China News - 10 January 2022
This newsletter is a little longer to include key stories from the past few weeks. It will resume in the usual format tomorrow.
As always, we would like to hear your feedback - you can get in touch by replying to this email or directly on office@chinaresearchgroup.org.
Upcoming event: The CPTPP, UK and China. Join Wendy Cutler, Vice President at the Asia Society Policy Institute (ASPI), and David Henig, co-founder of the UK Trade Forum, for a discussion of the benefits for the UK of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and whether China may also be allowed to join. This virtual event will be chaired by Andrew Bowie MP. Register here.
International
Over the past month, scrutiny of Western companies that seek to do business in China has intensified as policymakers and advocacy groups continue to voice concerns over complicity in human rights abuses:
HSBC holding shares in Chinese company linked to Uyghur atrocities. The UK’s biggest bank bought £2.2 million of shares in Xinjiang Tianye, a chemicals and plastics company, for an anonymous client last year. Xinjiang Tianye Group describes itself as a “large state-owned enterprise in the eighth division of the Xinjiang Production and Construction Corps (XPCC)”, a vast paramilitary and economic organisation that has helped to oversee the surveillance, mass detention and forced labour of hundreds of thousands minority citizens and is subject to US sanctions. The Sunday Times, 9 January
Tesla criticised for opening showroom in China’s Xinjiang region. The company, headed by billionaire Elon Musk, opened the showroom in the city of Urumqi on New Year's Eve and was criticised by the Council on American-Islamic Relations, the largest US Muslim advocacy organisation, for “supporting genocide”. BBC, Al Jazeera, 4 January
Intel apologises in China over Xinjiang supplier statement. CNBC, 23 December
Amazon agreed to allow only five-star reviews for Xi’s book in China. The Times, 20 December
Beijing Games’ corporate brand gamble. Politico China Watcher, 6 January
China crushes Hong Kong’s independent news outlets. On December 29th, Stand News, the territory’s leading pro-democracy news outlet, was forced to shut after hundreds of police raided its office, froze its assets and arrested seven people. Fearing for their reporters’ safety, two other news sites, Citizen News and Mad Dog Daily, halted operations on January 4th. The Economist, 8 January
Lithuania’s president chides government for China spat. Lithuania’s decision to allow Taiwan to open a de facto embassy in its own name was a mistake, the country’s president said, as he rebuked the country’s government for a move that sparked a diplomatic spat with China. Both France and the US vowed to support the Baltic state through anti-coercive instruments and cooperation. Meanwhile, Taiwan announced the creation of a $200 million fund to invest in Lithuanian industries. FT, Politico, 5 January
Five nuclear weapons states issue first joint statement on avoiding an arms race. The leaders of China, France, Russia, the United Kingdom and the United States, also permanent members of the UN Security Council, said they believe strongly that the further spread of such weapons must be prevented and signed a joint pledge to reduce the risk of a nuclear conflict ever starting. Gov.uk, 3 January
China’s growing access to global shipping data raises international concern. Even cargo that never touches Chinese shores often still passes through Beijing’s globe-spanning logistics networks, including through sophisticated data systems that track shipments transiting ports located far from China. Responding to a written question from CRG co-chair Alicia Kearns MP, the government said it does not monitor the use of China's main state-run logistics platform, LOGINK, in British ports. WSJ, 20 December
Beijing watches civil unrest in Kazakhstan with wary eye. China has much to lose should violence in Kazakhstan grind on or dissolve into civil war. For now, though, Beijing is largely sitting on the sidelines as Moscow, an ideological ally with which it shares many goals in Central Asia, handles the trickier task of suppressing dissent in their oil-rich neighbour. WSJ, 9 January
Olaf Scholz hugs China close - but 'Germany first' policy risks US and EU wrath. The Telegraph, 3 January
As China tensions grow, Japan and Australia move to sign defence treaty. WSJ, 5 January
Chinese foreign minister Wang Yi completes 3-nation tour of East Africa as Beijing seeks to deepen ties. SCMP, 2 January
Crisis-hit Sri Lanka asks China to restructure its debt. BBC, 10 January
UK-China news
UK government extends powers to intervene in foreign takeovers. The National Security and Investment Act came into effect last Tuesday, building on the government’s ability to deploy the national security rationale for “calling in” a takeover in 17 areas of the economy that warrant greater scrutiny when overseas investors seek to make an acquisition. Business secretary Kwasi Kwarteng wrote in the Daily Mail: “while we pride ourselves on being open for business, one fact must never be forgotten: our economic security is dependent on our national security.” The Guardian, 4 January
Revealed: Huawei’s Oxbridge millions. British universities have received twice as much funding from Huawei as previous estimates suggest, according to new figures obtained by The Spectator. The biggest recipient of donations and research grants is Cambridge University which has taken £25.7 million from Huawei alone since 2016. CRG Director of Research Julia Pamilih commented: "It’s in all of our interests to have a better picture of reliance and resilience when it comes to China." The Spectator, 30 December
