CHINA READER DAILY WIRE
ECONOMY
China faces massive deficit in FDI
On 19 February, according to official data from the State Administration of Foreign Exchange, FDI in China declined to a 30-year low due to tough crackdowns on foreign companies. According to the data, in 2023, China’s foreign direct investment totalled USD 33 billion, down to 80 per cent in 2022. In the last quarter of 2023, Inflows exceeded outflows by USD 17.5 billion. The Chinese government have been targeting foreign companies under the pretence of national security and espionage charges. Another reason for this decline is the US’s restriction on exporting advanced semiconductor technology that led to a decline in chip-related investment. This led to a decline to 1 per cent in 2022 FDI investments in China. Additionally, the slowdown in the Chinese economy is also attributed to the weak domestic demand resulting from the real estate market slump. (Iori Kawate and Shunsuke Tabeta, “Foreign direct investment in China falls to 30-year low,” Nikkei Asia, 19 February 2024)

INTERNAL
Chinese Premier Li Qiang calls for pragmatic action amid struggling economy
On 18 February, Chinese Premier Li Qiang, in a meeting of the Chinese State Council, called for “pragmatic and forceful” action to boost the nation’s confidence in the struggling economy. He further stressed that the officials should “do more things conducive to boosting confidence and expectations and ensure policymaking and execution are consistent and stable.” He urged the various departments to win the people's trust with real work and achievement. Authorities are finding ways to boost the country’s struggling economy before the holiday ends with growing consumption demand from the resurgence in travel over the Lunar New Year. (“China’s premier urges ‘forceful’ action to boost confidence,” The Edge Malaysia, 19 February 2024)

People angry over Chinese shadow banks, says an opinion in the Guardian
On 18 February, according to an opinion in The Guardian titled “‘It’s legalised robbery’: anger grows at China’s struggling shadow banks,” by Amy Hawkins, more than 8000 investors were given a deadline until 05 March to accept a sliding scale repayment plan that would return 80 per cent of capital to the smallest investors, and 40 per cent for those invested above 10 million yuan. The Chinese people got offended and mentioned it as “legalised robbery.” The op-ed stated that the troubles in Sichuan Trust are spreading over China’s entire EUR 2.3 trillion industry due to the economic downturn and tighter government regulations. These actions create risk for the majority of China’s shadow banking industry, which has filled the gaps left by traditional financial institutes. Despite Sichuan blaming the government for excessive regulations, Jason Bedford said the trust has been in trouble for the past ten years. While China introduced the reforms to control the shadow banking sector, it has caused massive trust erosion among investors. There is a greater shift in China’s economic policymaking as it is increasingly reluctant to save failing companies or inject the massive stimulus needed to boost the economy. (Amy Hawkins, “‘It’s legalised robbery’: anger grows at China’s struggling shadow banks,” The Guardian, 18 February 2024)

SCIENCE & TECHNOLOGY
Chinese astronomers detect the smallest star and its companion in space
On 19 February, according to an editorial in the South China Morning Post titled “China-led research team pinpoints smallest star and its ghostly lone companion,” by Ling Xin, Chinese astronomers from Tsinghua University Yunnan detected an exotic binary system known as hot subdwarf, which is seven times the size of the Earth and smaller than Saturn. According to the study published last week in the journal Nature Astronomy, the star and its companion are 760 light years from Earth. The researchers said that these unique binary systems are ultra-small with short orbital periods but have not been detected before. It was detected using the Ma Huateng Telescope for Survey (TMTS), including the Keck-I telescope in Hawaii and the Gran Telescopio Canarias in Spain’s Canary Islands. (Ling Xin, “China-led research team pinpoints smallest star and its ghostly lone companion,” South China Morning Post, 19 February 2024)

