As tempting as it is to ignore Beijing's pomp and ceremony, there's very little other news coming out of China this week
The great event, the pronouncements of which – on a serious note – will resound over the next five years. Photo: Handout.
What’s the point of being a “China expert” if you can’t at least attempt to decipher the oracle-bone runes of central power in Beijing.
The daring Wall Street Journal has even gone so far as to predict six of the seven members of the Politburo – the congress is ongoing all week and many important appointments are up for guesswork and bar-top pub bets … fantasy-league wagers even.
The South China Morning Post claims an “exclusive” on big changes at the top, but the actual report slips into a quicksand bog of guesswork based on age limits, and almost all contenders for important roles are close to or have arrived at the retirement age of 68 – unless you’re Xi.
Basically, there will be some outgoing and some incoming big-brass personnel, and the “newcomers” will be faceless technocrats – admittedly with histories of governance in various parts of China – who can be trusted to cleave to Xi’s derring-do vision, not only of a greatly rejuvenated China, but a new world order.
PBS News Hour features some good talking points by Christopher Johnson of the China Strategies Group on Xi’s inaugural Sunday speech.
He argues that Xi sees war with the United States as increasingly likely.
‘I think we see two aspects of this in the speech that he delivered to the Congress. The first is that longstanding phraseology in these work reports, where China judged that peace and economic development not only were the dominant global trend, but also would be an enduring one, are gone from this report.
And, instead, they have been replaced by what Xi Jinping called a spirit of struggle, which is clearly a throwback to the 1960s under Mao Zedong. The other way I think he's telegraphing that is that he's showing us that the economy is moving toward what we might call a fortress economy that is less dependent on the global order and less dependent upon the United States.
He talks a lot in the speech about self-sufficiency in technology. And that tells us that he's hardening that system for — in preparation for that possible coming war with the United States.
The Financial Times makes similar points:
Xi also issued thinly veiled criticism of the US and its allies, boasting that China under his leadership had taken a ‘clear-cut stance’ against hegemonism and stood unwavering in the face of ‘bullying.’ China’s most powerful leader since Mao Zedong reiterated his commitment to taking control of Taiwan, potentially by military force.
Meanwhile, as the Associated Press points out, all the above are best seen as a continuation of the Xi agenda and anyone searching the void of “Xipeechifying” for hints of change is snatching at strands of silk in the wind.
This is not an inflection point for the party. That happened 10 years ago when it named Xi as leader, though it wasn’t evident at the time.
Since then, Xi has reoriented China both domestically and internationally. The military has staked claims to disputed territory while diplomats have become more assertive, saying China won’t be bullied by the U.S. and others.
Xi has brought back stronger state control over the economy and society, expanding censorship and arrest to stifle dissent. An unprecedented crackdown on corruption has brought down hundreds of senior officials, including some potential political rivals.
All of that is here to stay — that was the message from a 1-hour-and-45-minute party report that Xi delivered to the opening session on Sunday.
All the same, CNN, with no irony, sees hints of weakness – a lack of “stamina” even – in the Great Xi.
He cleared his throat on several occasions and sipped on a cup of tea over the course of his speech 1-hour-and-45-minute party report, CNN reports – clear signs of vulnerability in a man who seeks to turn the trajectory of history on its head.
GDP numbers on hold
China has delayed at the last minute the release of eagerly anticipated third quarter economic data, including its closely watched gross domestic product growth rate, which were due to be issued on Monday.
What does it mean? If Reuters is to be believed, it’s an amplification of China’s “economic distress signal.”
It invites speculation that the numbers show the economy is in bad shape and are being kept under wraps so they don’t steal the thunder of the ruling Communist Party’s twice-a-decade congress, which began on Sunday. A massive amount of manpower and resources has been dedicated to beef up security and keep Covid-19 infections next to zero for the occasion. China's state banks also stepped up their intervention to defend a weakening yuan on Monday.
