China to Send Special Envoy to Ukraine, Russia From Monday; Exclusive Insight: Zhejiang Cadres: Stellar Advisors, Competent Generals, and Lacking Commanders
Yellen Says She’s Had No Contact With Her New China Counterpart; Tesla Recalls 1.1 Million Cars in China Over Braking Defect; 1MDB scandal: is Jho Low hiding in China? It depends on whom you ask
Welcome to this issue of The China Brief. Today is May 12, 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 Insight: Zhejiang Cadres: Stellar Advisors, Competent Generals, and Lacking Commanders
The Zhejiang cadres are characterized by their limited scope, restrained ambition, and insufficient strategic vision, leading to weak control and authority. Their tendency to concentrate on specific issues means that discussions regarding national affairs or global situations may yield some opinions, but their insights might not be especially profound.
In terms of execution, their determination is relatively subdued, often causing them to hesitate when faced with significant tasks. They display parochialism and localism, lacking a comprehensive, macroscopic perspective. Their control and authority are relatively weak, and they are not notably assertive.
In my personal opinion, Zhejiang cadres are excellent advisors, capable generals, and subpar commanders. While they excel in advisory roles, they lack the necessary drive for implementation. When it comes to orchestrating a broader vision, most Zhejiang cadres are significantly lacking.
Outwardly, Zhejiang cadres appear humble and modest, yet they harbor an unyielding spirit within. Like the people of Zhejiang, they possess unique characters and ideas. Generally, Zhejiang people are civilized, hailing from a land of prosperity and scholarly heritage. They engage harmoniously with others, addressing matters at hand without arrogance or extraneous complications. However, this disposition does not mesh well with the bureaucratic system, as individual ideas often fail to flourish.
The renowned Yiwu Small Commodity Market can be attributed to its former County Party Secretary, Xie Gaohua, who took considerable political risks to establish the market and participate in land auctions, among other endeavors. Despite scrutiny from various central government investigation teams and departments, he persisted.
Though Xie Gaohua's personal career may have suffered, he fostered the growth of the small commodity market. Many years later, the people of Yiwu still honor his memory. Each year during the Spring Festival, numerous Yiwu citizens visit his home to pay tribute and invite him to Yiwu. Even after his passing, the people of Yiwu continue to remember him.
("Zhejiang, Zhejiang People, Zhejiang Economy" Series, Part Twenty-Two. Author: Ye Feng, Zhejiang Research Scholar)
China to Send Special Envoy to Ukraine, Russia From Monday
Bloomberg
Representative of the Chinese government for Eurasian Affairs, Ambassador Li Hui, will visit Ukraine, France, Germany, Poland, and Russia in an envoy from Monday 22 March, according to China's foreign ministry. The visit has been seen by some as an attempt to aid a diplomatic resolution to the war in Ukraine while bolstering President Xi Jinping's image as a global peacemaker. The move comes after China faced criticism from western countries over its failure to condemn Russian aggression in Ukraine, prompting President Xi Jinping to announce an envoy would visit the country. The decision has been described as "really significant” and offers China an opportunity to participate in the peace negotiations in order to improve its relationship with European countries and the US.
G7 finance ministers meet in Japan ahead of leaders' summit
Deutsche Welle
The finance leaders of the G7 countries met for the second day of a three-day summit on Friday, where they set the financial agenda anticipated for the leaders’ summit in Hiroshima next week. Topics up for discussion include support for Ukraine, global economic growth, inflation and the US standoff over raising the US national debt ceiling. While China plays an important role in most issues, it was not officially listed as an official topic; however, there are reports that the finance ministers could debate informally possible investment controls against China. Another major topic under discussion was the US partisan domestic political standoff over the US debt ceiling and potential default.
Yellen Says She’s Had No Contact With Her New China Counterpart
Bloomberg
Treasury Secretary Janet Yellen has said she has not yet spoken with her Chinese counterpart, Vice Premier He Lifeng, as the Biden administration attempts to rebuild ties with China. Yellen made the comments on the sidelines of a meeting of Group of Seven (G7) finance officials held in Niigata, Japan. The lack of contact between high-ranking US and Chinese leaders since President Xi Jinping reshuffled the Chinese government in March signals a slow start to the re-engagement process encouraged by the Biden administration. However, the incident followed recent talks between US National Security Adviser Jake Sullivan and China’s top diplomat, according to sources. The White House described the talks – held over two days – as “constructive”. Yellen previously met with Liu He, Lifeng’s predecessor, in January. A scheduled visit to China by Yellen later was canceled after the US shot down an alleged Chinese surveillance balloon that had entered US airspace in February.
