.
Hong Kong rejects US report on crackdown on freedoms
Reuters
The Hong Kong government has condemned a report from the US Bureau of East Asian and Pacific Affairs regarding its alleged curtailment of freedoms, calling the report “slandering remarks and ill-intentioned attacks”. The report accused Chinese authorities of undermining the rule of law in Hong Kong, going on to directly threaten US interests. Hong Kong authorities have strongly disapproved of and firmly rejected the report. Hong Kong is governed in accordance with the Chinese principle of “one country, two systems”.
Fury as Russia becomes UN Security Council president
BBC
Russia has taken the rotating presidency of the United Nations Security Council despite protests from Ukraine, which highlighted that Moscow leads the organization as the perpetrator of the recent invasion of Ukraine. The 15-member council rotates the presidency each month, and Russia’s last term was in February 2022, when it launched the invasion. It is the first time Russia has held the post since the beginning of the year. Moscow’s presence on the Security Council means it can veto any resolution. International arrest warrants exist for the Russian president, Vladimir Putin, and other officials for alleged war crimes, but Russia cannot be removed as a permanent member of the council due to UN rules.
The TikTok fears and their impact on Africa
BBC
African governments are yet to publicly comment on data security concerns surrounding the social media app TikTok. While several US allies have either banned or restricted the app’s use among government employees due to concerns that the Chinese government could access user data gathered by the app, African countries have remained silent. The 2022 Reuters Institute Digital News Report has shown that TikTok has been growing on the continent, with more young people using it to keep up to date with news. Despite the app's rise in Africa, concerns about data security are growing louder, especially as third parties could potentially use data collected from users for manipulative political purposes or state surveillance. Gift Mirie, a manager at a Nairobi-based digital firm that deals with social media influencers, stated that even if African governments recognize that TikTok should be held accountable to similar regulations as its Western counterparts, users will still be at risk if the governments do not devote the necessary resources to monitoring the platform.
ABC (Australia)
The UN World Food Program has warned that the world faces mass migration, destabilized countries, and widespread starvation unless billions of dollars are made in funding available very soon. David Beasley praised American and German donations and called on "China, Gulf nations, billionaires, and other countries to step up big time" to raise the $23bn needed. Last year, Beasley raised $14.2bn for WFP, more than double the $6bn in 2017. That money helped over 128 million people in more than 120 countries and territories. He is "distraught" that WFP will not manage to hit the target this year.
Beasley highlighted several priority areas: Africa's Sahel region as well as the east, including Somalia, northern Kenya, South Sudan and Ethiopia; Syria, which is having an impact on Jordan and Lebanon; Central and South America, where the number of people migrating to the US is five times what it was a year-and-a-half ago. Beasley singled out China, commenting that the country gave WFP just $11 million last year but applauded the country for reducing hunger and poverty at home. He called on Gulf countries, particularly Muslim nations, to do more as many of them have strong relationships with countries in east Africa, in the Sahara and elsewhere in the Middle East. Lastly, Beasley said the wealthiest billionaires should step up and "help us in the short-term crisis," as "it's not too much to ask some of the multi-billionaires to step up and help us in the short-term crisis", even though charity was not a long-term solution to the food crisis.
China and India battle for leadership of Global South
Nikkei Asia
Developing countries are emerging as major global political players, as they neither side with the West nor the China-Russia alliance. This shift is significantly affecting global power dynamics.
Many countries of the Global South have opted to take a different path in the face of the deepening political confrontation between the West and the China-Russia camp. These emerging and developing nations are gradually emerging as major players in global politics, which has a notable impact on global power dynamics.
It remains to be seen how countries of the Global South will position themselves in the future. Still, for now, their growing influence suggests they will continue to play an important role in shaping global political and economic trends.
Can Russia and China succeed in dethroning the dollar?
Aljazeera
Since being subject to Western sanctions, Russia has increasingly turned to China for an economic rescue package and has been embracing the yuan as it seeks to establish an alternative economic system to that of the West. Trade volume between the two countries hit a record high of $190bn last year. Both China and Russia are seeking to counterbalance the dominance of the dollar with their respective economies, especially given the current weakness of the ruble.
Ukraine Latest: Top US General Doubts a Kyiv Victory This Year
Bloomberg
Chairman of the US Joint Chiefs of Staff Mark Milley has said it is unlikely Ukraine will expel all Russian troops from its occupied territories this year. "You're looking at a couple of hundred thousand Russians who are still in Russian-occupied Ukraine," he said. In light of this, the US is set to release a $2.6bn package of military assistance for Ukraine. The weapons package includes $2.1bn under the Ukraine Security Assistance Initiative and a $500m drawdown from existing US equipment, including additional ammunition.
Meanwhile, Ukrainian President Volodymyr Zelenskiy has again called for China to talk to him about peace. However, the US and other allies are concerned that China's own proposal of a ceasefire would freeze in place territory that Russia has already captured. Zelenskiy has said he is not spurning China's efforts to mediate as an attempt to help its ally Putin. The IMF has also approved a $15.6bn aid package for Ukraine, the institution's largest-ever loan to a nation at war.
Macau Gaming Revenue Jumps to Three-Year High on Tourism Boom
Bloomberg
Macau's casinos saw a rise of 247% in gaming revenue in March, its best performance since the beginning of the pandemic, as Chinese visitors flocked to the region. Gross gaming revenue reached MOP12.7bn ($1.6bn) in March, beating analyst expectations of a 205% YoY increase and the highest since January 2020. March revenue is up 23% on the previous month but is still 51% down from 2019 levels. High rollers, who accounted for half of the gaming revenue pre-pandemic, stopped traveling to Macau following China’s crackdown on junkets that provided credit to big gamblers. The region is now looking to develop non-gaming activities and expand its overseas market. China's ongoing scrutiny of potential frequent gamblers is also deterring high rollers from traveling to Macau. Some people who've visited Macau more than three times in the last year have been required to apply for visas in person instead of electronically; furthermore, travelers can be asked detailed questions about their trip, and some have been denied permission to travel to the region.
