Failed Russia mutiny offers China valuable lesson on military missions; Exclusive Insight: The Rise of Director of the Central Military Commission Office, Zhong Shaojun
DOJ argues Florida law restricting Chinese land ownership is ‘unlawful’; Why AI Is Next Flashpoint in US-China Tech Rivalry;
Welcome to this issue of The China Brief. Today is June 29, 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: The Rise of Director of the Central Military Commission Office, Zhong Shaojun
Zhong Shaojun, Director of the Central Military Commission Office, served as the personal secretary to Xi Jinping during his tenure in Zhejiang, Shanghai, and the Central Committee. Limited public data reveals that Zhong Shaojun was born in 1968 and graduated from the Department of Computer Science at Hangzhou University in 1990. In 2013, the first year after Xi Jinping took over as the General Secretary of the CPC Central Committee and the Chairman of the Central Military Commission, Zhong Shaojun transitioned from civilian work to military service. He was appointed Deputy Director of the Central Military Commission Office and Director of the Chairman's Office of the Central Military Commission, with the rank of Senior Colonel. He was promoted to Major General in 2016 and to Lieutenant General in 2019.
To understand the importance of Zhong Shaojun in the current military system and his relationship with the aforementioned two deputy chairmen of the Military Commission, we must start with the defense and military reforms led by Xi Jinping at the beginning of 2016. This reform, at a micro level, disrupted and restructured the entire group army, establishing new numbers. At the war zone level, the original seven military regions were restructured into five major war zones: East, West, South, North, and Central. At the service level, the Rocket Army and Strategic Support Force were established, along with the original three services of navy, army, and air force, making a total of five services. At the level of the Military Commission headquarters, the original four departments (General Political Department, General Staff Department, General Logistics Department, and General Equipment Department) were split into various functional departments.
The full names of the four original headquarters of the Central Military Commission all began with "People's Liberation Army of China", not "Central Military Commission", and each department held a significant amount of power. This led to the concentration of related military powers at the department level, making the Central Military Commission a mere shell.
Xi Jinping's military reform dismantled the General Political Department of the PLA, which was responsible for propaganda, ideological and political work, youth, organization, discipline, and defense and foreign liaison work. This department was split according to its functions into the Central Military Commission's Political Work Department, Central Military Commission's Discipline Inspection Commission, and Central Military Commission's Politics and Law Commission. The General Staff Department of the PLA, which had operations, intelligence, communications, military training, military affairs, mobilization, equipment, secret affairs, mapping, foreign affairs, management and various branches of business departments, was divided according to its functions into the Joint Staff Department of the Central Military Commission, Training Management Department of the Central Military Commission, National Defense Mobilization Department of the Central Military Commission, Strategic Planning Office of the Central Military Commission, Office Affairs Management Bureau of the Central Military Commission, International Military Cooperation Office of the Central Military Commission and the Strategic Support Force of the People's Liberation Army. The General Logistics Department of the PLA, responsible for logistical support, was split into the Logistics Support Department of the Central Military Commission and the Joint Logistics Support Force of the Central Military Commission. The General Equipment Department of the PLA, responsible for the army's equipment work, was split into the Equipment Development Department of the Central Military Commission, the Science and Technology Commission of the Central Military Commission, and the Strategic Support Force of the People's Liberation Army. The Central Military Commission Office, where Zhong Shaojun is located, is the hub that connects all the above headquarters departments, five war zones, group armies, and the Central Military Commission.
From Zhong Shaojun's qualifications, he hails from Zhejiang, and his military experience is relatively short, not as familiar with military affairs as the two deputy chairmen of the Military Commission. But his collaboration with the two deputy chairmen, who have extensive military experience and familiarity with military affairs from Shaanxi and Fujian respectively, forms a check and balance, creating a tripod-like dynamic. The two deputy chairmen of the Military Commission are older and should retire after one term, having reached the pinnacle of their positions and military ranks. Zhong Shaojun's actual position is extremely pivotal, his actual power is enormous, but he is younger and his military rank and position should not be too high. Otherwise, there would be no room for further advancement, which may lead to factionalism and private gain.
DOJ argues Florida law restricting Chinese land ownership is ‘unlawful’
The Hill
The US Department of Justice (DOJ) has argued that a new law in Florida that prevents Chinese citizens from owning land in the state violates a federal housing law and the Fourteenth Amendment. The law, signed in May, restricts people from "countries of concern" from purchasing land or property within 10 miles of a military installation or critical infrastructure facility. The law specifically restricts Chinese citizens from purchasing or owning any property in Florida. The DOJ argues that the law violates the Fair Housing Act and the Equal Protection Clause.
