How Saudi Arabia drifted away from the US and into the arms of China; Exclusive Insight: Zhejiang's Pioneering Spirit: The Trailblazers of China's Economic Reforms
SenseTime Soars After Expectations Mount of Own ChatGPT Rival AI; China’s Housing Market Has Plenty of Space but Not Enough Buyers
Welcome to this issue of The China Brief. Today is April 4, 2023. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources and exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
And here’s today’s exclusive insight:
Exclusive Insight: Zhejiang's Pioneering Spirit: The Trailblazers of China's Economic Reforms
During China's market-oriented economic reforms, Zhejiang's people were ahead of the curve compared to others, including Beijing. Even 20 years later, I don't think Beijing's status will surpass what Zhejiang people achieved years ago. While the people of Beijing only fully embraced the concept of "the customer is always right" at the turn of the century, the people of Zhejiang, particularly those from Wenzhou, were already profit-driven decades ago.
In the 1980s, Wenzhou's people were the first to make bamboo meal tickets (zhuchou) to replace the easily worn-out paper meal tickets that every work unit issued. They also made plastic meal tickets and work ID cards in plastic shells, which they sold to every unit in the country. Wenzhou was known for having 100,000 salespeople who went to great lengths to sell even the smallest products, earning very little money. For instance, a button sold in the Wenzhou button market would earn just a few cents.
While many parts of China were still in a planned economy, Zhejiang was already running ahead. Yiwu's economy was particularly powerful, with foreign trade comparable to that of Shenzhen. Starting with simple trades like exchanging chicken feathers for candy, Yiwu businessmen went on to collect goods from all over the country and turned them into a massive market.
In the past, Yiwu's people traded items such as chicken feathers, toothpaste tubes, and turtle shells for candy. They traveled around the country to purchase and sell these items, which later became the starting point for the market that eventually grew into a large and world-renowned market.
Yongkang in Jinhua, where Li Qiang once served as party secretary, produces the world's best small hardware, including all kinds of tools such as pliers and power tools. Yongkang has a tradition of sharpening scissors, and decades ago, an underground worker in Hangzhou's red light district used to sharpen scissors as a cover, and he was probably from Yongkang.
From scissors to small hardware to metal products, the people of Yongkang have diversified their manufacturing. When people from Yongkang saw the big leaders drinking tea on TV, they noticed that the leaders first used teacups, then bottles. They seized the opportunity to create stainless steel thermos bottles and stainless steel cups, which were initially sold for a few hundred yuan each but eventually dropped to 10 yuan each.
The Zhejiang people typically price their products near cost. While Westerners refer to this practice as "dumping," the Zhejiang people call it "giving consumers a discount." For example, eyeglasses are a highly profitable industry, but if you ask an eyeglass store owner, nine times out of ten, they will come from Huangyan, Zhejiang, where strong-willed businessmen have monopolized the industry. Zhejiang is distinguished by its unique regional characteristics and industrial clusters.
However, there were negative aspects as well. Qingtian engaged in smuggling to Europe, and Wenzhou's coastal areas had their share of smuggled and counterfeit products, such as fake belts and paper shoes.
(This is the eighth installment of the "Zhejiang, Zhejiang People, and Zhejiang Economy" series, written by Zhejiang researcher Ye Feng.)
China’s Housing Market Has Plenty of Space but Not Enough Buyers
Wall Street Journal
China's property market is struggling with a major oversupply of unsold apartments, equivalent to around 4 million homes. The oversupply is most acute in smaller cities with weaker demand than in bigger markets such as Beijing and Shanghai. It would take nearly six years for one third-tier city to absorb its stock of unsold homes, compared with seven months in Shanghai and nearly two years for Beijing. The need to absorb the excess housing supply could mean a prolonged period of depressed new-home construction, depriving China of one of its biggest growth drivers and job creators.
