World's spy chiefs meet in secret conclave in Singapore; Exclusive: Deciphering the Sceptre: A Portrait of Power and Personnel Dynamics in Xi Jinping's China
Japan’s chip tool export restrictions will deal heavy blow to China’s ambitions; Ukraine’s rapid reconstruction will be in Europe’s own interest; China is riding the next wave of industrialization
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Deciphering the Sceptre: A Portrait of Power and Personnel Dynamics in Xi Jinping's China
2023-06-04
Since ascending to power in 2012, Xi Jinping has emerged as one of the most influential leaders on the world stage. He has deftly cemented his control over the Chinese Communist Party, the military, and the economy, while suppressing dissent and strengthening censorship measures. However, to attribute Xi's rise entirely to his political acumen is to oversimplify the intricacies of China's political landscape.
Given the unsustainability of the existing political system, the centralization of power was nearly an inevitable outcome. Xi seized the opportunity, marking a new era of transformative change, forsaking Mao Zedong and Deng Xiaoping, and eschewing an immediate pursuit of constitutional democracy. To achieve this end, he dismantled a corruption-ridden collective leadership system and initiated systemic reforms in the military.
Economically, Xi addressed issues with monopolistic giants, supported small and medium-sized enterprises, and reinforced the Party's control over economic sectors. Diplomatically, China no longer subserves the West but sees it as an equal, refraining from interfering in domestic affairs while mediating conflicts, and focusing on trade and economic development.
The 20th National Congress of the Chinese Communist Party demonstrated the closed nature of China's power structure, and the external world's ability to assess China's situation has diminished. Xi has virtually eradicated all power factions, establishing his own personnel foundation. Through amending the constitution, he has explicitly expressed his intention to break the original term limit system and maintain supreme power. Currently, no significant factions within the CCP pose a genuine threat to Xi's personal power.
As of 2023, Li Keqiang has held the position of Premier within China's central government. Li Keqiang's leadership style is characterized by his humble demeanor, positioning himself as an engineer responsible for implementing the central government's policies through the State Council. His work focus is to address the practical needs of the people, such as housing, employment, income, education, medical care, and environment. Li Keqiang also stresses that officials must penetrate to the grassroots to understand and address the practical problems faced by the masses. He believes experts are among the people and encourages officials at all levels to actively seek the needs and opinions of the people.
From the 18th National Congress of the Communist Party of China in 2012 to the 20th National Congress in 2022, Xi spent a decade consolidating his power, eliminating differing factions within the party, including the military. Currently, the Communist Party's highest decision-making body, the Politburo Standing Committee, is composed of seven members, all from Xi's faction, including Li Keqiang. These members come from provinces where Xi has roots, including his hometown and the three provinces where he has worked.
The book introduces Cai Qi, a member of the Politburo Standing Committee, responsible for managing the daily work within the Central Committee of the Communist Party of China. He also serves as the Secretary-General of the CPC Central Secretariat and the Director of the Office. Cai Qi's entire career has been spent within the Communist Party, constantly ascending to become the Deputy Director of the CPC Central Secretariat. In 2017, he was elected Mayor of Beijing and a member of the Central Politburo.
Additionally, Ding Xuexiang ranks as the First Deputy Premier of the State Council and a member of the Politburo Standing Committee. Ding Xuexiang has held various positions in the central government, including Director of the CPC Central Office. Looking at the personnel layout of the current Politburo Standing Committee, Ding's appointment carries strategic significance as he assists Li Keqiang in his duties while simultaneously serving as a check and balance on the power of Cai Qi and Li Keqiang.
Overall, these three Premier-level officials have rich experience within the Chinese Communist Party and are trusted by Xi Jinping.
Japan’s chip tool export restrictions will deal heavy blow to China’s ambitions
South China Morning Post
China’s domestic semiconductor production has suffered a blow after Japan’s new export restrictions on 23 types of chip-related equipment targeting China are set to come into effect in July by requiring specific permission for the export of items to any country not on a list of 42 “friendly” markets. Analysts say the restrictions move beyond limitations that the US has already imposed. Japan is a key player in the global chip supply chain, with a monopoly in certain niche areas, which Tokyo has used in the past in its rivalry with South Korea.
