Nikkei: Xi Jinping's personality cult shows signs of weakening
Kevin Rudd on Xi Jinping; Why It’s Getting Harder to Fly to China
Welcome to this issue of The China Brief. Today is October 24, 2024. 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.
Could US-China military ties endure the turbulence of another Trump presidency?
South China Morning Post
The upcoming presidential race between Donald Trump and Kamala Harris is poised to impact US-China military relations amid rising geopolitical tensions. Analysts suggest a Trump victory could lead to unpredictability in military affairs, given his contentious history with military officials during his presidency. His approach has included controversial proposals and clashes over strategy, resulting in significant turnover among military leaders. In contrast, Harris, who aims to maintain open military communications with Beijing, is likely to uphold the policies of President Biden, providing greater stability in US-China relations. Experts note that while Trump's relationship with the military could remain complex and tense, the military's adherence to civilian authority is expected to persist. The deterioration of US-China ties has been evident since the trade conflict began in 2018, further strained by events like Nancy Pelosi's visit to Taiwan. Harris's stance emphasizes responsible competition and protecting American interests without seeking conflict, indicating a commitment to continuity in foreign policy. Ultimately, the election outcome could shape not only the future of US-China relations but also the dynamics of US military leadership.
https://www.scmp.com/news/china/military/article/3283595/could-us-china-military-ties-endure-turbulence-another-trump-presidency?utm_source=rss_feed
China’s President Xi commits to staunch cooperation with Iran amid Mideast conflict
South China Morning Post
Chinese President Xi Jinping and Iranian President Masoud Pezeshkian met at a Brics summit, where Xi reaffirmed China's commitment to strengthening cooperation with Iran amidst rising Middle Eastern tensions, particularly due to Israel's military actions in Gaza. Pezeshkian expressed Iran's readiness for deeper collaboration in key economic sectors, emphasizing mutual support against perceived global hegemony. Both leaders called for a ceasefire in Gaza, with China advocating for de-escalation. The expanded Brics bloc offers both nations a platform to counter US-led sanctions and enhance economic ties, particularly through yuan-trade infrastructure.
https://www.scmp.com/news/china/diplomacy/article/3283628/chinas-president-xi-commits-staunch-cooperation-iran-amid-mideast-conflict?utm_source=rss_feed
Why It’s Getting Harder to Fly to China
NY Times
American and European airlines are increasingly suspending flights to and from China, with Virgin Atlantic announcing the end of its London-Shanghai route after 25 years. Other airlines, such as LOT Polish Airlines and Scandinavian SAS, are also halting flights due to reduced demand and complications from flying over Russian airspace, which adds significant travel times and costs. Despite the lifting of Covid-19 restrictions in China, business travel has not rebounded as expected, partly due to a sluggish Chinese economy and foreign companies' hesitance to operate there. The lack of passenger demand further exacerbates the financial strain on airlines.
https://www.nytimes.com/2024/10/24/business/china-air-travel-flights.html
The Nuclear Brain Trust
Foreign Affairs
Since their inception, nuclear weapons have evolved significantly in both power and delivery methods, with the global landscape now featuring nine nuclear-armed states, predominantly Russia, China, and North Korea, which pose threats to U.S. security. The risks surrounding nuclear weapons have increased, and the decision-making process for their use remains solely in the hands of U.S. presidents. This concentration of power is troubling as a president could unilaterally order a nuclear strike without consultation, risking catastrophic consequences, especially if influenced by unreliable judgment or perceived threats.
The current U.S. nuclear decision-making process prioritizes speed, a relic of Cold War-era strategies aimed at countering a potential Soviet strike. The president utilizes the "nuclear football," a briefcase containing nuclear war plans, to communicate commands swiftly, allowing for a quick response to surprise attacks. However, this framework can also facilitate a first-strike order, where the president alone can initiate nuclear action, thereby increasing the risk of hasty decisions during crises. Such a scenario is particularly concerning given the growing complexity of potential nuclear threats from various actors.
