Xi Jinping warns top officials to contain political risks to avoid China’s economy, society being hit by ‘butterfly effect’; China’s Problem With Unfinished Homes Keeps Getting Bigger
Taiwan opposition talks deadlocked, with no signs of compromise; Ministers from Arab, Muslim countries to visit China in bid to end Gaza war
Welcome to this issue of The China Brief. Today is November 19, 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.
South China Morning Post
Chinese President Xi Jinping has cautioned top cadres about the interconnected nature of risks, emphasizing a potential "butterfly effect" where small threats can escalate into significant dangers. The comments were made during an internal meeting in February but were only recently disclosed in a book. Xi urged officials to identify and address risks promptly, highlighting that economic and social risks could transform into political risks. The president emphasized the importance of not delaying actions on small issues that could escalate. The speech, delivered a month before Xi's third term as president, underscores his ongoing focus on national security and the need for officials to be vigilant and proactive. The reference to the "butterfly effect" is seen as linked to concerns about protests following a deadly fire in Xinjiang and reflects Xi's holistic approach to security. The speech has implications for various government departments, emphasizing the need for heightened risk control throughout the bureaucracy. Under Xi's leadership, the Communist Party has prioritized a comprehensive view of national security, expanding the scope of anti-spy agencies to include finance and technology. The audience for the speech included key officials at the Central Party School, tasked with implementing decisions from the party's national congress. In addition to discussing risks, Xi praised the Chinese model of modernization and encouraged officials to confront challenges boldly.
Taiwan opposition talks deadlocked, with no signs of compromise
Reuters
The leader of a small Taiwanese party has refused to back down in a dispute with the main opposition party over who will run as president and vice president in the upcoming elections. The issue of China’s claim of sovereignty over Taiwan has created tension in the run-up to the January elections. The Kuomintang (KMT) and the Taiwan People’s Party (TPP) have agreed to use opinion polls to decide which party’s candidate will run for president and which for vice president, but they have not reached an agreement on how to interpret the polls. The Democratic Progressive Party’s (DPP) candidate, Vice President Lai Ching-te, is currently leading in the polls, leaving the KMT’s Hou Yu-ih and the TPP’s Ko Wen-je in a battle for second place.
Ministers from Arab, Muslim countries to visit China in bid to end Gaza war
Nikkei Asia
Ministers from Arab and Islamic countries will visit China on Monday as the first step of a tour aimed at ending the war in Gaza. This tour comes after decisions reached at a joint Arab and Islamic summit held in Riyadh earlier this month. The Saudi Foreign Minister, Prince Faisal bin Farhan, stated that the purpose of the tour is to convey a clear message that a ceasefire must be announced immediately and aid must be allowed into Gaza. The minister emphasized the urgency of ending the crisis and the war on Gaza as soon as possible.
China’s Problem With Unfinished Homes Keeps Getting Bigger
WSJ
China's housing market is still grappling with the problem of millions of unfinished homes which were sold but not delivered. The trend is leading to more property developers defaulting on their debt and adding more construction delays and residential developments across the country. Home buyers fear that developers will not be able to complete their projects, causing a vicious circle of falling new home sales. Potential home buyers waiting for years for the apartments they paid for are becoming increasingly desperate for a resolution.
Singapore family office applicants face 18-month wait amid tighter scrutiny
Financial Times
The queue to establish a family office in Singapore is now as long as 18 months, as wealthy investors face stricter regulations from authorities in the city-state. The number of Singapore-registered family offices has surged from 50 in 2018 to 1,100 at the end of 2022, according to the Monetary Authority of Singapore. The processing time for new applications has increased from less than six months to up to 18 months, deterring some potential clients. The increased scrutiny comes after Singapore’s largest money-laundering investigation, which has sparked regulatory concerns over the potential use of family offices for criminal purposes.
Maldives’ China-friendly president officially asks India withdraw its troops
South China Morning Post
Maldives President Mohamed Muizzu has requested that India withdraw its military personnel from the archipelago. Muizzu, who is seen as pro-China, campaigned on a promise to evict Indian military personnel and balance trade, which he said was heavily in favour of India under his predecessor. India and China have been vying for influence in the strategically located islands, which sit on a shipping route connecting east and west. Muizzu’s ally, former President Abdulla Yameen, made the Maldives part of China’s Belt and Road Initiative during his presidency.