Albanese could visit China in September, October after ‘in-principle’ invite
South China Morning Post
Chinese officials have reportedly issued an invitation "in principle" for Australian Prime Minister Anthony Albanese to visit China, along with an invitation to Australian trade minister Don Farrell, according to sources. The trips would mark a positive development in the strained relationship between the two countries, which began in 2020 when then-prime minister Scott Morrison called for a probe into the origin of Covid-19. Since then, China has placed official and unofficial bans and restrictions on the import of a range of Australian products. Albanese's visit, anticipated to take place around September/October, would mark the 50th anniversary of Gough Whitlam's trip to China.
Opinion: U.S. allies are on board for China chip tech controls after all
Nikkei Asia
Last October, the US implemented significant new export controls on China's chip and data center industries. Many warned that the move could prompt a move towards technological self-reliance, thereby undermining the US's dominant position in the chip manufacturing and design industries. US officials justified the move on the grounds of national security, highlighting concerns over the participation of Chinese entities in the global supply chain for semiconductors. Critics, however, have argued that the move was motivated by geopolitical considerations, particularly tensions between the US and China over trade.
However, the US controls have not prevented China from investing heavily in domestic chip production, with plans announced to pour almost $2 trillion into becoming self-sufficient in the industry by 2030. The recent shortage of computer chips particularly highlights the benefits of China's strategy, as the global supply chain has struggled to keep up with demand. This has led some US policymakers to argue for greater investment in domestic production facilities in order to avoid a national security threat to the country's infrastructure.
China voices concern over Australia's scrutiny of its firms
Reuters
Vice Commerce Minister Wang Shouwen of China met Australia's deputy secretary general for foreign affairs and trade in Beijing on Monday and called for a "fair, open and non-discriminatory business environment for Chinese enterprises". The talks come as the two countries seek to warm trade ties, with China having lifted some of the curbs on Australian coal exports at the very beginning of the year. Still, tensions remain over Australian wine, barley, beef, seafood, and timber exports. Australia's decision to ban TikTok, a social media platform owned by China's ByteDance, from all federal government-owned devices, has only added to the diplomatic complications between the two nations at a time when there is a need for greater "communication and co-ordination" to resolve concerns.
Taiwan rejects China pressure ahead of House speaker meeting
Associated Press
Taiwan’s President Tsai Ing-wen is facing threats of retaliation from China over her meeting with U.S. House Speaker Kevin McCarthy in Los Angeles. Although Taiwan sees the visit and demonstration of international support as important to its relations abroad, since China views Taiwan as its territory, any connection may threaten its sovereignty. The trip follows Honduras’ decision to cut ties with Taiwan last week potentially in favor of a $300m hydroelectric dam project built by a Chinese company. China's hostility toward Taiwan over the issue has grown in recent years, with the latest round of military exercises seeing the People's Liberation Army send 20 warplanes toward Taiwan and three warships. U.S. legislators have been visiting Taiwan more frequently given mounting concerns over China’s strategic position, while China has been funneling money into isolating the island.
India rejects China's bid to rename disputed places
BBC
India has rejected China's attempt to rename places in the north-eastern state of Arunachal Pradesh. In response to reports that Beijing had renamed 11 places along the Himalayan border, Indian foreign ministry spokesperson Arindam Bagchi said: "Arunachal Pradesh is an integral, inalienable part of India. And attempts to assign invented names will not alter this reality." China calls Arunachal Pradesh 'South Tibet' and claims the entire state, an area poorly demarcated along the approximately 3,440km Line of Actual Control, which can shift due to the presence of rivers, lakes, and snowcaps. In 2017, China sought to rename six districts in Arunachal Pradesh, and in December last year, it unveiled a second list of 15 renamed areas. India has rejected both attempts.
China art market slumps on virus curbs, falling wealth: report
Nikkei Asia
The art market in China suffered a 14% decline last year due to Covid-19 restrictions and a slowing economy. Art sales in China and Hong Kong totaled $11.2bn, which was the lowest amount since 2009, apart from the pandemic year of 2020, when sales were $10bn.
