China's Huawei poised to overcome US ban with return of 5G phones; Kerry to visit Beijing for climate talks amid efforts to revive relations between US and China
China plans to send two rockets for crewed moon landing; Japan and NATO usher in new era of cooperation amid China concerns
Welcome to this issue of The China Brief. Today is July 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.
North Korea launches long-range missile amid NATO summit
Deutsche Welle
North Korea has reportedly fired an unidentified ballistic missile into the East Sea, according to South Korean and Japanese officials. The missile is believed to have flown for 74 minutes at an altitude of 6,000 km, reaching a range of 1,000 km. The launch has prompted Japanese Prime Minister Fumio Kishida to suggest a summit with South Korea, Australia and New Zealand, and Japan has lodged a protest through diplomatic channels in Beijing. North Korea recently threatened reprisals against the US, claiming that the US had been conducting aerial reconnaissance flights over its territory.
China Offers Cash for Tipoffs on Illegal Rare-Earths Mining
Bloomberg
China's rare-earth industry is launching a campaign against illegal activity in the sector and is offering cash rewards to citizens who provide information about illicit practices. The Association of China Rare Earth Industry has partnered with government authorities for the initiative, which aims to crack down on illegal exploration, production, processing, and smuggling of rare-earth elements. China has a dominant global role in the mining and refining of rare earths, but illegal production and smuggling remain problematic. The move may pave the way for further consolidation of the industry.
Kerry to visit Beijing for climate talks amid efforts to revive relations between US and China
The Independent
U.S. Special Presidential Envoy for Climate John Kerry will travel to Beijing next week to discuss strategies for limiting global warming and address the climate crisis. Kerry's visit comes after Treasury Secretary Janet Yellen appealed to China for cooperation on climate change and other global challenges during her recent trip. The visits by U.S. officials are part of efforts to revive relations between the two countries, which have been strained due to disputes over trade, technology, and regional security. Kerry has previously called on China to increase its carbon reduction targets, as it is currently the top emitter of fossil fuels. However, China has resisted rapid phase-out of coal plants, citing its status as a developing nation.
German cabinet to pass China strategy on Thursday - govt sources
Reuters
The German cabinet is set to pass a China strategy on Thursday, as Chancellor Olaf Scholz's government aims to reduce dependencies on China while maintaining trade relations. The strategy includes measures such as screening investments by German companies doing business in China to protect sensitive technology and know-how. Germany considers China to be both its biggest trade partner and a strategic rival.
NATO Says It Will Invite Ukraine Some Day, Resisting Calls to Act Soon
NY Times
NATO has declared that Ukraine will be invited to join the alliance, but did not specify when or how, disappointing Ukrainian President Volodymyr Zelensky, but reflecting the resolve of President Biden and other leaders not to be drawn directly into Ukraine’s war with Russia. A communiqué agreed to by all 31 NATO nations stated that “Ukraine’s future is in NATO,” and that Ukraine will be allowed to join when member countries agree that conditions are ripe, but it did not offer specifics or a timetable. The wording means that President Biden and like-minded allies prevailed over Poland and Baltic nations who wanted a formal invitation for Ukraine to join as soon as the war ends. Instead of membership, NATO leaders offered Ukraine new military aid to fight Russia, promises of further integration, and statements intended to declare to President Putin that his strategy of wearing down the European nations would not work.
NATO leaders also promised to continue supporting Ukraine in its fight against Russia and to engage the alliance’s foreign ministers in a periodic review of Ukraine’s progress toward reaching NATO standards, both in democratization and military integration. The NATO commitment went somewhat beyond its vague statement in 2008 that Georgia and Ukraine would eventually become members. Given Ukraine’s shaky democracy, corruption, and old Soviet arsenal, that was a hazy prospect at best, and neither it nor Georgia has since joined.
In lieu of membership, NATO leaders offered Mr. Zelensky new military aid to fight Russia, promises of further integration, and statements intended to declare to President Putin that his strategy of wearing down the European nations would not work. Mr. Zelensky had threatened not to attend the meeting if he was unhappy with the NATO commitment. He and his top aides have argued that if Ukraine had entered NATO, Putin might not have dared to invade and risk a war with the Western alliance.
