The Death of Lieutenant General Wu Guohua and its Connection to Secret Surveillance
How a diplomat's downfall leaves China red-faced; Kim Jong Un shows off missiles to Russia's Shoigu; Huawei to restart 5G mobile chip output as early as this year
Welcome to this issue of The China Brief. Today is July 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.
The Death of Lieutenant General Wu Guohua and its Connection to Secret Surveillance
On July 26th, a Twitter user posted a photo of the obituary of Wu Guohua, a former Lieutenant General and Deputy Commander of the Rocket Force. It stated that Comrade Wu Guohua passed away on July 4th, 2023, in Beijing at the age of 66 due to illness. The funeral arrangements will be kept simple, with a memorial service scheduled for July 30th at 9 a.m. in the Eastern Hall of the Babaoshan Funeral Home.
Earlier in July, there were rumors circulating that "Comrade Wu Guohua died in Beijing last night at 9 p.m. due to a sudden cerebral hemorrhage, and the rescue was ineffective." The post also provided a brief overview of Wu Guohua's career, highlighting his various positions within the military, including Deputy Commander of the Second Artillery Corps, and his rank as Lieutenant General.
Wu Guohua's connection to the "洛外" institution refers to the PLA Luoyang Foreign Languages Institute, which is known to be a prominent school for training international spies.
Speculations have arisen linking the disappearance of Foreign Minister Qin Gang and the death of Lieutenant General Wu Guohua, suggesting that both events may be connected. However, these claims remain unconfirmed, and the situation surrounding their alleged connections remains uncertain.
Wu Guohua was a language expert, particularly in Russian, having graduated from the Russian State Pushkin Institute with a doctoral degree. He held various academic and administrative positions at the PLA Foreign Languages Institute and other institutions related to foreign language education and military intelligence.
It is worth noting that Wu Guohua's career path from a language specialist to the Deputy Commander of the Rocket Force seems unusual and surprising.
The Third Department of the General Staff Headquarters is a significant intelligence agency responsible for global monitoring and is commonly referred to as "3PLA." It is considered a core part of China's military strategic planning, engaging in extensive communication surveillance to counter external threats and gain a competitive advantage.
China industrial profits fall in H1
Reuters
China's industrial profits have declined for the sixth consecutive month, with a year-to-date fall of 16.8%. This decline in profits highlights the waning demand and weak economic recovery in China. In June alone, industrial earnings shrank by 8.3%. The struggles faced by Chinese manufacturers are exemplified by Maanshan Iron and Steel, which forecasted a net loss for the first half-year. China's leaders have pledged to increase policy support for the economy, but concerns over debt risks may hinder aggressive stimulus measures.
How a diplomat's downfall leaves China red-faced
BBC
The removal of China's former foreign minister, Qin Gang, has raised questions about China's diplomacy and the impact of his downfall on foreign relations. While Qin was seen as presenting a more moderate image of China to the world, analysts note that he had little say in the country's actual foreign policy. His replacement, Wang Yi, is expected to focus on improving relations with the US and handling cross-strait relations with Taiwan. However, there are doubts that Wang will remain in the role for long, as he is seen as a placeholder while President Xi Jinping looks for a permanent replacement.
Kim Jong Un shows off missiles to Russia's Shoigu
BBC
North Korean leader Kim Jong Un showcased the country's latest weapons to Russia’s defence chief Sergei Shoigu during a friendly tour ahead of the 70th anniversary of the Korean War's armistice. The weapons displayed included the Hwasong intercontinental ballistic missile (ICBM) and two new drone designs. The visit by the Russian and Chinese delegations marks the first time that Kim has hosted foreign guests since the start of the COVID-19 pandemic. The inclusion of Chinese and Russian envoys in the Victory Day parade has led to speculation that North Korea may be loosening its COVID-19 restrictions.