China says unmanned airship over US was isolated, unexpected event
Reuters
China has insisted that the recent incident in which an unmanned civilian airship flew over US territory was an unexpected and isolated event, and rejected “distortion and hyping up” of the matter. A spokesperson from the Chinese foreign ministry called for “safeguarding the security of relevant countries and regions and promoting security and development of the international community as a whole.” Neither the US nor China has made any suggestion that the drone was operating for espionage. However, the flyover has raised concerns among US officials about the unusual capabilities of the balloon, which is believed to have been created to monitor natural disasters. It is thought that the balloon may have undergone modifications which would allow it to undertake other surveillance tasks, such as tracking submarines.
How Saudi Arabia drifted away from the US and into the arms of China
Telegraph
Saudi Arabia is forming new security partnerships to ensure more reliable protection, free from the changing priorities of presidential administrations, according to this op-ed. As the US looks elsewhere to confront China over its economic and military influence in the Asia-Pacific, China has spied an opening in the Gulf. China has brokered a deal for Iran and Saudi Arabia to restore diplomatic relations, causing alarm in Washington, and Saudi Arabia has announced it is partnering with the China-led security bloc, The Shanghai Cooperation Organisation. Riyadh's deepening ties with Beijing reflect shifting oil export markets since China has become the largest importer of Saudi oil. Saudi Arabia is signaling that “they will act to secure their national interest” as new alliances form and the Iraq war has seen American dependency on Gulf oil decrease. The writer says Saudi Arabia is looking for security partners less subject to election cycles and less likely to raise human rights concerns.
Bunker mentality: Japan MPs push bomb shelters with eye on China, North Korea
South China Morning Post
Lawmakers in Japan are pushing for the rollout of shelters across the country to protect residents in the event of an attack. While civil defense plans are already in place, the focus is shifting to building infrastructure that will serve to protect people in the event of an attack from either North Korea or China. Subways in major Japanese cities would serve as locations for civil defense, however many of the country’s houses do not have basements, which can leave those not living in major metropolitan areas without protection. Furthermore, the vast majority of existing evacuation centers are not located underground. The first phase in any upgrading of existing facilities would be to strengthen them and equip them with relevant emergency supplies. At present, the strategy is not to create designated standalone defense centers.
Macron heads to China for delicate talks on Ukraine, trade
Associated Press
French President Emmanuel Macron is due to visit China for three days, and aims to use his trip to warn China against sending weapons to Russia and to encourage the country to support peace initiatives. He will also focus on seeking China’s greater engagement in global climate discussions and address human rights issues with Chinese authorities. Additionally, Macron will tackle trade talks to promote European unity, especially on economic matters. He is set to be accompanied by a delegation of over 50 CEOs, including those from EDF, Alstom, and Airbus. Trade unions will also stage the 11th round of nationwide demonstrations since January.
China Strikes Back at U.S. Chip Maker Even as It Signals Openness
NY Times
Micron Technology is being investigated by Chinese authorities over its products sold in the country, which experts interpret as China’s most significant action yet related to Washington’s campaign to cut its access to advanced chips. Beijing’s cybersecurity watchdog said that the review aimed to “safeguard the security of the information infrastructure supply chain” and had been set up by the government as a “normal regulatory measure”. However, the action signals collateral damage for Micron from China’s drive towards tech self-sufficiency, resulting from sweeping restrictions the US put on China’s semiconductor industry last year, targeting some of Micron’s Chinese competitors.
Micron has assembled an extensive relationship with China, with a center for chip design in Shanghai, branch offices in Shenzhen and Beijing, and approximately 3,000 employees in customer service, sales, and engineering across the country. The company opened its first factory in China in Xi’an in 2006, and became a significant player in the Chinese technology industry. However, as China’s plan to become more globally competitive has intensified, Micron has become a key part of the US tech competition with China, leading the US to scrutinize Chinese and Taiwanese chip makers for allegedly stealing trade secrets from Micron.
