HIGHLIGHTS
ECONOMY
Small to mid-level banks hit harder by the property crisis, says an opinion in Nikkie Asia
On 09 April, Nikkie Asia published an Opinion on the Chinese property crisis affecting smaller banks harder and more than the big banks. The toll of the re-estate crisis is hitting the low-growth generating provinces more as the banks are saddling debts by lending to smaller developers. Deloitte’s partner Glen Ho stated that the small to medium regional banks would be more affected by the debt problems as they lend to not-so-well-funded firms and enterprises. Jilin Jiutai Rural Commercial Bank had their profits drop by 90 per cent and the property debt grew by 37.3 per cent. 31 banks reported a 9.83 per cent hike in debt estimated to be 291.2 billion yuan. Additionally, the foreign investors in these banks are fleeing, one example being China Bohai Bank which saw a net fall in profit of 16.8 per cent. This made the UK-based firm Standard Chartered leave by paying USD 850 million in impairment charges. (ECHO WONG “China's property crisis hits small regional banks harder than big players,” Nikkie Asia, 09 April 2024)

CHINA & SOUTHEAST ASIA
“Comrades plus-brothers,” Xi Jinping meets Vietnamese top brass
On 08 April, Chinese President Xi Jinping hosted Vietnam’s Chairman of the National Assembly Vuong Dinh Hue. Hue’s trip was on invitation by the Chairman of National Pole’s Congress Standing Committee Zhao Leji. Xi outlines the distinct feature of China-Vietnam relations to be like-minded and that they are a pair bound by destiny and see them as “comrades plus brothers.” Xi asserted the need to promote China-Vietnam community building for a shared future and to benefit the two communities. Xi also said in the face of complex challenges: “It is in the common interest of China and Vietnam to safeguard the socialist system and maintain national stability and development.” He also suggested that they should extend people-to-people exchange through the BRI. (“Xi calls China-Vietnam ties 'comrades-plus-brothers' when meeting visiting Vietnam top legislator,” Global Times, 08 April 2024)

CHINA & EAST ASIA
China's warning on including Japan into AUKUS: "Disregards the risk of nuclear proliferation"
On 08 April, the Chinese Ministry of Foreign Affairs spokesperson Mao Ning expressed concerns regarding the possible inclusion of Japan into the AUKUS pact with the UK, US, and Australia. Ning said they were “gravely concerned,” and that this move ignores the risks to nuclear proliferation. She also stated that this would increase and intensify the arms race in the Indo-Pacific and this would in turn disrupt regional peace and stability. The statements come in as the AUKUS trio is set to discuss and consult the US suggestion to add Japan to the AUKUS security pact. China vehemently opposed the formation of exclusive small circles of blocs and iterated that Japan should learn from the historical lessons and exercise caution. (Meredith Chen, “China ‘gravely concerned’ about reports Japan could join Aukus security pact,” South China Morning Post, 09 April 2024)

CHINA READER DAILY WIRE 
INTERNAL
China probes into CETC defence company’s executive
On 09 April, the Financial Times reported on China’s Central Commission for Discipline Inspection and the National Supervisory Commission statement informing that China Electronics Technology Group Corporation’s (CETC) Deputy General He Wenzhoug is under investigation. The anti-corruption authorities in China are looking into the case, the company is also currently facing sanctions from the US. Before this, there has been a series of removal of top leaders and executives. The statement said: “He Wenzhong . . . is suspected of serious violations of discipline and law and is currently undergoing disciplinary review and supervisory investigation.” CETC was formed after merging 46 electronic research groups and 26 SOE’s. Currently, CETC has 200,000 employees and is touted as one of the world’s largest defence groups. CETC claims to be China’s only domestic source of military equipment and that it severs all branches of the military. The probe is said to have similar results to the disappearance of the defence minister after the Equipment Development Department was under the radar of a probe for corruption. Some people believe that the removal of that leadership was linked to leaked state secrets. ( Joe Leahy, “China investigates senior executive at top defence group,” Financial Times, 09 April 2024)

ECONOMY
PBOC to facilitate refinancing of USD 69 billion loans for tech-based firms
On 09 April, the South China Morning Post reported that the People’s Bank of China (PBOC) would restart the tool to stimulate lending for tech and innovation development. The bank will issue USD 69 billion in loans to commercial banks that would lend to qualifying firms for technological development. The two arenas they would be investing in would be technological innovation and large-scale equipment upgrades. This initiative shows the market player to what extent the government is ready to invest and where. The PBOC will offer re-lending rights to 21 banks at 1.75 per cent for one year. The bank also said that this refinancing will cover 60 per cent of the qualifying loans for small to medium-base tech firms. It said: “[The loans] will guide financial institutions to provide credit support to tech-focused enterprises in their start-up and growth phases, as well as projects focusing on digitalisation, intelligence enhancement, high-end upgrades, eco-friendly technological transformation and equipment renewal in key sectors.” (Sylvia Ma, “China pledges US$69 billion in credit backing for tech after resurrecting dormant financial tools,” South China Morning Post, 09 April 2024 )