To mitigate the risks associated with unilateral nuclear decisions, it is proposed that a system of consultation be established, requiring the president to engage with a select group of advisors before authorizing nuclear use. This would not only involve senior officials but also congressional leaders, ensuring a comprehensive examination of the strategic, military, and legal implications of any nuclear action. By reforming the nuclear decision-making process, as suggested, President Biden could set a precedent that may safeguard against impulsive actions in the future, ultimately contributing to greater global security in an increasingly perilous geopolitical landscape.
https://www.foreignaffairs.com/united-states/nuclear-brain-trust
No let-up likely in EU trade battle with China as commission nominees take tough stand
South China Morning Post
The EU is set to maintain a confrontational stance towards China over the next five years, as indicated by senior officials nominated for Ursula von der Leyen's European Commission. Key issues include trade probes, countering unfair subsidies, and addressing China's ties with Russia. Kaja Kallas, the proposed top diplomat, emphasized defending EU values against systemic rivals like China. The commission will leverage tools like the foreign subsidies regulation to ensure fair competition. Overall, the EU aims to establish a more balanced trade relationship with China while addressing economic security concerns, despite some opposition from member states.
https://www.scmp.com/news/china/diplomacy/article/3283573/no-let-likely-eu-trade-battle-china-commission-nominees-take-tough-stand?utm_source=rss_feed
Hong Kong IPO market sees signs of recovery
Nikkei Asia
Hong Kong experienced its largest IPOs of the year with Horizon Robotics and China Resources Beverage, signaling a potential revival of the struggling Chinese IPO market. Horizon Robotics raised $700 million, opening 30% above its offer price, while China Resources Beverage saw a 15% increase on its debut. Both listings were heavily oversubscribed, reflecting strong investor demand. The market has improved following a recent stimulus plan from Chinese authorities and a U.S. interest rate cut. However, concerns remain about sustained growth and corporate earnings as indicators of market stability.
https://asia.nikkei.com/Business/Markets/Hong-Kong-IPO-market-sees-signs-of-recovery
Chinese robotaxi start-up WeRide files for US$119 million IPO on Nasdaq
South China Morning Post
Chinese self-driving start-up WeRide has filed for a $119.4 million initial public offering (IPO) on Nasdaq, alongside a concurrent private placement aiming to raise $320.5 million. The Guangzhou-based company plans to offer 6.5 million American depositary shares priced between $15.5 and $18.5 each. WeRide, which seeks a valuation of up to $5.02 billion, was approved by China's securities regulator for a US listing and has been operational since 2017. The IPO comes amid a challenging environment for Chinese companies in the US following Didi Global's delisting in 2022. If successful, it would be one of the largest US listings by a Chinese firm since Didi in 2021, marking a significant moment for the revival of Chinese IPOs in the US market.
https://www.scmp.com/tech/tech-trends/article/3283606/chinese-robotaxi-start-weride-files-us119-million-ipo-nasdaq?utm_source=rss_feed
Where are the jobs? Top talent lured to Hong Kong struggle to find openings
South China Morning Post
Nearly two years after Hong Kong launched its Top Talent Pass Scheme to attract skilled graduates and professionals, many newcomers are struggling to find suitable employment. Graduates like Kira Xiong and Peter Zhang, who arrived with high hopes, have faced challenges in securing jobs that match their qualifications. Despite sending out numerous resumes and lowering salary expectations, Xiong accepted an administrative role, while Zhang competed with over 100 candidates for a junior analyst position. Although the scheme initially attracted a significant number of applicants, many top talent visa holders are questioning the disconnect between the government's recruitment efforts and the actual job market opportunities available.