China’s C919 jet makes its international debut
On 18 February, the C919 narrow-body aircraft manufactured by the Commercial Aircraft Corporation of China (COMAC) conducted its first international debut at the Singapore Airshow. The aircraft is seen as a rival to Airbus and Boeing’s passenger jets. Currently, the aircraft is certified only in China and is being slowly inducted into Chinese domestic carriers. Besides C919, its RJ21 regional jet is making a presence at the event and is in use in Indonesia's TransNusa Air. With the growing demand for planes and Airbus and Boeing’s struggle to ramp up production, the aviation industry is watching COMAC as a viable alternative. Mike Yeomans of aviation consultancy IBA said that with the order books filled out for A320neo and 737 MAX families, C919 has a solid opportunity to gain market share in China’s domestic market. (Lisa Barrington, “China's first homegrown airliner makes international debut in Singapore,” Reuters, 18 February 2024)

CHINA & TAIWAN
China to strengthen its law enforcement around Taiwan-controlled Islands
On 18 February, China’s Coast Guard said that it would strengthen its law enforcement activities and conduct regular patrols around small groups of islands controlled by Taiwan close to the Chinese coast amid the tensions between the two countries over the deaths of two Chinese nationals. On 15 February, Taiwan defended the actions of its coast guard after two Chinese fishing boats got too close to the Taiwanese coast guard ship. Taiwan has complained about the growing number of Chinese fishing boats near the Kinmen and Matsu islands near China’s coast. China’s Taiwan Affairs Office said that the “fishermen on both sides of the Taiwan Strait have been operating in traditional fishing grounds in the Xiamen-Kinmen maritime area since ancient times, and there is no such thing as ‘prohibited or restricted waters’,”. Currently, most of Kinmen Island is out of bounds for tourists and is heavily fortified by Taiwan’s military. (“China to send coast guard ships as tensions rise over Taiwanese islands,” The Straits Times, 18 February 2024)

CHINA & SOUTHEAST ASIA
Controversy erupts in Malaysia over UNESCO heritage status for “New Villages”
On 19 February, according to an editorial in the South China Morning Post titled “Dark history of Malaysia’s Chinese villages underscores fury over Unesco bid,” by Hadi Azmi, the Malaysian government’s proposal to seek UNESCO heritage status for its “New Villages” in Selangor has triggered heated debate between the Malay and Chinese communities. These names, also known as Kampung Baru in Malay, are associated with the relics of Peninsular Malaysia when it was besieged by guerilla warfare launched by the Malayan Communist Party (MCP). The camps, comprising 400 houses across the peninsula, were concentration camps set up by the British military to corral the Malayan population, mainly the ethnic Chinese community. The country’s two largest Malay nationalist parties, Umno and Bersatu, were critical of the UNESCO plan. Former MP and director of the human-rights organisation SUARAM, Kua Kia Soong, argued that the proposal insulted Malaysians in the fight against the British authorities. (Hadi Azmi, “Dark history of Malaysia’s Chinese villages underscores fury over Unesco bid,” South China Morning Post, 19 February 2024)

CHINA & SOUTH ASIA
China’s rapid construction of border villages amid border talks
On 18 February, according to an editorial in the South China Morning Post titled “Chinese village construction in disputed zone outpaces China-Bhutan border talks,” by Jack Lau, satellite imagery from US-based Maxar Technologies and local media reports said that the Chinese villages expanded to 147 houses to accommodate 235 households by the end of 2022. The villages are part of China’s state-led poverty alleviation scheme to provide better living conditions, but they are seen as “citadels” to strengthen national security. Lau explained that Bhutan has downplayed the issue so far, with its ally India paying a close watch to the ongoing developments in the disputed border area of around 495 sq km. CCP’s People Daily reported that more than 620 “border moderate prosperity villages” were established by the end of 2021 as part of Xi’s deadline for the party’s centenary goal to alleviate poverty in the country. While China has no formal relations with Bhutan, both countries are on the verge of their “three-step road map” to resolve the dispute. Nitasha Kaul, an international relations professor at the University of Westminster, said that the entrenched India-China rivalry made the dispute resolution “extremely important” to Bhutan. (Jack Lau, “Chinese village construction in disputed zone outpaces China-Bhutan border talks,” South China Morning Post, 18 February 2024)

