Taiwan Leader’s U.S. Visit Is Purposely Low-Key; Exclusive Insight: Zhejiang natives prioritize education over rebellion when it comes to changing their fate

Chinese companies rush for U.S. listings ahead of new rules; Tesla's Musk planning to visit China, seeking meeting with premier

Welcome to this issue of The China Brief. Today is March 31, 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.

And here’s today’s exclusive insight:

Zhejiang natives prioritize education over rebellion when it comes to changing their fate

Hangjiahu, known as Zhejiang's rice bowl, has long been the main source of food for the Jiangsu and Zhejiang regions. Its northern plain is also ideal for rice and silk production, creating a wealthy, commercialized region with a strong tradition of market economy.

Zhejiang's role as the Grand Canal's starting point was no accident, as southern Jiangsu and Hangzhou historically provided the nation's food and boasted a prosperous commodity economy. The province's close linkage between business and politics has facilitated change agents.

Zhejiang's rich cultural heritage reveals a history of seeking to improve one's fortunes through education. During the imperial era, individuals with talent were discovered through imperial examinations and used by the government, or they would rebel to change their fates.

Zhejiang natives believe in changing their fortunes through education. For instance, my three rural classmates all attended university in the late 1970s, when less than 1% of students succeeded. A father and son were even in the same university class.

I had a classmate from a poor mountainous area on the Zhejiang-Anhui border. He had to leave at 3-4 am to attend university in Hangzhou, undertaking a whole day's journey of over 100km, walking on a mountain road, taking a boat, and switching to a car. Half the villagers held torches to send him off, a sign of their pride and hope for him.

For Zhejiang natives, changing one's fate through education is a lifelong pursuit. It is a trait of Zhejiang people and a common one in the Yangtze River Delta region. Zhejiang is a representative; Jiangxi, Anhui, southern Jiangsu, and the Yangtze River Delta share similar experiences.

The Yangtze River Delta and the Pearl River Delta are China's two concentrated high-growth areas for economic development. Removing these two areas would leave China's remaining economy relatively average. This is worth discussing as unique geographical environments play a role in promoting a region's economic development.

(Translated from the original Chinese article, "Zhejiang, Zhejiang People, Zhejiang Economy" by Zhejiang researcher Ye Feng. This is the sixth article in the series.)

Taiwan Leader’s U.S. Visit Is Purposely Low-Key

Wall Street Journal

Taiwan's President Tsai Ing-wen is on a two-day stopover in New York, which is her first foreign travel since mid-2019. Her visit comes at a time of heightened tensions with China, which claims Taiwan as its sovereign territory. While Ms. Tsai discussed opportunities to expand trade with the US and tighten links, her visit was low-key and she did not meet any senior Biden administration officials. Meanwhile, her predecessor, who favors closer ties with Beijing, embarked on a 12-day jaunt across mainland China, where he met Communist Party officials. Ms. Tsai's visit has been denounced by China, which is mobilizing people to rally outside her hotel.

Huawei profit sinks in 2022 amid sanctions but sales higher

Associated Press

Chinese tech giant Huawei has reported its revenues for 2022 rose 0.9% from the previous year to reach ¥642.3bn ($93.5bn), while net profit fell by 68.7% due to pressures arising from the Covid-19 pandemic and US sanctions. The revenue boost came from Huawei's growing enterprise business with healthcare, manufacturing, and transportation services experiencing rises in demand as companies looked to increase digitisation during the pandemic. Enterprise sales grew 30% from a year earlier to reach ¥133.2bn ($19.38bn), compared with growth of just 2.1% in 2021. Huawei's smartphone business suffered an 11.9% decline in revenue. Huawei's outgoing rotating chairman, Eric Xu, said the company still had "considerable pressures ahead" but remained confident it could achieve growth. 

