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CHINA READER DAILY WIRE
ECONOMY
AmCham: Foreign firms to invest less but to stay in China
On 27 February, the South China Morning Post reported on an American Chamber of Commerce (AmCham) survey on Chinese investments by foreign firms where they found that while most of them are curbing their expansion in China, but refuse to opt out of the Chinese markets. The survey was filled by 183 respondents from the US and Europe. The survey showed that most were optimistic about the Chinese market and 76 per cent expressed their plans to reinvest in China. Though most of this was supported by the Chinese firms, amongst the American firms 63 per cent looked to reinvest a 5 per cent low from last year. From other countries, there was massive a massive drop in interest with only 11 per cent interested from 71 per cent drop. It also found that most American firms stated that they do not plan to decouple from China even though they have been impacted by the US-China tensions. (Mia Nulimaimaiti, “Foreign firms say China’s economic woes, geopolitical feuds won’t scare them off, but they’re investing less,” South China Morning Post, 27 February 2024 )
Migrant workers in China return early for work
On 27 February, the South China Morning Post reported on the economic woes of the Chinese migrant workers. The article stated that the migrants returned early for work even though there were four days remaining for the Chinese Lunar New Year to end. The Baiyun Railway Station in Guangzhou is already packed with migrant workers returning for work from their hometowns. Some workers complained that they have been back in the region for a few days but the wages were not as good. Most workers have low expectations of a pay rise this year. It is expected that there will be fewer export orders and that there will be more workers than vacancies. The return of the migrant workers has reduced the wage of hourly wage temporary workers. With the current economic condition, the factory owners now look to invest abroad with the surplus money they have as most expect factory profits to be overall lower. (He Huifeng, Frank Chen, “China jobs: returning migrant workers battling low salaries, lack of openings as economic realities hit home,” South China Morning Post, 27 February 2024)
China stabilizing its exchange rate, Financial Times
On 27 February, an editorial in the Financial Times, titled “China props up renminbi ahead of leadership summit in March,” by Hudson Lockett looked into China adjusting the exchange rate. The regulators in China are keeping the renminbi and dollar exchange stable ahead of the leadership summit. They are holding off short-term interest rates and ‘keeping the currency’s dollar trading band,’ which has helped the RMB from further falling. The Communist Party of cadres are set to meet in March that would make essential policy decision based on it. Last week, China lowered its mortgage lending rate as the leaders grew weary of the looser monetary policy says the Chief economist at Bank of Singapore, Mansoor Mohi-uddin. Another concern facing the renminbi is the US presidential election, where if Trump comes to power there might be a 60 per cent tariff on Chinese imports. (Hudson Lockett, “China props up renminbi ahead of leadership summit in March,” Financial Times, 27 February 2024)
INTERNATIONAL
Chinese and US representatives at the WTO conference discuss concerns
On 26 February, Chinese Commerce Minister Wang Wentao and the US Trade Representative (USTR) Katherine Tai discussed bilateral and multilateral trade issues during the 13th World Trade Organization’s Ministerial Conference. Wentao expressed his concerns over the extreme US tariffs and the closeness with Taiwan. Tai also called out the issue with China's excess capacity of steel that has caused an imbalance in the global market. At the beginning of the conference, USTR published a report on Chinese membership in the WTO and the biggest challenge for the international trading system. China called the US assessment groundless and accused it of bullying and unilateralism by disrupting the international supply chain. Tai said: “incredible potential in the green economy,” but it cannot be achieved “when some members use non-market economic policies to build global market dominance that can be abused,” And that “non-market policies and practices undermine fair competition. They create trade distortions and non-market excess capacity, which undermine our sustainability objectives and climate goals” (Ji Siqi, “Chinese commerce minister meets with US trade representative at WTO conference in Abu Dhabi,” South China Morning Post, 27 February 2024 )
SCIENCE & TECHNOLOGY
Chinese hacker I-Soon’s cyber leak, The Guardian
On 25 February, according to an editorial in The Guardian titled “Hackers for sale: what we’ve learned from China’s enormous cyber leak,” the FBI reported a massive cyber leak from a company called I-Soon. The leak revealed that the emails or servers of the government agencies of Kyrgyzstan, Thailand, Cambodia, Mongolia, and Vietnam were compromised. The hackers also secured access to chats with telecom service providers in Pakistan, Kazakhstan, Mongolia, Thailand, and Malaysia. They have gained access to higher educational institutions in Hong Kong and Taiwan. The staff said the Government of India was the primary target for infiltration as it was a geopolitical rival of Beijing. The I-Soon customers are the provincial or local police departments and other security agencies responsible for protecting CCP from potential threats. I-Soon focused on making Trojan horses, which are malware disguised as legitimate software, to gain access to private data and to build a database of personal information. One of the cases involved the client asking for access to the foreign secretary’s office, the foreign ministry’s ASEAN office, the prime minister’s office, and the national intelligence agency of an unknown country. (“Hackers for sale: what we’ve learned from China’s enormous cyber leak,” The Guardian, 25 February 2024)