Huawei to restart 5G mobile chip output as early as this year
Nikkei Asia
Huawei is working with Chinese chipmaker Semiconductor Manufacturing International (SMIC) to mass-produce its in-house designed 5G mobile chipset using 7-nanometer process technology, which is the most advanced available in China. If successful, this would be a significant victory for China's chip ambitions as it aims to develop a complete domestic chip industry to counter the US's clampdown on Huawei and other Chinese tech companies. However, the chips are still two generations behind global leaders, and devices built with them are not expected to hit stores until 2024.
Taiwan says China releases man accused of spying
Reuters
China has released a Taiwanese citizen who was detained on charges of spying, according to Taiwan's government. Lee Meng-chu went missing in southern China in 2019 and was later reported by Chinese state media to be an active member of a Taiwan separatist group. He was arrested when he entered China and was found to have photographs and videos of Chinese military drills, as well as materials showing support for anti-government protests in Hong Kong. Lee has since been released and has left China for Japan. Taiwan's government has warned its citizens about the risk of arbitrary detention when visiting China.
China pledges to boost imports, encourage firms to invest in Turkey
South China Morning Post
China has expressed its willingness to import more high-quality products from Turkey and to support businesses from both countries in using local currency for trade settlement. China's Foreign Minister Wang Yi also stated that Beijing would encourage more Chinese companies to invest in Turkey as part of its Belt and Road Initiative. Wang emphasised the similarities between the two countries as developing nations and emerging markets and called for increased cooperation in areas such as energy, education, and culture.
Taiwan practises repelling a Chinese invasion
BBC
Taiwan has increased its focus on military defence, following the conflict in Ukraine and increased Chinese military activity in the Taiwan Strait. Taiwan is vulnerable to invasion by China, and has identified its most vulnerable points as the beaches of northern Taiwan, as well as the main international airport and seaports. The Taiwanese government is working to increase military service to one year, revamp military strategy to counter cyber-attacks, purchase smaller and more mobile missile systems, and develop a home-built submarine. Despite China's economic and military strength, Taiwanese citizens are determined to defend their island.
France's Macron warns against new 'imperialism' in the Pacific
Reuters
French President Emmanuel Macron has warned against "new imperialism" in the Pacific, criticizing predatory behavior by major powers in the region. Macron did not name any specific country, but his comments were seen as a reference to China's increasing influence in the Indo-Pacific. France has been boosting defense ties with India and other countries in the region as part of its efforts to counter Chinese influence. Pacific Islands nations are being courted by both China and the United States, with China being a major infrastructure lender in the region. Macron's visit to the Pacific islands is part of France's strategy to provide an alternative and diversify partnerships for island nations in the region.
China tests solar wing tech for satellite constellation to rival Starlink
South China Morning Post
China has successfully launched its first communications satellite equipped with an ultra-thin flexible solar wing. Developed by Beijing-based start-up GalaxySpace, the Lingxi-03 satellite is part of China's plans to create a 13,000-satellite broadband megaconstellation in low Earth orbit. The satellite's bendable solar panel measures just 1mm thick and expands to 9 metres long and 2.5 metres wide once operational. The launch also included three remote sensing satellites owned by Skysight Technology, as part of the company's commercial Earth observation constellation.
Why Musk’s ‘X’ will struggle to become a Chinese-style super-app
South China Morning Post
Elon Musk is rebranding Twitter as "X" and aims to make it a super-app like China's WeChat, which combines chat, payments, games and other features. Musk wants X to be an "everything app" but experts think he will struggle because Twitter is much smaller and more limited in its functions. China's Tencent, which created WeChat in 2011, was able to bolt a payments system on to an earlier platform, QQ, and build from there. Critics of Musk say he is repeating the mistakes of his past by entering an industry he does not understand.
US to deploy coastguard ship to PNG as tussle with China for influence heats up
South China Morning Post
The US is set to increase its military presence in Papua New Guinea (PNG) and the South Pacific after US Defence Secretary Lloyd Austin announced the deployment of a US coastguard ship to PNG in August. The move comes as Washington seeks to boost its military footprint in the region amid increasing competition for influence with China. The US and PNG signed a defence pact earlier this year, allowing the US military to station troops and vessels at key ports and airports across the country.