Norway concerned over human rights in China, PM tells visiting Chinese foreign minister
Reuters
Norwegian Prime Minister Jonas Gahr Stoere has expressed concerns about human rights in Xinjiang and Hong Kong during a meeting with Chinese Foreign Minister Qin Gang in Oslo. Stoere conveyed his fears that Hong Kong's developments are a threat to human rights and that there are ongoing issues in Xinjiang.
Chinese Dissident Sentenced to 8 Years After He Tried to Fly to His Dying Wife
NY Times
Chinese human rights activist Yang Maodong, also known as Guo Feixiong, has been sentenced to eight years in prison after being accused of "inciting subversion of state power." He was detained in 2021 when he attempted to board a flight to the US. China's President Xi Jinping has taken steps to remove any perceived threats to the party's rule, even those who speak out. Mr Yang's sentencing comes one month after another Chinese court sentenced two prominent human rights lawyers, Xu Zhiyong and Ding Jiaxi, to 14 years and 12 years in prison. “He didn’t subvert anyone,” said Mr Yang's sister, Yang Maoping. “Who has the strength to subvert a country as big as this? Is it unacceptable just to speak out a few words?” He started reading a defence of his political ideals in court, but was ordered to stop after a few minutes; the statement has since been published online. Mr Yang has been committed to human rights activism since the 1980s and has continued his protests after previous prison stints, despite recurrent persecution.
Tesla Recalls 1.1 Million Cars in China Over Braking Defect
Bloomberg
Tesla must fix defective acceleration in almost every car it has ever sold across China. The issue occurs when the driver takes their foot off the accelerator and what usually occurs is extra power is transferred to the car’s battery to charge it, the deceleration becomes aleatory causing a collision risk and safety hazard. The State Administration for Market Regulation stated in a statement on Friday that around 1.1 million electric cars that Tesla made at its Shanghai factory or imported into China between January 2019 and April this year will need to be sent an over-the-air software fix to rectify the issue. Because of this defect, drivers may incorrectly press the accelerator thinking it’s the brake. An electronic notification will also be needed to be sent to drivers. Tesla sold around 1,129,055 cars in China from 2014 through March. No response has been seen from Tesla representatives as yet.
Former NBA star Howard stirs Chinese anger by calling Taiwan a country
Reuters
Former NBA star Dwight Howard has faced criticism on Chinese social media after calling Taiwan a country in a promotional video with Taiwan's vice president. China claims sovereignty over self-ruled Taiwan and says the island is part of "one China" governed by Beijing, making the vice president's reference to Taiwan as a "free country" and Howard's endorsement of a campaign for tourists to spend a night in Taiwan's presidential office building anathema to Beijing. Many people accused Howard of promoting Taiwan's independence. China's insistence that Taiwan is not a country means it is excluded from many international organizations and its athletes compete in international tournaments under the banner "Chinese Taipei".
China's tech elite lead AI startup frenzy
Nikkei Asia
Chinese tech giants are increasingly branching out into the country's artificial intelligence sector. High-profile figures such as former Alibaba vice president Jia Yangqing are quitting their roles at existing firms to start their own ventures in the burgeoning industry. The shift follows the interest generated this year by OpenAI's ChatGPT project. So far, most AI ventures in China have been started by academics or those working for foreign firms.
China’s foreign minister urges Norway to join hands to liberalize trade
South China Morning Post
Chinese Foreign Minister, Qin Gang, has urged Norway to increase cooperation, especially in the green economy, and work together against economic protectionism and decoupling. Qin said Norway had been a “long-standing” partner of China since Norwegian businesses entered the Chinese market as early as 1888. Qin has been on a three-nation trip and is now in Norway, which is China’s main European supplier of fertilizer, oil, and seafood. Although both countries agreed to normalize relations in late 2016, a free-trade agreement (FTA) again stalled last year after almost 20 years of negotiations.
Slew of downbeat economic data sends China’s yuan to 2-month low
South China Morning Post
The yuan fell past the key threshold of 6.95 against the US dollar due to a run of poor data. This puts the currency at a two-month low against the dollar. The wholesale sell-off by corporate clients pushed the yuan to the weakest level since early March. However, Asian markets, including South Korea's Kospi index, Japan's Nikkei and Shanghai's Composite index all posted gains thanks to US Treasury Secretary Janet Yellen, who called for a global minimum corporate tax rate and stopped short of labelling China a currency manipulator. This appears to have eased tensions only hours after China-US relations were dealt another blow, with new rules targeted at controlling information flow signed by US President Joe Biden.