CHINA & MIDDLE EAST
China prefers diplomacy in the Middle East, says SCMP
On 19 February, according to an editorial in the South China Morning Post titled “Why China prefers diplomacy to military pressure in the Middle East,” by Riaz Khokhar, the US is doubling down in its efforts to deploy additional aircraft carriers to its western Pacific fleet. Its joint naval exercises with its allies Japan and South Korea indicate Washington’s top priority is to preserve its strategic interests in the region despite the ongoing tensions in the Red Sea. The joint statements from the US and China in their bilateral meeting at Bangkok did not include Red Sea attacks. China highlighted the issue of Taiwan and the US’s politicization of trade and tech exports to China. In contrast, the US urged China to influence Iran to restrain its proxies in the Middle East. China’s top priority is Taiwan's re-unification, securing and defending its national interests, and if they are not threatened, there will be little incentive for China to be involved militarily in the region. Fudan University professor Chuchu Zhang and Sujata Ashwarya, an assistant professor at Jamia Millia Islamia, noted that China lacks a military presence in the region and unlike pursuing a security role like the US, it intends to pursue diplomacy by urging regional actors like Saudi Arabia and Iran to address the ongoing issue. (Riaz Khokhar, “Why China prefers diplomacy to military pressure in the Middle East,” South China Morning Post, 19 February 2024)

CHINA & EUROPE
EU-China bonhomie at Munich Security Conference
On 19 February, according to an editorial in the South China Morning Post titled “EU-China relations: spectre of Trump hangs over Munich conference as Beijing looks for openings in Europe,” by Finbarr Bermingham, the absence of former US President Donald Trump created concerns about the conversations on Ukraine, Gaza and Europe’s ability to provide own security. On 17 February, VP Kamala Harris tried to assure Europeans amid Trump’s remarks and said that “In these unsettled times, it is clear: America cannot retreat. America must stand strong for democracy. We must stand in defence of international rules and norms, and we must stand with our allies,”. With fewer presence, Chinese Foreign Minister Wang Yi said China is a responsible major country [that] will keep its major principles and policies consistent and stable. In a turbulent world, China will be a force for stability,”. The Chinese delegation conducted closed-door discussions with European countries and focused on climate cooperation amid great power politics. Despite conducting a meeting with Ukrainian FM Kuleba and the former promising not to sell weapons to Russia, Beijing’s relations with Moscow were seen as a red flag throughout the event. (Finbarr Bermingham, “EU-China relations: spectre of Trump hangs over Munich conference as Beijing looks for openings in Europe,” South China Morning Post, 19 February 2024)

China- Hungary on strengthening security ties
On 19 February, Reuters reported on Chinese Public Security Minister Wang Xiaohong’s meeting with the Hungary’s Prime Minister Viktor Orban. They both affirmed their 75 years of diplomatic relationship and China hoped to further law and security ties. Wang stated that they want to extend their support for issues like combating terrorism and transnational crimes. The Chinese delegate met with the Interior Minister Sandor Pinter and signed documents on law enforcement, and security cooperation. Hungary seeks to lessen its dependency on the western countries and is the only NATO state that has not ratified to join the security bloc. (“In unusual move, China offers to back Hungary in security matters,” Reuters, 19 February 2024)

China to not “add fuel to the fire …or sell lethal weapons in conflict zones or parties,” Wang Yi to Ukrainian FM
On 17 February, Ukrainian Foreign Minister Dmytro Kuleba met with the Chinese Foreign Minister Wang Yi at, Munich Security Conference to discuss a peaceful resolution to the Russia-Ukraine conflict. Kuleba stated that they discussed bilateral trade and the need to have lasting peace in the region. He also informed of Ukraine’s plan to hold a global peace summit and that both China and Ukraine have agreed to maintain continued dialogue. Wang Yi said it will not: “add fuel to the fire, take advantage of opportunities to reap gains or sell lethal weapons in conflict zones or parties.” China has supported lasting peace and called for a cease-fire, talks and the end of sanctions against Russia. (“Ukrainian foreign minister discusses peace prospects with China's Wang Yi,” Reuters, 18 February 2024)