China tops agenda as Biden welcomes Italy's Meloni to Washington
Reuters
Italian Prime Minister Giorgia Meloni met with President Joe Biden at the White House on Thursday, with discussions expected to focus on Italy's relations with China and the ongoing conflict in Ukraine. Meloni, who leads a right-wing coalition, has differing views from Biden on issues such as abortion and LGBTQ rights. She is also scheduled to meet with Republican House Speaker Kevin McCarthy, who has suggested the possibility of an impeachment inquiry into Biden. Italy's membership in China's Belt and Road Initiative (BRI) infrastructure plan is also expected to be a topic of discussion, with Italy likely to decline renewing the deal when it expires in 2024. The meeting comes after Meloni hosted an international conference on migration in Rome, as Italy deals with an influx of migrants from North Africa.
China limits expansion of coal-chemical industry, prioritises energy security
Reuters
China's state planner, the National Development and Reform Commission (NDRC), has announced that it will "strictly control" the approval and size of new coal-to-chemical projects. The move is aimed at prioritising the supply of coal to power plants and ensuring the country's energy security. The restrictions will not apply to the coal-to-oil or coal-to-gas sectors. China is expected to account for over half of the growth in global petrochemical processing capacity between 2023 and 2030.
Can Africa and China help end the Russia-Ukraine war?
Al Jazeera
The second Russia-Africa summit, which will take place in St Petersburg on 27 July, will be overshadowed by tensions caused by the ongoing war in Ukraine. African leaders presented a 10-point peace plan to Russian President Vladimir Putin in June, in an attempt to encourage negotiations between Russia and Ukraine. However, instead of showing a desire for peace, Putin has pulled out of a grain deal that allowed the export of Ukrainian wheat and maize to African nations. China has also proposed a peace plan, but neither China nor Africa has been successful in convincing Russia or Ukraine to engage in peace talks. Analysts believe that real negotiations will eventually take place, and at that point, China's influence over Russia and Africa's neutrality may make them well-placed to mediate between the two sides.
African nations are offering their peace plan to Ukraine, but they first need to overcome the perception that they are "pro-Russia" before Kyiv will seriously consider their proposal. African nations have abstained from condemning Russia in UN resolutions against the war, and they will need to change this perception in order for their peace plan to be taken seriously. However, African nations have been shifting their postures, and their peace plan includes points that are "pro-Ukraine." Meanwhile, China has also proposed a peace plan, but it is broad, vague, and open to interpretation. Some analysts believe that China's interests lie in a prolonged war in Ukraine, as this would distract the world and help China "normalise neutrality in the face of conflict." However, if Russia is pushed to the edge of collapse, China may be able to convince Putin to settle for a deal.
Ukraine has rejected the peace plans proposed by China and Africa, as they involve the loss of territory and do not address the need to bring Russian leaders to justice. Ukraine is pushing its own peace plan, which insists on a full recapture of territories occupied by Russia and justice for the alleged war crimes committed by Russian leaders. The Kremlin's ability to influence Russia's relations with Africa and China is weakening, and there are signs that China is becoming less aligned with Russia's worldview. Russia has largely welcomed China's peace plan, but has been lukewarm towards the African proposal. At the summit in St Petersburg, Putin may find that Africa's patience with Russia is starting to run out.
