WSJ: Party Priorities Complicate Plans to Revive China’s Economy
Xi Jinping calls for protection of ‘hard-won stability’ in Xinjiang visit;Russian ships return from joint Pacific patrolling with Chinese ships; Western arms suppliers shift Asian HQs to Japan
Welcome to this issue of The China Brief. Today is August 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.
Communist Party Priorities Complicate Plans to Revive China’s Economy
WSJ
China's economic policy is being strongly influenced by ideology, diverging from the West's consumer-driven growth approach. Chinese leader Xi Jinping opposes consumption-driven growth, viewing it as wasteful and counter to his goal of making China a technological powerhouse. Despite calls for more stimulus to boost the slowing economy, Xi emphasizes fiscal discipline due to China's high debt. Market-oriented changes and decentralized economic control are unlikely. China's economic outlook is grim, with contracting manufacturing, declining exports, weakening home prices, and rising youth unemployment. Xi's recent speech opposes Western-style stimulus, indicating resistance to pressure for more economic assistance. The Chinese leadership prefers government-led growth through infrastructure spending and targeted sectors. The debate highlights the tension between fostering consumption and maintaining state control. As China waits, the risk of prolonged stagnation increases, potentially impacting global growth. Xi's background and experiences shape his preference for austerity over Western-style social support.
Xi Jinping calls for protection of ‘hard-won stability’ in Xinjiang visit
Al Jazeera
Chinese President Xi Jinping has made a rare visit to the region of Xinjiang and called on officials to conserve "hard-won social stability". The region has been the subject of allegations of abuses against Uighur Muslims that the United Nations has said could amount to "crimes against humanity". The Chinese government has pursued a campaign against "terrorism" and "extremism" in the region, detaining large numbers of Uighurs and other ethnic minorities. The US, UK, Canada and France have labelled China's treatment of the Uighurs as "genocide", although Beijing denies the allegations.
Russian ships return from joint Pacific patrolling with Chinese ships
Reuters
A detachment of Russian navy warships has returned from a joint patrol of the Pacific Ocean with Chinese navy ships. The warships of Russia's Pacific Fleet travelled over 7,000 nautical miles through various areas including the Sea of Japan and the Pacific Ocean. During the patrol, the Russian-Chinese detachment passed along the Kuril ridge, the disputed islands off the northern Japanese island of Hokkaido. The detachment also circled part of the Aleutian Islands archipelago. This joint patrol comes after reports in August that 11 Russian and Chinese ships steamed close to the Aleutian Islands, in what appeared to be the largest such flotilla to approach American shores.
Western arms suppliers shift Asian HQs to Japan
Nikkei Asia
Major defense contractors from around the world are shifting their Asian operations to Japan as Tokyo prepares to increase defense spending in response to the deteriorating security situation in East Asia. BAE Systems, a leading British aerospace and arms company, will move the supervisory functions for its Asian operations from Malaysia to Japan by the end of this year. Lockheed Martin of the US has already completed the transfer. BAE, which established a subsidiary in Japan earlier this year, will increase the number of employees at the Japanese subsidiary to reinforce its business foundation. Lockheed Martin has also moved its Asian strategic headquarters to Japan from Singapore, and will control operations in South Korea, Taiwan, and other markets from Japan. Other defense contractors, including L3Harris Technologies of the US and Thales of France, are also increasing their presence in Japan to meet the growing demand for defense equipment. The Japanese government's move to strengthen the country's defense capabilities is expected to raise the level of domestic defense contractors, but it may also impact local companies and reduce profitability in the defense industry.
Is your made-in-China electric vehicle truly environmentally friendly?
South China Morning Post
Electric vehicles (EVs) do help reduce emissions compared to conventional vehicles, but their environmental impact is complicated when considering emissions throughout their life cycle, from production to disposal. EVs begin with a higher carbon debt than internal combustion engine (ICE) vehicles due to emissions generated during the mining and refining of battery materials, such as nickel, cobalt, and lithium. Emissions are also produced during the manufacturing of electricity in the country where the EV is made and charged. For example, producing one kilowatt-hour’s worth of Chinese-made EV batteries results in around 105kg of carbon dioxide-equivalent emissions due to China's coal-dominated power grid. While EVs reduce emissions once on the road, it can take 5,000 to 60,000km for an EV to "repay" its carbon debt compared to an ICE vehicle. The speed of repayment depends on the carbon footprint of the electricity supply. Decarbonising EV supply chains is crucial to realising their full environmental potential. This includes transitioning supply chains to renewable energy, reducing consumption, increasing the recycling rate of mineral resources, and using low-carbon or recycled materials. The Chinese EV and battery industry is taking steps to address the carbon footprint of their products, such as formulating sustainability standards, adopting green logistics, and increasing the use of low-carbon materials. Transitioning the electricity system to clean energy is also essential for decarbonising the EV supply chain.
Taiwan outpost Quemoy becomes battleground in presidential race
South China Morning Post
Taiwan's Quemoy island, also known as Kinmen, has become a battleground for presidential candidates to present themselves as the best candidate to reduce cross-strait hostility and bring peace. Quemoy, which lies just 10km from the Chinese mainland, was heavily bombarded by China in the 1950s during the First and Second Taiwan Strait Crises. Presidential hopefuls from the main opposition Kuomintang (KMT), ruling Democratic Progressive Party (DPP), and the smaller Taiwan People's Party (TPP) have visited the island in recent months to promote their cross-strait peace initiatives. This is particularly significant as Beijing views Taiwan as its territory and has not ruled out using force to bring it under its control. The KMT presidential candidate, Hou Yu-ih, called for improved relations with the mainland and peace, stability, and prosperity between the two sides. Meanwhile, Terry Gou, the billionaire founder of Foxconn, announced plans to create a foundation and dialogue office to promote cross-strait peace. Other candidates, such as William Lai Ching-te and Ko Wen-je, have also visited Quemoy to promote their own peace initiatives.
Australia concerned about China economy, monitoring ‘very closely’
South China Morning Post
The Australian Treasurer, Jim Chalmers, has expressed concerns about the weakness of the Chinese economy and the potential impact it could have on Australia. China is Australia's largest trading partner, with annual trade between the two countries valued at AUD 285bn ($183bn). Chalmers stated that the weakness in China could have "obvious implications" for the Australian economy. China's economic recovery has faltered recently due to a property slump, weak consumer spending, and falling credit growth. The Chinese authorities have cut interest rates and promised further support in response to the slowing economy.
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