China's Huawei poised to overcome US ban with return of 5G phones -research firms
Reuters
Huawei is planning a return to the 5G smartphone industry by the end of this year, according to anonymous sources at three third-party technology research firms. The Chinese firm's advances in semiconductor design tools, along with assistance from Semiconductor Manufacturing International Co (SMIC), should enable it to procure 5G chips domestically. Huawei's consumer electronics business was decimated by US restrictions on equipment sales.
Japan and NATO usher in new era of cooperation amid China concerns
Japan Times
Japan is stepping up its cooperation with NATO in several areas of security amid shared concerns over China and Russia. The new deal, called the Individually Tailored Partnership Programme (ITPP), will see Japan and NATO working together on cyber and emerging technologies, strategic communications, and counter disinformation, among other areas. This marks a new era in bilateral relations between Japan and NATO and reflects the recognition that the security of Europe and the Indo-Pacific are “inseparable.” NATO praised Japan for being its closest partner country. Japan, along with Australia, New Zealand and South Korea, is transitioning to an ITPP to expand and institutionalize its cooperation with NATO. It is hoped that the ITPP will give more focus and commitment to cooperation between Japan and NATO, particularly with regard to Japan’s recent changes in its defence and security policy.
China launches world’s first methane-fuelled space rocket
Al Jazeera
Chinese private company LandSpace has successfully launched the world's first methane-liquid oxygen space rocket into orbit. The Zhuque-2 carrier rocket completed its flight mission according to procedure, beating out US rivals in the race to develop space vehicles fuelled by methane. The launch comes on the same day that China announced plans to send two rockets to the moon by 2030. One will carry a spacecraft that will land on the moon's surface, while the other will transport astronauts. China has been developing a heavy-duty rocket powerful enough to send both astronauts and a moon lander probe into space.
China's export slide to steepen in June, imports seen down: Reuters poll
Reuters
China's export slump is expected to worsen in June, with outbound shipments projected to have fallen 9.5% YoY. This would be the worst decline since January and reflects sluggish overseas economies struggling with inflation and rising interest rates. Chinese factory activity has been shrinking in recent months, leading to concerns of prolonged slower growth in the economy. In addition, imports are expected to have shrunk by 4.0% in June, reflecting weak domestic demand. The weak trade data adds to the case for further policy stimulus in China.
China holds large military drills near Taiwan
Deutsche Welle
China has continued its military exercises for a second day, with navy ships and warplanes being sent towards Taiwan. The island's defense ministry confirmed that 30 Chinese aircraft were detected over the sea, including J-10 and J-16 fighters. On Wednesday, 23 planes crossed the midline of the Taiwan Strait. Similar activity was reported on Tuesday, when 32 Chinese air force planes crossed the midline, including four nuclear-capable H-6 bombers. China's military tactics come ahead of Taiwan's own annual military drills and during a NATO summit where leaders have expressed concern about China's "ambitions and coercive policies."
China regulator asks banks to respond to bearish Goldman report -Bloomberg News
Reuters
China's financial regulator has asked banks to respond to a report by Goldman Sachs that downgraded ratings on some Chinese banks and raised questions over the whole sector. Goldman Sachs downgraded Agricultural Bank of China, Industrial and Commercial Bank of China and Industrial Bank, which caused Chinese banking stocks to fall. The report stated that Chinese banks could not maintain a good balance of provisions, capital and dividends at the same time as their earnings have been squeezed. China's largest banks have been hit by a prolonged downturn in the property sector and now face near-term revenue and margin pressures due to rising costs and a deteriorating global economic outlook.
Japan and NATO agree on new partnership programme at NATO Vilnius summit
Reuters
Japan's Prime Minister Fumio Kishida has welcomed the new partnership programme between Japan and NATO, ahead of his attendance at the NATO Vilnius summit. The partnership aims to deepen cooperation between Japan and NATO in areas such as cyber-security and as NATO increases its engagement with the Indo-Pacific. NATO chief Jens Stoltenberg expressed concerns about China's military buildup and expansion of nuclear forces, as well as condemning North Korea's missile launches. China has criticized NATO's communique, claiming that it challenges its interests, security, and values.