Why South Korea needs China even as it teams up with US on chips and more
South China Morning Post
South Korea is set to record its first annual trade deficit with China this year, marking a significant shift in the economic relationship between the two countries. China's focus on self-sufficiency and the relocation of Korean supply chains out of China have contributed to this change, while the rivalry between the US and China has also had an impact. Analysts suggest that widening gaps in economic power and changes in the global industrial landscape have been key factors in the growing tensions between the three countries. As China's hi-tech sector has developed, Chinese market share and profits for Japanese and Korean products have declined, leading to increased tensions. South Korean companies are now turning towards the US for investment opportunities, further straining economic and diplomatic ties with China. The economic rise of Japan, South Korea, and China has followed similar trajectories, with all three countries experiencing rapid growth and moving from labour-intensive to innovation-intensive sectors. However, this has also led to competition and strategic jockeying in the global value chain. South Korea's dependence on Chinese imports has decreased its technological competitiveness, making changes in the trade relationship between the two countries inevitable. The widening gap in economic power between China and South Korea has also affected their military spending, with Beijing's expenditure now more than six times that of Seoul. South Korean President Yoon Suk-yeol is leading efforts to diversify Korean trade away from China and build supply chain alliances, particularly in the semiconductor industry. South Korea, Japan, and the US are all working together to reduce their dependence on China and contain its rising influence.
Beijing approves 88 video game licences ahead of ChinaJoy event
South China Morning Post
China has approved a batch of video game licences ahead of the country's largest gaming event, ChinaJoy. The National Press and Publication Administration (NPPA) has published a list of 88 approved game titles developed by domestic companies. Although the approved titles do not come from the country's top gaming companies, it signals that Beijing is now focused on supporting the industry, particularly smaller studios. This comes as China continues to ease its year-long crackdown on the video gaming industry. The NPPA has approved over 600 domestic games so far this year, higher than the total approvals for all of 2022.
US, allies must keep ‘eye on the ball of China’ with tech curbs: commerce chief
South China Morning Post
The US is seeking "narrow" restrictions on the sale of advanced technology to China, with a focus on "chokepoints" that the Chinese military could use, according to US Secretary of Commerce Gina Raimondo. She said that certain technology could be used by the Chinese military against the US, but other exports qualify as "commodity" technology and could still be sold. Raimondo also said that the US plans to strengthen bonds with Japan, South Korea, and countries in Europe, despite possible hi-tech competition.
Young Chinese are getting paid to be ‘full-time children’ as jobs become harder to find
CNN
China is facing a major youth unemployment crisis as the jobless rate for 16 to 24-year-olds in urban areas hit a record high of 21.3% in March. Many young people are retreating home and becoming "full-time sons and daughters," paid by their families to stay at home. These young people, who are unable to find work, spend their days caring for family members or doing household tasks in exchange for financial support. The true youth unemployment rate could be as high as 46.5% if those who are "lying flat" at home or relying on their parents for support are included. The phenomenon of "full-time sons and daughters" has gained popularity on Chinese social media platforms, with thousands of young people discussing their experiences and challenges. The trend is a sign of shrinking opportunities for young people in an economy that has slowed down and faces weak business confidence. While the financial support from parents may provide temporary relief, it is not a viable solution to the jobs problem in China and may lead to long-term unemployment and unemployability for young people.
Analysis: Investors dumping China load up on other emerging markets
Reuters
Global investors are bypassing China's markets and investing in other emerging countries that are either benefiting from China's economic pain or have better growth prospects. A Reuters analysis found a significant increase in the assets of emerging market mutual funds and exchange-traded funds (ETFs) that exclude China as investors become more wary of being exposed to the Asian giant. Some of the money is being diverted into markets directly benefiting from China's economic pain, such as Mexico, India, Vietnam, and other locations that are replacing it across global manufacturing supply chains.
US lawmakers debate bill pressing Hollywood to reject China’s film censorship
South China Morning Post
US lawmakers in the House Foreign Affairs Committee have approved a bill that could prevent Hollywood studios from receiving federal funding if they do not promise to ignore China’s censorship requests. The bill, called the Stopping Communist Regimes from Engaging in Edits Now Act (SCREEN Act), would require studios to report to the US State Department films which have been submitted to Beijing for approval before accessing federal funding. If the bill passes, the federal government will also be prohibited from assisting studios with film production if the movie is co-produced by a Chinese company.
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