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Scooped by Malcolm Riddell

Chinese Communist Party Seeks Sway Over Private Business - The New York Times

Chinese Communist Party Seeks Sway Over Private Business - The New York Times | ANALYSIS Stream | Scoop.it
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The Real Strategic End Game in Decoupling From China – The Diplomat

The trade between the United States and the European Union (EU) makes all other trade volumes pale in comparison — including trade with China. Transatlantic trade levels (in goods and services)  totaled more than $1.3 trillion.

This dwarfs by far trade activity between the United States and China ($636 billion) and between EU and  China ($718 billion).  Counting exports and imports of goods and services, the U.S.-EU bilateral trade is as big as the sum of U.S.-China and EU-China activities.

Meanwhile, the United States and EU have in common huge trade deficits with China. These deficits,  $307 billion for the U.S., and  $146 billion for the EU  are not healthy. 

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US-China Techno-Nationalism and the Decoupling of Innovation – The Diplomat

Alex Capri | Hinrich Foundation

Techno-nationalism will affect the majority of the world’s leading universities and research institutions, most of which reside in the United States, Europe and within other liberal democracies. Beijing has made it a priority to maximize its access to these institutions so it can tap into the world’s best subject matter experts, R&D networks, and innovation communities.

Consequently, policymakers are taking actions to make it difficult for perceived hostile actors to exploit the openness of educational systems — while simultaneously trying to avoid inflicting collateral damage on human capital pipelines, which, from a techno-nationalist perspective, provide a net positive.

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China Is Hostage to a Rules-Based Multilateral System

Yukon Huang | Carnegie Endowment

The rapidly deteriorating relations between the two nations may have less to do with historical differences in political systems and ideology than with the similarities in their leaders’ aspirations. Both came to power with strong populist agendas symbolized by Trump’s “America First” and Xi’s “Chinese Dream.”

Trump’s political base lies in a largely rural, white working class who feels economically neglected and views globalization as synonymous with sending jobs abroad. Xi’s supporters are restless workers and stalwart party cadres who welcome the opportunity to reclaim China’s status as a great power. The interaction of these two objectives is a recipe for conflict, not engagement.


Trump’s actions have undermined the principles of an international system based on strategic alliances and cooperative behaviors. His assumption that geopolitics is a zero-sum game has moved U.S. policy toward China beyond containment to aggressive competition and decoupling.


Beijing continues to argue that it is merely reacting to the provocations of others—be it potentially destabilizing protests in Hong Kong or U.S. restrictions on Chinese companies like Huawei. Regardless, China’s recent foreign policy initiatives and “wolf warrior” diplomacy—as China’s newly aggressive style of international engagement has been dubbed—have played into the hands of U.S. hardliners.

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The complexities of China–Iran strategic balancing - East Asia Forum

The complexities of China–Iran strategic balancing - East Asia Forum | ANALYSIS Stream | Scoop.it

China’s engagement in the Middle East has grown out of President Xi Jinping’s BRI. The region has benefited from Chinese investment as a strategic gateway and global transit point. China has signed five comprehensive strategic partnerships alongside 12 strategic partnerships with regional states, including Israel, promising strengthened commercial and economic ties.

China–Iran relations were elevated to a comprehensive strategic partnership level in 2016. Iran is considered geographically and strategically essential for the BRI. Bilateral relations are also historical, dating back centuries. Ties have been further strengthened by reciprocal presidential visits in 2014, 2016 and 2018. Discussions on the partnership agreement supposedly began during President Hassan Rouhani’s 2014 visit to Beijing.

Unlike other stakeholders in the region, China’s strategy has been primarily economic — believing that economic gains will bring greater stability to the region. This approach has enabled China to avoid taking sides in regional conflicts and has allowed Beijing to benefit from the US security presence in the region.

China’s increasing influence in the region presents an opportunity for Beijing to fill a vacuum at a time when regional states that have long relied on US security are more anxious about US security commitments.

