If Biden Wanted to Ease U.S.-China Tensions, Would Americans Let Him? Exclusive Insight: Who Is the Director of China’s National Supervisory Commission
The U.S. is slowly weaning India off Russian arms; Europe weighs using frozen Russian assets to rebuild Ukraine
Welcome to this issue of The China Brief. Today is June 27, 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: Who Is the Director of China’s National Supervisory Commission
The whip of the Chinese Communist Party (CCP), the Central Commission for Discipline Inspection (CCDI), has the primary responsibility of supervising party cadres' exercise of power and investigating and dealing with their legal violations, in accordance with the "Constitution of the Chinese Communist Party" and other internal party regulations.
When the CCDI fulfills its responsibilities, it does so in accordance with party laws, supervising, investigating, and dealing with party members. However, there are two flaws in this system.
Firstly, the CCDI may violate the law in exercising its powers. For instance, if the CCDI detains a party cadre for a prolonged investigation, it would be in violation of the law. Even the Public Security Bureau does not have such authority. Secondly, while the CCDI exercises its power over party members, a large number of public servants are not party members, such as grassroots leaders, public school teachers, and temporary workers in the government. The CCDI's supervision and investigation do not cover them.
To fill these two gaps, in 2018, China amended its constitution and passed the "Supervision Law of the People's Republic of China," establishing the National Supervisory Commission. In reality, the National Supervisory Commission co-offices with the CCDI and merely serves as a legal subsidiary platform for the CCDI to exercise supervision, investigation, and processing over all public servants. The secretary of the National Supervisory Commission is also served by the deputy secretary of the CCDI.
The newly elected director of the National Supervisory Commission, Liu Jinguo, was born in Changli, Hebei, in 1955. After graduating from high school in 1974, he started as the secretary of the village party branch and step by step, over 18 years, ascended to leadership roles at the commune, township, county, district, and city levels. In 1992, Liu Jinguo moved to the Public Security Department, first serving as the director of the Qinhuangdao Public Security Bureau and then progressively rising to leadership positions in Hebei Province and the Ministry of Public Security. In 2014, he served as the Deputy Minister of Public Security and Deputy Party Secretary (Minister level), Secretary of the Disciplinary Committee, and Chief Inspector. In October 2014, Liu Jinguo transferred to become the deputy secretary of the CCDI. At the 20th National Congress of the CCP in 2022, Liu Jinguo was elected Secretary of the Central Secretariat, Deputy Secretary of the CCDI, entering the sequence of party and state leaders. In 2023, Liu Jinguo was elected as the Director of the National Supervisory Commission.
During his leadership in the Ministry of Public Security, Liu Jinguo led a series of public security remediation campaigns, including combating counterfeit goods, solving long-unsolved major cases, arresting long-wanted criminal suspects, and eliminating fire hazards.
Whenever the nation faced an emergency, Liu Jinguo was always at the forefront of command. At the beginning of 2008, when southern China suffered from a freezing rain and snow disaster, Liu Jinguo directed the successful evacuation of millions of passengers gathered at Guangzhou railway station, preventing a stampede. In May 2008, during the Sichuan Wenchuan 8.0 magnitude earthquake, Liu Jinguo served as the overall commander of the rescue, mobilizing over 20,000 public security personnel for the rescue. In July 2010, when an oil pipeline exploded at Dalian New Port, Liu Jinguo was again on-site, directing firefighting efforts. His leadership helped extinguish the blaze, creating a miracle in the history of firefighting. Due to this accomplishment, Liu Jinguo was selected as one of the "Touching China" characters of the year 2011 by the Central Television of the CCP.
Liu Jinguo is one of the rare leaders within the party who has a reputation for integrity. According to public media reports, his wife remained a temporary worker until her retirement, and he himself does not accept any invitations or gifts.
If Biden Wanted to Ease U.S.-China Tensions, Would Americans Let Him?
NY Times
Public opinion in the United States is becoming increasingly hostile towards China, and the same was true of the Soviet Union in the run-up to the Cold War, according to the New York Times. This decline in public opinion in both cases occurred despite the fact that both China and the Soviet Union were initially viewed positively in the US. The report argues that such a decline in public opinion could worsen US-China relations, as political leaders tend to respond to public sentiment. Both the US and China have become more hawkish towards each other, and this is being communicated to the public through political leaders and the media, thus reinforcing negative views of each other. Additionally, public opinion can drive leaders’ decision-making, even in countries where politicians are not democratically elected. Given this, a Cold War framework could help keep tensions between the US and China from escalating, the report argues.