The decision to probe Micron goes against the statement by China Premier Li Qiang, at last week's economic forum that China would continue to “open its doors wider and wider”. The analysts are saying that, among other things, the decision on Micron appears aimed at sending a message to US tech policymakers whilst affording protection to the domestic industry; however, it is leaving Micron facing a worrying, uncertain future, having got caught up in China’s ambitions.
Shanghai woos foreign investors with slew of incentives to boost FDI flows
South China Morning Post
Shanghai has unveiled measures to attract foreign investors as it bids to maintain its position as China's commercial center and to help achieve its growth target. Incentives include cash awards for foreign direct investment projects and investors who reinvest their profits in the city. There will also be cash subsidies for office rent and a tax rebate, although no further details were provided. Hua Yuan, vice-mayor of Shanghai, also said visa and residency permit procedures would be eased to attract more foreign professionals and their families.
The move comes after the city reported a drop in foreign investment projects during the year's first two months. A total of 641 FDI projects were approved, down 22.4% from a year earlier. A local government official acknowledged that the FDI policies announced might not be sufficient to reassure foreign investors. However, they could help bring back multinationals' confidence in the city and the country. Foreign firms account for 25% of the city’s GDP and for one in every five jobs.
Leonardo DiCaprio testifies in embezzlement trial of Fugees rapper Pras Michel
Telegraph
Actor Leonardo DiCaprio appeared as a witness in a court case this week in Washington DC which accuses hip hop artiste Prakazrel “Pras” Michel of helping to channel money from Malaysian businessman Low Taek Jho into the US political system. Michel, part of group The Fugees, is alleged to have funneled Low’s money to then-President Barack Obama’s 2012 re-election campaign. The accusations relate to one of the largest embezzlement cases ever, involving Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB). Low, known as Jho Low and a former friend of Michel’s, has denied allegations of stealing billions from the fund. He is on the run and a co-defendant in the case. According to the US Justice Department, he used more than $3.5bn to invest in art, property and luxury yachts. A part of the money was used to invest in the film, The Wolf of Wall Street, which DiCaprio starred in and co-produced.
DiCaprio spent an hour in the witness box on 8 April answering questions. The actor said that, at the time Low asked him to invest in The Wolf of Wall Street, he had been “given a green light by my team as well as the studios to accept Mr Low’s funding”. As far as he knew, said DiCaprio, Low was seen as a “prodigy” and his funding had been considered safe to accept. DiCaprio also explained that he had met Low at a Las Vegas party in 2010 and had attended parties thrown by the Malaysian which were held on boats and at nightclubs. Low also gifted money to DiCaprio's environmental foundation.
China ‘very capable of inventing a new future’ as US edge erodes, Aukus told
South China Morning Post
Australia, the US and the UK will have to collaborate on hypersonic and quantum tech to compete with China, according to speakers at an annual global security summit in Sydney. Andrew Shearer, the director general of the Australian Office of National Intelligence, warned that the balance of power in the Indo-Pacific region was increasingly shifting away from the US and its allies, undermining deterrence. “We are seeing our long-standing technological edge start to erode, and in some cases, that edge is gone,” he claimed. The three nations will focus on developing hypersonic and quantum technology, with the Aukus alliance seen as an opportunity to pool expertise. Australia's leading quantum computer scientist, Michelle Simmons, called for creating a "joint mission" to develop a quantum computer capable of pooling all three countries' resources.
Xi's China can't replace the US as a financial superpower
Telegraph
China has made $104bn of emergency loans to developing nations between 2019 and the end of 2021, according to a study by AidData and the World Bank. The move suggests that China is switching from solely a creditor to a “lender of last resort”. Some analysts recommend that developing nations consider the higher cost of China’s aid, having regard to the International Monetary Fund (IMF), which offers loans at an interest rate of around 2%, compared to China’s 5%. Critics claim that the People’s Republic is, in reality, attempting to “compel” borrowing nations in the developing world to accept loans and bailouts with stringent or non-existent conditions attached, leading to the potential for lost control over economies, industries, and national resources.