King's College London refuses to remove its honour for Hong Kong justice secretary Teresa Cheng. The Daily Mail, 8 January
Ballooning £40bn trade deficit with China raises fears of British dependency. Britain's trade deficit with China has more than tripled during the pandemic after successive lockdowns sparked a wave of spending on electronic goods. The Telegraph, 4 January
British firms must 'try harder' to make Covid tests, says Sir John Bell. The senior Covid scientist has warned British manufacturers to “stop complaining and try harder” to make working lateral flow tests, after they claimed widespread shortages were caused by undue reliance on China. The Telegraph, 8 January
UK hints at banning Chinese imports with forced labour links. The UK could follow Washington and ban goods imported from the Chinese region of Xinjiang that were made with forced labour, according to senior British minister Penny Mordaunt. Politico, 20 December
Stop our new embassy in London being harassed, China tells Britain. Beijing has demanded that the British government protect its proposed £750 million embassy in London from “harassment” after warnings it will be targeted by human rights campaigners. The Times, 10 January
British Steel lost £140m in 2020 under new Chinese ownership. The Guardian, 30 December
China's Tencent builds stake in UK digital bank Monzo. Reuters, 31 December
Economy & tech
Morgan Stanley lists 4 reasons why China’s growth could be better than expected in 2022. China’s economy appears to be bouncing from a “mini-downturn” into an upswing as the country eases policy, said the investment bank. CNBC, 2 January
China’s property market set for gloomy year after 2021 ends in a funk. Analysts expect housing sales to continue falling this year and foresee more debt defaults by developers, which could become a drag on GDP. Caixin, 6 January
Chinese banks cut back traditional lending as concern over economy mounts.
Banks rushed to meet their annual state-imposed lending quotas last month by buying up low-risk financial instruments rather than issuing loans, a surge that bankers and analysts said reflected financial institutions’ wariness about the country’s slowing economy. FT, 5 January
Chinese Premier Li Keqiang urges bigger tax cuts to ensure economic growth. Bloomberg, 5 January
Huawei logs first annual sales drop in 2021 amid US crackdown. The telecoms giant has also set up a new foundry company called "Huawei Precision Manufacturing" to produce optical communication equipment optoelectronic devices; electronic components and semiconductor discrete device manufacturing. Nikkei Asia, 31 December
China rolls out new regulation to rein in algorithms used on apps as Beijing continues to clip wings of Big Tech firms. Regulators want full disclosure of how tech groups crunch big data and users’ viewing histories to show them products or content. SCMP, 4 January
Chip shortage leaves Tesla and other electric car buyers in China waiting months for new vehicles. SCMP, 9 January
China will step up foreign exchange market monitoring in 2022. Reuters, 27 December
Chinese shipbuilding starts 2022 with record LNG carrier order. The Maritime Executive, 7 January
China focus
Beijing on high alert as China's first Omicron cluster edges closer weeks before the Olympics. Tianjin, located just 80 miles southeast of Beijing, is testing its entire population of 14 million people after Omicron was detected in at least two local residents. This follows a Covid outbreak in the city of Xi’an, where officials were punished after reports emerged of people being denied medical help and running low on food amid a strict lockdown. CNN, FT, 10 January
CCP leadership stresses enhancing historical confidence, unity, fighting spirit. A two-day meeting of the Politburo, themed on studying the Party's history, stressed carrying forward the Party's great founding spirit and upholding its historical experience from the endeavours over the past century. Xinhua, 29 December
More visibility for Xi Jinping’s point man on ideology: Jiang Jinquan. The Diplomat, 29 December
Beijing replaces Xinjiang party boss associated with Uyghur crackdown. Ma Xingrui, the governor of the coastal economic powerhouse Guangdong province since 2017, has replaced Chen Quanguo as the Xinjiang party chief in a provincial leadership reshuffle. Ma, a 62-year-old technocrat, comes to the job with a strong background in science and technology. SupChina, 29 December
How will China change in 10 years under Xi’s common prosperity push? Citizens speak out. Bloomberg, 29 December
Full text: Chinese President Xi Jinping's 2022 New Year address. CGTN, 31 December
Opinion & editorial
West faces hard choices in contest with China. Democracies must demonstrate that their ideas and institutions are a better route to wealth and security than Beijing’s. James Kirkup. The Times, 29 December
From economic miracle to mirage – will China’s GDP ever overtake the US? Analysis: issues of governance, rising debt, Covid and property market turmoil will delay Beijing’s quest to become the global economy’s No 1. George Magnus. The Guardian, 28 December
China’s online nationalists turn paranoia into clickbait. Chaguan - The Economist, 8 January
China renewables: the stretched ethics of solar panels from Xinjiang. FT, 10 January
Long reads
2021 letter: the year in review. Dan Wang, 1 January
End of year note: 2021. 2021 was a year of seismic change for UK-China relations. What will 2022 have in store? Beijing to Britain, 27 December
China’s reform generation adapts to life in the middle class. Peter Hessler. The New Yorker, 27 December
A digital manhunt: how Chinese police track critics on Twitter and Facebook. NYT, 31 December
3 challenges for Chinese foreign policy in 2022. Dingding Chen. The Diplomat, 3 January