TSMC Chairman Mark Liu to retire next year; US Says China Curbs ‘Dangerous’ Military Acts After Xi Met Biden
Chinese quake death toll rises to 118; How online scam warlords have made China start to lose patience with Myanmar’s junta
Welcome to this issue of The China Brief. Today is December 19, 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.
US Says China Curbs ‘Dangerous’ Military Acts After Xi Met Biden
Bloomberg
The US has said that China has not conducted any "dangerous" military actions since President Xi Jinping met with his US counterpart Joe Biden, indicating that tensions are easing between the two countries. Admiral John Aquilino, head of US Indo-Pacific Command, stated that if this trend continues it would be "incredibly beneficial". Relations between China and the US have been tense, with high-level military communications severed in 2022 after then-House Speaker Nancy Pelosi visited Taiwan. Although relations may be improving, the US has asked China for three years to speak with its Chinese counterpart, with no avail.
China, Russia pave even stronger ‘financial track’ with a new deal, state visits
South China Morning Post
China and Russia have signed agreements to facilitate bilateral capital flows and bond issuance, in a show of cooperation against the backdrop of American sanctions. The two countries signed a memorandum of understanding to align the process of audit monitoring while sharing experience in public finance, taxing and budgeting. China's Ministry of Finance said the agreements were signed in preparation for the two-day annual leader's meeting between Chinese Premier Li Qiang and Russian Prime Minister Mikhail Mishustin in Beijing.
TSMC Chairman Mark Liu to retire next year
Nikkei Asia
Taiwan Semiconductor Manufacturing Co (TSMC) Chairman Mark Liu has announced that he will retire next year, after leading the company during a period of escalating tensions between the US and China and overseeing an aggressive expansion into overseas markets. Liu has been with TSMC since 1993 and has served as chairman since 2018. TSMC CEO C.C.Wei has been proposed as Liu's successor. The company will hold its Annual Shareholders Meeting in June 2024.
Why is Shanghai using surveillance cameras and AI to monitor its autumn trees?
South China Morning Post
Shanghai is using surveillance cameras and AI algorithms to manage its "unswept fallen leaves" campaign. The cameras are trained on the canopies of trees in nine of the city's landscape roads, with an AI algorithm using the data to calculate the timing and volume of leaf litter they are likely to produce. The resulting "defoliation index model" helps the city's sanitation workers maintain the number of fallen leaves at manageable levels. The index will also support autumnal street cleaning arrangements by suggesting personnel and vehicle deployments.
Why North Korea is upping the ante through missile tests ahead of US election
South China Morning Post
North Korea has said that its latest test of a new ICBM was aimed at gauging the readiness of its nuclear force against mounting American hostility. State media in one of the world’s most secretive and isolated nations said leader Kim Jong-un had watched Monday’s launch of the Hwasong-18 intercontinental ballistic missile (ICBM) at a site east of the capital, Pyongyang. The missile reached an altitude of 6,518km (4,050 miles), flying 1,002km and accurately hitting the intended target, an empty patch of sea.
Chinese quake death toll rises to 118, says state media
Nikkei Asia
A magnitude-6.2 earthquake has struck a remote region on the northern edge of the Qinghai-Tibetan plateau, killing at least 118 people and injuring hundreds, according to Chinese state media. Rescue operations have been hampered by subzero temperatures and the remote location. The earthquake struck near the border between Gansu and the neighbouring province of Qinghai. Over 2,200 personnel from the Gansu provincial fire department, 900 from the forest brigade, 260 professional emergency rescue workers, and hundreds from the military and police have been deployed to the disaster zone.
What if Putin wins? US allies fear defeat as Ukraine war aid stalls
South China Morning Post
The future of Ukraine is increasingly uncertain as aid from the US and Europe remains tied up in political disputes. The impasse has caused some allies of Ukraine to consider the possibility that Russian President Vladimir Putin may win the conflict. The longer Ukraine is unable to defend itself against Russian forces, the more uncertain the situation becomes for Ukraine's cities, power plants, and ports. Furthermore, European allies are contemplating the risks posed by a strengthened Russia to NATO members in the east. The potential ripple effects of a Russian victory in Ukraine would be felt worldwide, as US partners and allies question the reliability of Washington's defense promises. The consequences would be more significant than the botched US pull-out from Afghanistan in 2021. The stalemate on the ground in Ukraine is making it increasingly clear that the conflict could continue for years to come. As a result, some Baltic states are already preparing for the next war, as they believe Putin's forces will not be destroyed in Ukraine. There are growing doubts about whether the US and its allies would put their troops at risk to defend countries that were once part of the Soviet Union.