China lifts bans on Spanish beef imports
On 18 February, Spanish Foreign Minister Jose Manuel Albares met with the Chinese Foreign Minister Wang Yi and they agreed to lift the import ban on Spanish beef to China. The ban goes back to the 2000s when China imposed the ban due to the emergence of mad cow disease among its several neighbouring states. The agreement comes after the Spanish farmers took part in a protest against heavy regulation high costs and cheaper imports affecting their livelihood. Albares stated that when one accounts for the size of the Chinese market, the impact of the deal would be paramount and that this measure would in the long run benefit the entire countryside. They also discussed the two-state solution for the Isarel-Palestine war and expressed concerns over the situation in Rafah. (“China Agrees to Lift Ban on Spanish Beef Imports,” VOA, 18 February 2024)

CHINA & THE AMERICAS
Chinese Councillor met with US Homeland Security Secretary on security talks
On 18 February, the Chinese State Councillor and the Minister of Public Security, Wang Xiaohong met with U.S. Homeland Security Secretary Alejandro Mayorkas and stressed mutual respect and cooperation with the US regarding international law and Drug control. Wang expressed his concerns regarding the discriminatory behaviour against Chinese international students in the US and urged that they need to stop the “unwarranted harassment and interrogation of Chinese students,” and called for concrete measures to be taken to secure the safety of Chinese students. Wang also asked that the US should lift visa restrictions on Chinese institutions and individuals. (“China's police chief calls for cooperation with the U.S. on law enforcement,” CGTN, 19 February 2024)

Canadian FM urges China to step up to resolve the Red Sea conflict
On 18 February, Canadian Foreign Minister Melanie Joly urged China to take charge and keep the security in the Red Sea safe. Joly said that they should play the key role as the conflict affects the commerce business and that Chinese ships are at the most risk. She also urged China to refrain from helping Russia to avoid sanctions. Joly said that China: “to help to influence the Houthis to keep the Red Sea open,” and that it is China’s interest as an exporter. Before this, the US and UK also urged China to intervene and pressure Iran to hold back the attacks. Talking about the sanctions, she said that though our sanctions are strong, China should not be a loophole for Russia to avoid them. (Steve Scherer, “Canada says China has a role to play in keeping Red Sea safe,” Reuters, 19 February 2024)

EAST ASIA & THE PACIFIC READER

EAST ASIA
Japan reaffirms its support to Ukraine with new tax treaty and Ukraine reconstruction discussions
On 19 February, Japanese Prime Minister Fumio Kishida hosted Ukrainian Prime Minister Denys Shmyhal and pledged to a bilateral tax treaty with a discussion on Japanese roles in the reconstruction of Ukraine. Kishida stated that they have continued to stand and support the Ukrainian cause where he accounted for the treaty and the ongoing negotiations for an investment treaty. Since the onset of the war, Japan has pledged USD 13.5 billion to the Ukrainian cause. Kishida said that Japan plans to support venture capital companies in Ukraine and that both countries affirmed the importance of “consolidating the international support for Ukraine.” (“Japan hosts Ukraine reconstruction meeting, pledges new tax treaty,” The Straits Times, 19 February 2024)

THE PACIFIC
64 killed in Papua New Guinea over tribe clashes
On 19 February, the Papua New Guinea police force informed that 64 dead bodies were found after the clash between two rivalling tribes escalated. The clash between two local warring tribes began in the Wapenamanda District of the Enga Province. It was between the Ambulin and Sikin tribes where the factions used high-powered guns. A senior police officer of Papua New Guinea said: “This is by far the largest [killing] I’ve seen in Enga, maybe in all of Highlands as well, in Papua New Guinea.” After the incident, the military deployed 100 troops in the region to limit the impact. Australian Prime Minister Anthony Albanese said: “That is very disturbing the news that has come out of Papua New Guinea. We’re providing considerable support, particularly for training police officers and for security in Papua New Guinea.” (“At least 64 killed in ‘largest’ tribal clashes in Papua New Guinea,” AlJazeera, 19 February 2024)