Failed Russia mutiny offers China valuable lesson on military missions
Japan Times
The recent armed insurrection by the Wagner mercenary group in Russia has raised concerns in Beijing about the potential for upheaval if China were to engage in a war, particularly over Taiwan. Experts believe that China is unlikely to order an attack on Taiwan due to the potential for a protracted war of attrition, which could lead to political instability that endangers the regime. The recent events in Russia have highlighted how wartime chaos can weaken powerful leaders, and China's leaders will be wary of a similar outcome. China's priority continues to be economic development, which requires a stable external environment. While China and Russia are not formally allied, they have a close partnership that has made Russia dependent on China for its oil and gas sales. China sees Russia as a vital partner that shares its worldview, and the two countries work together to counter "American hegemony." China has called for peace negotiations in Ukraine and positioned itself as a peace mediator. However, China has refused to condemn Russia's actions or call the war an invasion.
Why AI Is Next Flashpoint in US-China Tech Rivalry
Bloomberg
The technological rivalry between the US and China in the field of artificial intelligence (AI) is intensifying. The US has made significant progress in generative AI systems, with San Francisco-based OpenAI launching the ChatGPT chatbot, triggering a wave of investment from Silicon Valley. However, China is seen as being ahead in practical applications such as image recognition. While China has historically lagged behind in turning AI ideas into real-world entrepreneurship, there has been an explosion in startup creation in recent months, with major Chinese technology players unveiling ChatGPT contenders. The US leads in terms of AI investment, drawing $26.6bn compared to China's $4bn, but the gap is narrowing. China's use of AI for surveillance and military purposes is causing concern for the US, leading to restrictions on chip exports and the possibility of imposing curbs on investment in Chinese tech firms. China's limitations in AI include limited access to US hardware and datasets, as well as concerns about censorship and constrained innovation. China has begun to regulate its AI industry, while the US is working towards regulation but is hampered by gridlock in Congress.
China on track to blow past Xi’s clean power goal five years early
Japan Times
China is set to almost double its wind and solar capacity by 2025, surpassing its clean power target for 2030, according to a report by Global Energy Monitor. The country has announced or begun construction on enough projects to reach 1,371 GW of total wind and solar capacity by 2025, exceeding Chinese President Xi Jinping's goal of 1,200 GW by 2030. However, China is still heavily reliant on coal and is building new coal-fired power plants to avoid electricity shortages. The country will need to make advancements in energy storage and green technologies for a secure energy future, said Martin Weil, a researcher at GEM.
Chinese Chipmaker Asks Suppliers to Buy Back Banned Gear
Bloomberg
Yangtze Memory Technologies, a Chinese memory chipmaker, has called on global chipmaking equipment manufacturers to buy back equipment that the company is barred from using due to US sanctions. The company's chairman and acting CEO, Chen Nanxiang, made the comments at an industry event in Shanghai and criticised the "broken" state of the global supply chain caused by US-led tech sanctions on China. Chen also warned that the rush to set up advanced fabrication plants in the US and Europe is disrupting the supply-demand balance and could lead to oversupply.
US Probe Finds Chinese Balloon Used American Tech, WSJ Reports
Bloomberg
An alleged Chinese spy balloon that was discovered over the continental US earlier this year was equipped with American-made surveillance equipment, according to anonymous sources cited by the Wall Street Journal. The balloon was found to be filled with commercially available American equipment, as well as more specialised Chinese sensors. However, it did not appear to transmit any data back to China, contradicting a previous report by NBC News. US investigators reportedly traced purchase orders for some of the equipment carried on the balloon back to the Chinese government.
UBS Joins Goldman, Morgan Stanley in Trimming China Stocks View
Bloomberg
UBS has lowered its forecast for Chinese stocks due to slowing growth momentum in the country. The Swiss banking group revised its year-end target for the MSCI China Index to 72, down from 83, based on a reduced earnings growth forecast of 15%. UBS joins Goldman Sachs, Nomura and Morgan Stanley in reducing their forecasts for Chinese stocks.