Hundreds of Thais to be evacuated from Myanmar via China amid heavy fighting
Reuters
More than 200 Thai nationals who were trapped in northern Myanmar due to the surge in fighting between the military junta and ethnic-minority groups are being evacuated to Thailand via China. The Thai foreign ministry stated that the group, which includes 266 Thais as well as an unspecified number of Filipinos and Singaporeans, will be allowed to enter China and then fly to Bangkok where they will undergo screening for human trafficking and criminal records. The evacuation comes as the Myanmar military is losing control of various towns and military outposts in the country.
Japanese troops drill on island seen as vulnerable to China
Reuters
The Japanese military has conducted a simulation of an amphibious assault on an island beach in order to demonstrate their readiness to defend against potential attacks from China. The simulation was part of an 11-day series of exercises known as 05JX, which aimed to show the readiness of ground, sea and air forces to defend Japan. The military exercises come as tensions run high with neighbouring countries China, Russia and North Korea. Japan’s Prime Minister, Fumio Kishida, recently unveiled the country’s biggest military buildup since World War Two, in response to concerns about potential attacks from China in particular.
China links could weaken his role on world stage as UK foreign secretary
Guardian
Concerns have been raised over UK Foreign Secretary David Cameron's links to a Chinese-backed development project in Sri Lanka. Cameron reportedly spoke at two events promoting the Port City Colombo development, which is being constructed by a Chinese state-owned company. He is said to have been paid $210,000 for the speeches. Critics have warned that the project could become a Chinese military outpost in the Indo-Pacific, a claim denied by Sri Lanka’s minister of investment promotion. Cameron has also been accused of a conflict of interest in his new role as foreign secretary. Calls have been made for him to disclose all his financial interests. Cameron’s association with the Port City Colombo project follows his previous enthusiasm for UK-China relations when he was prime minister. However, since his resignation, successive UK governments have adopted a more cautious approach to China, banning the Chinese telecommunications firm Huawei from the country’s 5G network.
Asian regulators turn focus to Big Tech
Japan Times
Last week, a number of stories emerged about Big Tech companies facing regulatory challenges. Apple is facing scrutiny in the US over concerns that the Chinese government is influencing its program commissioning. Meanwhile, Elon Musk's X has failed to pay a fine imposed by Australian regulators. These incidents highlight a growing trend of regulators and governments around the world seeking stricter rules for tech companies. Both the European Union and the US are taking action to address this, and Asian countries are also becoming increasingly concerned about the dominance of a few tech giants in the digital landscape.
Defence ministry reports increased Chinese military drills nearby
Guardian
Taiwan has reported renewed Chinese military activity, including nine aircraft crossing the sensitive median line of the Taiwan Strait and warships carrying out "combat readiness patrols." Taiwan has complained for the past four years of regular Chinese military patrols and drills near the island, as Beijing seeks to pressure Taipei over its sovereignty claims. The Chinese president, Xi Jinping, met with US President Joe Biden last week, and military activity around Taiwan had decreased during that time. However, Taiwan's defence ministry reported that starting on Sunday morning, it had detected nine Chinese aircraft crossing the Taiwan Strait's median line. The aircraft were accompanying Chinese warships carrying out "joint combat readiness patrols." China's defence ministry did not comment on the activity. Taiwan's government rejects Beijing's sovereignty claims and says only the island's people can decide their future.
Japan faces 'friendshoring' dilemma in Asia amid China risks
Japan Times
The growing need for economic security in the Asia-Pacific region has led to the formation of groups that seek to counterbalance China's increasing influence. Japan is pushing for a rules-based, 'free and open Indo-Pacific' in order to maintain its own engagement in the region, but it must be careful not to alienate countries that are closer to China.
China’s millions of SMEs lure US alternative investment manager Ares
South China Morning Post
Ares Management is looking to tap China's private capital market to take advantage of opportunities among the country's small and medium-sized enterprises (SMEs). The alternative investment manager believes that the long-term and medium-term opportunities in the country are hard to ignore, and is excited about the growth prospects in China's economy. SMEs account for around 60% of China's GDP, and the total number of micro, small and medium-sized enterprises in the country exceeded 52 million in 2022. Ares Management is also interested in the distressed property market in China, which presents an opportunity for private capital to restructure and recapitalise struggling developers.
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The further politicization of the Chinese economy is literally unfortunate. I am no great fan of megabucks billionnaires but I understand economic principles. Maybe Xi Jinping / CCP dont, but the laobaixing, ordinary chinese people most certainly do.