Li Shangfu: The public face of China's military under corruption probe; Putin and Kim’s Embrace May Place Xi in a Bind
WTA urged to keep Peng Shuai case in focus as tennis returns to China; Troubled Chinese Trust Company Brings In State Help; IMF to urge China to shift growth model toward consumption
Welcome to this issue of The China Brief. Today is September 16, 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.
The public face of China's military under corruption probe
Reuters
China's Defense Minister, General Li Shangfu, is reportedly under investigation for alleged corruption in relation to the procurement of military equipment. Li rose to prominence under President Xi Jinping's military modernization drive and became defense minister earlier this year. His disappearance last month and failure to attend meetings led to speculation that he was the target of a corruption probe. While his post is largely ceremonial, Li is one of China's five state councillors, and his relations with the US have defined his tenure. He was sanctioned by the US in 2018 for buying weapons from Russia.
Putin and Kim’s Embrace May Place Xi in a Bind
NY Times
Closer ties between North Korea and Russia could threaten China's perceived clout in negotiations over ending Russia's war in Ukraine and curtailing North Korea's nuclear program. “I doubt Xi is overjoyed to see the Kim-Putin love-fest unfolding across China’s border,” said John Delury, a professor of Chinese studies at Yonsei University in Seoul. Russia could gain more weaponry from North Korea to intensify its war in Ukraine. North Korea could garner aid or technological assistance from Russia and ramp up its nuclear weapons program. “All this activity would come on Beijing’s doorstep but outside its control or influence,” Mr. Delury said. For China, such cooperation may embolden Russia and North Korea to escalate their provocative actions. This might be a headache for Beijing, which wants to avoid coming under increased pressure to rein in Pyongyang and Moscow. China has also sought to prevent its neighbors from drawing closer to Washington. Mr. Kim’s missile tests have already contributed to the decision last month by South Korea and Japan to put aside their historic differences to sign a trilateral defense agreement with the United States.
Troubled Chinese Trust Company Brings In State Help
WSJ
China's Zhongrong International Trust has announced that it is working with two state-owned institutions to address its financial problems. Zhongrong Trust failed to make payments on high-yielding investment products that it had sold to many companies and wealthy individuals last month, sparking concerns of a wider financial contagion. As we have previously noted, China's trust industry has long been a source of funding for Chinese real-estate developers. Zhongrong Trust, which had the equivalent of $108bn in assets under management at the end of 2014, has said that the arrangement with the two state-backed firms is not a government bailout; however, this has done little to allay fears that the trust industry could be the next casualty of China's property crisis.
South Korea’s Interest in Nuclear Weapons Hasn’t Gone Away—It’s Just On Hold
WSJ
Many in South Korea's political elite, including Seoul Mayor Oh Se-hoon, are calling for the country to develop its own nuclear weapons. South Korea is surrounded by nuclear-armed nations and there is broad public support for a nuclear program. Some argue that relying on the US nuclear umbrella is not enough to protect the country. However, following a recent pact with the US, support for nuclear armament in South Korea dropped to 60% this year, according to a survey.
IMF to urge China to shift growth model toward consumption
Japan Times
IMF Managing Director Kristalina Georgieva is planning to request China to address several issues that are affecting both Chinese and global economic growth. Georgieva aims to discuss the need for China to reduce its reliance on debt, address financial vulnerabilities, and implement structural reforms to boost productivity and innovation. She will also emphasize the importance of addressing climate change and promoting sustainable development. Additionally, Georgieva plans to discuss the trade tensions between China and the United States and the need for a comprehensive and fair trade agreement.
China sees ‘Cold War mentality’ in US-Vietnam pact, Vietnamese disagree
Al Jazeera
China has warned the United States to discard its "hegemonic and Cold War mentality" following the upgrade of diplomatic relations between the US and Vietnam. The US and Vietnam signed a comprehensive strategic partnership, which some Chinese officials have interpreted as a move in a new Cold War playing out in Southeast Asia. However, US officials have rejected these claims, stating that the partnership with Vietnam is not about choosing between the US and China, but rather about shared values and interests. Vietnam has emphasized that its relationship with China is a top priority, but it has also sought to maintain good diplomatic relations with the US. Vietnamese citizens have expressed support for closer ties with the US, hoping that it will bring economic and educational opportunities. However, they also emphasize the need for Vietnam to remain neutral and not be drawn into any particular side amid current geopolitical tensions. The US hopes that the partnership with Vietnam will give it more influence in the Southeast Asia region and the South China Sea dispute.
WTA urged to keep Peng Shuai case in focus as tennis returns to China
South China Morning Post
The Women's Tennis Association (WTA) has ended its boycott of China and will hold its first tournament in the country since 2019. The WTA suspended its tournaments in China after Chinese tennis star Peng Shuai accused a senior former Chinese government official of sexual assault in a now-deleted social media post. Peng later denied making the accusation, sparking concerns over her safety. Critics have called on players and the WTA to continue advocating for Peng and pressing for a resolution to her case. The WTA has said it will continue to call for a formal investigation and a private meeting with Peng.
Not just China, the world is at risk of hidden debt and financial shocks
South China Morning Post
There is a lack of focus on the financial threats facing the US and Europe, with all the attention being placed on China’s property sector problems. There are concerns over the real estate and non-banking financial sectors in advanced economies due to higher interest rates and huge amounts of debt. The Financial Stability Board (FSB) recently warned of “further challenges and shocks” due to high interest rates undermining economic recovery and threatening key sectors. The FSB highlighted hedge funds as a potential source of instability due to their bond market exposures and high levels of synthetic leverage.