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What Is China’s Strategy in the Senkaku Islands? - War on the Rocks

China’s recent moves are destabilizing, and Japan clearly stated as much in a newly released defense white paper. In the report, the Japanese government presents the nature of the Chinese challenge to its security — especially to the Senkaku islands — in the strongest terms yet. Chinese authorities are in fact described as “relentlessly” pressing their claims to the islands with ever-increasing levels of maritime activities undermining the status quo. Japanese Defense Minister Taro Kono made clear that further intensification of activities might trigger the intervention of Japanese military assets.

In response to Japanese concerns, the commander of U.S. military forces in Japan has stated that the United States would help monitor the situation. Every successful step Beijing takes in undermining the status quo around the Senkakus through coercion and force is a direct challenge to the credibility of the U.S.-Japanese alliance and, crucially, to the principles informing the maritime rules-based order centered on the 1982 Convention on the Law of the Sea.

While the United States is not party to this treaty, both China and Japan are, and Abe has clearly articulated why China’s actions around the Senkakus fundamentally undermine the principles enshrined in the convention.

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‘Negative Peace’? China’s Approach to the Middle East - War on the Rocks

What differentiates the U.S. and Chinese positions are their respective places in the international system. As the established power, the United States has shaped and maintains the security structure. As an emerging, or rising, power, China has had less involvement in that process. It therefore has greater flexibility in realizing its goals. The result is that it has been able to adopt one or more of several different roles in dealing with the region’s contentious politics and the need for security:  “supporter,” “spoiler,” or “shirker.”

What shapes China’s response depends on two factors: the state of its economic relations and the surrounding political context. Where China’s economic interests have been strong, it has taken a closer interest in security issues. But where someone else — such as the United States — provides security and its economic interests are fewer, China has shirked involvement in security provision.

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Is nuclear deterrence in the cards for India and China  - Observer Research Foundation

Given the nuclear-armed status of both India and China, there has been buzz around the possibility of nuclear escalation as a result of unresolved territorial disputes.

In order to address the nuclear question, it is useful to examine both the relevance of both countries’ deterrence policies to the current scenario and how these policies have played out across previous conflicts between India and China.

Both countries have adopted nuclear policies of credible minimum deterrence and No First Use (NFU).

Therefore, a change in the aforementioned policies (or lack thereof) coupled with the absence of nuclear signaling and/or escalation in previous conflicts, indicates that a change in future deterrence policies by either country remains unlikely.

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Winning Friends and Influencing People: Naval Diplomacy with Chinese Characteristics - Naval War College

Winning Friends and Influencing People: Naval Diplomacy with Chinese Characteristics - Naval War College | ANALYSIS Stream | Scoop.it

In recent years, Chinese leaders have called on the People’s Liberation Army Navy (PLAN) to carry out tasks related to naval diplomacy beyond maritime East Asia, in the “far seas.” Designed to directly support broader strategic and foreign policy objectives, the PLAN participates in a range of overtly political naval diplomatic activities, both ashore and at sea, from senior leader engagements to joint exercises with foreign navies.

These activities have involved a catalogue of platforms, from surface combatants to hospital ships, and included Chinese naval personnel of all ranks.

To date, these acts of naval diplomacy have been generally peaceful and cooperative in nature, owing primarily to the service’s limited power projection capabilities and China’s focus on more pressing security matters closer to home.

However, in the future a more blue-water capable PLAN could serve more overtly coercive functions to defend and advance China’s rapidly growing overseas interests when operating abroad

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PODCAST | Kevin Rudd And Orville Schell On Hong Kong's Pivotal Year 

PODCAST | Kevin Rudd And Orville Schell On Hong Kong's Pivotal Year  | ANALYSIS Stream | Scoop.it

Two of the world's great experts on China discuss the implications of a new National Security Law for Hong Kong's future — and China's.

