China's Xi Jinping attends funeral of former Premier Li Keqiang；How to fix China’s economy? Investors are unsure and that’s a problem
The Biden Doctrine: Show Strength, Whisper Restraint; Vanguard Takes Final Step to Exit China, Dismantling Last Team
Welcome to this issue of The China Brief. Today is November 2, 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's Xi Jinping attends funeral of former Premier Li Keqiang
Nikkei Asia
Chinese President Xi Jinping attended the funeral on Thursday of former Premier Li Keqiang, who was cremated in Beijing after dying from a heart attack last week. Flags flew at half-mast across the country.
Xi and the other six Politburo Standing Committee members in the morning offered condolences at the funeral home to Li's family members, the official Xinhua News Agency reported. Former President Hu Jintao did not attend but sent a memorial wreath.
How to fix China’s economy? Investors are unsure and that’s a problem
South China Morning Post
The recent decline in the Chinese stock market has left many investors puzzled as to why the market is falling despite positive economic data and increased policy support from the government. The disconnect between the stock market and the economy in China is due to a number of factors, including concerns about the property sector, the global economic outlook, and a lack of confidence in the government's ability to restore confidence in the economy. The complex and multifaceted nature of China's economic problems makes it difficult for global investors to accurately assess and price the risks.
The Biden Doctrine: Show Strength, Whisper Restraint
Bloomberg
US President Joe Biden has been playing the role of restrainer in various global conflicts, including the Israeli-Palestinian conflict, the Ukraine-Russia conflict, and the tensions in East Asia. He supports his allies while urging them to exercise restraint to prevent conflicts from escalating and becoming catastrophic. The US is increasingly assuming the role of a super restrainer due to the need to adjust its grand strategy in response to geopolitical disruptions caused by rogue nations. The US is considered the indispensable nation and its leadership is crucial in maintaining global stability.
China’s top fund managers lend support for stocks amid rampant foreign selling
South China Morning Post
China's leading asset-management firms are increasingly optimistic about the country's onshore stocks, due to the economic recovery, attractive valuations and generous dividend payouts, according to Liu Xiaoyan, Chairman and General Manager of E Fund Management. Liu's comments were echoed by GF Fund Management and China Asset Management executives. The calls by the largest asset managers may provide support to China’s $9.3tn stock market, which has been struggling to find a bottom after the benchmark CSI 300 Index fell to a four-year low last month.
China bids a quiet farewell to popular ex-premier
BBC
China has mourned the death of former premier Li Keqiang, with national flags flown at half-mast across the country. Li, who was once tipped to be China's future leader, was overtaken and sidelined by current president Xi Jinping. His funeral was held at the Babaoshan Revolutionary Cemetery in Beijing and was attended by Xi and other members of the Communist Party leadership. The event was covered with muted state media coverage, in contrast to the outpouring of grief and praise from ordinary Chinese citizens. Analysts suggest that the public reaction reflects a sense of mourning for a more open and optimistic time before Xi's tenure. Li, who served as premier for a decade, was known for his pragmatic economic policies and focus on reducing the wealth gap and providing affordable housing. He struggled to implement reforms under Xi, who took a firmer grip on China's economy.
Chinese EV suppliers eye Japan as domestic competition heats up
Nikkei Asia
Chinese auto parts makers are looking to expand into overseas markets, including Japan, as competition in China's electric vehicle (EV) market intensifies. BYD, China's largest EV maker, and three Chinese component suppliers recently showcased their products at the Japan Mobility Show, the country's flagship auto industry event. Sunwoda Electronic, one of the world's top 10 EV battery manufacturers, is hoping to supply power batteries to major Japanese automakers, while Industrial Man is seeking Japanese clients due to intense competition and higher profit margins in overseas markets.
US lawmakers press Biden for plans on Chinese use of open chip technology
Yahoo US
A wider bipartisan group of US lawmakers is asking the Biden administration about its plans to respond to China's rising use of RISC-V chip design technology after Reuters last month reported on growing concerns about it in both houses of Congress. RISC-V, pronounced "risk five," is a free open-source technology that competes with costly proprietary technology from British semiconductor and software design company Arm Holdings and Intel Corp. It can be used as a key part of anything from a smartphone chip to advanced processors for artificial intelligence.