China has often argued that the countries borrowing from it do so willingly and without strings attached. However, Western critics suggest China is increasingly exposed to risks arising from investments in big infrastructure projects and is therefore keen to extend its influence in targeted developing countries beyond simple lending. They claim that Beijing views China’s “Belt and road” infrastructure initiatives as a way of implementing quasi-imperial economic policies to extend its global soft-power reach. A report last year by AidData found that China often demanded the right to be excluded from collective restructuring, often resulting in China getting better terms than other creditors, potentially hampering bailout negotiations, as is currently being seen in Sri Lanka.
UK Foreign Secretary, Jeremy Hunt, recently opined that China could become a moral force in the modern world, able to use its economic clout and diplomatic reach to encourage global leaders to do more to prevent persecution of vulnerable minorities, a suggestion that infers that while China might be trusted to be good, it must also ensure that its aid and loan conditions are not too favorable to China at the expense of other countries.
Evergrande creditors holding US$19 billion of its debt approve workout
South China Morning Post
Chinese property developer Evergrande has agreed on the terms of a deal with some of its creditors amounting to $19.15bn in offshore borrowing, according to a filing made by the firm. The terms will guide as to what other fallen developers must offer to win creditor support. Creditors may opt for new bonds on extended maturities of between 10 and 12 years or shorter terms of between five and nine years, which also come with bonds convertible to Evergrande branches or shares in the company. Some creditors may opt for debt-to-equity swaps. Evergrande's total borrowing exceeds $300bn.
Japan to Increase Chip-Gear Spending Faster Than Any Other Nation
Bloomberg
Japan is preparing to increase its chip-gear spending to gain an advantage in the global semiconductor market, to counter the US-led strategy of limiting China’s tech objectives by curbing exports. Next year, Japan is expected to increase fab equipment spending by 82% compared to 2% in China. The total amount expected to be spent in Japan will surpass the combined spending of the Europe and Mideast markets. Tokyo is focusing on developing next-generation chips, such as solar panels, and wants to collaborate with countries such as the US for joint research while attracting manufacturing facilities to its soil. However, this latest move could restrict China’s access to advanced chipmaking technology, and Beijing has outlined that such restrictions could damage the stability of the global supply chain. China holds just 6% of the total value of the global semiconductor supply chain, but it is quickly developing its supply chain abilities. It is said to be seeking to achieve self-reliance in chips, according to recent remarks from China’s Foreign Minister Qin Gang.
China’s intensifying nuclear-armed submarine patrols add complexity for U.S. and allies
Japan Times
According to the Pentagon, China is keeping at least one of its nuclear-armed ballistic missile submarines constantly at sea for the first time. The assessment of China's military says six Jin-class ballistic missile submarines are operating “near-continuous” patrols from Hainan Island into the South China Sea. The subs are now equipped with a third-generation missile, the JL-3, which has an estimated range of more than 10,000 kilometers and carries multiple warheads. Even as the AUKUS deal will see Australia field its first nuclear-powered submarines over the next 20 years, constant Chinese ballistic missile patrols at sea are piling strain on the resources of the United States and its allies as they intensify Cold War-style deployments.
The new patrols imply improvements in many areas, including logistics, command and control, and weapons. They also show how China is starting to operate its ballistic missile submarines like the United States, Russia, Britain, and France have for decades, military attaches, former submariners and security analysts say. The Pentagon report notes that with an estimated range of more than 10,000 kilometers and carrying multiple warheads, the JL-3 allows China to reach the continental United States from Chinese coastal waters for the first time.