In fairness to the CCP, this really should be a week of good news, and economic data were not expected to buoyantly contribute any good news given the property crisis and strict zero-Covid policies that are stifling consumption and effectively closing China off from the rest of the world.
But back to those indefinitely delayed GDP numbers, which offer yet more proof that in today’s brave new China it’s politics before the economy, Bloomberg reports:
Elite politics “was opaque before, but it’s now entirely dark,” Scott Kennedy, a senior adviser at the Washington-based Center for Strategic and International Studies, said recently.
The decision to postpone the release of crucial economic data at the last minute is unprecedented in China: regular economic releases continued even at the height of the original Covid outbreak in 2020 when Wuhan was still locked down, and there was no delay in the data five years ago during the previous party congress.
No explanation or new release date has so far been given.
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Chips: the ongoing saga
Photo: Jeremy Waterhouse; Pexels.
Some 43 US executives are thought to be in limbo and some are saying that, sans personnel and know-how, China’s tech ambitions – as in moving up the semiconductor-chip value chain – are temporarily trashed due to the Biden administration’s latest moves on high-tech transfers to China.
“Annihilation” reports the Australian press, via NewsCorp.
Technology and Business features a wide-ranging report on the overall significance of the latest sanctions:
‘The Biden administration is targeting China’s self-sufficiency goal — and it no longer involves only a few selected companies. The US last week introduced sweeping export controls that will severely complicate efforts by any Chinese companies to develop cutting-edge technologies, from semiconductors and supercomputers to surveillance systems and advanced weapons.
While the sweeping control measure is said to be an approach to control China’s ‘weapon powers,” it is apparent that the Biden administration is also striking at China’s effort to build its own chip industry. The moves are in fact the US’ most aggressive yet as it tries to stop China from developing technological capabilities it deems as a threat.
The new rules leverage the United States’ dominance of the semiconductor equipment market, using it as a choke point to prevent Chinese firms that supply the country’s military from advancing too rapidly.
Already, U.S. suppliers, including KLA and Lam, have halted deliveries and support for existing tools provided to Yangtze Memory Technologies Co., also known as YMTC, the Wall Street Journal reported. YMTC and 30 other companies were added to the “unverified list,” which doesn’t explicitly prevent U.S. companies from dealing with them, but it does heighten scrutiny of any deals and transactions. Semiconductor Manufacturing International Corporation, also known as SMIC, is also thought to be a key target of the new rules.
Meanwhile, Apple has suspended plans to use chips from YMTC, Nikkei Asia reports.
Caixin Global, as reported by Sixth Tone, notes that the new rules are a surprisingly direct attack on Chinese aspirations but will also have damaging effects on the US semiconductor sector:
As much as Chinese companies anticipated expanded export controls, the restrictions on talent caught the industry by surprise. Years of global integration resulted in an open market for semiconductor talent. Many scientists and engineers with U.S. citizenship or permanent residency work in the Chinese industry. Now they face what one semiconductor investor called an ‘inhuman’ choice—either giving up their U.S. citizenship or quitting their jobs.
The human cost aside, technologically it’s a body blow to China.
“The reality is that domestic equipment is not enough to support a similar production line now,” a person close to local government policymakers in the semiconductor industry told Caixin, in reference to advanced semiconductor chip manufacturing.
The Greater Sinosphere
Consular staff drag protester inside for a beating
Photo: Matthew Leung via Reuters.
Reuters reports that an investigation is underway after a protester was dragged inside the grounds of the Chinese consulate in Manchester during a demonstration against Chinese Communist Party General Secretary Xi Jinping and beaten by consular staff.
Video footage of the event that was circulated widely showed unidentified men forcing the protester inside the gates of the compound, before police and other demonstrators helped pull him back out.
This is not standard consulate or embassy procedure, but the consulate staff were apparently outraged by “an insulting portrait of China’s president.”
