HIGHLIGHTS
CHINA & EUROPE
Giorgio Armani bags made by Chinese subcontractors accused of using exploited workers from China, reports Italian Police
On 06 April, the South China Morning Post reported on an ongoing investigation in Italy where Giorgio Armani bags were made by exploited Chinese workers in Italy. The fashion house denied all allegations against the GA Operations that is responsible for producing the handbags and the apparel. The company Armani said: “The company has always had control and prevention measures in place to minimise abuses in the supply chain,” and that “GA Operations will collaborate with the utmost transparency with the competent bodies to clarify its position on the matter.” The Italian police found that the scam was part of the illegal supply chain, most workers were brought in from China’s rural area. While GA Operations are not directly under investigation they are been looked into. The report released by the police found that the Chinese subcontractor was paid USD 100 and the same bag was sold for USD 1,950. The police said: “The system allows for maximising profits [in which] the Chinese factory produces the products, lowering labour costs by resorting to off-the-books and illegal workers.” (“Giorgio Armani bags made by exploited Chinese workers near Milan, Italian police say,” South China Morning Post, 06 April 2024)

CHINA & SOUTHEAST ASIA
China-Cambodia canal project can lead to increased Chinese military presence, says Vietnam
On 06 April, an opinion in The Straits Times looked into the concerns regarding Cambodia’s plan to build the Funan Techo Canal project with the help of China. The navigation canal is estimated to be USD 1.7 billion. Vietnam has expressed concerns that this would welcome a larger Chinese military presence in the region. The 180km canal would end close to the Vietnam border in the province of Kep. The project would be built under the China Road and Bridge Corporation. The arrangement will be based on a build-operate and transfer basis. Where the Chinese company after the completion of the canal would use it for 50 years and then return it to the Cambodian government. The Cambodian government believes that this would help increase imports and exports in the region and help them transit through Vietnam ports. Oriental Research Development Institute under the Vietnam Union of Science and Technology Associations researchers criticized the project stating that it is not just an economic project but has a major military value as they fear Chinese military presence in the region and that it would give them access to Vietnam and the Gulf of Thailand. (Tan Hui Yee, “Vietnamese concerned that canal project in Cambodia could be a potential gateway for Chinese forces,” The Straits Times, 06 April 2024)

CHINA READER DAILY WIRE 
INTERNAL
The declining birth rate led to the closure of several Obstetric Unit, says an Opinion in SCMP
On 06 April, an opinion South China Morning Post reported on the repercussions of a declining birth rate. This has led to several maternity wards being closed and an “obstetrics winter” is observed a term coined by Professor Duan Tao. Since last June at least 11 public hospitals suspended their delivery services, these included small local clinics and bigger hospitals. In light of hospitals closing their services, the government issued a notice that public hospitals need to check with the pregnant women registered with them before closing the ward. The public’s right to medical service must be ensured. The closure of medical wards has also further led to the closure of kindergarten schools. In 2023, only 9 million babies were born, the lowest since 1949. The lack of childbirth is attributed to the general fall in the marriage rate. Where increasing number of young populations are refusing to get married, owing to economic and societal pressure. (Phoebe Zhang, “China’s maternity services put on notice as the country faces an ‘obstetrics winter’,” South China Morning Post, 06 April 2024)

China’s overcapacity is stimulated by the state, says an analyst
On 05 April, VOA reported on issues with the Chinese overcapacity of goods and how it has hurt the market. It quoted a senior fellow at the Peterson Institute for International Economics, Gary Clyde Hufbauer, who said that when the capital utilization of steel and oil refining industries is less than 75 per cent, it is observed that production is in overcapacity. Hufbauer stated that Chinese industries are backed by the government and stimulated and heavily financed by Chinese banks. This has resulted in the industries creating at over capacity. Hufbauer said: “If China does pursue a massive export 'solution,' that will hurt manufacturing firms in Japan, the E.U., Korea and other industrial countries. But low prices will be welcome in many developing countries in Latin America, Africa and Asia.” Rhodium Group found that the Chinese market utilisation rate of silicon wafers fell to 57 per cent in 2022. While some over-capacity is normal, this problem begins when the government pushes for it. Hufbauer said: “Systemic bias toward supporting producers rather than households or consumers allows Chinese firms to ramp up production despite low margins, without the fear of bankruptcy that constrains firms in market economies.” (Li Ya, “China's overcapacity results from state interference in markets, say analysts,” VOA, 05 April 2024)

CHINA & SOUTHEAST ASIA
Live fire drill footage near the Myanmar border showcases the mobility and quick response of the PLA, says Global Times
On 04 April, Global Times reported on the People’s Liberation Army releasing the footage of a live army drill near the Myanmar border. The drills were aimed to test the rapid mobility, precise targeting and joint strike capability. The Global Times reported that: “the Air Force aviation, Army aviation, armoured infantry, artillery, air defence forces and others rapidly mobilized to the designated exercise area to conduct joint live-fire exercises in different zones and at different times.” The PLA’s Southern Theatre Command stated that: “stressing that the command has been prepared at all times to respond to various emergencies and is committed to safeguarding national sovereignty and border stability.” The live drills are in light of the recent conflict in Myanmar and the spillover effects in the bordering regions of China. (“Videos of PLA's live-fire drills along China-Myanmar border released; troop's rapid mobility, precise targeting honed,” Global Times, 04 April 2024)

CHINA & THE AMERICAS
US-China military officials discuss avoiding accidental escalation at Military Maritime Consultative Agreement Working Group
On 04 April, the US and Chinese military officials met in Honolulu for a meeting on the Military Maritime Consultative Agreement Working Group. The military officials met to discuss ways to avoid any unintentional and accidental clashes in the Indo-Pacific region. Indo-Pacific Command’s Colonel Ian Francis said: “The United States will continue to operate safely and professionally in the Indo­-Pacific wherever international law allows, and we take this responsibility seriously.” And that open communication with the PLA and the other military forces in the region is the most important to avoid any escalation or miscommunication. This comes in as Xi Jinping and Joe Biden had a telephone call to discuss and stabilize relations as they escalated increasingly. (Khushboo Razdan, “US-China military talks address potential for accidental conflicts in Indo-Pacific,” South China Morning Post, 06 April 2024)

EAST ASIA & THE PACIFIC READER
EAST ASIA
Naval drills to be conducted between the US, Philippines, Japan and Australia at the EEZ of Manila
On 06 April, the US, Philippines, Japan and Australia released a joint statement regarding the conduction of naval drills in the South China Sea and within the Exclusive Economic Zone of the Philippines to strengthen the interoperability of their forces. The statement said: “Our four nations reaffirm the position regarding the 2016 South China Sea Arbitral Tribunal Award as a final and legally binding decision on the parties to the dispute.” The Embassy of Japan also reported that the exercise will also include anti-submarine warfare training as well. The naval exercise comes right before the trilateral meeting between US President Joe Biden Philippines President Marcos Jr and Japanese Prime Minister Fumio Kishida. U.S. Defense Secretary Lloyd Austin said: “These activities with our allies Australia, Japan, and the Philippines underscore our shared commitment to ensuring that all countries are free to fly, sail and operate wherever international law allows.” CEO of Amador Research Services in the Philippines Julio Amador said: “The presence of ships from the U.S., Australia, and Japan indicate attempts at closer collaboration, and [are] probably made more urgent by Chinese aggression in Ayungin Shoal,” and that the Philippines is comfortable with its allied strategic partners. (Ramon Royandoyan And Yuichi Shiga, “Philippines, Japan, Australia, U.S. to hold drills in the South China Sea,” Nikkie Asia, 06 April 2024)