Chinese scientists discover the first super cosmic ray accelerator
On 26 February, according to a paper published by the peer-reviewed Science Bulletin, the structure that is a super cosmic ray accelerator was observed in the Cygnus constellation with the Large High Altitude Air Shower Observatory (Lhaaso) in Sichuan province. The scientists said that the discovery would change the understanding of the origin and the source of cosmic rays in the Milky Way galaxy. Corresponding author Cao Zhen said that it is the first super cosmic ray accelerator identified till now. According to Cao, Cosmic rays with an energy lower than 1 PeV were thought to originate from within the Milky Way. Cao further said that the stars in the cluster have a radiation intensity “a hundred to a million times that of the sun.” Cao added that further discoveries within this could solve the century-long enigma of the origin of cosmic rays. (Victoria Bela, “Chinese scientists identify Milky Way origin for ultra-high energy cosmic rays,” South China Morning Post, 27 February 2024)
CHINA & TAIWAN
Chinese research ships expand its incursion into Taiwanese waters
According to an editorial in the Financial Times titled “Chinese research ships increase activity near Taiwan,” by Kathrin Hille, Josh Gabert-Doyon, and Chris Cook, Chinese research ships are increasingly sailing in Taiwanese waters as its latest operations include the sailing of Zhu Hai Yun throughout Taiwan’s east coast on 14 November 2023. The director of the China Maritime Studies Institute at the US Naval War College, Christopher Sharman, said that the PRC employs such tools to exert all domain pressure against Taiwan. As per the UNCLOS, Taiwan cannot use this international legal framework to control waters beyond 24 nautical miles from its coastline. China’s maritime vessels are operated by the government to conduct multiple scientific research in disputed waters, which can also be used for naval warfare. China has used such vessels to conduct extensive surveys in the South China Sea, Japan, Guam, and the Indian Ocean to prepare for a potential US-China conflict. According to Matthew Funaiole, author at CSIS, “China seeks to obfuscate and create this sort of ambiguity between the science, the commercial and the military.” Sharman further says that the PRC uses Zhu Hai Yun and other research vessels to penetrate the contiguous zone with a drone swarm to test Taiwan’s response, and that would greatly increase the risk of an incident. (Kathrin Hille, Josh Gabert-Doyon, and Chris Cook, “Chinese research ships increase activity near Taiwan,” Financial Times, 26 February 2024)
CHINA & CENTRAL ASIA
Central Asia’s dilemma amid the geopolitical rivalry between the global powers, Opinion
On 26 February, according to an opinion in the East Asia Forum titled “Central Asia caught in a geopolitical tug of war,” by Alessandro Arduino, Central Asian countries such as Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan are re-orienting their foreign policy to balance their ties by staying away from Russia’s aggression against Ukraine and also avoiding antagonizing Kremlin. According to Arduino, Central Asia faces challenges in the form of Afghanistan as it grapples with the water crisis, large-scale migration, and the growing presence of the Islamic State of Khorasan Province (ISKP). Arduino notes while balancing ties, Central Asia has become a gateway for Moscow amid the Western sanctions against Russia. China is emerging as a major regional player with its inaugural China-Central Asia summit in May 2023, which led to the construction of the China–Kyrgyzstan–Uzbekistan railway and other energy projects. The growing China-Russia ties with its no-limits partnership will limit Central Asian countries' ability to navigate between the great power rivalry. (Alessandro Arduino, “Central Asia caught in a geopolitical tug of war,” East Asia Forum, 26 February 2024)
CHINA & THE AMERICAS
Delays in the renewal of US-China science pact, South China Morning Post
On 27 February, according to an opinion piece in the South China Morning Post, the US-China Science and Technology Agreement will face further delays as its six-month extension is set to expire on 27 February while negotiations continue on new terms and conditions. The spokesperson for the US State Department said that the priority of the US government is to ensure the safety and security of American citizens overseas first before renewing the agreement. The US-China Science and Technology Agreement was signed in 1979 and was renewed every five years. President Biden decided not to renew the agreement as the US feared China gaining a military advantage through this cooperation. Duke Kunshan said that the US intends to ensure the safety and security of its citizens, especially scientists while going to China to collaborate on joint projects considering China’s new national security regulations. (Khushboo Razdaan, “Renewal of US-China science pact likely to be delayed again as sticking points remain,” South China Morning Post, 27 February 2024)
US Commerce Secretary on grants to semiconductor companies: “We have to be tough with companies”