SenseTime Soars After Expectations Mount of Own ChatGPT Rival AI
Bloomberg
China's major AI firm, SenseTime – backed by SoftBank – has spiked 18% on rumors it will launch its AI model to compete with OpenAI's ChatGPT. SenseTime has yet to release further details after confirming it will hold an upcoming media event, which has led analysts to predict that the new product will be related to AI-generated content. The Shanghai-based firm is competing against a variety of chatbots and software creators in the expanding AI sector, with the likes of Google's Bard, Baidu's Ernie Bot, and Microsoft’s ChatGPT. SenseTime is one of several major AI companies in China, including megafirms Huawei and Baidu, each of which invested vast sums in AI projects in recent years.
Malaysia, China to Discuss ‘Asian Fund’ to Cut Dollar Dependency
Bloomberg
Malaysia's Prime Minister, Anwar Ibrahim, has called for discussions with China to form an Asian Monetary Fund, as the world becomes increasingly impatient with the dominance of the US dollar. Anwar proposed the formation of the fund at the Boao Forum in Hainan last week, highlighting the need to reduce dependence on the International Monetary Fund (IMF) or the US dollar. Following the proposal, he reportedly discussed it with President Xi Jinping, who referred to the idea and welcomed dialogue. The bank is already enabling negotiations on trade using the ringgit and renminbi.
Anwar first mooted the idea of the Asian Monetary Fund during his first tenure as finance minister in the 1990s. However, the proposal did not gain traction at that time as the US dollar was seen as very strong. Anwar believes that with the strength of economies in China, Japan and other countries in the region, such a fund should be considered. There have been discussions among former officials in Singapore as to whether the region should try to reduce the risks of the strength of the dollar, which has weakened local currencies and has become a tool of economic statecraft.
China's 'Big Three' airlines reported sky-high losses in 2022
Nikkei Asia
The big three state-owned airlines in China have seen massive losses in 2022, with combined losses reaching nearly ¥109bn ($15.8bn), as Covid-19 restrictions devastated travel and caused passenger numbers to plummet. Air China, the national flag carrier, was the worst performer with net losses widening by 132% from the previous year to ¥38.6bn, according to its earnings report. Another major carrier, China Southern Airlines, saw a net loss of ¥30.84bn, while China Eastern Airlines posted a net loss of ¥39.05bn. However, the airlines predicted a recovery in demand this year as vaccination rates rise and pandemic-related travel restrictions are lifted.
Brussels calls on China to use its influence with Russia to rein in war
Financial Times
The EU's president Ursula von der Leyen has called on China to "influence Russia", which is currently at war with Ukraine, by playing a "constructive role" in bringing about a peaceful resolution. Von der Leyen commented ahead of a joint trip to China with France's Emmanuel Macron, who is looking to "re-engage" with the country and "forge a consensus" with Chinese leaders. The French president is expected to spend up to seven hours in meetings with President Xi during the three-day trip, accompanied by business leaders and foreign and finance ministers.
China's relationship with Russia has caused concern for the EU, which is currently withholding ratification of the EU-China Comprehensive Agreement on Investment due to sanctions imposed by China on some of its lawmakers. The ambassador to the EU, Fu Cong, said he was optimistic about the visit, hoping for progress on the inclusion of the investment agreement. France has suggested China has a "game-changing effect" on the conflict in Ukraine and called on China to have a "more constructive" impact on the situation.
Ahead of the trip, Paris and Beijing were still discussing where there might be an agreement on helping the civilian population of Ukraine. Macron views himself as having a central role in diplomatic efforts to resolve the conflict, as he did during the Russian invasion. He has previously held frequent calls with Putin and Volodymyr Zelenskyy, the Ukrainian President.
Hong Kong's Workforce Sees Its Biggest Drop in Almost 40 Years
Bloomberg
Hong Kong’s labor market has seen its sharpest drop on record, underscoring the city’s challenges with an aging population and outflow of talent. Hong Kong's working population fell by 94,100, down 2.4% in 2022, according to data released by the Census and Statistics Department. This is the most significant labor plummet since the government began keeping records in 1985. Tens of thousands of people, including lawyers and bankers, left the city following the national security law and strict pandemic curbs. A manpower shortage will affect services for the public and the city’s competitiveness, Hong Kong Chief Executive John Lee said at a daily press conference on Tuesday.