Alibaba hiring seed-breeding scientists amid growing appetite for food security
South China Morning Post
Alibaba is hiring scientists for its Damo Academy to lead the field of "smart breeding", to promote development in China's seed industry. The company's research institute is recruiting high-performance computing scientists, life science scientists and technology experts to use artificial intelligence, bioinformatics, computational biology, statistics and other technologies to solve major challenges in seed breeding. Development in the sector is of growing interest to Beijing, which places food security among its highest national priorities amid rising geopolitical uncertainties. Alibaba is also hiring experts in quantum computing, semiconductors and machine learning.
Insight: Dispute over China's embassy in London strains ties with Britain
Reuters
A diplomatic standoff between China and the UK is escalating after seven months of disputes over China's plans to build a new embassy next to the Tower of London. Chinese officials say that British authorities have plotted to stop the embassy plans and orchestrated local opposition. The Chinese government has expressed frustration over the failure to grant planning permission for its embassy, which could also halt the UK's plans to rebuild its embassy in Beijing. The dispute is undermining efforts to repair relations between the two countries and is hindering the UK's attempts to forge a new approach to China. China has accused the UK of interfering in its internal affairs and violating international law. The UK government has distanced itself from the planning process but will likely need to choose a side soon. An appeal deadline looms for Beijing, and if the Planning Inspectorate finds the application contentious or nationally significant, the final decision could rest with British housing minister Michael Gove.
Hong Kong Investment Property Transactions Drop to 19-Year Low
Bloomberg
Sales of commercial real estate and residential buildings in Hong Kong fell to a 19-year low in Q2 2019, reaching just HKD 2.7bn ($345m), according to Colliers International Group. The lack of transactions in office and industrial properties was the main contributor to the weak performance. The city's office sector is under pressure, with a 15% vacancy rate and rental income falling 2% in H1 2019; meanwhile, the industrial real estate sector is struggling to attract investors due to high interest rates and a lack of rental yield. Colliers predicts that total investment will decline 50% to HKD 35bn in 2023, with both offices and industrial real estate values expected to fall.
Greater China investors join global migration to ETFs
Financial Times
Investors in the greater China region are increasingly shifting their money out of mutual funds and into exchange-traded funds (ETFs), according to research from Brown Brothers Harriman. Despite significant market headwinds, the ETF landscape in mainland China, Hong Kong, and Taiwan has been thriving. Total ETF assets in these markets jumped 12% from $300bn to $336bn in 2022, with much of the inflows to ETF products coming from outflows from mutual funds. Hong Kong's ETF market saw $6bn in net new flows last year, while mainland China recorded $60bn in net inflows. Taiwan's ETF market recorded total net sales of $24bn in 2022. The report found that investors in the greater China region and the wider Asia-Pacific region are finding advantages in the structural benefits of using ETFs and are no longer simply seeing them as passive market-cap weighted products. The report also revealed that a significant 30% of flows year-to-date in the global ETF space have been into active strategies. In total, about 750 ETFs were in the China market at the end of 2022, with total assets exceeding $200bn. The report surveyed more than 100 institutional investors in the greater China region, with the majority managing over $1bn in assets each. The majority of respondents said they would either be maintaining or increasing their exposure to ETFs over the next year.
Philippine censors approve Barbie movie – if ‘childlike’ eight-dash line blurred
South China Morning Post
The Philippine censors have allowed the Barbie film to be shown in cinemas after requesting that the Hollywood distributor blur a map allegedly depicting China's claims to the disputed South China Sea. The film, directed by Greta Gerwig and starring Margot Robbie and Ryan Gosling, is set to open in the Philippines on July 19. The decision comes after Vietnam reportedly banned the film due to scenes featuring a map showing the so-called nine-dash line, which China uses to justify its maritime claims. After reviewing the film twice and consulting with officials and legal experts, the Philippine censors concluded that the map in the film did not depict the nine-dash line and allowed it to be screened.
TikTok content under scrutiny with Taiwan election heating up
Japan Times
Taiwan is emerging as the latest battleground in the war against political disinformation on social media platform TikTok. The app is owned by China, and concerns are rising that the government could manipulate its content to its advantage. The platform has already been barred from Taiwanese government-issued devices, a move that authorities are considering extending. The risk derives from the app's fast growth and its status as the fastest-growing app in the world. Next year's presidential election in Taiwan has brought the issue into sharp focus, given the island's sensitivity to Chinese influence. The government is currently assessing the national security and free speech implications of the platform before deciding on its future. TikTok is already the subject of controversy in the US and Europe, amid fears that its algorithms could be manipulated for political purposes and that user data could be accessed by its Beijing-based parent company, ByteDance, on the Chinese government's behalf.