CHINA & TAIWAN
“No losers in peace”: Urges KMT leader and former Taiwanese President
On 08 April, Kuomintang leader and former Taiwanese President Ma Ying-jeou visiting China with 11 youth delegates inferred that there are “no losers in peace.” He called on the younger generation to “resolve disputes peacefully.” He said: “People in both the mainland and Taiwan had been bullied by Japanese warlords, and suffered heavy casualties. Although we were lagging in terms of equipment and training in a disadvantaged situation, we were united in our determination.” He urged that there are no losers in peace and that the younger generation must remember that they should learn from history and not repeat it. The visit stands as Taiwan is set to inaugurate the new leader of Taiwan Willian Lai Ching-te who is part of the Democratic Progressive Party. (Vanessa Cai, “‘No losers in peace’: Taiwan’s Ma Ying-jeou sends anti-war message in Beijing,” South China Morning Post, 08 April 2024)

CHINA & EAST ASIA
Japan “deviating from the principle of a pacifist constitution,” says PLA Daily
On 09 April, the South China Moring Post reported on an article published in the Chinese military newspaper People’s Liberation Army Daily questioning the Japanese military’s pivot towards a more offensive tactic. The articles stated that Japan was moving away from its pacifist laws and ideology as they established a new anti-ship missile in Okinawa. The Japanese Self Defence forces installed the 7th Surface to Ship Missile Regiment which would be the first on the Island of the Ryukyu chain. The PLA Daily stated that they would supervise the military unit and would aim to strengthen the defence and attack capabilities of the Islands. It informed that Japan now can block and even attack arriving ships entering the region. It also said: “[Tokyo’s] accelerated arms expansion is increasingly deviating from the principle of a ‘pacifist constitution’, bringing more uncertainty to regional and global security, and deserves higher awareness from neighbouring countries and the international community.” The report also stated that Japan is changing its defensive role and is pushing for “joint-deterrence.” (Hayley Wong, “Japan showing ‘obvious offensive characteristics’ with new Okinawa missile unit, says Chinese military newspaper,” South China Morning Post, 08 April 2024)

CHINA & THE AMERICAS
“China constantly uses coercion and pressures other countries, including Japan and the Philippines,” says US envoy to Japan
On 08 April, the US ambassador to Japan, Rahm Emanuel, said: “China constantly uses coercion and pressures other countries, including Japan and the Philippines.” He made his remarks at the Center for Strategic and International Studies event in Washington before the arrival of Japanese Prime Minister Fumio Kishida and Philippines President Ferdinand Marcos Jr for a summit with President Biden. (“China constantly coerces Japan and Philippines, US envoy to Japan Emanuel says,” Reuters, 08 April 2024) 

China rejects Yellen’s remarks on overproduction concerns
On 08 April, China’s deputy finance minister, Liao Min, said that Beijing dismissed the allegations of the US Treasury Secretary on scaling back industrial production. He countered her claims and said that there are disagreements over the overcapacity issue, and China’s economy is on the right track and warned of any protectionist measures. His remarks came after Secretary Yellen warned of scaling down production as Chinese goods overwhelmed American industries. Liao mentioned that overcapacity is a market mechanism that always remains imbalanced, and so the balance between the demand and supply is relative. He further noted that the current global production capacity is far from addressing emerging demand from developing countries. Liao also said that China’s advantage in the new energy sector is based on the country’s massive market, complete industrial system, and abundant human resources working together with the companies and entrepreneurs. Liao warns Yellen that protectionism measures in the new energy sector will hinder other countries from tackling climate change. (“Beijing Pushes Back on Overproduction Concerns After Yellen Visit,” The Wall Street Journal, 09 April 2024)

US won’t allow Chinese imports threatening new domestic industries, warns US Treasury Secretary
On 08 March, US Treasury Secretary Janet Yellen warned China that Washington would not accept further Chinese imports that would damage the new domestic industries during her four-day trip to Beijing. She reiterated President Biden’s agenda of not repeating the China shock, which had decimated two million American jobs in the early 2000s. She also warned of further new tariffs and trade restrictions if China continues to extend its subsidy for its electric vehicles, batteries, solar panels, and other green energy goods. On her second trip to Beijing within nine months, Yellen complained to China about its excessive manufacturing capacity exceeding domestic demand and threatening other countries. She mentioned the newly created US-China financial working group to discuss the solution to tackle the overcapacity issue. She suggested China boost consumer demand by shifting its growth model away from supply-side investment. In her meeting with Chinese Premier Li Qiang, Finance Minister Lan Foan, People’s Bank of China (PBOC) governor Pan Gongsheng, and former vice-premier Liu He, Yellen said that the US aims to improve economic ties with China through cooperation and mutual understanding. (“Yellen says US will not accept Chinese imports decimating new industries,” The Straits Times, 08 April 2024)

