Xi Jinping Could Visit Russia Next Week; Exclusive Insight: Taking Caution: Xi Jinping Contemplates How to Wield Power
China's debt issues loom as Beijing revamps financial regulation; China’s Premier Seeks to Soothe Anxieties About Economy; Oscars 2023: Michelle Yeoh makes history with best actress
Welcome to today's issue of "The China Brief". In today's news, President Biden will announce a landmark nuclear-powered submarine deal with Australia and Britain to counter China's military development, Chinese President Xi Jinping urges the country to advance tech self-reliance and Taiwan unification, and China's new Premier, Li Qiang, seeks to boost business confidence and shore up economic growth. In other news, Xi Jinping brings China's reform era to an end, China's debt issues loom as Beijing revamps financial regulation, and Xi Jinping vows to make the Chinese military into a "great wall of steel" as tensions rise with the West. Lastly, Malaysian actress Michelle Yeoh makes history by becoming the first Asian woman to win the Academy Award for Best Actress.
And here’s today’s exclusive insight:
Exclusive Insight: Taking Caution: Xi Jinping Contemplates How to Wield Power
China's conservative GDP growth target of 5% for this year and the decision to maintain continuity in the personnel of the State Council ministries and commissions indicate that Xi Jinping, a political strongman with unchallenged power, is cautious in wielding it.
This caution is necessary after three years of strict pandemic control and harsh crackdowns on large private companies and bureaucratic elites, leaving the Chinese society anxious and exhausted. At this time, China needs less trouble and more space for recovery.
The United States is uniting democratic nations to call out Xi Jinping and applying various measures, including sanctions and public opinion campaigns, that appear to encircle China.
Despite the prevalent perception of the West's global supremacy, China has not been isolated internationally. Although China is not necessarily recognized as a political leader by many nations, its economic appeal as an investor, market, and manufacturer is hard to ignore.
Developing nations across Africa, Central and South America, and Southeast Asia have discovered that China is less exacting than the United States and does not make human rights and democracy a prerequisite.
However, these nations do not intend to make a binary choice between the United States and China. Instead, they aim to safeguard their interests and broaden their options by engaging with both parties.
Despite the rhetoric, Xi Jinping does not incline to replace the U.S.’s leadership. Instead, he sees some of the deficiencies and voids left by the United States as opportunities to expand China's international role. One of his recent successes in this regard is the resumption of diplomatic relations between Saudi Arabia and Iran.
Xi Jinping is slated to visit Europe, potentially extending his itinerary to other nations besides Russia. While Biden is unlikely to let Xi Jinping be the "mantle of peace," the Russia-Ukraine conflict is approaching a turning point.
Xi Jinping's power is not hampered by the need to appease public opinion or win elections. Rather, his true test lies in how effectively he can wield the power he already commands.
It is clear that Xi Jinping is not the leader the West anticipated. With China’s economic prowess, no external forces can easily mold its policies to align with the West’s interests. With immense power at his disposal, Xi is free to pursue his agenda, even if it does not conform to external expectations.
(The article's author is Ho Pin, an analyst for “The China Brief.”)
NYT: Biden to Announce Landmark Nuclear-Powered Submarine Deal with Australia and Britain
President Biden will announce a landmark agreement with the leaders of Britain and Australia to develop fleets of nuclear-powered attack submarines to strengthen their naval forces across the Asia-Pacific region. The deal is aimed at countering China's military development and territorial claims across Asia and involves the US sharing nuclear technology for such vessels for the first time in 65 years. Under the agreement, Australia will buy three Virginia-class nuclear-powered submarines from the United States, then a new class of nuclear-powered submarines manufactured by Britain. The move is part of a broader effort by the Biden administration to expand the US military's presence in the Pacific and to strengthen cooperation among the Quad partnership.
Reuters: Xi could visit Russia next week, sources say, as Bakhmut battle rages
Chinese President Xi Jinping may visit Russia as early as next week, according to sources, in what could be seen as a show of support for Russia's war on Ukraine. The visit would come earlier than expected and would be a significant event for Russian President Vladimir Putin, who portrays the conflict as a battle against the combined might of the West. On the ground, Russian forces led by the Wagner private army are attempting to capture the small ruined city of Bakhmut, the main focus of a Russian winter campaign involving hundreds of thousands of reservists and mercenaries.
Nikkei: Xi urges China to advance tech self-reliance, Taiwan unification
Chinese President Xi Jinping has urged the country to accelerate self-reliance capabilities in technology and innovation-driven development and has vowed to "unswervingly advance the process of reunification" with democratically ruled Taiwan. In a speech to the National People's Congress, Xi also warned against secessionist attempts and opposed external interference amid reports of Taiwan President Tsai Ing-wen's planned meeting with U.S. House Speaker Kevin McCarthy next month. The new Chinese Premier, Li Qiang, batted off concerns about weakening growth and defended China's abrupt halt of its zero-COVID policy last year in his first news briefing after taking office. Li outlined the government's strategy to boost domestic demand and investment and policies to advance innovation and reforms.