Analysis: Alibaba overhaul leaves fate of prized cloud unit up in the air

Reuters

Alibaba's plan to split its cloud computing unit into a standalone firm has raised questions about the profitability of the business, the Financial Review reports. The split will give investors an opportunity to make more focused bets, although it will likely put Alibaba even more in the cross hairs of regulators, noted analysts. There were differing views on whether external investment and separation from Alibaba's core ecommerce business would help the firm grow overseas, where it is behind rivals such as Amazon Web Services, but experts suggested the Chinese government could invest in the cloud business. Alibaba is set to establish the Cloud Intelligence Group to house the AliCloud cloud computing unit, AI and semiconductor research.

AI is a new focus for Alibaba, with the tech giant planning to launch AI-generated voice actors for the film industry through its cloud computing unit. The process of using AI is expected to enable filmmakers to translate hours of recorded content into short audio files impersonating the voice of an actor. The short audio files can then be used to create sound effects or as a voice-track for minor or background characters. Despite being a tech giant, Alibaba faces stiff competition from rivals AWS, Microsoft Azure and Google Cloud in terms of AI innovation.

Chinese companies rush for U.S. listings ahead of new rules

Reuters

The number of US IPOs by Chinese firms rose in March as seven firms, including Chanson International and Hongli Group, launched public offerings to raise $82.3m. China’s new rules, to come into effect on 31 March, are expected to complicate the offshore listing process, prompting some firms to get in ahead of the clampdown. The new system will impose an approval mechanism together with a requirement that materials be submitted to the Chinese regulator, the CSRC, leading observers to predict the standardisation of domestic firms’ international listings. The time-consuming procedure and concerns about power data security may deter other potential firms. The increased listings come after a slowdown triggered by tensions between the US and China and by the tough stance adopted by both countries regarding regulatory scrutiny.

US and Taiwan 'closer than ever,' Tsai in New York

DW

Taiwanese President Tsai Ing-wen arrived in New York City for a visit to Central America, during which she delivered an address to supporters claiming the relationship between Taiwan and the US is closer than ever. Chinese officials have warned that the trip could lead to political confrontation between Beijing and Washington, intensifying a period that has proved difficult for diplomatic relations between the nations. The US does not endorse China's claim over Taiwan and is a central provider of military hardware to the island. The Taiwanese leader is expected to meet with US House Speaker Kevin McCarthy during a stopover in Los Angeles.

China factory activity grows at slower pace in March

Associated Press

A survey conducted by the China Federation of Logistics and Purchasing and the national statistics agency showed that China's factory activity grew at a slower pace in March than it did in February, yet remained stronger than expected due to the end of anti-virus restrictions. The monthly purchasing managers' index (PMI) dropped from February's 52.6 to 51.9 in March. Numbers above 50 indicate activity is increasing. However, the sub-measures of production and new orders in the PMI grew at a slower pace whilst employment contracted. Last year's economic growth fell to 3%, which was the second-lowest level since the 1970s. Manufacturers in China are also under additional pressure from weak US and European demand following interest rates increases by central banks to try and cool inflation. Despite the slower growth, government infrastructure spending has been revived, particularly in the construction industry, to try and boost the economy further.

China rolls over $2 bln loan to Pakistan - finance minister

Reuters

China has renewed its $2bn loan to Pakistan to help the South Asian nation's balance of payments crisis, according to Ishaq Dar, Pakistan's finance minister. Pakistan only has reserves of four weeks’ worth of imports and talks over a $1.1bn International Monetary Fund (IMF) bailout have stalled. The IMF wants external financing as a condition of the new package. China has already given $1.8bn to Pakistan, making it the nation's only lender so far. China has not commented on the loan rollover.

Xpeng launches semi-autonomous driving system in 3 Chinese cities

South China Morning Post

Chinese electric vehicle (EV) start-up Xpeng has launched an advanced driver assistance system (ADAS) that is similar to Tesla’s full self-driving software, capable of navigating vehicles on city streets. Xpeng claims this to be China’s first ADAS system for city driving, as it uses sensors to analyse real-time traffic data to pass a slow-moving car. The cars can change lanes and turn left and right automatically. The technology will be made available for free through remote updates to G9 Max and P7i Max models in Guangzhou, Shanghai and Shenzhen. The software has up to 90% driver efficiency and Xpeng estimates an updated system for all-scenario autonomous driving will launch in 2024. Driver supervision is still required for Xpeng’s NGP and Tesla’s FSD system.

