Ping An Exited Its Country Garden Stake, Has No Takeover Plan; Discontent in China on the Rise as Economy Slows, Survey Shows
Joe Biden, Xi Jinping set to steal APEC spotlight with talks to steady ties
Welcome to this issue of The China Brief. Today is November 8, 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.
Ping An Exited Its Country Garden Stake, Has No Takeover Plan
Bloomberg
Ping An Insurance has sold all its shares in Country Garden Holdings and has no plans to acquire the distressed developer, according to people with knowledge of the matter. The Chinese insurer offloaded the stake in Q3, said the unnamed sources. Country Garden recently defaulted on a dollar bond for the first time.
Fed Governor Lisa Cook Says Worsening Geopolitical Tensions Pose Market Risk
Bloomberg
Federal Reserve Governor Lisa Cook has warned that geopolitical tensions, particularly those involving Russia, the Middle East, and China, could have negative spillover effects on global markets, including higher inflation. Cook stated that issues such as Russia's war in Ukraine and the conflict in the Middle East could lead to disruptions in regional trade and energy markets, as well as worsening global humanitarian and migration challenges. Furthermore, Cook warned that a slowdown in China's economic growth could exacerbate financial stresses, potentially affecting other emerging market economies. She also expressed concerns about weaknesses in nonbank financial institutions.
EU threatens tougher stance on China amid growing policy concerns
South China Morning Post
European Union leaders and business leaders have criticized China's economic policies ahead of a summit in Beijing. They have threatened to adopt more adversarial trade policies if China does not open its market to European firms and cease what they perceive as economic bullying. European Commission President Ursula von der Leyen stated that there is an explicit element of rivalry in the EU-China relationship, accusing China of seeking to change the international order and promoting a different vision of the world order. She criticized China's support for Russia and accused it of destabilizing the world. The EU's top diplomat Josep Borrell warned that it will be difficult for China to maintain access to the European market if European companies continue to face difficulties in China. He stated that if China does not open its market, the EU may have to close its market. The EU has launched an investigation into subsidies in China's electric vehicle sector, which could result in large countervailing duties on EV imports. European businesses are also frustrated with China's economic policies, particularly the issue of overcapacity and cheap exports. A survey of European businesses operating in China found that almost two-thirds of respondents considered dependency on China to be a significant risk to their supply chains.
ByteDance angers some former US employees with a lower buy-back offer: sources
South China Morning Post
ByteDance, the Chinese unicorn that owns TikTok, has launched a share buy-back scheme for employees. The company is offering $160 per share to current and former employees who were laid off, and $128 to those who voluntarily quit. ByteDance conducts share buy-backs twice a year, and the latest offer is a slight increase from the previous round. The company said the scheme is aimed at providing liquidity for stock units and options to motivate employees. The share buy-back programme was expanded to US employees in October, but the lower offer for those who left voluntarily has caused discontent.
Discontent in China on the Rise as Economy Slows, Survey Shows
Bloomberg
A new study by Morning Consult has revealed rising discontent among Chinese citizens due to concerns about the country's economy and property market. The study found that the level of satisfaction among Chinese adults has fallen below levels seen during the worst of China's zero-Covid policy in late 2022, leading to widespread protests. The researchers warned that this discontent could be an early warning sign, particularly following the recent death of former Premier Li Keqiang. The study also found that Chinese adults are prioritizing growth and social stability over defense. Additionally, attitudes towards the West have softened, with fewer Chinese adults viewing the US as an enemy. However, the study found that despite this, the majority of Chinese adults are still willing to boycott foreign brands.
Alibaba CEO commits to AI with aim to become ‘open tech platform’
South China Morning Post
Alibaba is repositioning itself as an "open technology platform" by leaning into artificial intelligence (AI) innovation, according to CEO Eddie Wu. Speaking at the World Internet Conference in China, Wu said the future of the 24-year-old e-commerce giant lies in AI, which will help it become a platform that "serves the entire society in AI innovation and transformation". Wu said the company has strong capabilities in computing power, networking, storage, big data and large models, and has developed an open AI system to help small businesses and developers innovate more efficiently.
Top US officials Blinken, Austin to visit India for Indo-Pacific talks
Yahoo US
US Secretary of State Antony Blinken and Defense Secretary Lloyd Austin will hold talks with India this week that officials say will focus on security challenges in the Indo-Pacific and concerns over China, rather than the wars in Gaza and Ukraine.
Resolving Hong Kong conundrum key to U.S.-China APEC summit
Japan Times
US President Joe Biden is expected to meet with Chinese President Xi Jinping in November during the Asia Pacific Economic Cooperation (APEC) forum in San Francisco. The meeting comes after months of intense diplomacy between the two countries. However, there are still some unresolved issues, such as the treatment of Hong Kong's chief executive, John Lee, who is sanctioned by the US and barred from entering the country.
34 Chinese tycoons to give away US$26.2 billion, led by Country Garden magnates
South China Morning Post
Yeung Kwok-keung, founder and chairman of Country Garden, and his daughter Yang Huiyan, chairman of Country Garden, have donated a combined total of CNY5.9bn ($778m) to charitable causes. The donations have placed the pair at the top of Hurun's Philanthropy List, which lists 34 Chinese business magnates who have each pledged to give away at least CNY100m ($13.7m) in the last year.