The scheme, which aimed to address brain drain in the wake of the Covid-19 pandemic, has seen over 66,000 individuals arrive in Hong Kong, with a notable concentration from mainland China. However, a government survey revealed that close to half of these newcomers had not secured jobs after six months, with the employment rate for graduates from recognized universities hovering around 50%. The financial services sector remains the primary employer, but many newcomers find themselves in a saturated job market where employers prefer seasoned local candidates familiar with regulations and networks. This has led to concerns about the scheme's effectiveness and its focus on attracting the right talent to meet the city's needs.
In addition to employment challenges, entrepreneurs are facing hurdles in transferring capital from mainland China to establish businesses in Hong Kong due to strict capital controls. Many entrepreneurs have resorted to personal loans or help from local contacts to fund their ventures. Lawmakers and industry leaders have called for reforms to facilitate capital remittance and better align the talent scheme with local demand for specialized skills. As the government shifts its focus from attracting talent to retaining it, upcoming measures include extending visa durations and promoting better support for newcomers, though concerns over job market saturation and talent redundancy remain prevalent.
https://www.scmp.com/news/hong-kong/politics/article/3283587/where-are-jobs-top-talent-lured-hong-kong-struggle-find-openings?utm_source=rss_feed
Tesla, HSBC among first foreign firms in China to apply for telecoms service trials
South China Morning Post
China is allowing foreign companies to independently operate data centres and telecommunications services in the country, with companies like Tesla and HSBC among the first applicants. The Ministry of Industry and Information Technology (MIIT) launched a pilot program in major cities, permitting foreign firms to fully own and run internet data centres and provide various telecom services. This initiative aims to integrate foreign businesses into China's digital economy and stimulate market innovation. While foreign ownership caps have been lifted for many telecom sectors, certain areas, such as online news and audiovisual services, remain restricted. The move is part of China's broader strategy to attract foreign investment and support economic recovery, targeting a GDP growth of around 5% in 2024. Additionally, Tesla faces challenges with its self-driving services in China due to regulatory concerns regarding data security and compliance.
https://www.scmp.com/tech/policy/article/3283542/tesla-hsbc-among-first-foreign-firms-china-apply-telecoms-service-trials?utm_source=rss_feed
French Nobel-winning laser scientist Gérard Mourou joins China’s top university
South China Morning Post
Gérard Mourou, a French physicist and Nobel laureate, has been appointed as a chair professor at Peking University's School of Physics, starting on October 12. His role is to help establish a new institute dedicated to advanced research and international collaboration, focusing on fields like laser physics and astrophysics. Mourou, who won the Nobel Prize in Physics in 2018 for his work on chirped pulse amplification, has a history of collaboration with Chinese institutions and has praised China's scientific advancements. He believes that the gap in scientific progress between China and the West is closing, expressing admiration for China's prioritization of science compared to the U.S. under Donald Trump's administration. Mourou's extensive academic career includes positions at various prestigious institutions and contributions to significant projects like the Extreme Light Infrastructure. He was elected a foreign member of the Chinese Academy of Sciences in 2020 due to his strong ties with Chinese academia.
https://www.scmp.com/news/china/science/article/3283624/french-nobel-winning-laser-scientist-gerard-mourou-joins-chinas-top-university?utm_source=rss_feed
US tariffs a necessary response to China’s trade practices, says Jake Sullivan
South China Morning Post
US National Security Adviser Jake Sullivan defended the Biden administration's China strategy and foreign policy at the Brookings Institution, emphasizing the continuation of tariffs on China. As the election nears, Trump, seeking a return to the presidency, proposes cutting income taxes and increasing tariffs, while Vice-President Kamala Harris promotes middle-class policies. Sullivan highlighted the need for a balanced approach to confront China's economic practices and warned against dependency on Beijing. He called for increased multilateral financing to counter China's influence and emphasized the importance of reforming global trade institutions like the WTO.
