Xi Jinping is asserting tighter control of finance in China; The truth about ‘America skepticism’ in Taiwan; The Untold Story of a Massive Hack at HHS in Covid’s Early Days
Wanda’s Billionaire Founder Sells Film Unit as Debt Pressure Builds; China EV maker Nio to spin off its battery production unit
Welcome to this issue of The China Brief. Today is December 6, 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.
Xi Jinping is asserting tighter control of finance in China
Japan Times
China's Communist Party has issued a statement instructing financial institutions in the country to follow Marxist principles and obey President Xi Jinping. This move further extends Xi's control over China's financial system and could contradict Beijing's efforts to show that the economy is open to investment. The statement was published in Qiushi, the party's official theoretical journal, and is seen as a way for Xi to assert greater control over the economy.
The truth about ‘America skepticism’ in Taiwan
Japan Times
A survey conducted by Academia Sinica in Taiwan found that only 33.9% of Taiwanese believe the United States to be a trustworthy country, reflecting growing skepticism towards the US as Taiwan faces increased pressure from China without formal security guarantees from Washington. Despite friendly bilateral ties, Taiwanese society has deep concerns about the reliability of the US as its primary security partner. The US and Taiwan have grown closer since President Tsai Ing-wen took office in 2016 and distanced Taipei from Beijing, which views her ruling Democratic Progressive Party as secessionist.
The Untold Story of a Massive Hack at HHS in Covid’s Early Days
Bloomberg
The US Department of Health and Human Services (HHS) was targeted by a major cyberattack in March 2020, which the department initially downplayed. The attack, a distributed denial of service (DDoS) attack, was the largest of its kind ever experienced by the US government, involving billions of fraudulent connection requests. The attack lasted for months and was part of a series of attacks that began in October 2019. Former officials involved in the response to the attack believe it was an attempt by a state-level actor, likely China, to gain access to data related to the US response to Covid-19. The attack targeted various divisions of HHS, including the Centers for Disease Control and Prevention, the Food and Drug Administration, and the National Institute of Allergy and Infectious Diseases.
The duration and scale of the attack, as well as its timing, led officials to believe that it was a smokescreen for a state-sponsored probe of the US's pandemic response. The hackers behind the attack used the DDoS attack to map HHS's network and identify areas where large data repositories were located. The attack also involved relaying large amounts of traffic through HHS's network in order to disguise it as legitimate traffic. The ultimate goal of the attack is believed to have been the theft or tampering of sensitive data.
The attack highlights the vulnerability of critical organizations during times of crisis, as well as the potential for cyberattacks to be used as part of broader geopolitical conflicts. It also underscores the need for enhanced cybersecurity measures to protect against such attacks.
Attack on Pakistan highway to China shakes key Belt and Road link
Nikkei Asia
A bus attack near the border with China in the Gilgit-Baltistan region of Pakistan has once again raised security concerns over the Karakoram Highway, which is a key component of the China-Pakistan Economic Corridor (CPEC). The highway is a crucial road link for plans to connect China with the southern Belt and Road Initiative port of Gwadar in Balochistan. Fakhar Kakakhel, an independent analyst, said that militants targeting Chinese interests would hamper CPEC’s success.
Wanda’s Billionaire Founder Sells Film Unit as Debt Pressure Builds
Bloomberg
Dalian Wanda Group founder Wang Jianlin has sold his 51% stake in Beijing Wanda Investment, which controls Wanda Film Holding, to China Ruyi Holdings. The move brings an end to Wang's ambitions of turning Dalian Wanda into a rival of Walt Disney after the company was forced to shed assets following the stock-market bubble burst in 2015 and a Chinese crackdown on excessive debt-fueled expansion.
China's Wang Yi stresses promoting stable, healthy Sino-US relations with Blinken
Reuters
China's Foreign Minister Wang Yi spoke with U.S. Secretary of State Antony Blinken on Wednesday, discussing the importance of promoting healthy and sustainable China-U.S. relations. They also exchanged views on the Israeli-Hamas conflict and agreed to maintain communication on the situation in the Middle East. Wang emphasized the need for a ceasefire and thanked Blinken for his condolences on the death of former U.S. Secretary of State Henry Kissinger. Wang stressed the importance of the Taiwan issue to China and the legacy of Kissinger's diplomatic efforts. Both diplomats also highlighted the need to build upon the progress made in the November summit between the two countries' presidents.
Exclusive-China EV maker Nio to spin off its battery production unit -sources
Yahoo US
Chinese electric vehicle manufacturer Nio is reportedly planning to spin off its battery manufacturing unit in order to turn profitable, reduce costs and improve efficiency. The nascent battery unit, which is led by senior manufacturing engineers who have worked for Apple and Panasonic, will seek external investors after the spin-off, which could take place as early as the end of 2021. The company currently buys all of its batteries from CATL and CALB Group.
Japan adds Chinese nuclear weapons lab and others to WMD concern list
Nikkei Asia
China's China Academy of Engineering Physics (CAEP) is one of 36 organisations added to Japan's End User List, which provides exporters with information on foreign entities involved in activities such as the development of weapons of mass destruction (WMDs). The CAEP is the main research and manufacturing centre for Chinese nuclear weapons. The latest revision brings the total number of organisations and institutions on the list to 706 across 15 countries and regions. The list aims to prevent the outflow of civilian technology that could be diverted to military use, and will take effect from Monday.
Apple wants battery suppliers to move production to India
Yahoo US
Apple is reportedly encouraging its battery suppliers, including Desay of China and Simplo Technology of Taiwan, to establish new factories or scale up production facilities in India. The move is part of Apple's broader plans to reduce its reliance on China and diversify its supply chain. The company has faced challenges in expanding its overall production in India, but it is now extending its efforts to battery production. If successful, Apple plans to move more iPhone battery production to India. Additionally, TDK, a leading supplier of cells to Apple, is building a new factory in India to produce battery cells for iPhones made in the country. The move is seen as a response to ongoing trade tensions between the US and China.
Volkswagen-commissioned audit finds no signs of forced labor at plant in China’s Xinjiang region
Associated Press
An independent audit commissioned by Volkswagen has found no evidence of forced labor at its factory in Xinjiang, China. The German automaker has faced criticism for operating in the region amid allegations that the Chinese government has violated the human rights of ethnic minority Uyghurs. The audit found that employees were paid above average wages and had little work to do. Volkswagen's Urumqi plant now acts only as a distribution hub, with vehicles undergoing quality checks before being delivered to regional dealers.
Moody's outlook cut complicates Beijing's 'war' against market bears
Reuters
Moody's negative outlook on China has intensified Beijing's battle with market bears, raising pressure on the government for more forceful measures to prop up sinking stocks and stabilise the yuan as investor confidence deteriorates. In its Tuesday announcement, the ratings agency flagged weakening growth prospects, adding to mounting global concerns that China's economic miracle is over, potentially leaving the world's second-largest economy stuck in a middle-income trap.
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