Jack Ma loses more than half of his wealth after criticizing Chinese regulators
CNN
Jack Ma's fortune has declined by $4.1 billion over the past year, according to the Bloomberg Billionaires Index. The decrease in wealth is primarily attributed to the massive drop in the valuation of Ant Group, the fintech giant that Ma co-founded but no longer controls. Ma's net worth is now approximately $30 billion, less than half of its peak of $61.2 billion in 2020. Ant Group is currently conducting a share buyback that values it at $78.5 billion, a 75% decrease from its valuation in 2020. Ma's criticism of Chinese financial regulators and banks in a speech just before Ant's planned IPO in 2020 led to a crackdown on private enterprise in China and heightened regulatory scrutiny of tech companies. Since then, Ma has kept a low profile, focusing on philanthropy and stepping back from the companies he founded. Ant and its units were recently fined $984 million for allegedly breaking rules related to consumer protection and corporate governance.
China's state planner praises Tencent, Alibaba as attitude towards tech shifts
Reuters
China's state planner, the National Development and Reform Commission (NDRC), has praised tech giants Tencent and Alibaba in a statement, signaling a warming up to the technology sector after a three-year crackdown. The NDRC highlighted the contributions of platform companies to areas of tech innovation such as semiconductors and autonomous driving. This comes after authorities last week signaled the end of their crackdown on the technology sector with fines on Ant Group and Tencent. Beijing has been softening its tone towards the tech sector in recent months as it works to reinvigorate the country's economy and reduce reliance on Western technology.
China plans to send two rockets for crewed moon landing
Reuters
China plans to send two rockets to the moon by 2030, one carrying a spacecraft that will land on the surface and the other transporting astronauts. The twin-rocket plan will overcome China's technological hurdle of developing a heavy-duty rocket powerful enough to send both astronauts and a lander probe. After the astronauts have completed their scientific tasks and collected samples, the lander will transport them back to the orbiting spacecraft for their return to Earth. China's lunar objectives include developing a super-heavy carrier rocket, a new-generation crewed spacecraft, a lunar lander, and a crewed lunar rover. China brought back lunar samples from the moon in 2020 on an uncrewed mission, making them the third nation to have retrieved lunar samples after the United States and the Soviet Union.
Can climate envoy John Kerry lower the heat in US-China relations?
South China Morning Post
US climate envoy John Kerry will travel to China this week to discuss climate change with Chinese officials. He will be the third senior US official to visit China in recent weeks, following Secretary of State Antony Blinken and Treasury Secretary Janet Yellen. The US State Department stated that Kerry intends to engage with China on addressing the climate crisis and promoting a successful COP28. China’s Ministry of Ecology and Environment added that the two sides will discuss cooperation on climate change. Analysts believe that the visit will be significant for renewing climate talks between the world’s two largest greenhouse gas emitters. However, no breakthroughs are expected, as the two countries continue to disagree on whether climate change should be separated from other bilateral disagreements. Climate discussions have been suspended since China protested against a visit to Taiwan by former US House Speaker Nancy Pelosi last year. Some experts believe that Kerry’s trip is primarily aimed at strengthening personal bonds with his Chinese counterpart, Xie Zhenhua. The two have previously spoken virtually twice this year, but have not met since November.
Canada probes Nike over alleged use of forced Uyghur labor
Deutsche Welle
Canada's corporate ethics watchdog, the Canadian Ombudsperson for Responsible Enterprise (CORE), has launched investigations into sporting goods company Nike and mining firm Dynasty Gold over allegations of using forced labor from China's Uyghur minority. CORE received complaints about the overseas business practices of 13 Canadian companies, and this is the first investigation launched since the agency was established in 2017. CORE is also investigating complaints against the other 11 companies and is expected to release reports in the coming weeks. Nike Canada is suspected of having supply relationships with Chinese companies using forced labor, while Dynasty Gold is alleged to have benefited from forced labor at a mine in China. The investigations come amid global concerns about human rights abuses against Uyghurs in China.