NYT: As Economy Falters, China’s New Premier Tries to Boost Business Confidence
China's new premier, Li Qiang, has promised to treat private-sector companies equally with state-owned ones and to protect entrepreneurs' property rights and interests to reinvigorate confidence in the country's faltering economy. Speaking at his first news conference as premier, Li delivered the most forceful statement by a Chinese leader in years, emphasizing the need to preserve the vitality of the private sector. The state-led banking system has been steering more loans in recent years to state-owned enterprises, contributing to the weak confidence, spending, and investment by consumers and private businesses.
WSJ: Xi Jinping Brings China’s Reform Era to an End
China's President Xi Jinping has marked a definitive end to the reform-and-opening era of Deng Xiaoping by tearing down the fundamentals of the Chinese governance model. While Deng introduced a collective-leadership system to protect against the one-man rule, gave private enterprise wider room to flourish and marked a separation between the party and the government, Xi has done away with term limits, narrowed the scope for the private sector and placed the party—and himself—at the center of Chinese society. Xi's changes reflect his priority of fortifying the Chinese system against a prolonged period of tension with the U.S.-led West, a contrast with the Deng era, which focused on building ties with the developed world.
Nikkei: China's debt issues loom as Beijing revamps financial regulation
China's recent centralization of financial regulation is seen as a response to the high levels of local government debt and off-budget financing vehicles. China's augmented public debt has risen from CNY64.5tn ($9.25tn) in 2017 to CNY132.3tn in 2022, equivalent to 110% of China's nominal GDP. The new financial regulatory administration and the central bank will focus on de-risking local government and financial institutions. There is also a focus on LGFVs, which comprise much of China's non-budgetary debt, and their potential funding. Local governments will have less leeway in borrowing from local banks, which may make it more difficult for them to repay their maturing debt.
Reuters: Xi adds oversight risk to China EV battery growth plans
Chinese President Xi Jinping's comments on electric vehicle (EV) battery maker CATL have put the company and China's wider battery industry on notice. In response to a presentation by CATL's chairman Robin Zeng at China's annual parliament, Xi said he was "both pleased and concerned" about the company's EV battery dominance, a message understood by industry executives and regulators as a warning to throttle back expansion to prevent overcapacity. Since last year, CATL customers have complained about its market position and the company itself has warned of the risks of the industry expanding too quickly.
FT: Xi Jinping vows to make Chinese military ‘great wall of steel’ as tensions rise with west
Chinese President Xi Jinping has pledged to make China's military into a "great wall of steel" to defend the country's interests as relations with the West reach the lowest point in decades. Xi made his remarks at the close of China's annual parliamentary session, during which he secured a third term as president and appointed a close ally as his number two. Xi also pledged to marry better "development and security", stating that "safety is the foundation of development, and stability is the prerequisite for prosperity"” His comments come amid rising tensions over Taiwan and concerns about US containment efforts.
WSJ: China’s Premier Seeks to Soothe Anxieties About Economy, Business Environment
China's new premier, Li Qiang, has pledged to restore business confidence and shore up economic growth in his first press briefing since taking office. He acknowledged that the GDP growth target of around 5% for 2023 would be a challenge. He expressed confidence and reiterated Beijing's focus on ensuring stability in economic growth, consumer prices, and employment in the coming year. Li also extended conciliatory remarks toward Washington, calling for more goodwill between China and the US. He pledged "unswerving" support for the private sector, with measures to ensure fair competition and protect property rights, but didn't go into detail on what that might involve.
SCMP: China’s ‘two sessions’: Li Qiang takes 1 foreign affairs question – on US-China decoupling
In his first press conference after taking office, China's new Premier Li Qiang focused little on foreign affairs but singled out the destructive economic effects of decoupling from the US. During the press conference that marked the end of China's two sessions parliamentary meetings, Li said US-China economic relations remained strong with a record trade volume of $760bn last year, and warned that suppressing either side would not benefit anyone. Calls to decouple the US economy from China have grown in Washington, and relations between the two countries remain strained despite initial signs of thawing after Xi and Biden's G20 meeting.
AP: Oscars 2023: Michelle Yeoh makes history with best actress win, as Everything Everywhere wins best picture and five other Academy Awards
Malaysian actress Michelle Yeoh has made history by becoming the first Asian woman to win the Academy Award for Best Actress, for her role in the movie "Everything Everywhere All at Once". She used her speech to give a message of hope and possibility and dedicated her award to her mother and all the mothers in the world. The movie won a total of seven Academy Awards, including Best Picture, Best Director, and Best Original Screenplay.
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