Christmas ends early for Chinese exporters as Western demand slumps
Nikkei Asia
China's exporters are facing a difficult year, with sales figures down by a third compared to 2022. After years of strict COVID restrictions, China loosened its border controls in 2023, raising hopes for increased exports. However, many exporters are finding that business was better in 2022 when consumers indulged in post-pandemic spending sprees. The US and Europe have cut catalog prices by 10% due to high inflation in their countries, and China's exports to the US, EU, and Southeast Asia have all declined.
UK Demands Consular Access to Jimmy Lai as Security Trial Starts
Bloomberg
The UK government will push for consular access to pro-democracy activist Jimmy Lai, who is currently on trial in Hong Kong for national security charges. Western governments have called for Lai's release, with Lai facing life imprisonment if convicted. China has criticised the calls for his release as politically motivated. The UK government has stated that Lai is a British citizen, but China considers him to be exclusively Chinese. Lai's trial has been adjourned until Friday, when a decision on a sedition charge will be delivered.
Tesla challenger Nio gets $2.2 billion investment from Abu Dhabi’s CYVN
CNN
Chinese electric vehicle (EV) maker Nio has secured $2.2 billion in investment from CYVN Holdings of Abu Dhabi, giving the Tesla challenger a longer financial runway as it seeks to make inroads in an increasingly competitive market. The deal, which follows a previous $1 billion investment from CYVN in July, will give the Emirates-based firm a 20% shareholding in Nio (NIO), the Shanghai-based EV upstart said in a Monday statement. CYVN will also be able to nominate two directors to Nio’s board.
Australia’s PM Hails Aukus Win, Says China Aims to Reshape World
Bloomberg
Australian Prime Minister Anthony Albanese has hailed the passing of legislation in the US Congress to facilitate the Aukus security pact as “historic”. The agreement will allow the transfer of US nuclear-powered submarines to Australia and reshape “the way our technology, research and defense industries cooperate,” Albanese said. The Aukus deal will transform Australia’s ability to contribute to regional stability. The speech also noted the rise of powers such as India and Indonesia and challenges to the global order.
Robot maker UBTech to make Hong Kong’s final IPO of 2023 as billionaire emerges
South China Morning Post
UBTech Robotics, a Chinese robot maker backed by Tencent, is planning to raise up to HKD 1.31bn ($167.4m) through an IPO on the Hong Kong Stock Exchange. The IPO is set to take place on 29 December 2023, and if successful, will value UBTech at HKD 35.9bn. The company, which is the largest manufacturer of educational robots in China, plans to use the proceeds to strengthen its R&D capabilities, build its brand and repay loans.
How online scam warlords have made China start to lose patience with Myanmar’s junta
CNN
China’s growing frustration with Myanmar’s military rulers over their failure to crack down on cross-border crime has led to Beijing’s tacit support for Operation 1027, a major offensive by ethnic rebel groups against the junta, according to experts. The rebels have been liberating scam compounds near the Chinese border, many of which are run by Chinese organised crime bosses. The Chinese authorities have pressed the generals to rein in the centres, which have thrived during the pandemic, but they have done little to curb them. As part of the offensive, powerful warlord families, once deemed untouchable, have been arrested by Chinese police, which has led to a temporary ceasefire between the junta and the rebels. China has been leveraging the operation to maximise pressure on the military government to crack down on cross-border crime affecting Chinese nationals.
ABC
A man named Di Sanh "Sunny" Duong has been found guilty of trying to secretly influence former Australian federal minister Alan Tudge in order to advance the aims of the Chinese Communist Party (CCP). This makes Duong the first person to be found guilty of planning to commit an act of foreign interference, which carries a maximum penalty of 10 years in prison. The conviction comes after Duong made a large donation to a hospital in Melbourne during the COVID-19 lockdowns, which prosecutors argued was an attempt to improperly influence Tudge. Duong has protested his innocence and pleaded not guilty, but prosecutors described his actions as a "subtle form of interference" and argued that he was in regular contact with Chinese intelligence operatives. Duong's history includes involvement with Chinese-Australian community groups, and secret recordings captured him saying that his actions were known to Beijing. He will face a pre-sentence hearing at a later date.
Who Gets to Tell China’s Story?
Foreign Affairs
The rise of citizen historians in China is challenging the Chinese Communist Party's (CCP) control of history. Digital technologies such as PDFs and digital cameras have allowed citizens to preserve and spread historical memory, enabling the revival of banned or out-of-print books and the creation of new publications. These tools have become the modern-day weapons of the weak, allowing citizen historians to confront the government's mythlike telling of history. Despite the CCP's efforts to control history, events such as last year's "white paper" protests against COVID-19 lockdowns and a slowing economy show that large groups of Chinese people are questioning the government's version of events.