Wang Yi calls for nations to reject ‘bloc confrontation’ in swipe at US
South China Morning Post
China's foreign minister, Wang Yi, has called for nations to oppose "bloc confrontation" and a zero-sum approach to maritime affairs, in a veiled swipe at the United States. Wang made the comments at a Symposium on Global Maritime Cooperation and Ocean Governance in Hainan, attended by diplomats, officials and academics from more than 20 countries and regions. Wang said the world’s oceans should be “a link for the promotion of exchanges and cooperation among countries” and not used for “decoupling and creating obstacles that separate the world”.
China’s Xi urges countries unite in tackling AI challenges but makes no mention of internet controls
Associated Press
Chinese President Xi Jinping has called for international cooperation in dealing with the potential risks of artificial intelligence (AI), stating that countries should work together to address these challenges. Xi's remarks were made during a prerecorded speech at the World Internet Conference Summit. He also expressed his objections to "cyberspace hegemony" and emphasized the need for common security in cyberspace. China has been criticized for its strict control of free speech on the internet, but has also leveraged the economic benefits of the internet and the propaganda potential of social media for the Communist Party's agenda. China is ready to promote the safe development of AI and has launched the Global AI Governance Initiative, which calls for an open and fair environment for AI development. The Chinese government's efforts to improve the safety, reliability, controllability, and fairness of AI technology were also echoed by Li Shulei, director of the Communist Party's publicity department.
Hillhouse Chief Predicts ‘Greatest Companies’ Emerging From Asia
Bloomberg
Chairman of Hillhouse Capital, Zhang Lei, has said that falling valuations are providing better bargains in Asia and that the next few years could produce the "best vintages for private equity" in the region. Zhang believes that the best companies are built in challenging times and that those that improve on technology and align with suppliers and distributors can withstand the downturn. Private capital raised in Asia-Pacific by the end of Q3 2016 was only 39% of the amount raised in 2015, according to Preqin, and the region's private capital is forecasted to have the lowest fundraising in a decade. Zhang expects private asset classes such as private credit, real estate and infrastructure to grow in Asia under the challenging environment.
Joe Biden, Xi Jinping set to steal APEC spotlight with talks to steady ties
Reuters
The Chinese President, Xi Jinping, and US President, Joe Biden, are expected to hold summit talks in San Francisco next week as they seek to stabilize tense ties by meeting in-person for just the second time in nearly three years. While no big breakthroughs are expected and the Biden administration officials say announcing a slate of meeting outcomes is an outdated way to measure progress in relations with China, experts have pointed to possible signals of improvement - such as increasing commercial flights between the countries - or steps toward cooperation on thornier issues, like stemming the flow of fentanyl precursor chemicals from China.
5 takeaways from new polls that reveal Biden’s challenges and Trump’s potential victory path
CNN
New polls are casting doubt on the rationale of a second term for US President Joe Biden, who turns 81 later this month and is losing support from critical younger and minority voters even as Democrats running in 2023 elections hit on issues that resonate. A CNN/SSRS survey published Tuesday shows ex-President Donald Trump leading Biden 49% to 45%. The new poll reveals deep public discontent with Biden’s job performance and a lack of confidence in his leadership in a war-torn world. Most damagingly, the data show that just a quarter of Americans believe he has the stamina and sharpness to serve as president. This survey follows New York Times/Siena College polling over the weekend that show significant leads for Trump in most of the swing states likely to decide the 2024 election. That triggered another round of agonizing among Democrats over whether Biden should have passed on a run for a second term – even if no realistic challenger for the nomination has emerged in a new generation of the party. Biden’s poor polling contrasts with a strong election night for Democrats on Tuesday when voters in Ohio enshrined abortion rights in the state constitution and Democratic Gov. Andy Beshear won a second term in Kentucky, a deep red state, CNN projected. Democrats picked up the Virginia state House to take full control of the commonwealth’s legislature – a blow to GOP Gov. Glenn Youngkin. This could mean polls are underplaying Democrats’ resilience under Biden, as they did in last year’s midterms when a Republican red wave was averted. There is another interpretation of Tuesday’s results, however. Biden appears to be less popular than some of his party’s policies and some of its other candidates, raising the possibility that someone else would be better at keeping the Democratic coalition together next year.
The Right Way to Deter China From Attacking Taiwan
Foreign Affairs
The United States must adopt a comprehensive vision of deterrence to deter China from invading or blockading Taiwan. While military capabilities are important, deterrence is an exercise in political-psychological persuasion. The United States should prioritize a clear and unwavering signal of support for Taiwan, avoid provocative political stunts, and build a stronger coalition of countries to support Taiwan's security. Diplomatic efforts, such as persistent engagement with Chinese leaders, are necessary to maintain open channels of communication and prevent miscalculations. Washington must also disabuse Beijing of any suspicion that the US commitment to Taiwan is weakening. The United States should provide China with incentives to moderate its aggression by better acknowledging its existing commitments, such as not supporting Taiwan independence and accepting a peaceful resolution negotiated between Taipei and Beijing. While the United States should remain committed to the "one China" policy, it must also be flexible and adapt to new dynamics in the Indo-Pacific. The goal is to stretch time horizons and protect US interests in peace and stability in the Taiwan Strait.
US plans to build a $553 million terminal at Sri Lanka’s Colombo port in rivalry with China
Associated Press
The US International Development Finance Corp (DFC) has announced a $553m project to build a new shipping container terminal in the Port of Colombo, Sri Lanka. The project will be financed through private loans and aims to transform Colombo into a "world-class logistics hub" at the intersection of major shipping routes and emerging markets. The move comes as the US seeks to compete with China in international development financing. China has invested billions of dollars each year to build infrastructure, such as ports, across the globe through its Belt and Road Initiative.
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