China's top insurers hit by $5 billion 2022 profit drop
Nikkei Asia
China's leading insurers have experienced a collective decline in profits of almost $5bn due to volatile markets and the economic impact of Beijing's zero-COVID policies. Five of the six top Hong Kong-listed Chinese insurers saw a drop in net profits. New China Life, China Pacific Insurance, China Life, and China Reinsurance reported that their earnings were more than $4.38bn less than 2021 figures.
Part of the decline in profits stems from reduced investment income, hit hard by unpredictable COVID-19 protocols; implementing changes, such as travel restrictions, affected key assets, including Chinese consumer services and the property market, leading to a broad economic downturn.
Could this Chinese-developed ‘chiller’ change how we cool our buildings?
South China Morning Post
Chinese researchers have developed a cooling technology that can be used in industrial facilities and buildings to reduce human body heat. Building cooling currently accounts for 10% of global electricity use, likely to triple by 2050 as the world warms and air conditioning demand increases, according to the International Energy Agency. Scientists have sought cleaner, more effective cooling methods to help meet the challenge. The researchers from Tsinghua University in Beijing developed a material combining hydrogel and breathable fibers that can conduct evaporative and radiative cooling at the same time.
The "integrated radiative and evaporative chiller" (IREC) had unprecedented practical average daytime cooling of 710 watts per square meter in experiments, several times that of a single radiative cooling process. Radiative cooling allows an object to send out its heat to colder surroundings, with energy emitted as thermal radiation. The material the researchers developed emits energy as thermal radiation and also speeds up the evaporation process to complement heat reduction from sunlight. In testing, the material was applied to a container of ethylene glycol, reducing the temperature from 45 degrees Celsius to 36 degrees Celsius. It also cooled the human body by 13 degrees Celsius for periods of over 12 hours.
Hong Kong falls to 7th IPO market as fundraising plunges 52 percent
South China Morning Post
Hong Kong's ranking for new share listings fell to seventh place globally in Q1 2022, as funds raised via IPOs fell 52% year on year to $837m. Hong Kong was ranked third globally in 2021, its worst position since 2009. The shift is linked to the uncertainty about market sentiment globally, as inflation, interest rate rises, and the European banking crisis led to a quiet IPO market worldwide, which was exacerbated by setbacks from the fifth wave of Covid-19 in Hong Kong last year. Analysts suggest a rebound is likely from Q3 2022, as restrictions end and economic activity returns to normal.
The region's largest new listing in the current quarter was Beijing SinoHytec, which raised $140.52m. China-based Lalamove's operator Lalatech Holdings filed for listing in Hong Kong this week, while JD.com submitted separate listings for its property and industrial units. Alibaba Group announced a split into six separate business units earlier this month, which is expected to pave the way for listings.
Pop icon Leslie Cheung’s legacy endures 20 years after death
Associated Press
Fans flocked to the city to commemorate Canto-pop icon Leslie Cheung, one of the first singers to come out as gay in Hong Kong, to mark the 20th anniversary of his death. Cheung became a well-known superstar during the height of Hong Kong’s entertainment industry in the 1980s and 90s. This week also saw the government include concerts and film screenings about Cheung in the city’s first pop culture festival, which will officially be kicking off in three weeks. Cheung’s impact on the music and film industries in China was significant and has been described as culturally evocative of the changing times.
His creativity enabled him to have a large following that stretched beyond Asia, and stood out against the backdrop of social conservatism in his time. His performances in classic Asian films such as John Woo’s “A Better Tomorrow,” Wong Kar-wai’s “Happy Together,” Stanley Kwan’s “Rouge” and Chen Kaige’s “Farewell My Concubine” are still remembered today. His bold decision to reveal his sexuality and intimate relationships during his time in Hong Kong has also been highly praised. Cheung’s work has inspired not only older generations of fans but also those who were just toddlers when he died, and his profound influence has been celebrated across social media.
Bangladesh urges China loan tweaks amid scrutiny of BRI bailouts
Nikkei Asia
Bangladesh is set to finalize a new $276m 'tied loan' from China that will be used for a water treatment plant, but the country wants to revise the loan conditions that it considers in its disinterest. The specific project, whose contractor will be selected by China without competitive tender, will be provided by the Export-Import Bank of China. A signing event is expected to take place in April. China has been increasing its investment in Bangladesh with various infrastructure projects under President Xi Jinping's Belt and Road initiative.
However, this loan agreement has been delayed and revised on several occasions due to the conditions Bangladesh seeks to change that it believes will have an unfavorable effect on its economy in the long term. Bangladesh wants to set a fixed interest rate for the loan while also requesting other benefits that will protect its interests. Bangladesh is also reluctant to sign loans with High-Interest Countries or tied-loans condition without appropriate negotiations after suffering from high debt servicing costs.
Bangladesh relies heavily on foreign loans and aid for infrastructure projects as it struggles to build a stronger industrial sector. Prime Minister Sheikh Hasina has previously said that she will not accept any proposals that may have any adverse effect on the interests of Bangladesh. The country is seeking a developed infrastructure and improved cities that can accommodate millions of people and hopes the water treatment plant will be a step toward this.
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