Cars fitted with the system can recognise traffic lights at an intersection and manoeuvre on full auto-drive mode. The technology also facilitates overtaking slow vehicles, lane changing, and negotiating busy intersections. Wu Xinzhou, vice-president and head of autonomous driving centre at Xpeng, said that the company wanted to “enrich driving experience using the latest technology iterations. We are continuously pushing the envelope to further enhance the safety of our customers". The Xpeng start-up is seen as China's best response to Tesla in the premium EV sector.

Huawei steps up ASEAN foray with Singapore lab revamp

Nikkei Asia

Chinese telecom giant Huawei has expanded its Singaporean research center in a bid to increase its activities in Southeast Asia outside of purely telecom infrastructure. The move is part of Huawei's push to diversify its digital offerings in the region across cloud computing, smart cities and artificial intelligence. Huawei has more than 100,000 researchers worldwide who will work with clients to test and verify its products in real-world environments while digitizing businesses, including factories and offices, and rolling out the new technology in region-specific markets. 

China stages combat patrols after warning Taiwan about U.S. speaker meeting

Reuters

According to Taiwan's Ministry of National Defense, nine Chinese military aircraft crossed the Taiwan Strait's median line on 29 March, completing combat readiness patrols. The move follows China's recent threat of unspecified retaliation if Taiwan's President Tsai Ing-wen meets with U.S. House Speaker Kevin McCarthy. Tsai has arrived in the United States, where she is due to meet McCarthy next month, and Taiwan's armed forces responded to Friday's incident using its aircraft and ships to monitor the situation. Although Beijing claims Taiwan as its territory, the two countries are officially separate and diplomatically (albeit not necessarily economically) independent. Recent weeks have seen rising tensions between the two countries, with China angered by what it sees as stepped-up support for Taiwan from the U.S.

Chinese church members detained in Thailand fear deportation, persecution

South China Morning Post

More than 60 members of a Chinese Christian church have been detained in Thailand, raising fears they may be returned to their home country. The adults charged were alleged to have overstayed visas while children were not charged, but supporters are concerned that they may be vulnerable to persecution if forced to return to China. The church members fled to Thailand in 2020 seeking asylum, claiming that their members were being persecuted by government security forces. They had settled in South Korea but left for Thailand after it became clear that prospects for refuge were dim. When they arrived in Thailand, the church members told reporters that they had been stalked, harassed and received threatening calls and messages even while in South Korea. They said relatives in China had been summoned, interrogated and intimidated. China bans foreigners from spreading religious content online, and Chinese Christians are legally only allowed to worship in churches affiliated with Communist Party-controlled religious groups. Tens of millions of worshippers attend independent, unregistered “house churches,” but in recent years house churches have come under heavy pressure, with many prominent ones shut down. 

Exclusive: Tesla's Musk planning to visit China, seeking meeting with premier -sources

Reuters

Elon Musk is reportedly planning to visit China in April 2021 and is seeking a meeting with China's Premier Li Qiang, according to two sources familiar with the planning. China is the second-largest market for Tesla after the US, and the country's market played a significant role in the electric carmaker's strong Q4 2020 performance. Tesla's Shanghai plant is its largest production hub. A visit by Musk would be his first to China since the COVID-19 outbreak and since Xi Jinping secured a third term as the country's president. Neither Tesla nor China's State Council Information Office commented on the reports.

Japanese and Chinese foreign ministers to hold talks in Beijing

Japan Times

Japan’s Foreign Minister, Yoshimasa Hayashi, is set to visit Beijing this weekend to hold talks with his Chinese counterpart, Qin Gang. The visit comes at a time when Japan is calling for the release of a Japanese businessman detained in China for alleged espionage. The talks are also expected to cover bilateral issues such as the two country’s longstanding dispute over the Senkaku Islands in the East China Sea. Hayashi announced his visit at a news conference on Friday, also revealing plans to travel to Brussels for a foreign ministerial meeting of NATO countries where there is expected to be discussion of Russia’s invasion of Ukraine.

