US Seeks to Head Off Chinese Call for Cease-Fire in Ukraine; Exclusive Insight: Xi Jinping's attempts at reconciliation face obstacles
Why Has Xi Jinping Let His Hair Go Gray? WHO Accuses China of Hiding Data That May Link Covid’s Origin to Animals; Silicon Valley and Capitol Hill Build Anti-China Alliance
Welcome to today's issue of The China Brief, where we bring you the latest news and insights on China's economy, politics, and international relations. In today's issue, we cover a range of topics, from the US's efforts to head off any Chinese call for a cease-fire in Ukraine to TikTok's lobbying efforts in Washington to China's sweeping directive to overhaul its financial sector. We also delve into the critical minerals that the US military depends on, most of which are sourced from China, and the need for the US to create a more robust domestic supply chain to ensure national security and military preparedness. Stay tuned for all this and more.
And here’s today’s exclusive insight:
Exclusive Insight: Xi Jinping's attempts at reconciliation face obstacles
Despite no active battlefield between China and the US, ongoing casualties persist in the conflict between Russia and Ukraine. President Biden's upcoming call with President Xi may help mitigate the escalating risk of confrontation.
It's worth noting that while tensions continue to escalate, there is no active battlefield between China and the US, be it in the Taiwan Strait or the South China Sea. Vietnam and the Philippines have not shown any intention to engage in a conflict with China in the South China Sea, and China is actively pursuing better relationships with both nations.
As for Taiwan, while political rhetoric may suggest otherwise, the island's leaders are taking a cautious approach and recognize that Taiwan is not in the same situation as Ukraine.
Russia and Ukraine lack a clear path to victory, complicating any political concessions. However, ending the war is a pressing issue, and Xi Jinping has begun negotiations to achieve a ceasefire. Given China's relationship with both countries, such an agreement may temporarily halt the bloodshed.
Still, some remain dissatisfied, and according to the Wall Street Journal, White House officials fear a ceasefire would entrench Russia's control over Ukraine.
The US cannot let China gain more international acclaim, particularly as Saudi Arabia and Iran reestablish diplomatic ties with Xi's mediation. Unless the conflict escalates, providing Ukraine with advanced weaponry to deal a heavy blow to Russia and force Putin's retreat would end the ongoing war of attrition. The conflict will continue to be a political liability for both parties, especially with the approaching election season.
(This article was written by Ho Pin, an analysis expert of The China Brief.)
WSJ: U.S. Seeks to Head Off Any Chinese Call for Cease-Fire in Ukraine
The US is trying to prevent a potential Chinese proposal for a cease-fire in Ukraine ahead of the upcoming Russia-China summit. Suspending fighting now would only help Russia maintain its hold on Ukrainian territory, said John Kirby, a spokesman for the National Security Council. The US has been using public statements and disclosures to try to narrow China's room for manoeuvre with Moscow, including by projecting itself as a mediator. Chinese leader Xi Jinping is due to meet Russian President Vladimir Putin in Moscow next week.
NYT: WHO Accuses China of Hiding Data That May Link Covid’s Origins to Animals
The World Health Organization (WHO) has criticized Chinese officials for withholding data that may link COVID-19's origin to wild animals and for missing evidence related to the same research. The data, downloaded and analyzed by an international team of virus experts, appeared online in January and supported the idea that the pandemic could have begun when illegally traded raccoon dogs infected humans at a Wuhan seafood market. However, the gene sequences were removed from a scientific database once the experts offered to collaborate on the analysis with their Chinese counterparts. The missing evidence now "needs to be shared with the international community immediately," says WHO's director-general.
WSJ: Why Has Xi Jinping Let His Hair Go Gray?
Since ancient times, black hair has been a requirement for leadership in China, as it projects an image of energy and vigor. For a Chinese leader to have white hair would be a sign that he has left politics, either by force or voluntarily. Chinese politicians need to touch up their hair roots every 10 days or so to maintain the jet-black look, and the belief that white-haired people are not supposed to rule is perhaps the one article in China’s unwritten constitution that cannot be violated. President Xi Jinping has broken this tradition by allowing his hair to show signs of gray in recent years, demonstrating his unique status as the most powerful leader in China. While political norms that influence the highest echelons of Chinese politics often filter down to lower levels of the bureaucracy, it remains unclear whether President Xi’s more natural appearance reflects the end of collective leadership in China.