Ukraine’s rapid reconstruction will be in Europe’s own interest
Financial Times
Ukraine could become a key player in Europe’s green energy transition, with geographical proximity, renewable resources, nuclear expertise and a tradition of metallurgy. The country is also affordable in terms of wages, so could potentially fill supply gaps in manufacturing and processing as the European Union diversifies away from China, according to Rostyslav Shurma, deputy head of the Ukrainian president’s office. These credentials make it a strategic economic opportunity if Europe wants to support Ukraine's reconstruction but there's no strong political will to support mobilising reconstruction funds beyond ordinary budget aid. Private investments will only materialise if there is confidence in sufficient public funding.
China is riding the next wave of industrialisation – the West must wake up or sink
Telegraph
China has launched "the second great wave of industrialisation" and is set to dominate industries including aerospace, autos, pharmaceuticals, consumer goods, telecommunications, retail and finance, according to Jeremy Warner in The Telegraph. He argues that the West needs to learn from China's strengths and focus more on innovation, deregulation and lower taxes rather than trying to compete on subsidies and industrial strategies. It follows the maiden flight of the country's new commercial jet, the C919, and the rise of home-grown auto-maker BYD.
China accuses US of ‘provoking’ Beijing with American warship move
The Independent
China's defense minister, General Li Shangfu, has told top defense officials in Singapore that US-led freedom of navigation patrols (FONOPs) in the Taiwan Strait are provocations to China. He stated that while China has no issues with innocent passage, it must prevent any attempts to use these patrols to exercise hegemony of navigation. His address followed comments by US Defense Secretary Lloyd Austin, who said that Washington would not deter from sailing and flying through the area to emphasise that they are international waters. Tensions have increased, with safety-related incidents having occurred in recent weeks.
Exclusive: World's spy chiefs meet in secret conclave in Singapore
Reuters
Senior officials from several major intelligence agencies have held secret meetings in Singapore this weekend organised by the Singapore government. Approximately two dozen intelligence agencies, including China and India, were present. The discussions were described as "not confrontational" however few details have been disclosed. The US was represented by Director of National Intelligence Avril Haines and attendees also met with officials from the United Kingdom and Australia, as well as representatives from Southeast Asian countries including Vietnam, according to the sources.
Fiji minister says terminating police pact with China 'possible'
Nikkei Asia
Fiji is still considering a police cooperation agreement with China and may withdraw, according to the Pacific island nation's minister in charge of defence. Pio Tikoduadua, the Fijian home affairs and immigration minister, said termination of the agreement was one possible outcome of the review, in an interview on the sidelines of the Shangri-La Dialogue defence forum in Singapore.
Clash with U.S. would be 'unbearable disaster,' says China
Nikkei Asia
Speaking at the Shangri-La Dialogue in Singapore, Chinese Defense Minister Li Shangfu said that conflict with the US would be an "unbearable disaster" but that his country sought dialogue over confrontation. Li's remarks come days after he refused to meet his US counterpart for direct talks.
China and U.S. trade barbs at Asian security meet despite growing calls for dialogue
Japan Times
Calls for dialogue featured at Singapore's Shangri-La Dialogue as US and Chinese delegates argued over the breakdown of military communications between Beijing and Washington. The event showcased US attempts to strengthen Indo-Pacific security alliances, a move that has raised fears among Southeast Asian governments regarding policies that include bolstering deterrence without dialogue. Key speeches included Australian PM Anthony Albanese's opening address; US Defense Secretary Lloyd Austin asking "For responsible defense leaders, the right time to talk is anytime, the right time to talk is every time, and the right time to talk is now," and China's Defence Minister Li Shangfu aiming criticism at the US and its partners, dubbing recent security alliances as reflective of "NATO-like military alliances."