Hayashi will be the first Japanese foreign minister to visit China since December 2019, and the first foreign minister to hold an in-person meeting with his Chinese counterpart since November 2020. During the visit, Hayashi has said that he will “explain our nation’s position” on bilateral issues. The Japanese Foreign Minister is also expected to hold talks with China’s Vice President, Wang Qishan.

The detention of the Japanese businessman comes at a time when relations between Japan and China are already strained due to military activities in the waters around the disputed islands. There are fears that tensions could escalate further if China does not release the detainee soon. Nevertheless, it is also a signal that the two countries continue to have open dialogue despite disagreements.

Japan to re­strict chip equip­ment ex­ports amid Chi­na fears

Aljazeera

Japan's plans to restrict exports of 23 types of semiconductor manufacturing equipment could limit shipments from Nikon, Advantest, Screen Holdings and Tokyo Electron from this July. The move was designed to fall in line with the US's efforts to limit China's ability to create its own advanced chips. The Economy, Trade and Industry Ministry said that export controls would be imposed on six equipment categories: cleaning, deposition, lithography, and etching. It did not specifically name China as a target or state that the restrictions covered semiconductor equipment. Industry Minister Yasutoshi Nishimura said at a news briefing: “We don’t have one specific country in mind with these measures.” Japan once dominated the chip industry but only now has a market share of around 10%.

India Turns Optimistic on Forging G-20 Consensus on Russia’s War

Bloomberg

India could secure a G20 consensus on the language used to describe Russia’s conflict in Ukraine, following increased optimism after representatives from various countries sat in the same room during recent meetings, according to a source close to the matter. Last year’s talks saw regular walkouts during similar discussions in Indonesia. India, which is due to host the annual G20 summit in September, is under pressure to show it can forge agreement, with its Prime Minister using the G20 presidency to “depoliticize” supply chains of food and fertilizers made scarce by the war. Recent meetings have purportedly concerned public infrastructure but are being used to discuss the G20’s largest sticking point.

India has emerged as one of the largest swing nations in relation to Ukraine, maintaining closed ties with the US, although not participating in American-led attempts to sanction Moscow and not voting on UN resolutions regarding the conflict. On the other hand, it has abstained from votes of condemnation. India has struggled to use its relatively friendly connections with Putin to function as G20 host and broker an agreement. The ministers for both finance and foreigners posted a chairman’s statement of a lack of consensus, making the task of brokering an agreement on the war more difficult, while China has also refused to agree to a G20 statement.

China’s global influence looms over Harris trip to Africa

Toronto Star

The United States reportedly worries that China is increasing its influence in Africa. Vice President Kamala Harris recently traveled around several African countries on a tour, focusing on building partnerships independently of geopolitical competition. However, the trip was dominated by highlights of Chinese-development projects that are alarmingly placing Africa deeper into Beijing’s sphere of control. Additionally, Beijing financed Zambia’s new airport, a 60,000-seat stadium in Lusaka, and new roads and bridges around the country. Zambia and Tanzania are channeled with billions of dollars of debt for infrastructure developments that China has supported so far. Conversely, the US is seen as giving admonishments about democracy more often than China does regarding its activities in the region, according to analysts. However, African leaders have stated that they see China’s influence in the area as largely positive in comparison to the US, which has been falling behind in investing more than China has been. Africa sees China as an economic opportunity, while the US often views it as political and historical problems that need to be solved, meaning companies are more likely to grow towards China.

‘Dare to fight’: Xi unveils China’s new world order

Financial Times

Chinese President Xi Jinping has declared the decline of the US-led world order and the need for a new system that better serves China's interests. In his speech at the National People’s Congress, he invoked "daring to fight" as the guiding ethos for the country's new robust foreign policy. China is keen to counter US efforts to curb its technological and military capabilities as it seeks to consolidate its position as global leader in the face of such a challenge. China is pursuing a series of initiatives to encourage international cooperation, particularly with the developing world. These include the Global Development Initiative, focused on using China's economic power to rally developing countries; the Global Security Initiative, aimed at offering alternatives to US-led international security; and the Global Civilization Initiative, which challenges the western concept of universal values.   