According to Hong Kong Free Press late yesterday, “Chinese consul-general Zheng Xiyuan was involved in the incident and ripped down placards.”
UK Minister of State Jesse Norman met with the Chinese ambassador’s deputy yesterday afternoon, amid pressure to have the Manchester consul-general and any other Chinese officials involved ousted from Britain.
PLA throws big bucks at Brit pilots
F-35s in a simulated dogfight. Photo: Public Domain.
The BBC reports that British pilots are being lured to China by big bucks to train their Chinese counterparts.
Experience in an F-35 preferred.
Up to 30 former UK military pilots are thought to have gone to train members of China's People’s Liberation Army.
The UK is issuing an intelligence alert to warn former military pilots against working for the Chinese military.
The problem, as the New York Times notes, is that it’s not illegal – yet.
None of the retired pilots are suspected of violating the Official Secrets Act, the British law that covers espionage, sabotage and other crimes. But … [an] official said that Britain was determined to tighten the controls on retired service members to guard against training activities that could contravene espionage laws.
In the meantime, one Western official told the BBC, “It is a lucrative package that is being offered to people" – around US$270,000 a year – “Money is a strong motivator.”
It’s proven a strong motivator in the past even for the best of the UK’s political class after their stints serving the public interest.
9 plead guilty to 2019 protests
2019 anti-totalitarian protests in Hong Kong. Photo: Senator Rick Scott; Public domain.
Nine people who previously pleaded innocent have now pleaded guilty to rioting in September 2019.
Just two defendants are holding out on not-guilty pleas over their alleged involvement in a “global anti-totalitarianism” rally near Admiralty on September 29, 2019, reports Hong Kong Free Press.
All of defendants face one count of rioting.
The prosecution alleged that on that day, protesters organised an unauthorised “anti-totalitarianism” rally against China’s rule over Hong Kong, which started in Causeway Bay and headed towards the government headquarters near Admiralty, local media reported.
Protests roiled the streets of Hong Kong in June 2019 over an extradition law – since axed – building into general protests against the PRC’s incursions into every facet of Hong Kong life. Some 100 people have been charged for involvement in the anti-totalitarian protests.
‘Fugitive whale’ hiding out in Shanghai
Jho Low. Photo; WikiCommons.
The New Straits Times reports that Low Taek Jho (AKA Jho Low) may be hiding, perhaps not in plain sight, but close enough – in China’s Shanghai World Financial Center.
Let’s say you haven’t been tracking this, or had sheer forgotten given the accelerated mayhem of recent global events: Jho Low is Malaysian businessman – sometimes described as a “master criminal” – who is wanted in connection with the 1Malaysia Development Berhad scandal (1MDB scandal).
Low is alleged to have siphoned off US$4.5 billion (perhaps as much as US$8 billion) from the government fund but claims he’s the victim of harassment and political persecution due to his connection with former Malaysian Prime Minister Najib Razak, who’s already been convicted on multiple charges related to the fund.
Low seemingly has control over a Chinese company with a subscribed capital of US$333 million (RM1.6 billion), whose offices are located in the Shanghai World Financial Centre.
This is the latest finding by Tom Wright and Bradley Hope, the authors of Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, in their sixth episode of "Search for Jho Low" on [their] YouTube channel.
Author Wright described Low’s hideout on the 28th floor of the Shanghai World Financial Center as "a very low" move (a higher floor would be preferred?), adding:
‘It also lays bare what we were talking about in the previous editions of this YouTube series, that Low is able to operate freely in China,’ he said.
Fellow author Hope agrees, the New Straits Times reports.
Sentosa provides refuge to Myanmar military supporters
Sentosa Island, tropical playground of the rich – and the occasional rogue, sanctioned No 1 crony businessman. Photo: Taylor Simpson, Unsplash.