EU says China will take advantage of Russian defeat in Ukraine
Financial Times
The EU must respond to China's global ambitions and be aware it will "take geopolitical advantage" of a defeat for Russia in Ukraine, according to EU chief diplomat Josep Borrell. High on a two-day discussion agenda for EU foreign ministers, the talks will focus on redressing the bloc's stance towards China with a three-pronged approach of “partner, competitor, rival” with more emphasis on a "rival", according to insiders. In a letter, Borrell favored a "de-risking" strategy rather than embracing the US’s hardline approach, and urged EU leaders to "find a coherent strategy" that deals with Beijing's rising nationalism.
Chinese smartphone brand Oppo shutters chip design unit amid sufficiency drive
South China Morning Post
Chinese smartphone maker Oppo has abruptly shut down chip-design unit Zeku, blaming “uncertainties in the global economy and smartphone market”. The under-scrutiny semiconductor industry is a key priority for the country’s government, though an increasingly hostile US political environment hampers Chinese chip acquisition and manufacturing. Oppo is one of China’s largest smartphone makers and Zeku employed an estimated 3,000 people.
EU considers impact of sanctions crackdown on China relations
Financial Times
European Union (EU) foreign ministers are to hold two separate meetings to try and define the bloc's relationship with China and address the country’s alleged influence in the Ukraine war. One meeting in Stockholm will discuss a new EU joint strategy for dealing with China, while in Brussels, another group will recalibrate proposals for the 11th sanction package against Russia, which would explicitly hit Chinese companies allegedly selling banned goods to Russia. The latter group believes more general measures should target EU companies facilitating exports to Russia, rather than non-EU ones, to avoid alienating or pushing countries closer to Moscow.
Ukraine under pressure for fast gains as Trump sends warning
CNN
Former US President Donald Trump's recent comments on Ukraine have raised concerns that the country's fate could rest in the hands of US voters in the 2024 election. Trump's refusal to say whether he wants Ukrainian President Volodymyr Zelensky to win the war after Russia's invasion has added to the political strain on the war in the US, potentially creating added pressure on Ukraine's offensive to defeat the Russian forces. A potential Trump return to power could also give Russian President Vladimir Putin an incentive to prolong the conflict in the hope that a decrease in US aid to Ukraine could be exploited.
Trump's involvement in the Ukraine conflict highlights the political calculations and changing political landscape for key players like President Joe Biden, whose legacy rests on Ukraine's survival. Trump's views of Ukraine are driven by an economics-based mindset, which views the world through a dollars and cents equation. Perceptions on US roles in supporting Ukraine have softened among Republicans, a factor that Trump is trying to use to his advantage. However, GOP support for Ukraine in Congress remains firm.
Ukraine faces the potential for an uncertain future if Trump returns to power, where the country could see its fate being decided in US voters' hands. Washington has provided Ukraine with over $11 billion in aid since 2014, but Trump's transactional view of global alliances reflects his narrow views on US security interests. Trump's transactional views ignore the way US-European partnerships have helped to ensure peace in Europe for nearly 80 years and created one of the greatest democratic political experiments in history.
US-China Talks Gives Hope to Investors After Tumultuous Period
Bloomberg
US National Security Advisor, Jake Sullivan, has met with China's top diplomat, Wang Yi, in Vienna to ease the strain between the US and China. The meeting raises the possibility of a call between Chinese President Xi Jinping and President Joe Biden. The US-listed Chinese stocks have seen their largest climb in three months, linked to the news about the meeting. The Hong Kong-listed technology shares have also seen gains for the third consecutive day. Analysts have cautioned against the bullishness, noting that conflicts could still arise between the two countries.
From Taiwan to supply chains: China topics to watch at the G7
Japan Times
The G7 leaders will meet next week in Hiroshima to discuss issues such as climate change and global health and also how to engage with China regarding China's increasingly assertive steps in Taiwan and the South China Sea. The G7 foreign ministers’ meeting last month agreed on the importance of working with Beijing, but fears and tensions over how best to strategically manage China’s rise will continue to be a topic as the grouping’s stance toward Beijing may be redefined.