China says official to lead a delegation in China-US nuclear talks
Yahoo US
China's foreign ministry has announced that a leading official from its department of arms control affairs will head a delegation in upcoming nuclear talks with the US. The ministry did not disclose the official's name. The talks are expected to cover a wide range of issues, including the implementation of international arms control treaties. The announcement comes after Chinese Foreign Minister Wang Yi met with senior US officials and President Biden, signalling a willingness to engage in dialogue despite deep policy differences.
'He won hearts': Li Keqiang's hometown mourns his death
BBC
The death of Li Keqiang, China's former premier, has become an opportunity for the country's citizens to express their appreciation for his leadership style, which is seen as more open and moderate than that of current leader, Xi Jinping. However, the Communist Party has kept a close watch on mourners, particularly in Li's home province of Anhui, to ensure that their expressions of gratitude do not turn into public criticism.
PLA says US and Canada ‘hyped’ warships’ Taiwan Strait passage
South China Morning Post
China's military has said that it closely tracked a US and Canadian warship that sailed through the Taiwan Strait. The People's Liberation Army said it had monitored the activities of the USS Rafael Peralta and the Canadian navy's HMCS Ottawa as they passed through the strait. Tensions between China and Taiwan have been escalating in recent months, and China has repeatedly warned against any moves towards independence by Taiwan.
China plans to launch inter-provincial power trading by year-end
Yahoo US
China's National Development and Reform Commission (NDRC) has said that the country will pilot more regional electricity grids and introduce inter-provincial spot power trading by the end of the year. The NDRC has also said that the Beijing-Tianjin-Hebei regional power market will start trial operations by June 2024 and that it aims to accelerate the construction of the Yangtze River Delta electricity market. China plans to launch a national spot market by 2030, allowing for a quicker response to supply and demand changes.
China’s President Xi pays final tribute to former premier Li Keqiang
South China Morning Post
Chinese President Xi Jinping and other top party and state leaders paid their last respects to former premier Li Keqiang, who passed away from a heart attack. Li's body was cremated following a ceremony at the Babaoshan Revolutionary Cemetery in Beijing. Xi bowed three times in front of Li's casket and shook hands with Li's wife and family members to express condolences. Former president Hu Jintao did not attend but sent flowers. Li served as premier for two terms from 2013 to 2023 and was hailed as an "outstanding leader" by the Communist Party. Flags were flown at half mast across China and at Chinese embassies overseas.
China’s 2024 Growth May Even Beat 2023, Ex-PBOC Adviser Says
Bloomberg
China's economy could grow at a faster pace in 2023 compared to this year, according to former central bank adviser Huang Yiping. He suggested the growth potential is currently around 5% to 5.5% and could increase if things go well next year. The Chinese government last month announced further support for the economy amid challenges from weak consumer and business confidence and an ongoing property crisis. However, Huang warned that investor and entrepreneur confidence remains a key question that needs to be addressed.
Israel’s ties with China worked well – until the Gaza conflict exposed limits
South China Morning Post
China's failure to condemn Hamas during the recent Israel-Gaza conflict has led to concerns that China is choosing sides in the conflict and may no longer be a reliable partner for Israel. China's veto of a US-backed proposal at the UN Security Council that failed to call for a ceasefire in the conflict also drew criticism from Israel. Analysts believe that the war has revealed the limits of the growing partnership between China and Israel and that it will likely lead to a shift in Israel's policy towards China. The strategic priority that China gives to Arab states over Israel is also evident in the trip by China's special envoy to the Middle East, which has so far not included a visit to Israel. The recent conflict has highlighted the limitations of China's relationship with Israel and may restrict the prospects for a closer partnership between the two countries.