Bloomberg reports that Tay Za – accused by the US and others of supplying arms and equipment to the Myanmar military – has been living and working in Singapore despite sanctions first imposed on him by the US in 2007
Tay Za has around 10 companies incorporated in Singapore in palm oil, teak and aviation. Sanctions against him were lifted in 2016 after democratic elections in Myanmar, then reinstated earlier this year following a February 2021 coup that removed Aung San Suu Kyi from leadership.
Some “color” on the man the US has called Myanmar’s “number one crony businessman:”
[He lives] in a development overlooking the South China Sea known as a playground for the wealthy. A short drive away is the Marina Bay Sands casino, where he would often show up carrying a duffel bag stuffed with cash.
Pure Hollywood, and you just know something has to go wrong, although so far it hasn’t – not devastatingly so – apparently.
Meanwhile, Singapore is opposed to sanctions against the Myanmar military government but is coming under increasing pressure to reverse its position.
‘Singapore was at first very reluctant to impose sanctions on the military government, fearful of the impact that it would have on the financial sector,’ said Zachary Abuza, a professor at the National War College in Washington who specializes in Southeast Asian politics. ‘It has started to crack down on some military-linked corporations that are operating in the city-state, but there remain a large number conducting business in Singapore, which provides a financial lifeline for the military as well as a conduit of weapons, munitions and spare parts.’
Tay Za denies the claims.
In a 90-minute interview from Putao, a picturesque town in the Himalaya foothills where he owns a resort, the 58-year-old businessman said he has provided only transportation equipment, not weapons, to Myanmar’s military. He said he has suffered financial setbacks as a result of the sanctions, including having to close his airline because he couldn’t obtain insurance, and is now semi-retired because of health issues.
Blinken warns of heightened Taiwan threat
Antony Blinken pictured here in Nigeria. Photo: WikiCommons.
Secretary of State Antony Blinken yesterday issued a warning on China’s threat to Taiwan, shortly after CCP General Secretary Xi Jinping reiterated China’s intent to take Taiwan by force if necessary at the 20th party congress, according to Bloomberg.
Headlines splashed news that Blinken had announced that China’s timeline on annexing Taiwan had been brought forward, but Blinken’s remarks at The Hoover Institution, Stanford University in California, were less explosive.
“There has been a change in the approach from Beijing toward Taiwan in recent years,” Blinken said.
Actually the secretary of state spoke at some length on the subject of Taiwan, stressing that the status quo has worked enormously well for decades, allowing Taiwan to prosper and providing safe passage to vast flotillas of shipping through the Taiwan Strait, which serves as a conduit to the goodies that line shelves of stores worldwide.
China is changing that status quo, said Blinken, by making unification more of a pressing issue. He added that China’s position was now that if unification doesn’t happen naturally (impossible), unification can be coerced and, if that doesn’t work, be undertaken forcibly, or by military means.
He didn’t explicitly say that China wants to do this sooner rather than later, and drawing that conclusion is speculative, even if it is a very possible outcome, given the rate that Taiwan is drifting out of China’s ambit ideologically (and perhaps even commercially), while arming itself and gathering sympathizers globally by the day.
Does the DPP have a shot at Taipei?
Former health minister and head of the Central Epidemic Command Center Chen Shih-chung is a real contender for Taipei mayor, maybe. Photo: Mori / Office of the President.
It’s going to be a tight race, but some local observers are of the opinion that after 24 years the Democratic Progressive Party (DPP) might finally retake “blueish” – as in KMT-leaning – Taipei.
The DPP’s last Taipei mayor was Chen Shui-bian (Chén Shuǐbiǎn, 陳水扁), who went on to become president and famed for his de-sinification program – officially known as the “Taiwan Name Rectification Campaign” – and later jailed for corruption (misuse of government funds) under the KMT Ma Ying-jeou (Mǎ Yīngjiǔ, 馬英九) administration that was elected after Chen’s second term ended.