https://www.scmp.com/news/us/us-elections/article/3283594/jake-sullivan-defends-us-tariffs-necessary-response-chinas-trade-practices?utm_source=rss_feed
Bots Linked to China Target Republican House and Senate Candidates, Microsoft Says
NY Times
A report from Microsoft's Threat Analysis Center reveals that numerous inauthentic accounts on X, linked to China, are targeting Republican members of Congress in Alabama, Tennessee, and Texas. These accounts are part of a coordinated influence operation called Spamouflage, which aims to undermine critics of China's policies. The targeted officials include Representatives Barry Moore and Michael McCaul, and Senator Marsha Blackburn, all known for their critical stance toward China. The posts not only accuse these politicians of corruption but also promote their opponents, with some using antisemitic language against Moore for his support of Israel. The operation appears to focus on down-ballot races rather than the presidential race, likely to mitigate anti-Chinese sentiment in Congress. Despite the coordinated efforts, the posts have not gained significant traction.
https://www.nytimes.com/2024/10/23/us/politics/x-bots-china-republicans.html
Analysis: Xi Jinping's personality cult shows signs of weakening
Nikkei Asia
Katsuji Nakazawa, a senior staff and editorial writer at Nikkei, highlights an intriguing shift in the Chinese political landscape under President Xi Jinping's administration. While maintaining a strong military posture towards Taiwan, Xi's government has begun to adopt a more flexible stance on economic policies, recently launching a series of measures aimed at stimulating growth. This pivot comes in the wake of internal pressures from retired Chinese Communist Party elders who are maneuvering behind the scenes to influence the future direction of the country, particularly concerning the economy.
The political dynamics surrounding Xi's leadership appear to be evolving, with indications that his personality cult may be losing momentum. Observations from a recent reception celebrating the 75th anniversary of the People's Republic of China reveal Xi seated among influential party elders like former Premier Wen Jiabao and Vice President Zeng Qinghong, who command significant respect and authority. Their presence suggests a subtle shift in the balance of power within the party, especially as discussions about the economic downturn and necessary reforms have emerged. The elders' guidance seems to have prompted Xi's administration to acknowledge the economic challenges facing China.
In tandem with Xi's economic outreach, military developments are also noteworthy. While Xi presided over significant military exercises around Taiwan, he was notably absent from a major military meeting, allowing General Zhang Youxia to take center stage. This absence raises questions about Xi's control over the military narrative, as he has traditionally emphasized anti-corruption efforts within the armed forces. Meanwhile, Xi's recent inspection tours, devoid of his close aide Cai Qi, suggest a possible recalibration in Xi's approach to leadership and his personality cult. The interplay between economic strategies and military posturing signals a complex political landscape where Xi's authority is being scrutinized, and the influence of party elders is becoming increasingly salient.
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Xi-Jinping-s-personality-cult-shows-signs-of-weakening
Biden aide floats critical minerals marketplace to cut China dependency
Nikkei Asia
The U.S. aims to establish a marketplace for critical minerals to counter China's dominance in the sector, according to national security adviser Jake Sullivan. He highlighted risks from China's price manipulation and concentration of critical minerals, stressing the need for investment to diversify supply chains. Sullivan announced that tangible progress would be made in the coming weeks, emphasizing a marketplace that promotes strong worker rights and environmental protections. He criticized broad tariffs proposed by former President Trump, advocating for targeted trade approaches alongside international partnerships. Critical minerals are vital for modern manufacturing and energy transitions.
https://asia.nikkei.com/Business/Markets/Commodities/Biden-aide-floats-critical-minerals-marketplace-to-cut-China-dependency
U.S., China trade tariffs escalating would be 'costly for everybody,' IMF deputy director says
CNBC
An escalation of trade and tariffs tensions between the U.S. and China would have "costly" economic consequences around the world, Gita Gopinath, deputy managing director of the International Monetary Fund told CNBC on Wednesday.
"We are seeing geopolitically driven trade around the world, which is why when you look at overall trade to GDP that's holding up fine, but who's trading with whom is certainly changing," she said.