China’s ‘art factory’ painters turn from fakes to originals

Japan Times

Artists from the village of Dafen, China, which produced near-perfect copies of Western artistic masterpieces, have shifted towards creating their own original world-class art worth thousands of dollars for the booming domestic art market. Dafen has over 8,000 artists and, in its prime, three out of five oil paintings sold worldwide were made in Dafen. However, exports began to dive after the global financial crisis in 2008, and in 2020 the village's exports dried up due to China's borders closing due to the COVID-19 pandemic. Several artists closed their studios in response, but others saw the opportunity, and the obstacles faced, as a chance to establish themselves as painters in their own right catering to China's art market, the second largest in the world, where sales have risen by 35% in 2021.

Whilst China starts to dismantle its 'Zero-COVID' policy, interest in the art from Dafen village is again increasing and visitors are returning. They come not only to buy paintings, but also to learn to paint, looking for a good deal, which is leading to the fading market in handmade fakes as people begin to realise that they can buy originals from new artists for a small premium over the fake copies. The boost in tourism is allowing the village to move forward and has given artists an opportunity to make a name for themselves in the art world. Many artists are painting using styles of traditional Chinese landscapes, while others focus on their individualism by developing unique styles which appeal to the wealthy local art buyers. 

What Is Lemon8 and What Are Its Links With Under-Fire TikTok

Bloomberg

As political scrutiny continues to mount over short video app TikTok, owned by China's ByteDance, another of its products, Lemon8, is booming in popularity. The app, describing itself as a "content sharing platform with a youthful community", enables users to create blog-like posts on subjects such as fashion, travel, cooking and fitness complemented by suitable pictures and videos. The app's downloads have soared in the US with iPhone users making the application the top lifestyle app downloaded ahead of Pinterest, Zillow and Tinder.

While details surrounding the app are unclear, it is believed to be owned by ByteDance, the parent company of TikTok. Regulatory filings and blueprints suggest that anonymous Singapore-based firm, Heliophilia Pte, owns the application. The publicity surrounding the application's success has caused concern as the US may force ByteDance to divest the app, or even prohibit it entirely, similar to the action taken against TikTok.

Although both the success of the application and the interest it has gained is similar to that of Beijing firm Shein and Chinese e-commerce giant PDD Holdings Inc.'s Temu, Lemon8 is expected to come under greater scrutiny if it continues to thrive in markets like the US and UK.

Chinese artists test censorship’s new red line

Financial Times

Artists in China are struggling to express themselves under the country’s increasingly restrictive censorship laws. Even work that previously skirted under the radar is now being shut down under the guise of maintaining public order. Deng Yufeng, an artist whose work highlights issues surrounding data privacy and surveillance, was arrested in 2018, and has had exhibitions closed early. Meanwhile Nut Brother’s exhibition, No Entry, was closed down earlier this year in Chengdu, because of its attitude towards feminism.

Even traditional methods of interpretation are becoming difficult for artists, making it difficult to navigate the grey areas that artists have previously taken advantage of. To avoid any accusations of subversion or disruption, students at Chinese Art Academies are being told to not depict Westerners, avoid nudity, horror, English titles and make work with no political ideology. The ideal work would be realist painting without any real-world significance. It’s said that Realist work is the most likely to pass censor checks, with its focus on being innocent and sun-filled.

Despite the restrictions, artists are attempting to push the boundaries within the safety of their art circles. Jian An’er, for example, explores China’s social issues subtly and indirectly, layering work with references to significant historical events. Jian is currently exhibiting work that is too risky to display on the mainland, and displaying it in Hong Kong. He says he is testing what is still possible in the city following the passing of the controversial security laws. Art Basel Hong Kong was recently the site of controversy after “No Rioters” by Patrick Amadon was pulled after it listed the names of imprisoned pro-democracy activists.

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 http://6do.world.