Nikkei: China's 228m retirees set to drain the economy and social safety net
China faces a significant wave of retirements over the next decade, with an estimated 228 million people retiring over the next ten years. This has raised concerns about the sustainability of China's pension system, particularly the basic pension for urban employees. A shrinking working-age population has prompted the government to consider raising the retirement age gradually to 65 over three decades to address the issue, although this is widely disliked. However, there are a few other options to keep China's social safety net intact. The government is signaling it will tread carefully on the retirement age to avoid public anger.
Reuters: Beijing may allow foreign financial firms to list in China - ex-finance minister
China may allow foreign-funded financial institutions to go public in the country when "cond” to encourage foreign capital to participate in its financial markets, according to former finance minister Lou Jiwei. The move would align with China's financial industry opening and follow recent efforts to woo foreign companies and investors to aid economic recovery. China has also sped up fund license approvals for foreign asset managers recently.
POLITICO: TikTok’s plan to stave off government intervention: Flood D.C. with influencers
TikTok is sending dozens of influencers to Washington for three days next week to lobby against the forced sale of the social media app. This comes as the Biden administration urges TikTok's Chinese owners to sell the app to a new owner or face a potential ban in the US. The Committee on Foreign Investment in the United States has spent years reviewing the potential national security risks posed by TikTok and its owner, ByteDance. The creators will hold a press conference on Capitol Hill, while the app's CEO is set to testify before the House Energy and Commerce Committee.
Reuters: Huawei has replaced thousands of U.S.-banned parts in its products, founder says
According to a speech transcript posted by Shanghai Jiao Tong University, Huawei's founder, Ren Zhengfei, said the company had replaced more than 13,000 components in its products impacted by US trade sanctions. Over the past three years, the components were replaced with domestic Chinese substitutes, and Huawei also redesigned 4,000 circuit boards for its products. This provided insight into Huawei's efforts to recover from US trade restrictions, which began in 2019.
NYT: China’s Leader Will Visit Putin Under Shadow of War-Crimes Warrant
Chinese President Xi Jinping is set to visit Russia next week to help make peace between Russia and Ukraine. Still, this move is seen by Western officials as a sign of China's support for President Vladimir V. Putin. The visit comes as Russia faces global isolation, with Finland set to join NATO, European allies providing military aid to Ukraine, and the International Criminal Court accusing Putin of war crimes. China has proposed a peace settlement to the war in Ukraine, but it does not address important questions like whether Russian troops would withdraw.
WSJ: Silicon Valley and Capitol Hill Build an Anti-China Alliance
Silicon Valley executives, including investor Peter Thiel, and Washington lawmakers are allying against China's involvement in the US tech industry ahead of TikTok CEO Shou Zi Chew's Capitol Hill testimony next week. The group, called the Hill & Valley Forum, plans to discuss China, national security, and the competition between the tech sectors of the US and China. The dinner will be paid for by venture-capital firms 137 Ventures and Founders Fund and will draw approximately 200 attendees. The US government and other Western countries have blocked TikTok on government-issued devices.
Nikkei: Netherlands to tighten export controls of chip equipment
The Netherlands plans to expand its list of chip manufacturing equipment subject to export controls to prevent military use, including some of the latest models of deep ultraviolet (DUV) lithography tools, according to Dutch Trade Minister Liesje Schreinemacher. The move is in response to US semiconductor restrictions on China. The Netherlands has already restricted some extreme ultraviolet (EUV) lithography equipment exports. Schreinemacher stressed that the measures are "country neutral" and "not specifically aimed against China" but at preventing technology from falling into the wrong hands.
Reuters: Additions to Xinjiang sanctions list a priority -US DHS official
The US Department of Homeland Security's top priority for this year is to add more companies to a sanctions list for using forced labor in China's Xinjiang region, according to Robert Silvers, DHS undersecretary for strategy, policy, and plans. Silvers also said that DHS was interested in using technology, such as DNA testing, to determine whether cotton products came from Xinjiang. The US has accused China of genocide in the region, which Beijing denies, and is seeking to persuade other countries to pursue enforcement regimes like its own.