Blackpink’s Lisa, Angelababy Banned on Weibo After Risque Show
Bloomberg
The Weibo accounts of K-pop star Lisa from Blackpink and Chinese actress Angelababy have been shut down, leading to speculation that their attendance at a burlesque show by Lisa in Paris was the cause. President Xi Jinping has been cracking down on celebrity fan culture and has ordered action to clean up the entertainment industry. Authorities have warned against "vulgar and obscene" content and have taken measures to ensure the younger generation becomes motivated, patriotic and productive workers. Angelababy's Douyin (Chinese Tiktok) account has also been blocked and her career may be difficult to resurrect. Blackpink has been under an unofficial ban in China since South Korea implemented a THAAD anti-missile system that angered Beijing.
MSCI’s Non-China Emerging Markets ETF Bigger Than China ETF For The First Time
Bloomberg
The iShares MSCI Emerging Markets ex-China ETF has surpassed the iShares MSCI China ETF in terms of assets, marking a shift in investor preference away from China. The ex-China ETF's assets have surged to $6.8 billion, while the China ETF's assets have dropped to about $6.4 billion. This milestone reflects China's declining influence in the global investment landscape, as doubts over the investability of China have grown due to Beijing's limited efforts to restore confidence and increased oversight from Western countries. The launch of EM ex-China funds and foreign fund withdrawals from Chinese stocks have also contributed to China's diminishing clout.
China’s Male Leaders Signal to Women That Their Place Is in the Home
NY Times
China's President Xi Jinping has told the country's Women's Congress that Communist Party officials should influence young people's views on love and marriage, fertility and family. The country is in the midst of a demographic crisis, with its population shrinking as its birth rate plummets. Officials have been concerned about the rise of feminism in China, and the party has chosen to push women back into the home, in a bid to encourage them to marry and have children. The party has failed to address many concerns over gender violence, discrimination and sexual harassment, and feminists and advocates have been jailed. The Women's Congress is organised by the All-China Women's Federation, which promotes party policies.
China Struggles to Convince Some Li Mourners of Reason for Death
Bloomberg
As China prepared to cremate former Premier Li Keqiang on Thursday, its leaders were struggling to convince everyone in his hometown to accept their version of how he died. A number of mourners in eastern Anhui province this week expressed doubt the former No. 2 official died of a heart attack — the reason given in a government statement Friday. Li found himself sidelined by President Xi Jinping before exiting the Politburo Standing Committee — China’s most powerful body — a year ago despite being young enough to stay on. While the health conditions of senior leaders are always treated as a state secret in China, no evidence has emerged to undermine the Communist Party’s account of Li’s death. The Politburo praised the former premier as “a time-tested and loyal communist soldier” in a statement last week, suggesting he hadn’t fallen from favor. Li’s death comes as a series of unexplained oustings in China’s leadership create a heightened a sense of mystery around the party.
The Take: What do Russia and China think of the war on Gaza?
Al Jazeera
The article discusses the position of Russia and China in the war between Israel and Hamas. Both countries have complex relationships with Israel and Palestine and their own foreign policy considerations. The article explores how the conflict impacts Russia and China and what they stand to gain from it. The episode was produced by Khaled Soltan and Zaina Badr, with Kevin Hirten as the host. Miranda Lin fact-checked the episode, and Alex Roldan is the sound designer. The executive producer is Alexandra Locke and the head of audio is Ney Alvarez.
China, US and EU agree to work together on AI safety at UK summit
South China Morning Post
China has agreed to collaborate with the US, the European Union (EU) and other nations in managing the risks associated with artificial intelligence (AI). Political leaders and technology executives have frequently warned that the rapid development of AI poses an existential threat if left uncontrolled. Over 25 countries, including China and the US, signed the "Bletchley Declaration" at the Bletchley Park summit, which aimed to establish a common approach to oversight. The declaration set out a two-pronged agenda focusing on identifying shared risks and developing cross-country policies to mitigate them.
Vanguard Takes Final Step to Exit China, Dismantling Last Team
Yahoo US
Vanguard is reportedly preparing to shut down its office in China as the company exits the $4tn yuan ($570bn) mutual fund market. The firm wound up its robo-advisory joint venture with Ant Group in October. The Shanghai office will be closed, with most of the 10-strong team expected to leave by early 2024. BlackRock and Fidelity International have boosted their presence in China, but Vanguard abandoned plans for a mutual fund management licence two years ago, surprising the market.
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