Foreign Affairs
The United States has a significant lead in the global competition for artificial intelligence (AI), with advantages in computing hardware and human talent that other countries cannot match, according to an article in Foreign Affairs by Paul Scharre. However, the Chinese government's strategy for advancing AI is considered superior to that of the US, and China has a large and growing community of high-quality AI experts. Despite China's advantages, the US must approach Beijing carefully and construct its own initiatives thoughtfully to retain its lead in AI. The US needs to ensure that its institutions, including the military, fully adopt new innovations, harness its academic, corporate, and government resources to improve its mastery of AI technology and maintain a strategy that will keep China dependent on foreign-made chips while attracting and retaining the world's top AI talent.
The US has the upper hand over China in controlling advanced semiconductor manufacturing equipment and AI chips made with US technology. The Biden administration banned companies from selling advanced semiconductor manufacturing equipment and AI chips made with US technology to China in October 2022. China is highly dependent on foreign chips, importing over $400 billion worth of them per year. The two Asian countries with the biggest chip manufacturing markets, Japan and the Netherlands, have reportedly joined the US controls. The three nations collectively control 90 percent of the global market for semiconductor manufacturing equipment, so the restrictions could ensure that China's domestic chip production falls behind as the worldwide industry advances.
The Chinese exodus of AI talent is not the only way that China's larger population has failed to give the country a leg up in the AI race. Major US tech firms, the ones that are funding some of the biggest AI breakthroughs, have a global reach that exceeds that of Chinese companies. Facebook, for example, has 2.7 billion users, YouTube has over 2 billion, while WeChat, China's biggest app, has 1.2 billion users. U.S. tech firms also have a more diverse database. Except ByteDance’s TikTok, Chinese social media platforms have struggled to gain a foothold outside China, putting them at a disadvantage in gaining access to diverse data.
Philippines reveals locations of four new strategic sites for U.S. military pact
Japan Times
The Philippines has opened up four new military bases for US access, almost doubling the number already covered under the Enhanced Defense Cooperation Agreement (EDCA), signed in 2014 under US President Obama. The additional locations are at the Camilo Osias navy base in Sta Ana, Lal-lo airport, both in Cagayan, the island of Balabac off Palawan, and Camp Melchor Dela Cruz in Gamu, Isabela province. Cagayan and Isabela are situated facing north towards Taiwan, while Palawan is close to the disputed Spratly Islands in the South China Sea, which China has equipped with runways and missile systems. The original agreement covered facilities for joint training, pre-positioning of equipment, and buildings such as fuel storage, runways, and military housing. Duterte confirmed the expansion on Monday, citing the “growth of our alliance” as contributing to the move.
New Chinese ambassador demonstrates drive to deepen North Korea ties
Nikkei Asia
China's new ambassador to North Korea, Wang Yajun, has arrived in the country as the two nations seek to counter growing security cooperation between the US, Japan and South Korea. Although North Korea's borders have remained closed since March 2020 due to the pandemic, an exception appears to have been made for Wang's arrival, indicating the strength of the ties between the two nations.
US Says Tough China Moves Needed to Counter ‘National Champions’
Bloomberg
The US must use “more assertive economic measures” in relation to China, according to Jose Fernandez, the Undersecretary of state for economic growth and energy under President Biden. During the country’s annual legislative session last month, China’s President Xi Jinping accused the US of trying to “contain and suppress” his country. Washington has applied export controls to key technologies and has imposed punishing tariffs for responding to what it sees as unfair economic practices by Beijing, especially about intellectual property. The Trump administration also sought to damage the interests of Chinese firms such as telecoms giant Huawei.
Fernandez said that the State Department had encouraged its Asian allies to engage with the Indo-Pacific Economic Partnership but that the Biden administration had not committed to an Asia-Pacific regional trade deal that would provide greater market access.
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