SCMP: China’s State Council’s first meeting looks to the private sector and foreign investment as part of economic plans
In its first plenary meeting, China's State Council promised to tap consumption potential and boost the private sector and foreign investment to ensure the national economy continues to grow. Premier Li Qiang has said that the council will implement the decisions of the Communist Party's Central Committee and will deepen economic reform and opening, plan a new round of state-owned enterprise reform, boost development and the private economy, and stabilize foreign direct investment and foreign trade. The government's economic plan also includes technological advancement, prevention of systemic risk, boosting investor confidence, and grain security.
Reuters: Britain says China should encourage Russia to withdraw from Ukraine
British Prime Minister Rishi Sunak's spokesperson has urged Chinese President Xi Jinping to encourage Russian President Vladimir Putin to withdraw Russian troops from Ukraine during a trip to Moscow. The spokesperson said that any peace deal that does not consider Ukraine's sovereignty and self-determination is not at all, adding that the UK will continue to call on China to join other countries in calling for the withdrawal of Russian troops.
NBC: White House hopes Biden's relationship with Xi can defuse U.S.-China tensions
The personal relationship that President Joe Biden has built with Chinese President Xi Jinping over the past 12 years is believed to be a thin thread preventing tensions between the US and China from worsening further, according to administration officials and foreign policy analysts. However, with Xi now being the lone figure in Beijing making decisions that will drive future relations, the durability of the personal relationship remains in question. Biden’s rapport with Xi is also under constant strain from each country's hard-line positions.
Reuters: India says the situation with China fragile, dangerous on the Himalayan front
The situation between India and China in the western Himalayan region of Ladakh remains fragile and dangerous, with military forces deployed very close to each other in some parts, according to Indian Foreign Minister S Jaishankar. The 2020 border clash resulted in at least 24 deaths, and although disengagement has occurred in many areas, discussions continue over unresolved points. Jaishankar said that India-China relations could not return to normal until the border dispute is resolved in line with the September 2020 in-principle agreement.
SCMP: China’s financial overhaul brings more power to the party, with US$58 trillion in assets at stake
China has announced a sweeping directive to overhaul its financial sector, including establishing a Central Finance Commission to replace the Financial Stability and Development Committee. The new commission, which is expected to be led by President Xi Jinping, will have the power to oversee China's banking, insurance, and securities assets worth $58tn and dictate how the world's second-largest economy opens its capital market to foreign investors. Analysts see the move as strengthening the Communist Party's control over finance and technology to tackle elevated economic risks and challenges. However, details about the new directive remain scarce.
AP: Brazil's Lula to go to China with 240 business representatives, says official
Brazilian President Luiz Inacio Lula da Silva will visit China later this month with a delegation of 240 business representatives, including 90 from the agriculture sector. All of the Brazilian government's ministries will be represented during the March 26-30 visit to Beijing and Shanghai, to diversify Brazil's trade relationship with China, its largest customer for exports, which are mainly soybeans and iron ore.
Foreign Policy: America’s Military Depends on Minerals That China Controls
The United States’ military depends on critical minerals mostly sourced from other nations, with China being the primary supplier. These minerals are essential for modern weaponry and maintaining the country's military technological edge. However, the dependence on other countries, especially those that are hostile, poses a significant threat to national security. The U.S. Defense Department has been researching how to support its ammunition industrial base and has asked for $500 million annually to upgrade ammunition plants. Developing advanced weaponry requires new critical minerals, including gallium, arsenic, and neon, mostly located and produced in China, Russia, and Ukraine. The United States needs to create a more robust domestic supply chain for critical minerals to ensure national security and military preparedness.
Reuters: England to end pre-departure COVID test rule for arrivals from China
From April 5, the UK government will end the requirement for people flying from mainland China to England to provide proof of a negative pre-departure COVID-19 test. According to the UK Health Security Agency, the voluntary, on-arrival testing program of travelers arriving from China at London’s Heathrow airport will also end on March 18. The measures were introduced in January to help strengthen Britain's ability to detect potential new variants circulating in China rapidly. The UK health department stated that the removal of these measures comes as China has increased information sharing regarding testing, vaccination, and genomic sequencing results, providing greater transparency on their domestic disease levels.
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