G77 summit in Cuba calls for new global order
Deutsche Welle
The Group of 77 developing countries (G77) has called for a new global order at a summit in Havana, Cuba. The bloc, which was established in 1964 to advance the economic interests of the Global South, now includes 134 members. Cuban President Miguel Diaz-Canel, who currently chairs the organisation, said that developing countries were the main victims of a "multidimensional crisis" in the world today, ranging from "abusive unequal trade" to global warming. The summit was attended by a number of Latin American leaders, as well as Palestinian Authority leader Mahmoud Abbas. China, which is listed as a member by the bloc, sent a representative to the summit who stressed the country's commitment to South-South cooperation and building technological change to reduce digital divides.
‘Significant losses’ for Putin’s forces as Kyiv retakes village
The Independent
Ukraine has announced the recapture of the village of Andriivka from Russian forces, a move that the army says is "key to success in all further directions". The Ukrainian armed forces claim that Russian forces suffered "significant losses" in the battle. Ukraine's forces are seeking to reclaim land occupied by Russia across multiple areas of southern and eastern Ukraine. Andriivka is located about 10 kilometres south of the Donetsk town of Bakhmut, which was captured by Russia in May. Britain's most senior military officer, Sir Tony Radakin, praised Ukraine's offensive against Russia, stating that they have taken the initiative and are making progress of between 10 to 20 kilometres in the south.
The UN's World Heritage Committee has placed two major historical sites in Ukraine - the Saint Sophia Cathedral in Kyiv and the medieval center of Lviv - on its list of sites considered to be in danger. The decision has no enforcement mechanism but could help deter Russian attacks. Ukraine's president, Volodymyr Zelensky, hailed the destruction of a Russian air defense system in Crimea, which was annexed by Russia in 2014. Meanwhile, Ukraine continues to target Russia's Black Sea fleet for a second day.
This article highlights Ukraine's recent successes in its counteroffensive against Russian forces. The recapture of Andriivka is seen as a significant achievement for the Ukrainian army, as it is a step towards reclaiming land occupied by Russia. The Ukrainian armed forces claim that Russian forces faced significant losses in the battle. The inclusion of two major historical sites in Ukraine on the UN's list of sites in danger highlights the ongoing conflict between Ukraine and Russia and the potential threats to cultural heritage. Overall, this article reflects the ongoing tensions between Ukraine and Russia and the ongoing conflict in eastern Ukraine.
How China can spy on the world
Telegraph
The UK is being forced to radically redraw its approach to China to protect itself against a sharper, more assertive Beijing, according to The Telegraph. The Chinese Communist Party reportedly has a “high level of intent” to interfere with the UK government, targeting officials and bodies at all levels to influence political thinking and decision-making. While the UK has been slow to respond to these activities, it is now considering forcing anyone working in Britain “at the direction” of China to register on a “foreign influence scheme” or face up to five years in jail. However, identifying those working “at the direction” of China is a significant challenge. China’s espionage activities are holistic, diverse, and organised in an opaque manner. They range from soft power lobbying to hard-nosed spy games, all designed to procure knowledge and influence that will allow China to become the world’s pre-eminent power of the 21st century.
What we know so far about Singapore’s U$1.3 billion money laundering case
South China Morning Post
Singapore's recent US$1.3 billion money laundering scandal could involve more suspects and assets, according to prosecutors and officials. So far, 10 individuals, all of mainland Chinese origin, have been arrested and charged. The suspects are alleged to have ties with organised crime. Assets seized include luxury properties, vehicles, cash, bags, watches, and jewellery. The case has raised questions about Singapore's reputation as a financial hub, but observers have noted that it was investigated by authorities of their own accord. The city-state has seen an influx of high-net-worth individuals from Hong Kong and mainland China setting up family offices during the pandemic.
‘The credit will go to Modi’: India’s PM seeks G20 boost in upcoming elections
Financial Times
Indian Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) are capitalising on the publicity boost from hosting the G20 summit last weekend to kick off their campaign for national elections early next year. The BJP is seeking to translate the momentum gained from the summit into electoral success as Modi faces a unified opposition in polls that will be fought largely on domestic and economic issues such as inflation. India is entering a busy political season, with five state polls due in the coming months and a national vote in early 2024.
Ukraine latest: Russia shows North Korea's Kim hypersonic missiles
Nikkei Asia
Ukrainian drones and other cutting-edge technologies are disrupting conventional warfare by challenging the belief that the side with the most heavy weapons will always prevail. Drones have been used for surveillance, target acquisition, and precision strikes against Russian military positions. They have been particularly effective in the urban battlefields of Ukraine, where traditional heavy weapons are less useful due to the risk of collateral damage. The use of drones has allowed Ukrainian forces to maintain the initiative against Russian aggression and hold their own against a more powerful adversary.
Russia has shot down two Ukrainian drones over its territory, in the Kaluga and Tver regions. The drones were likely used for reconnaissance purposes, gathering information on Russian troop movements and positions. This incident highlights the increasing role of unmanned aerial vehicles (UAVs) in modern warfare, where they can be used for intelligence gathering, surveillance, and targeted strikes against enemy positions. As technology continues to advance, drones are likely to play an even bigger role in future conflicts.
North Korean leader Kim Jong Un visited Russia and was shown Russia's Kinzhal hypersonic missiles and strategic bombers by Defense Minister Sergei Shoigu. The meeting between Kim and Putin comes at a time when Russia is facing increasing international isolation due to its aggression in Ukraine. By cultivating closer ties with North Korea, Russia may be trying to counterbalance Western pressure and gain support from a country that is also facing sanctions and international isolation. This move could further complicate the situation in Ukraine and undermine efforts to resolve the conflict peacefully.
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