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PODCAST | China-Africa Trade Update With Walter Ruigu 

PODCAST | China-Africa Trade Update With Walter Ruigu  | ANALYSIS Stream | Scoop.it

Two-way China-Africa trade fell sharply in the first half of the year to $82 billion, down 20% from the same time last year. Trade between the two regions has been severely disrupted by the COVID-19 pandemic and the ongoing lockdowns.

But now that the Chinese economy is getting back up to speed and a growing number of African countries are re-opening their markets, trade volumes in the second half of the year are widely expected to improve.

But it's not going to be easy warns Walter Ruigu, managing director of CAMAL Group, a Beijing-based shipping and logistics company that does a lot of import/export between China and Africa. Walter joins Eric & Cobus to talk about what he's hearing from his clients about what they want to ship and to where.

 

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PODCAST | The Mulan Debacle ChinaTalk 

PODCAST | The Mulan Debacle ChinaTalk  | ANALYSIS Stream | Scoop.it

Turning a beloved movie of female empowerment into a dull endorsement of the patriarchy, autocracy and mass forced labor is no easy feat, but Disney Magic is one hell of a drug. Think tanker Rui Zhong and novelist/meme goddess Xiran Jay Zhao join to discuss.

 

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On China's New Silk Road (Episode 1: The China Dream)

On China's New Silk Road (Episode 1: The China Dream) | ANALYSIS Stream | Scoop.it

This week, we're delighted to bring you the first episode of Mary Kay Magistad's brand new podcast, On China's New Silk Road.

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Why is China picking so many fights - and where are they leading? - DW

The West is pushing back against Beijing over a growing list of human rights concerns, including its security law in Hong Kong and efforts to extinguish dissent on the semi-autonomous territory. Where are these battles heading when trust in China - greatly damaged over the coronavirus pandemic and attempts to silence early warnings - is so low?

 

Our guest this week on Conflict Zone is Wang Huiyao, a government advisor in Beijing and president of the Center for China and Globalisation think tank.

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China's push for dominance in global value and supply chains: Implications for Europe

China's push for dominance in global value and supply chains: Implications for Europe | ANALYSIS Stream | Scoop.it

By 2049, the 100th anniversary of the People's Republic, the government in Beijing wants China to become a global superpower in the field of industrial manufacturing and innovative research and development (R&D). Industrial policy programs such as "Made in China 2025" (MIC25) and "Internet+" aim to improve the innovative and competitive capacity of the Chinese economy.

Stable, modern and competitive production and supply chains as well as economic development along value chains are crucial to reach these goals. To strengthen China's position in global value chains, Beijing is still relying heavily on international cooperation in addition to state support in the form of funds or tax breaks. In the medium and long term, however, as State and Party Leader Xi Jinping emphasized in a much noticed speech just recently in August this year, China wants to reduce its dependence on foreign countries by building up its own capabilities and replacing foreign products and technologies with Chinese alternatives.

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How China Ramped Up Disinformation Efforts During the Pandemic

How China Ramped Up Disinformation Efforts During the Pandemic | ANALYSIS Stream | Scoop.it
Beijing has increased its manipulation of information as well as disinformation efforts around COVID-19 to damage democracies and boost itself, but its strategies have had mixed results.
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Outlook for the Chinese Economy in the Post-Pandemic Era

Outlook for the Chinese Economy in the Post-Pandemic Era | ANALYSIS Stream | Scoop.it
By Xu Bin The period from 1980 to 2008 was really a good time. Of course, there were some moments of negative shocks but, overall, those years were fantastic in terms of the global economy. In large part, this was due to the fact that almost all countries in the world adopted globalisation and liberalisation.
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 To buy peace, officials in China tolerate some forms of disobedience

 To buy peace, officials in China tolerate some forms of disobedience | ANALYSIS Stream | Scoop.it
Their goal, though, is the maintenance of power
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China Macro Reporter Archive

China Macro Reporter Archive | ANALYSIS Stream | Scoop.it

Greetings!

The outlines of U.S.-China ‘decoupling’ are becoming a little firmer.

  • With this, two sides are emerging.