Shangri-La Dialogue: Southeast Asia ‘acutely concerned’ about US-China rivalry
South China Morning Post
South-East Asian leaders at the annual Shangri-La Dialogue urged the US and China to repair their damaged relationship, claiming the region fears becoming embroiled in any further negative knock-on effects. US and Chinese bilateral interactions have remained halted for several months, although the Singapore three-day security conference provided a platform for discussion, but which failed to include a face-to-face meeting between the two nations' defence leaders. However, several speakers at the conference suggested that the issue comes down to establishing channels of communication, formal and informal, that can be relied upon to prevent further escalation.
U.S. fires up Asian allies but makes no progress on China talks
Nikkei Asia
US Secretary of Defense Lloyd Austin made strides with allies during the Shangri-La Dialogue in Singapore, including hosting the inaugural four-way defence ministers meeting with Japan, Australia and the Philippines, and launching a real-time intelligence-sharing mechanism between Washington, Tokyo and Seoul. However, US-Chinese relations remain cool, with Austin's only engagement with the Chinese delegation being a five-second handshake with Chinese Defense Minister General Li Shangfu before dinner on Friday. The two almost had no choice but to shake hands, as they were seated at the same table.
The Big China Play That Fueled Luxury Stocks Is Now Fizzling Out
Bloomberg
The lustre of luxury stocks is waning, as uncertainty surrounding China's post-pandemic retail sector undermines the trend. Luxury brands including LVMH and Hermes, that dominated European stock plays this year, are losing favour after a disproportionate rise in valuation compared to benchmark indexes resulted in a significant battering of shares; LVMH has already shed $50bn. With high youth unemployment and increasing economic shakiness among China's Gen Zs, big-spending, prospective buyers' hesitance is endorsed through signs of slowdowns, with retail sales below expectations in April and industrial production dipping. Economists warn that more stimulus is required to sustain the country's recovery, and the normalised function rather than expectant boom which is expected to characterise the industry over the medium term will limit upside potential.
Hong Kong Remembered the Tiananmen Massacre, Until It Couldn’t
NY Times
Hong Kong was previously the only place in China where the victims of the 1989 military crackdown could be publicly mourned in a candlelight vigil. However, it is now apparent Hong Kong is doing all it can to forget the massacre. In the days leading up to the June 4 anniversary which commemorates the massacre, even small shops displaying items alluding to the crackdown were closely monitored. Thousands of officers patrolled the streets and arrested eight people. Zhou Fengsuo, a student leader in the Tiananmen Square protest movement, said that Hong Kong is now under the same “despotic rule” as the mainland. China has criminalised virtually all forms of dissent in Hong Kong since imposing a national security law last year. Pro-democracy and antigovernment protests have been silenced. The authorities have paid particular attention to commemorations of the Tiananmen massacre and have stopped all public memorials for two years citing pandemic restrictions. This year, Victoria Park was occupied by a trade fair organised by pro-Beijing groups to celebrate the 1997 return of Hong Kong to Chinese rule.
Former Chinese ambassador says US must halt military deployments near China
Reuters
A retired veteran Chinese diplomat has said the US should reduce its military deployments close to China as a gesture of "good faith" if high-level defence talks between the two countries are to resume. Speaking to Reuters, former ambassador to the US Cui Tiankai said that while communication channels between the countries' militaries remained open, there was little political will to prevent conflict. His remarks reflected the comments of Chinese Minister of National Defence Li Shangfu, who said at the Shangri-La Dialogue conference in Singapore that a conflict between China and the US would result in "unbearable disaster".
Asian hubs set to reap gains from US crypto crackdown
South China Morning Post
Hong Kong and Singapore are well-positioned to emerge as the new hubs of the global cryptocurrency system, say industry executives. US regulation of cryptos has become stricter, with the SEC issuing fines and penalties to lending firms, causing a market turmoil, major firms filing bankruptcy and a FTX exchange failing citing fraud offences. Hong Kong and Singapore have been regulating cryptos differently, with Hong Kong treating them as financial assets and Singapore as a new technology ecosystem built on blockchains. The two cities' regulations will offer legal certainty and businesses are expected to move there from the US and other regions without regulations.
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