US, Japan, S.Korea hold rare military meeting as N.Korea launches missile
Reuters
The top generals of the United States, South Korea, and Japan held a trilateral meeting in Hawaii on Tuesday, as North Korea conducted a ballistic missile test launch. The meeting aimed to improve cooperation between the three countries in countering threats from China and North Korea. The relationship between South Korea and Japan has been strained due to historical disputes. The North Korean missile was launched towards the Sea of Japan. North Korea has conducted several missile tests this year, in violation of UN Security Council resolutions. North Korea's powerful sister, Kim Yo Jong, warned that US forces would face consequences if they continued to conduct surveillance flights in North Korean airspace. However, a US defense official stated that North Korea's threats were largely bluster and not a significant threat. The US general is scheduled to travel to Japan and South Korea this week.
China evacuates 40,000 people from floods, more rain expected
Reuters
Over 40,000 people have been evacuated in China's Sichuan province due to heavy floods caused by cloudbursts. Unusually heavy rain has caused flooding and mudslides, destroying homes and infrastructure and resulting in several deaths. The floods in China are part of a global trend of disastrous downpours, raising concerns about the impact of climate change. Officials have issued red alerts for heavy rain in several provinces, and meteorological authorities have extended an alert for rainstorms.
China unveils big tech, economy wish list amid US curbs after wrapping up probe
South China Morning Post
China's National Development and Reform Commission (NDRC) has given its first official endorsement of projects by Alibaba, Tencent, and Meituan, marking the end of a two-and-a-half-year investigation into platform companies. The move is expected to bolster national economic growth, and the NDRC plans to release typical investment cases for platform companies to support their role in economic development, job creation, and international competition. The investigation results were released following a fact-finding campaign that aimed to address issues such as private confidence, foreign direct investment, unemployment, and an ageing population.
China Tech Stocks Gain as Beijing Lauds Key Firms for Innovation
Bloomberg
Chinese tech stocks in Hong Kong experienced a third consecutive day of gains following positive comments from China's top economic planner and news of a meeting between officials and key tech companies. The National Development and Reform Commission praised companies such as Tencent, Meituan, and Alibaba for their support of technological innovation through increased investment. This comes after the head of China's Ministry of Science and Technology reportedly met with executives from private tech firms, including Xiaomi and Alibaba Cloud Computing Beijing. These developments suggest a more supportive stance from Beijing towards the private sector after a two-year crackdown. The Hang Seng Tech Index rose 2.8% but remains down more than 60% from its February 2021 high.
Trial starts for Korean chip exec accused of stealing Samsung secrets for China factory
Reuters
The trial has begun for a South Korean chip executive accused of stealing sensitive information from Samsung Electronics. Prosecutors claim that Choi Jinseog, a former Samsung executive, stole the information to help his client set up a chip factory in China. The case highlights South Korea's efforts to crack down on industrial espionage and slow China's progress in chip manufacturing. Choi denies all charges.
China Slams Bulgari For Not Showing Taiwan As Part of Country
Bloomberg
Bulgari, a luxury jeweler owned by LVMH, faced backlash in China after state and social media accused the brand of treating Taiwan as a separate country on its official website. The brand apologized and stated that the mistake was due to management negligence. However, the apology did not appease Chinese consumers, with many questioning its sincerity. This incident highlights the challenges faced by foreign brands in China, where nationalism is on the rise and consumers have become more sensitive to political tensions between Beijing and foreign governments. Other luxury and fashion brands have also faced criticism in China for similar reasons, including Christian Dior, Coach, Givenchy, Versace, Nike, and H&M.
Chinese Hackers Gained Access to Government Email Accounts, Microsoft Says
NY Times
Chinese hackers gained access to U.S. government email accounts, Microsoft revealed on Tuesday. The hacking group used forged authentication tokens to gain access to about 25 organizations, including government agencies. The breach allowed the hackers to access some accounts for a month before being detected. Although the scale of the breach is not as large as the SolarWinds hack, it still raises concerns about Chinese espionage and could strain relations between China and the U.S. The hack comes as the Biden administration faces criticism for not doing enough to deter Chinese espionage.
Australia Gives China Extra Month to Decide on Barley Tariffs
Bloomberg
Australia has agreed to China's request for an additional month to decide whether to lift duties on Australian barley. China requested the extension to review the restrictions, and if the duties are not lifted at the end of the four-month period, Australia will resume the dispute in the World Trade Organization (WTO). The tariffs on Australian barley were imposed by Beijing in May 2020, accusing Australia of dumping the grain in China. The penalties could cost the Australian market up to AUD 2.5 billion ($1.7 billion) over five years.