On the ‘What Decoupling?’ side:

  • S. companies in China are mostly staying put.
  • And U.S. financial institutions are increasing their stakes.

On the ‘Could we decouple faster?’ side is tech, especially semiconductors:

  • China isn’t yet capable of producing world-class chips.
  • And the Trump administration is getting better and better at starving China of them.

At the same time, the U.S. is waking up to the need for its own industrial policy that accelerates the U.S. lead in semiconductors and counters China’s massive support of its industry.

  • Nothing is firm yet but it’s now just a matter of time.

For China’s part, General Secretary Xi Jinping is betting on the state sector, supported by private firms, plus lots of money, to try to end China’s reliance on foreign imports and make China’s tech sectors not only self-reliant but world leaders.

We look at each of these in today’s issues:

1. Betting on China: Manufacturers & Financial Firms

  • 'US Companies Defy Trump’s Threats About ‘Decoupling’ From China.'
  • 'Why Is Wall Street Expanding in China?'

2. Betting Against China: Tech

  • 'The Coming Tech Cold War With China'
  • 'Semiconductors and Modern Defense Spending'

3. Betting On The State

'Xi Signals Unshaken Commitment to State’s Role In Chinese Economy.'

Go deeper into these issues - Browse the posts below.

To read the original article, click the title.

Let me know what you think. And please forward the China Macro Reporter to your friends and colleagues.

All the best,

Malcolm 

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'Why is Wall Street expanding in China?' (It may be a step on the way to China becoming a financial superpower)

'Why is Wall Street expanding in China?' (It may be a step on the way to China becoming a financial superpower) | ANALYSIS Stream | Scoop.it

The Economist

‘Far from short-term greed, Wall Street’s taste for China reflects a long-term bet that finance’s centre of gravity will shift east.’

‘In the tech industry the rupture between China and America continues to grow.’

  • ‘Yet in one part of the global economy the pattern is of superpower engagement, not estrangement: high finance.’

‘BlackRock, a giant asset manager, has got the nod to set up a Chinese fund business.’

  • ‘Vanguard, a rival, is shifting its Asian headquarters to Shanghai.’
  • ‘JPMorgan Chase may spend $1bn to buy control of its Chinese money-management venture (see article).’
  • ‘Foreign fund managers bought nearly $200bn of mainland Chinese shares and bonds in the past year.’

‘Far from short-term greed, Wall Street’s taste for China reflects a long-term bet that finance’s centre of gravity will shift east.’

  • ‘And unlike in tech, both sides think they can capture the benefits of interaction without taking too much risk.’

‘Western, and in particular American, capital markets still reign supreme on most measures. Derivatives are often traded in Chicago; currencies in London.’

  • ‘American firms dominate the league tables in asset management and investment banking.’

‘The White House has sought to weaponise America’s pre-eminence, by pushing Chinese firms to delist their shares from New York, for example.’

  • ‘But if anything the trade war has shown the growing muscle of China in finance.’

‘A big wave of ipos is taking place in Hong Kong, often done by firms keen for an alternative to New York.’

  • ‘China’s prowess in fintech will soon be centre-stage with the listing of Ant Group, which may be the world’s largest ipo’
  • ‘And then there is the surprising rush of Wall Street firms and other foreign investors into mainland China.’

‘They have been knocking on the door for 30 years with little success.’

  • ‘Now they are betting that China is serious about welcoming foreign finance.’

‘With its current-account surplus set to fall over time, or even fall into deficit, it needs to attract more foreign capital.’

  • ‘The terms of access have improved.’
  • ‘China is at last allowing Western firms to take control of their mainland operations and has made it easier for fund managers to buy and sell mainland securities.’
  • ‘The potential prize is vast: a new source of fees for Wall Street banks, and for fund managers a huge universe of potential customers and companies to invest in.’

‘There are risks.’