Bearish bets on Asian currencies firm as weak China growth weighs: Reuters poll
Reuters
Investors have increased their bearish bets on most Asian currencies due to a slow post-pandemic recovery in China. Bearish bets on Thailand's baht and the Malaysian ringgit have risen to their highest levels since November, while short positions on the yuan have also increased. The Malaysian ringgit has been one of the worst-performing currencies in the region this year, closely tied to the Chinese yuan due to strong trade links. The yuan has weakened as weak consumer and private sector demand has affected the post-pandemic recovery in China. However, some analysts believe that investors are too bearish on Asian currencies and that EM currencies may appreciate later in the year when the US Federal Reserve stops raising rates.
Barring war in Russia, Chinese exporters to keep seizing opportunity
South China Morning Post
Chinese manufacturers are looking to expand their business in Russia, as Western brands have been shunning the country due to sanctions imposed following the invasion of Ukraine. Despite the recent aborted mutiny in Russia, Chinese manufacturers are optimistic about the potential of the Russian market, with many reporting an increase in orders from Russian buyers so far this year. China-Russia bilateral trade has increased by 40.7% in the first five months of this year, standing as an outlier in China's overall weak export growth.
Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’
CNN
Nvidia's CFO, Colette Kress, has warned that any new restrictions on the export of AI chips to China would result in a "permanent loss of opportunities" for the US industry, although she does not anticipate any immediate material impact on the company. The US is planning to tighten export curbs on AI chips to China, which could make it harder for companies like Nvidia to sell advanced chips to the country. China is a key market for Nvidia, with revenues from mainland China and Hong Kong accounting for 22% of the company's revenue last year.
Yellen Says She Hopes to Meet New Leaders on Possible China Trip
Bloomberg
US Treasury Secretary Janet Yellen has expressed her desire to travel to China and establish contact with the country's new leaders. She stressed the importance of getting to know one another and discussing disagreements to avoid misunderstandings. Yellen did not provide details of any upcoming trip, but she has repeatedly stated her intention to visit China. The Biden administration has been working to reinstate lines of communication with China, which were severed by Beijing last year. Yellen reiterated that the US is not seeking to decouple from China but wants to de-risk its relationship. She also called for cooperation on global challenges such as debt and climate change.
China’s Arsenal of FX Support Is Ready as Yuan Pessimism Lingers
Bloomberg
China may need to implement more aggressive measures to support the yuan if it wants to counter pessimism towards the currency. The People's Bank of China (PBOC) has set a stronger-than-expected reference rate for the yuan, but this has failed to prevent the currency from reaching a seven-month low. If the PBOC's efforts to strengthen the yuan continue to fail, it may consider implementing measures such as loosening dollar liquidity and adding capital curbs.
China tells US to lift sanctions to reopen high-level military talks
The Hill
The Chinese embassy has called on the US to lift sanctions against Beijing in order to reopen high-level military talks between the two countries. The spokesperson for the embassy said that the US knows the reason for the difficulties in military-to-military relations and that it had imposed unilateral sanctions on China. The spokesperson added that such obstacles should be removed before any exchange and cooperation could take place. The US has repeatedly pushed for open lines of military communication with China amid increasing tensions between the two countries.
Joe Biden confused Ukraine and Iraq twice in 24 hours
South China Morning Post
US President Joe Biden made two mistakes in the last 24 hours by confusing the US war in Iraq with the Russian invasion of Ukraine. He mistakenly said that Russian President Vladimir Putin had been weakened by a mercenary group's mutiny in his war with Ukraine, when he meant to say Iraq. He also made a similar mistake while speaking about his efforts to galvanise US allies in support of Ukraine. Biden has a history of making verbal gaffes and is facing doubts from voters about whether he should serve another term in the White House.
The Cosmos Is Thrumming With Gravitational Waves, Astronomers Find
NY Times
Scientists from the North American Nanohertz Observatory for Gravitational Waves (NANOGrav) collaboration have discovered evidence for the existence of a low-pitch hum of gravitational waves reverberating across the universe. The researchers suspect that these gravitational waves are the collective echo of pairs of supermassive black holes, some as massive as a billion suns, sitting at the centers of ancient galaxies up to 10 billion light-years away. The findings, which have been published in The Astrophysical Journal Letters, are consistent with Albert Einstein’s theory of general relativity and could help researchers understand how the universe achieved its current structure and reveal exotic types of matter that may have existed shortly after the Big Bang. The discovery was made by studying the behavior of pulsars, rapidly spinning stars that emit beams of radio waves. The researchers analyzed data from pulsars collected over 15 years and found a correlated signal that indicates the presence of a gravitational-wave background.
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