On 26 February, US Commerce Secretary Gina Raimondo said, “We have to be tough with companies,” in talks with the US semiconductor companies seeking grants to boost domestic manufacturing. This is intended to boost greater economic and national security at a lower cost to the taxpayers. She said that there were limited funds available to address national security goals against the demand of USD 70 billion in federal funding requested by the US chip makers. The manufacturers include Intel, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics. US semiconductor manufacturing declined from 37 per cent in 1990 to 12 per cent in 2023 due to the cost competitiveness from countries such as China. To counter China, the US introduced the Chips and Sciences Act in 2022 with a budget of USD 39 billion to boost domestic chip manufacturing and reduce reliance on imports from Asia. Raimondo further said that she was confident of a rise in the US-made chips from zero to 20 per cent of global production by 2030. (Khushboo Razdaan, “US, semiconductor firms in ‘tough’ talks over funding American chip manufacturing: commerce secretary,” South China Morning Post, 27 February 2024)
China ahead of the US in global diplomatic presence
On 27 February, according to the Global Diplomacy Index published by the Lowy Institute, China had 274 diplomatic missions around the world, compared with 271 for the US. The report said the growing rivalry between the US and China had led them to dominate the global diplomatic presence. In 2019, China overtook the US in terms of the number of diplomatic missions in the world. According to Associate Professor Chong Ja Ian, more diplomatic missions are needed to translate into better relations or greater effectiveness for any state. The study shows that China has a larger diplomatic presence in Africa, East Asia, the Pacific Islands, and Central Asia, while the US has a diplomatic presence in Europe, North and Central America, and South Asia. Chong said that Beijing’s diplomatic presence seeks to build ties in Africa and the Pacific. The report also highlights the growing competition between the two countries for influence in the South Pacific alongside Australia and other European countries. (Alyssa Chen, “China narrowly ahead of US in global diplomatic presence – but this may not translate into greater influence,” South China Morning Post, 27 February 2024)
CHINA & THE PACIFIC
US warns Pacific Islands countries of taking Chinese security assistance
On 26 February, the US cautioned Pacific Island countries not to take any assistance from Chinese security forces amid the presence of Chinese police in a remote atoll of Kiribati. The US State Department spokesperson said that the US won’t tolerate “transnational repression efforts” to establish police stations around the world. Kiribati’s acting police commissioner, Eeri Aritiera, said that the Chinese officers were working with the local police for community policing and a crime database program. Kiribati is strategically located close to Hawaii and has one of the world’s biggest exclusive economic zones, covering more than 3.5 million square km of the Pacific. The US is concerned about China’s plans to rebuild a World War Two-era U.S. military airstrip on Kiribati's Kanton Island. To counter China, the US has pledged to upgrade the wharf on Kanton Island and is willing to open an embassy in Kiribati. Aritiera further said that Kiribati had requested Chinese policing assistance in 2022, and the Chinese police started arriving on a six-month rotation in 2023. (David Brunnstrom and Kirsty Needham, “US cautions after Hawaii neighbor Kiribati gets Chinese police,” Reuters, 27 February 2024)
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EAST ASIA & THE PACIFIC READER
EAST ASIA
South Korea and Japan need a new Joint Statement in 2025
On 27 February, according to an interview in Nikkei Asia, foreign policy adviser to South Korean President Yoon Suk Yeol, Park Cheol-hee, said that both South Korea and Japan need to issue a new statement in 2025 to address the growth in their bilateral relations for a shared perspective and break away from old stereotypes. On the issue of wartime labour, Park said that the Future Partnership Funds, jointly set up by both countries, are required to promote greater business projects and to create an environment for resolving past issues. Park further said the year 2025 is a significant milestone for South Korea – Japan ties and must create a shared vision on the joint declaration by Prime Minister Keizo Obuchi and President Kim Dae-Jung in 1998. (Tetsuya Fujita, “South Korea and Japan need new joint declaration, Yoon adviser says,” Nikkei Asia, 27 February 2024)
THE PACIFIC
New Zealand initiates the prosecution of tour operators involved in White Island volcanic eruption
On 26 February, New Zealand initiated the prosecution of the tour operators involved in the volcanic eruption on the White Island that killed 22 people on 09 December 2019. Most of the tourists killed were from countries like Australia, the US, and Malaysia. Tour operators White Island Tours, Volcanic Air Safaris, Kahu New Zealand, and Aerius, along with the corporate owner of the island, Whakaari Management Limited, are being sentenced to the criminal offence of not ensuring adequate safety to workers and tourists to the island. They are fined NZD 1.5 million per tour operator. White Island was one of the most popular tourist destinations until the volcanic eruption in 2019. The prosecutor for workplace regulator WorkSafe, Ms Kristy McDonald, said that White Island Tours had NZD 5 million and Volcanic Air Safaris had NZD300,000 available for reparation payments through insurance they held. (“New Zealand begins sentencing of those involved in White Island volcanic eruption,” The Straits Times, 26 February 2024)
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