  • ‘China could bend the rules to protect local banks and brokers. Corruption is a hazard: in 2016 JPMorgan Chase was fined by American regulators for giving jobs to well-connected Chinese “princelings”.’
  • ‘Worries over human-rights abuses may intensify.’
  • ‘And navigating America’s sanctions regime will be tricky—global banks active in Hong Kong, such as hsbc, are already under pressure to cut off some Chinese officials there.’
  • ‘Yet American financial firms’ exposure to China is low enough that they have little to lose.’

‘The tech industry is dangerously dependent on China: Apple assembles many of its devices there.’

  • ‘By contrast, the top five Wall Street banks have only 1.6% of their assets exposed to China and Hong Kong.’

‘China’s ability to attract Wall Street firms during a bitter trade war shows the clout its capital markets have.’

  • ‘But to become a financial superpower it would need to create its own global finance and payments infrastructure and make the yuan more freely convertible.’

‘The leading Chinese firms have a tiny presence abroad (just 5% of revenues for Ant) and most of China’s trade is invoiced in dollars, making it vulnerable to American sanctions.’

  • ‘Building an alternative to America’s global monetary network is a huge task that will take years and require China’s control-obsessed officials to loosen their grip further.’

‘Still, the trade war has given China a big incentive to take the next step.'

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'US companies defy Trump’s threats about ‘decoupling’ from China'

'US companies defy Trump’s threats about ‘decoupling’ from China' | ANALYSIS Stream | Scoop.it

Financial Times

‘US companies are ignoring Donald Trump’s threats to “decouple” from China and repatriate manufacturing,

Read more of ‘AmCham Shanghai Releases 2020 China Business Report’ results.

‘US companies are ignoring Donald Trump’s threats to “decouple” from China and repatriate manufacturing, according to a survey of more than 200 companies with operations in the country.’

  • ‘The American Chamber of Commerce in Shanghai found that fewer than 4 per cent of respondents were relocating some production capacity back to the US. The majority — more than 70 per cent — had no plans to relocate any manufacturing out of China despite higher tariffs from Mr Trump’s long-running trade war with the world’s second-largest economy.’

‘ “Covid-19 hit the Chinese economy hard in early 2020, but the recovery was quick,” Ker Gibbs, chamber president, said on Tuesday.’

  • ‘ “American companies still see China’s consumer market as a great opportunity.”

‘Earlier this week, Mr Trump reiterated his enthusiasm for “decoupling” the world’s two largest and closely integrated economies.’

  • ‘ “If we didn’t do business with [China] we wouldn’t lose billions of dollars,” he said. “We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all.” ’

‘According to the survey, the rapidly deteriorating Sino-US relationship is now the largest concern for American companies, overshadowing for the first time perennial fears about slower economic growth in China, domestic competition and intellectual property protection.’

  • ‘ “The geopolitical tension is the number one concern among business operations managers, which is remarkable,” Mr Gibbs said.’

‘The Chinese economy has shown signs that it has largely bounced back from the coronavirus pandemic.’ 

  • ‘China is also continuing to rack up large bilateral monthly trade surpluses with the US — surpluses that Mr Trump expected the two countries’ “phase-one” trade deal, signed in January before coronavirus erupted in central China, would help reduce.’
  • [See Brad Setser’s analysis of U.S. trade deficit with China, below.]
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The Return of Big Chinese Surpluses (And Large U.S. Deficits)

The Return of Big Chinese Surpluses (And Large U.S. Deficits) | ANALYSIS Stream | Scoop.it
Global trade imbalances are, once again, largely the result of Chinese and American trade imbalances. China's surplus has increased even as the pandemic has reduced global trade, as has the U.S. deficit.
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Semiconductors and Modern Defense Spending | Center for Strategic and International Studies

Semiconductors and Modern Defense Spending | Center for Strategic and International Studies | ANALYSIS Stream | Scoop.it
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The Coming Tech Cold War With China

The Coming Tech Cold War With China | ANALYSIS Stream | Scoop.it
China and the United States are preparing for a long-term technological rivalry
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