Hong Kong stocks set for best winning run in a month on China stimulus bets
South China Morning Post
Hong Kong stocks rose for a third day as speculation grew that China will increase fiscal stimulus measures. This comes as the Chinese government called for a wider economic reopening and trade, indicating concerns about the nation's struggling recovery. The Hang Seng Index increased 1.4%, heading for its longest winning streak in a month. The Tech Index rose 2.7%, while the Shanghai Composite Index remained largely unchanged. Stocks such as Alibaba, Tencent, and Meituan all saw gains, with online travel operator Trip.com also increasing. Carmakers BYD and Xpeng saw gains after Goldman Sachs initiated coverage on both electric vehicle makers with a buy rating on their US-listed shares. Beijing is anticipated to introduce more supportive policies to boost the economy, with a report suggesting there may be a possibility to ease local government's funding strain through special bond sales. The president of China, Xi Jinping, called for greater opening up of the economy, focusing on foreign cooperation in trade, investment, and financial innovation. In other news, five stocks began trading for the first time on Wednesday, with mixed results across key Asian markets.
Australia urges China to ‘provide transparency’ on Solomon Islands police pact
South China Morning Post
Australia is urging China to release the details of a new policing pact with Solomon Islands, expressing concern that China's increasing influence in the region could escalate tensions in the South Pacific. Solomon Islands Prime Minister Manasseh Sogavare signed several agreements with China during a recent trip to Beijing, including an agreement allowing China to maintain a police presence in Solomon Islands until 2025. Australia fears that this police cooperation plan could lead to further regional competition. Solomon Islands has become a key battleground for influence between China, Australia, and the United States. Australia's own security pact with Solomon Islands is currently under review, prompting fears that the country is moving closer to China's orbit. Solomon Islands opposition politician Peter Kenilorea Junior believes that Sogavare wants to shift the country's stance closer to China.
China lashes back at NATO criticism, warns it will protect its rights
Reuters
China has strongly rebuked NATO’s accusation that it poses a security threat and challenges the group’s interests. NATO made the claims in a communique issued during a summit in Lithuania, stating that China uses a range of political, economic, and military tools to increase its global footprint and project power, while remaining opaque about its strategy and intentions. China’s mission to the European Union responded by saying that the communique disregards basic facts, distorts China’s position, and deliberately discredits the country. The statement also warned that any action threatening China’s rights would be met with a resolute response.
‘Sluggish prospects’ or US$40,000 a year? Poles apart for China’s graduates
South China Morning Post
China is facing a highly competitive job market for university graduates, with a record 11.58 million students graduating this year. The country's zero-Covid policy has led to shrinking job opportunities, with the highest youth unemployment rate ever recorded. Graduates from non-elite universities are particularly affected, with reduced salary growth and a lack of job prospects. Elite universities offer better resources and job market information, giving their graduates an advantage in finding well-paying jobs. However, even graduates from elite institutions are experiencing reduced income expectations due to the pandemic. Private universities in China have a lower reputation among employers due to weak teaching resources and lack of government funding. The pandemic has exacerbated the challenges faced by graduates, with the average starting salary increasing by only 3% in 2021, compared to an 8% increase four years ago. As China's economy recovers from the pandemic, small- and medium-sized private enterprises are becoming hesitant to recruit on a large scale, further impacting job prospects for university graduates.
Biden picks China specialist for ambassador to Marshall Islands
South China Morning Post
US President Joe Biden has nominated Laura Stone, a senior career diplomat, to be the US ambassador to the Marshall Islands. Stone, who is a Chinese speaker, has previously worked on countering Chinese influence and has served in various positions related to China, including as acting deputy assistant secretary for mainland China, Taiwan, Hong Kong, and Mongolia. The nomination comes as the US seeks to renew the Compacts of Free Association (COFA) with Pacific island nations, including the Marshall Islands, in order to counter China's expanding influence in the region. However, a final deal with the Marshall Islands has been held up due to disagreements over addressing the legacy of US nuclear testing in the country. China has also been increasing its presence in the Pacific, with its construction and mining companies expanding their business in the region.
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