CHINA & EUROPE
China not to take advantage of the Ukraine war, says Chinese Foreign Ministry
On 08 April, the Ministry of Foreign Affairs of the People’s Republic of China spokesperson Mao Ning said that China does not seek to derive any profits from the ongoing war in Ukraine. She reiterated Beijing’s stance to advance peace in its own way and maintain communication with both parties (Russia and Ukraine). She also mentioned China’s control of the export of dual-use goods to Russia. White House National Security Council spokeswoman Adrienne Watson said that President Biden had discussed the need to prevent the bolstering of Russian military capacity with Chinese President Xi Jinping. Mao also notes Russian Foreign Minister Sergei Lavrov’s visit to Beijing on 08 April to discuss bilateral cooperation. (“China says it will not seek to gain from war in Ukraine,” The Straits Times, 08 April 2024)

EAST ASIA & THE PACIFIC READER
EAST ASIA
Australia initiates security cooperation with Taiwan
On 08 April, deputy chair of Australia’s Parliamentary Joint Committee on Intelligence and Security Andrew Wallace raised the subject of security cooperation with Taiwan during a meeting with Taiwanese President Tsai Ing-wen. While both sides have a vested interest in ensuring regional security, Andrew said: “Taiwan and Australia both recognize the importance of maintaining peace and stability in the Indo-Pacific region. Our partnership, our strategic partnership, contributes significantly to regional security.” He also emphasized the need for security cooperation amid the changing geopolitical landscape in the region. He also mentioned the ongoing collaborations on cyber security initiatives safeguarding critical infrastructure and important digital networks. Recently, a senior US State Department official mentioned the importance of AUKUS in safeguarding Taiwan from Chinese aggression. Tsai told Andrew that both countries are defenders of freedom and democracy. (“Senior Australia lawmaker broaches security cooperation on Taiwan trip,” The Straits Times, 08 April 2024)

South Korea launches its second indigenous spy satellite
On 07 April, South Korea launched its indigenous spy satellite on a SpaceX Falcon 9 rocket from the US to keep an eye on the threats from North Korea. The satellite is a synthetic aperture radar (SAR) satellite that can use radar waves to produce ultra-high-resolution images of objects on the ground. The Ministry of Defense of South Korea said that launching the first military SAR satellite has strengthened the country’s intelligence monitoring and surveillance capability. South Korean Defence Minister Shin Won-sik said North Korea plans to launch its spy satellite by mid-April. Through this launch, South Korea aims to reduce its reliance on the US and wants to increase its own reconnaissance capabilities by launching five such satellites by 2025. (“South Korea launches second home-grown spy satellite from the US,” The Straits Times, 08 April 2024)

Washington announces USD 6.6 billion grant to Taiwan’s TSMC plant
On 08 April, the US announced a USD 6.6 billion grant to Taiwan Semiconductor Manufacturing Company (TSMC) to build a third plant to manufacture advanced semiconductors. In addition, the US Department of Commerce will grant a loan to TSMC to build three semiconductor fabrication plants in Arizona worth USD 65 billion. The department added that the chip factory will be ready by the end of 2030 and will produce two-nanometer chips. Ji notes President Biden’s intent to push semiconductor manufacturing in the US through the Chips and Science Act, which came into effect in 2022. The US currently produces less than 10 per cent of chips globally. The Commerce Department said that by 2030, the US will produce 20 per cent of the world’s global supply of chips, thereby providing America with a competitive edge in science and technology innovation. Ji also mentions the delay in the operation of TSMC’s previous two plants due to a shortage of specialist workers and the US government initiatives. (Ji Siqi, “US-China tech war: TSMC strikes US$11.6 billion deal to make ‘most advanced semiconductor chips’ in Arizona,” South China Morning Post, 08 April 2024)

Japan faces delay over the upcoming Expo 2025 in Osaka, says a commentary in Nikkei Asia
On 09 April, according to a commentary in Nikkei Asia, Japan aims to launch the Expo 2025 in Osaka on 13 April 2025, which faces major construction delays that are caused due to labour shortages, overtime restrictions, and political and business infighting. The delays led to cost overruns of more than USD 1.5 billion. According to Akira, the Expo 2025 is organized by the Japan Association for the 2025 World Exposition, which is themed “Designing Future Society for Our Lives.” Akira also mentioned a similar expo launched in 1970 and marked its status as a post-war economic superpower. The event will be held on an artificial island called Yumeshima, meaning “Dream Island,” with an estimated 28 million visitors attending the expo. Akira also noted Japanese officials' concerns over the construction delays as the country faces a chronic shortage of labour and is prioritizing elsewhere the construction of large-scale projects like TSMC’s new plant in Kumamoto, Japan. According to Tomonari Yashiro, president of Tokyo City University, construction companies are disinterested in bidding for the expo project due to the insufficient design completion level and limited capacity of building services suppliers. According to estimates by the Asia Pacific Institute of Research, Expo 2025 will have a positive impact worth Yen2.5 trillion on Japan. (Akira Kitado, “Japan's Expo 2025: Osaka triumph or billion-dollar folly?” Nikkei Asia, 09 April 2024)