The U.S. and China are trading with one another less, and some parts of their trade is being re-routed through other countries, she added.
Trade tensions between the U.S. and China and the European Union and China have been mounting this year, with both the U.S. and EU implementing higher tariffs on some Chinese goods over what they claim are unfair trade practices from Beijing.
China has also announced higher temporary tariffs on some imports from the EU as the tit-for-tat measures continue.
If tariffs were escalated, modelling from the IMF suggests it would be "costly for everybody," Gopinath told CNBC's Karen Tso on the sidelines of the agency's annual meeting in Washington.
"Output is going to be much lower than what we are projecting for all countries in the world, there's going to be pressure on inflation, so that's not the direction in which we should be going," she explained.
Gopinath's comments come after IMF Managing Director Kristalina Georgieva said last week that international trade would no longer be the "engine of growth" it once was, and that "retaliatory" trade measures could hurt those imposing them as much as their targets.
Tim Adams, CEO of the Institute of International Finance, also warned Wednesday that tariff proposals from U.S. presidential candidate Donald Trump would interrupt the path of disinflation and could lead to higher interest rates.
The IMF's Gopinath said it would benefit both the U.S. and China to have "good working relations," noting that this was also important for the rest of the world.
It is "in everyone's self interest that these relationships are maintained," she said.
The IMF warned in its recent World Economic Outlook report that increasing protectionist policies were a downside risk to growth.
"A broad-based retreat from a rules-based global trading system is prompting many countries to take unilateral actions. Not only would an intensification of protectionist policies exacerbate global trade tensions and disrupt global supply chains, but it could also weigh down medium-term growth prospects," the report said.
— CNBC's Jenni Reid contributed to this story
https://www.cnbc.com/2024/10/23/us-china-trade-tariffs-escalating-would-be-costly-for-everybody-imf-.html
Xi Jinping and Narendra Modi meet, two days after a China-India border deal
South China Morning Post
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met for the first time since a deadly 2020 border clash, emphasizing the need for better communication and cooperation to manage differences. The meeting at the Brics summit in Kazan followed a recent agreement on border patrolling, aimed at de-escalating tensions. Both leaders acknowledged the importance of mutual trust and respect for regional and global stability. Modi highlighted that the relationship is crucial for the prosperity of their nations, while Xi stressed the significance of international responsibilities and unity among developing countries.
https://www.scmp.com/news/china/diplomacy/article/3283586/xi-jinping-and-narendra-modi-meet-two-days-after-china-india-border-deal?utm_source=rss_feed
Kevin Rudd on Xi Jinping
Diplomat
Xi Jinping has significantly reshaped China’s political, economic, and foreign policy since taking office in 2012, leading to a rise in its global influence. In his book “On Xi Jinping,” Kevin Rudd examines Xi’s departure from previous leaders' policies, characterizing his ideology as “Marxist-Leninist nationalism.” Xi’s focus has shifted from economic growth to addressing the inequalities and social imbalances that arose during his predecessors' leadership. He has centralized power within the Communist Party, promoting a nationalist agenda that challenges the U.S.-led global order instead of merely integrating into it.
Rudd notes that Xi attempts to “sinify” Marxism by incorporating Chinese cultural elements, creating a unique ideological framework that aims to resonate with the Global South. The year 2023 marked a significant moment for Xi’s China, as economic recovery post-COVID stagnated and a tactical effort was made to stabilize U.S.-China relations. Rudd questions the long-term durability of Xi’s ideology, suggesting it may take decades to fully entrench within the Communist Party. He emphasizes that analysts often overlook the ideological underpinnings driving China’s foreign policy and the increasing self-confidence derived from perceived Western decline.
