China News - 1 July 2022
International
Hong Kong: Xi Jinping defends China's rule at handover anniversary. China's "one country two systems" model of ruling Hong Kong has worked in protecting the city and must continue long term, said Xi Jinping on Friday. It was the clearest sign yet that China intends to preserve the political model, which critics say has already been compromised to suit Beijing. Swearing in new leader John Lee, Xi warned that power in Hong Kong “must be administered only by patriots”, saying that it was essential for safeguarding the long-term stability and security of Hong Kong. BBC, FT, 1 July
UK Prime Minister says China must be held to commitments made on Hong Kong:
Beijing hits out at Nato strategy for ‘malicious attack’ on China. “Who’s challenging global security and undermining world peace? Are there any wars or conflicts over the years where Nato is not involved?” China’s mission to the EU said after Nato agreed for the first time to include challenges and threats posed by China in its Strategic Concept. The Guardian, 30 June
EU countries agree on rules to curb subsidised foreign companies. The European Commission had presented its proposals for the new takeover rules last year in a bid to stave off what it deems unfair competition from countries such as China. Reuters, 30 June
China stalls on EU trade talks as push for Lithuania WTO case gains ground. SCMP, 30 June
Foreign Office slashes China centre funding. The Spectator’s Steerpike reports that FCDO funding to the Great Britain China Centre, an executive non-departmental public body established to support UK-China relations, has been stopped. The funding was worth £500,000 in grant-in-aid in the 2021-22 financial year. The Spectator, 30 June
China outlines legal path for cross-border data transfer. Under the draft rule released by the Cyberspace Administration of China (CAC), qualified data processing entities could legitimately transfer personal data abroad by signing standard contracts with overseas recipients. Entities collecting personal data would be responsible for assessing the legality, legitimacy and the need for the data. Caixin, 1 July
US kicks off 26-nation Pacific naval exercise without Taiwan. Nikkei Asia, 30 June
Economy & tech
Central banks look to China’s renminbi to diversify foreign currency reserves.
The proportion of central bank reserve managers that have invested in, or are interested in investing in, the renminbi increased to 85 per cent this year, from 81 per cent last year, according to an annual survey by UBS. The rising interest in China’s currency comes after western powers froze around $300bn of Russia’s foreign currency reserves. FT, 1 July
China doubles down on domestic operating systems to cut reliance on Windows, MacOS from the US. Kylinsoft, a subsidiary of state-owned China Electronics Corp, last week joined forces with more than 10 Chinese entities to set up an open-source code community. SCMP, 1 July
EV supply chain: Japan, China vie for power in lithium standards. Nikkei Asia, 1 July
GM calls off plan to sell India car plant to China's Great Wall. Reuters, 30 June
China focus
Some Chinese want their country to move closer to communism. How can a wealthy China still claim to be in the “initial stage of socialism”, scholars wonder? The Economist, 30 June
Shanghai offers hassle-free ‘Hukou’ to city’s postgraduates. The city is using its much sought-after household registration document known as the hukou to convince local graduates to work and stay, as the country’s financial hub seeks to attract more talent for a post-lockdown recovery. Sixth Tone, 30 June
Long reads & opinion
UK won’t rest until Hong Kong has its freedoms back. Liz Truss. The Times, 30 June
The significance of Xi Jinping’s visit to Hong Kong. It is an opportunity to bang the nationalist and patriotic drums as he prepares to continue for a third term in the trinity of top party, army and state posts. Charles Parton. Council on Geostrategy, 30 June
The high costs of disengagement for China. George Magnus. Project Syndicate, 28 June
In Depth: How SoftBank wrestled back control of Arm China. Caixin, 30 June