The U.S. is slowly weaning India off Russian arms
Nikkei Asia
India's historically close relationship with Russia has been a major obstacle in its strategic alliance with the US. Efforts to court India as a new strategic ally have faced difficulty due to India's reliance on Russian arms imports. However, the recent deals signed during Indian Prime Minister Narendra Modi's visit to the US could potentially shift this dependence. The Stockholm International Peace Research Institute has noted that Russia's share of India's arms import market has dropped from 64% to 45%, indicating a possible reorientation towards US arms imports.
Europe weighs using frozen Russian assets to rebuild Ukraine
Nikkei Asia
The European Commission is considering using frozen Russian central bank assets to help rebuild Ukraine after Russia's invasion. European Commission President Ursula von der Leyen said that Russia must pay for the destruction it has caused in Ukraine and discussions are ongoing to find ways to utilize Russian public assets for this purpose. The EU and G7 partners have blocked around €300 billion ($328 billion) of Russian central bank assets as part of sanctions, and von der Leyen stated that the EC will put forward a proposal soon on how to use these assets to rebuild Ukraine.
China joins effort to avert sovereign debt crisis
Nikkei Asia
China has taken on a new role in helping sovereign borrowers restructure repayments as it emerges as the largest creditor to developing countries. This comes amid the worst debt crisis for poor countries since the 1980s, with over 70 low-income nations collectively managing $326bn in debt, more than half of which are in or near debt distress. This debt crisis has been exacerbated by the COVID-19 pandemic, with increased borrowing costs and a stronger dollar making refinancing and repaying loans more expensive for developing countries. Debt servicing in Africa now averages 17% of government revenue, the highest since 1999, according to Debt Justice.
China, alongside India, Saudi Arabia, and the Paris Club, is working on debt resolution cases in multiple countries. China's share of debt from low-income countries has risen to 30.4% from 2.1%, making it the largest creditor to many countries facing imminent debt distress. For example, three-quarters of Zambia's borrowings that must be restructured are owed to China. China's participation in debt relief negotiations is crucial, as it is a key element of discussions on who should bear potential losses and how restructuring plans should be arranged.
The debt resolution process has been slow, with delays in implementing the Common Framework for restructuring debt from poor countries. However, progress has been made, with Zambia reaching an agreement in principle to restructure $6.3bn of debt with bilateral lenders. This marks the first major relief won by a developing country under the Common Framework and could pave the way for other nations to achieve similar agreements. It is crucial for creditors to provide debt relief and for restructuring terms to be agreed upon, as this is in the best interest of lenders and allows countries to grow, ultimately enabling them to pay back their creditors.
China's Li Qiang underscores 'stability' after Russia rebellion
Nikkei Asia
Chinese Premier Li Qiang has called for global stability in order to protect economic growth. Speaking at the World Economic Forum in Tianjin, Li stated that global stability and development have been disrupted by "unfortunate events" and that acts of encirclement, suppression, and regional wars and conflicts have occurred as a result. Li Qiang's comments came in the wake of the aborted uprising by the Wagner Group in Russia. Li Qiang did not name any specific country in his speech but emphasized the importance of stability for China's own growth, which is facing external challenges. v also criticized the "politicization of economic issues" by some Western countries and called for cooperation to maintain global industrial and supply chains.
China, in swipe at U.S., accuses West of ‘sowing division and confrontation’
Washington Post
Chinese Premier Li Qiang has accused Western nations of "sowing division and confrontation" and politicizing economic issues, in a thinly veiled criticism of the US. Speaking at the World Economic Forum's Annual Meeting of the New Champions, Li sought to position China as a responsible world power and champion of globalization. He also criticized the strategy of "de-risking" adopted by the US and other G7 countries, arguing that businesses, not governments, are best placed to assess risk. Li's comments come as China faces a property market downturn, rising unemployment, and unsustainable levels of government debt.
Wanda Bonds Jump After Huarong Takes Over Investment JV
Bloomberg
China Huarong Asset Management has taken over a joint venture with Dalian Wanda Group via a capital injection. The state-controlled bad-debt manager has injected CNY1.67bn ($232m) worth of debt assets into Wuhan Huadajiuhao Innovation Investment, which owns a real estate subsidiary that has purchased land parcels in Wuhan. Wanda has been facing a debt-repayment crisis in recent months.
China fears Russia chaos after Wagner uprising
Nikkei Asia
China is reportedly concerned about the potential destabilization of Russia following the recent insurrection of the Wagner paramilitary group. A senior Ukrainian official has said that China's fears were confirmed by the weekend mutiny and that "internal unrest in Russia would be one of the worst possible scenarios for Beijing." The weakened state of President Vladimir Putin is also expected to affect China's potential future plans to take over Taiwan, as it no longer has a strong ally in Russia to back it.