If the DPP stages a comeback in Taipei this time, it can probably thank the KMT’s somewhat dubious choice of Chiang Kai-shek’s grandson, Chiang Wan-an (Jiǎng Wàn'ān, 蔣萬安) as its mayoral candidate, and its own choice of former health minister and head of the Central Epidemic Command Center Chen Shih-chung (Chén Shízhōng, 陳時中).
During the early stages of the pandemic, while accolades from around the world rolled in for Taiwan’s effective response, Chen … was a superstar. People carefully folded together cartoon cutouts of him, downloaded LINE stickers featuring Chen, meme-ifed him, dressed their kids up like him for Halloween, and even some people tried to make money off his visage by selling merch.
For anyone whose memory stretches that far back, a young Chen Shui-bian took Taipei with similar tactics as A-bian, complete with A-bian dolls and provocative billboards – tactics that happen to be a DPP strong point when it comes to tipping the balance in a tight race.
Hotels clamor for workers
No shortage of attractions, but Taiwan is having trouble staffing its hotels. Photo: Yauetepaings, Creative Commons Attribution-Share Alike 3.0.
Taiwan has reopened for tourism, but the hotel sector is short of workers – by at least 30%, reports United Daily News (Chinese) – despite claims by Taiwan’s Minister of Labor that the sector is “over-supplied.”
Hong Chong-yuan (Hóng Chóngyuán, 洪崇元), chairman of the National Federation of Hotel Association, struck back, saying “over-supply” was the least of the sector’s problems.
Even at NT$35,000 (US$1,100, which is considered generous in Taiwan) a month, he said, “Most Taiwanese are now reluctant to work as housekeepers, making beds and cleaning toilets, and that’s that.”
This brings us back to the ongoing Taiwan story of migrant labor. The hotel sector argues that Japan does it – and in Taiwan, if Japan does it, that’s good enough for Taiwan – and the Ministry of Labor is holding back tourism by not permitting labor from abroad.
Bigger picture, Taiwan is more aware of the demographic problem it faces looking ahead than its regional neighbors, and there’s a lot of talk about integrating non-Taiwanese into Taiwan because the country is going to need them, but implementation continues to be as slow and painful as pulling teeth.
Pop-up ads ahead
Electric cars (or EVs) are taking off in China, but are they safe? Photo: Anna Frodesiak, Creative Commons Zero, Public Domain Dedication.
Panda Daily reports that pop-up advertisements on the central control screens of vehicles are distracting and could cause accidents – who would have thought?
Is it even legal?
The central control screen displays the navigation information every day. When the user is driving on the highway at a speed of 100 km/h and is about to turn, a pop-up advertisement may cause the user to miss the intersection, or suddenly change lanes or apply the brakes, resulting in a greater risk of traffic accidents.
One Mercedes-Benz GLC owner posted that while on the road a pop-up advertisement blocked the speed limit and road condition information on his screen, and it was difficult to reach the tiny “close” button.
Panda Daily notes:
NIO [a manufacturer of EVs] also saw complaints by users on Weibo last year because of the push notifications of advertisements on the vehicle screen. Judging from pictures found online, the advertisement was ‘NIO Life’s new fashion and environmental protection brand Blue Sky Lab debuts in Shanghai Fashion Week.’
Clearly important news – the debut of Nio’s Blue Sky Lab at Shanghai Fashion Week – but not if what you really want to know is where the next off-ramp is located while traveling at 100 km/hr surrounded by other drivers dealing with pop-up ads.
This week in history
PLA defeats Tibetan army in Chamdo
PLA soldiers march on Tibet. Photo: Public Domain.
On October 17 (yes, Monday this week) 1950 the People’s Liberation Army (PLA) defeated the Tibetan army at Chamdo, which is strategically situated between central Tibet and Tibetan regions that have now been assimilated into Sichuan, Qinghai and Yunnan provinces.
It was the turning point in the PRC’s invasion and annexation of Tibet. Negotiations were to drag on into 1951, but eventually the Chinese got the High Plateau – the source of almost every major river in Asia.
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