It's Too Early for Britain to Turn the Page on Hong Kong
Bloomberg
The UK is attempting to revive its relations with Hong Kong almost three years after China imposed a national security law which erased many of the freedoms the country had guaranteed. British Foreign Secretary James Cleverly made a keynote policy speech and Vice President Han Zheng attended King Charles III’s coronation, whilst the first cabinet minister to visit Hong Kong in five years, Dominic Johnson, vowed to foster trade and investment ties. This is seen by some as a pragmatic move by the UK given its need to safeguard its economy. UK exports to China increased by 38% last year, whereas imports from China only grew by a quarter. However, hawks in the Conservative Party and Hong Kong democracy activists have criticized the move. The UK has criticized China’s failure to abide by the Sino-British Joint Declaration around Hong Kong control, accepted over 140,000 Hong Kongers, and there are further calls to bring attention to British citizen Jimmy Lai, who has been imprisoned for running a popular pro-democracy newspaper since 2019.
China's SMIC foresees better Q2 on rush of domestic chip orders
Nikkei Asia
China's top chipmaker, Semiconductor Manufacturing International Corp (SMIC), has said that a surge of orders from new domestic clients will drive earnings in Q2, but added that the outlook for the chip industry this year remains uncertain. The firm said that the new orders would keep its factories busier than in Q1.
No 2 US diplomat Wendy Sherman expected to leave post: report
South China Morning Post
US Deputy Secretary for State Wendy Sherman is expected to leave her post in the summer, although her replacement is not yet known. Sherman, a foreign policy veteran, has been in the role since April 2021 and has been involved in various policy areas including US-China relations. The reason for her departure was not given, and the State Department did not immediately comment.
China Bond Watchdog Probes Major Banks’ Debt-Issuance Work
Bloomberg
China's National Association of Financial Market Institutional Investors (NAFMII) has expanded its probe into the country's primary corporate-debt market with probes into China Construction Bank, Export-Import Bank of China, and China Minsheng Bank. Regulators are investigating practices such as charging underwriting fees below market rates and significant price gaps between primary and secondary market prices. This increased scrutiny follows years of pressure by Chinese securities regulators to improve oversight of the country's debt market.
EU plans to tweak China policy but keep balanced approach
Reuters
The EU is looking to recalibrate its China policy in order to reduce the risks of economic dependency on Beijing whilst continuing to cooperate on global issues. The European External Action Service wrote a seven-page document presenting the proposal to EU governments ahead of a meeting of their foreign ministers. The document suggests that in order to de-risk when it comes to economic dependency on China, the EU ought to screen investments more closely, have more robust export controls and diversify sources of supply in key sectors like semiconductors, telecoms, batteries, raw materials and critical minerals. The document also states that coordination with the US will remain essential.
1MDB scandal: is Jho Low hiding in China? It depends on whom you ask
South China Morning Post
Speculation about Jho Low, the Malaysian financier accused of playing a key role in the country's ongoing 1MDB corruption saga, has reignited. Recently, Malaysian Prime Minister Anwar Ibrahim said that his government was cooperating with "many countries" in a push to extradite Low to Malaysia. Following that statement, journalist Tom Wright took to Twitter to argue that the unnamed countries included China. Wright claims that, based on sources, Low is hiding in China, an allegation that the Chinese government has repeatedly denied. Wright and Bradley Hope are authors of a book on Low titled Billion Dollar Whale.
Beijing steps up food security with stiff assessments of local-level cadres
South China Morning Post
China is to enforce strict performance evaluations of local officials to ensure they protect farmland and ensure grain production, said the National Food and Strategic Reserves Administration. Provincial cadres risk failing their appraisals if they don't satisfy quotas on farmland size, crop structure, and grain output. The Chinese government has grown increasingly anxious over food security in recent years as geopolitical tensions have risen and the nation's arable land share is shrinking. In response to this concern, Beijing is exploring diversifying its sources of imports and reducing domestic consumption of some food oils.
Hong Kong stocks snap three-day streak of declines as JD.com jumps
South China Morning Post
Chinese stocks have risen thanks to strong earnings from JD.com, helping to offset weak US job data. The Hang Seng Index climbed 0.3%, the first gain in three days, taking the weekly decline down to 1.4%. The Hang Seng Tech Index increased by 1.2% and the Shanghai Composite Index added 0.3%. JD.com's Q1 operating profit rose by 57.7% YoY to ¥3.1bn ($445m) resulting in the stock surging 7.3% to HKD145.20 ($18.50). Semiconductor Manufacturing International also rose 3.7% to HKD20.85 ($2.66) after reporting it expects a recovery in wafer deliveries this quarter.
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