Baidu Claims Its Ernie Bot Now Beats ChatGPT on Key Measures
Bloomberg
Baidu has announced that its ChatGPT-style service, Ernie 3.5, has outperformed OpenAI's GPT-3.5 and GPT-4 on several measures. According to Baidu, Ernie 3.5 demonstrated superior general abilities and Chinese-language capabilities in a test conducted by China Science Daily. The new model also improved training and inference efficiency, making it faster and more cost-effective to iterate and upgrade. Baidu aims for Ernie Bot to become a leading app in China's internet space and is integrating it across various business lines. The company has also established a $140 million venture fund to invest in OpenAI-like startups.
China's growth to be higher in Q2, projected to hit annual 5% target - Premier Li
Reuters
China's Premier Li Qiang has stated that the country's economic growth in the second quarter will be higher than the first and is projected to reach the annual growth target of around 5%. He also mentioned that China will implement more effective policies to expand domestic demand and open markets. However, analysts are downgrading their growth forecasts for China for the rest of the year due to weak industrial output and retail sales data. Premier Li also commented on the pandemic, stating that it is unlikely to be the last public health crisis, but he believes that it will eventually be over and barriers will disappear. He reiterated China's commitment to globalization and open business, emphasizing the importance of effective communication and dialogue between countries.
New Zealand foreign minister confirms 'very robust' meeting with Beijing
Reuters
New Zealand's Foreign Minister, Nanaia Mahuta, has described her meeting with China's foreign minister in March as "very robust" ahead of a visit by New Zealand Prime Minister Chris Hipkins to China. A report in an Australian newspaper claimed Mahuta had been "dressed down" during the meeting, highlighting strains in the relationship between the two countries. Mahuta did not provide details of the discussion, but said the invitation for the prime minister to visit China reflected the mature nature of the relationship. China is New Zealand's largest trading partner.
Chinese state-owned company to invest $1.4b in Greater Bay Area
Nikkei Asia
Guangzhou City Construction Investment Group (GZCCI Group), a Chinese state-owned company, has established a CNY10bn ($1.4bn) fund to invest in the cultural industry in southern China. The Guangdong-Hong Kong-Macao Greater Bay Area Cultural Industry Investment Fund I will target core cultural segments, including technology-enabled cultural innovation, consumption, tourism, education and sports. It will mainly back local cultural brands and companies in Guangzhou and the Greater Bay Area, but will also look to attract quality cultural projects from outside the region.
China's state banks seen selling dollars offshore to slow yuan drop - sources
Reuters
China's major state-owned banks have been selling dollars in the offshore spot foreign exchange market in an effort to slow the pace of the yuan's recent slide. The move comes as the offshore yuan weakens towards the psychologically important 7.25 per dollar level. State banks usually act on behalf of the country's central bank in the foreign exchange market, but they could also be trading on their own behalf or on behalf of clients. The yuan's weakness has been driven by China's faltering post-pandemic economic recovery and widening yield differentials with the United States.
Asia lobby group pushes for easing of China's offshore listing rules
Reuters
China's new offshore listing rules for domestic companies have left bankers and lawyers unsure how to take on liabilities and avoid breaching tightened confidentiality rules, according to Asia's largest financial lobby group, ASIFMA. The new rules, which come into effect on 31 March, require bankers, lawyers and accountants to formally pledge with China's securities regulator that they guarantee the "truthfulness, accuracy, and completeness" of their work within three days of an overseas listing. ASIFMA has voiced its concerns to the China Securities Regulatory Commission.
China home sales require more easing to escape ‘current malaise’, analysts say
South China Morning Post
The struggling home sales market in major Chinese cities is unlikely to bounce back without further stimulus from the government, according to analysts. Home sales by gross floor area rose 18.5% in June compared to the previous month, but were down 44.2% from a year ago, according to China Index Academy. Analysts are predicting that a reduction of at least 50 basis points in mortgage rates is necessary to stimulate the market.
Stay informed about the latest news, analysis, and policy briefs from across the globe related to China with the China brief. Our team aggregates, synthesizes, and summarizes the most important information from various sources, including media outlets, think tanks, government agencies, and industry experts.
Our mission is to provide you with easily accessible and critically valuable information tailored to your specific field of interest. We understand the significance of staying up-to-date on developments related to China and aim to make this information comprehensible for our readers.
Join the conversation and stay informed about the latest news and developments related to China by visiting our website at www.6dobrief.com