https://thediplomat.com/2024/10/kevin-rudd-on-xi-jinping/
New US president must send Beijing, Taiwan clear signals to cut ‘escalation risks’: report
South China Morning Post
A recent report by the International Crisis Group emphasizes that the next U.S. president should clarify that Washington does not seek Beijing's collapse and should avoid encouraging Taiwanese independence. The report warns that U.S.-China strategic rivalry is likely to intensify, regardless of whether Kamala Harris or Donald Trump wins the election. Both candidates view China as a significant strategic competitor. The report advocates for a "dual deterrence" strategy regarding Taiwan, aiming to prevent both Chinese aggression and Taiwanese independence declarations. It suggests the U.S. should reinforce Taiwan's defense capabilities while reassuring Beijing about the possibility of peaceful resolutions. The report discourages rhetoric implying a desire for a “cold war-style defeat” of China, suggesting that the U.S. should instead aim for "competitive coexistence." The report also outlines potential differences in the candidates' approaches: Trump is expected to focus on trade and economic decoupling, while Harris may prioritize human rights and international cooperation. Ultimately, the report calls for a realistic assessment of China's trajectory, asserting it will remain a formidable and enduring competitor.
https://www.scmp.com/news/china/diplomacy/article/3283510/new-us-president-must-send-beijing-taiwan-clear-signals-cut-escalation-risks-report?utm_source=rss_feed
Chinese smartphone giant Oppo enters tech pact with top EV maker BYD, acquires AI start-up
South China Morning Post
Oppo, a leading Chinese smartphone manufacturer, has partnered with BYD, the country's top electric vehicle maker, to enhance interoperability between smartphones and smart cars. Their collaboration aims to allow Oppo's Android smartphones to unlock and control BYD's electric vehicles, starting with the Find X8 smartphone series, which can control the newly launched Tengshi Z9 GT sedan. Additionally, Oppo is reportedly acquiring AI start-up AIWaves, which has developed a large language model called "Weaver," similar to ChatGPT. This acquisition aligns with Oppo's strategy to expand beyond the smartphone market by integrating generative AI applications into its devices for its 50 million users by year-end. AIWaves' flagship product, Wawa Writing, aids in various writing tasks and can generate significant amounts of text rapidly. Other major Chinese smartphone brands like Vivo, Huawei, and Xiaomi are also pursuing similar AI enhancements in their devices.
https://www.scmp.com/tech/big-tech/article/3283554/chinese-smartphone-giant-oppo-enters-tech-pact-top-ev-maker-byd-acquires-ai-start?utm_source=rss_feed
TSMC halts chip supply to a customer after finding it in Huawei product, source says
The Globe and Mail
Taiwan Semiconductor Manufacturing Co (TSMC) has paused shipments to a customer after discovering that one of its chips was found in a Huawei product, raising concerns about potential violations of U.S. export restrictions. This suspension occurred about two weeks ago, prompting TSMC to investigate the situation and notify both U.S. and Taiwanese governments. The specific client has not been disclosed, and TSMC has declined to comment further. The issue surfaced after a tech research firm identified TSMC's chip in a Huawei device, highlighting ongoing U.S. efforts to limit China's access to advanced technology, particularly in light of concerns regarding military applications. Taiwan is also vigilant about its export controls to prevent advanced chips from reaching China, in line with U.S. regulations.
https://www.theglobeandmail.com/business/technology/article-tsmc-halts-chip-supply-to-a-customer-after-finding-it-in-huawei/
China confirms deportation of Volkswagen manager due to drug use
Yahoo US
China has deported a Volkswagen manager for drug use, confirmed by the Foreign Ministry. The manager was detained for 10 days after testing positive for cannabis and cocaine upon returning from Thailand, where cannabis is legal. Volkswagen declined to comment on the incident for confidentiality reasons. This incident adds to the challenges the company faces in China, where it is struggling to compete in the electric vehicle market and address concerns related to its operations in the Xinjiang province.
https://www.yahoo.com/news/china-confirms-deportation-volkswagen-manager-112321106.html
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