China News - 11 January 2023

International

UK and Japan to sign defence pact to counter China threat. Rishi Sunak, the UK prime minister, and his Japanese counterpart, Fumio Kishida, will on Wednesday sign a “reciprocal access” defence deal. Sunak said: “This Reciprocal Access Agreement cements our commitment to the Indo-Pacific and underlines our joint efforts to bolster economic security.” The talks in London will also see the two leaders discuss Britain’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade bloc. Gov.uk, FT, 11 January

Shanghai investment group behind £28 million purchase of Cambridge semiconductor firm. A Shanghai investment group owned by a number of private and state-owned investors is behind China’s deal to take over UK semiconductor company Flusso, which develops flow sensor technology. One of the major investors is a firm 73% controlled by the Chinese government. CRG chair Alicia Kearns has written to the Business Secretary, asking for the takeover to be called in for review under the National Security and Investment Act. SCMP, UKtech News, 11 January

New US House creates committee focused on competing with China. The US House of Representatives voted overwhelmingly to create a select committee on China, using one of its first votes since Republicans took control to stress members' desire to counter Beijing's growing international influence. The committee will investigate the issue and make policy recommendations. Reuters, 10 January

China’s population likely fell in 2022 as births hit new low. China’s population likely started shrinking last year for the first time in decades, experts say, a significant milestone that will have long-term repercussions for the economy. The drop could worsen this year as Covid spreads across the nation. Bloomberg, 11 January

China’s new foreign minister heads to Africa for first trip. Qin Gang, who until recently was ambassador to the United States, will visit Ethiopia, Gabon, Angola, Benin and Egypt. The new foreign minister is following in the footsteps of his predecessors, who have for more than three decades started each year with a trip to Africa. AP, 9 January

Tokyo lodges protest after China punishes Japanese travellers over Covid test requirements. Chief cabinet secretary Hirokazu Matsuno characterised the move as an act of revenge rather than a public health measure and requested China reverse the decision. The Guardian, 11 January

Philippine court voids oil exploration pact involving China. Nikkei Asia, 11 January

China building laser-beam drone for permanent flight. The Times, 10 January

Economy & tech

TikTok chief meets with top EU officials. TikTok chief executive Shou Zi Chew met European Union officials to discuss the Chinese-owned company’s plan to comply with new EU rules and concerns over TikTok’s recent disclosure that it surveilled two journalists. The meetings come shortly before new European tech legislation takes effect and amid heightened scrutiny of the social-media giant in the US. WSJ, 10 January

An investing enigma in London is helping direct $3 trillion in China reserves. At low-profile Gingko Tree Investment, some 30 employees carry out investment research for its owner, China’s State Administration of Foreign Exchange. Their advice helps direct how a portion of US$3 trillion (RM13.12 trillion) in Chinese foreign reserves is invested. Bloomberg, 11 January

Alibaba signs cooperation agreement with authorities in China's Hangzhou. The Chinese e-commerce giant has signed a cooperation agreement with the government of Hangzhou, with local authorities formulating specific measures to help develop the online platform economy. Reuters, 10 January

Chinese bank tries to entice wealthy customers with mRNA vaccines. FT, 10 January

Long reads & opinion

Has China admitted failure for zero Covid? Cindy Yu. The Spectator, 11 January

Covid will complicate China’s efforts to re-engage with the world. Foreign critics have seized on the country’s lack of transparency. The Economist, 10 January

The Chinese Communist Party wants the property bubble back. Personal and political fortunes were made in two decades of real estate madness. Robert Foyle Hunwick. Foreign Policy, 10 January

China now publishes more high-quality science than any other nation. Caroline Wagner. The Conversation, 10 January