Taiwan Ruling Party’s Polling Edge Narrows as Election Heats Up
Bloomberg
Taiwan's ruling party, the Democratic Progressive Party (DPP), has seen its lead in the presidential race narrow, according to a recent survey. DPP candidate Lai Ching-te has the support of 35% of respondents, just ahead of Kuomintang candidate Hou Yu-ih at 31.7%. Taiwan People's Party nominee Ko Wen-je is in third place with 18.2%. The election, set to take place on January 13, 2024, will shape US-China relations and Beijing's goal of bringing Taiwan under its control. The DPP has sought to strengthen ties with the US and its allies to counter Beijing's influence.
China expected to stand pat on lending benchmarks in December
Yahoo US
China is set to leave lending benchmark rates unchanged this week, according to a Reuters survey of 28 market watchers. All participants predicted that both the one-year loan prime rate (LPR) and the five-year rate would remain the same. Most loans in China are based on the one-year LPR rate of 3.45%. The five-year rate is 4.20%. The survey comes after China's central bank injected $112bn of fresh funds into the banking system, but left interest rates unchanged.
Singapore restricts remittances to China after US$10 million in funds frozen
South China Morning Post
The Monetary Authority of Singapore (MAS) has ordered remittance companies in the city-state to stop using non-bank and non-card channels to send money to China following a scare in which remittances to China through Singapore were frozen in the beneficiaries' bank accounts by law enforcement agencies. The reason for the freeze is unknown.
China real estate crash would threaten goal of doubling GDP: report
Nikkei Asia
A financial crisis triggered by a burst Chinese real estate bubble could result in the country's economic growth being stuck at around 1%, jeopardising its goal of doubling gross domestic product by 2035, according to a report by the Japan Center for Economic Research (JCER). The report estimates that in the case of a major financial crisis, China's nominal GDP in yuan terms in 2035 would be only 1.9 times that of 2020, while nominal GDP per capita in dollar terms would be just above $15,000.
China game developers see overseas sales drop for 2nd straight year
Nikkei Asia
China's game developers have seen a second consecutive year of decline in overseas sales, with revenue dropping 5.7% to $16bn in 2023, according to the China Audio-video and Digital Publishing Association. The decline is steeper than the 3.7% decrease in 2022 and has been attributed to challenges including international instability, market competition, and shifting privacy policies. The US and Japan are the top two overseas markets for Chinese self-developed mobile games, followed by South Korea, Germany, the UK, and Canada. However, China's domestic gaming market has rebounded, with sales revenue increasing 14% to $42.8bn this year.
China launches 5-year plan to cut digital red tape, ‘meaningless labour’
South China Morning Post
China's cyberspace regulator has launched a campaign to cut down on red tape and excessive formalities across government apps and social media. The directive, issued on Monday by the Central Cyberspace Affairs Commission, said that government apps, social media accounts, and WeChat groups need to be regulated to make tools more user-friendly and not used by officials in evaluations or to show off levels of digitalisation. The campaign, which could last up to five years, follows remarks made by President Xi Jinping about preventing formalism and bureaucracy.
How Beijing is changing the way it involves itself in Taiwan’s election
Al Jazeera
Taiwanese voters are being targeted by Chinese cyberattacks and disinformation campaigns ahead of the presidential and legislative elections on 11 January 2020, according to Google. The company warned that there had been a significant increase in the number of cyberattacks originating in China against Taiwan’s defence sector, government and private industries. Meanwhile, Facebook recently cracked down on a Chinese influence campaign involving over 7,500 accounts across multiple platforms, many of which had been targeting Taiwan. Chinese disinformation tactics have also evolved, with accounts operating only during Chinese working hours to post purely media content more than 200 times per day, according to Taiwanese research analyst Ai-Men Lau. The Chinese authorities have also extended investigations into “Taiwan’s trade barriers against China” until 12 January. Such decisions so close to the election are part of an “organised Chinese effort to create chaos, stoke distrust and spread dissatisfaction with the current [ruling party] government”, according to Fang-Yu Chen, an assistant professor at Soochow University in Taipei.
China Flows Into New Stock Funds Plunge to Lowest in Decade
Bloomberg
Chinese retail investors are turning away from mutual funds as disillusionment with their performance grows. The amount of money raised by mutual funds this year is at its lowest level in a decade, down by half compared to last year. Retail investors are instead hoarding cash due to uncertainties over employment and declining property prices. The benchmark CSI 300 Index is on track for its third consecutive year of losses, and government policies are seen as insufficient or ineffective. Aggregate household savings reached a record CNY134.6tn ($20tn) as of the end of November.
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