China News - 11 May 2023
International
UK MPs urge minister to do more to free Hongkongers’ trapped retirement savings. A letter signed by more than 90 MPs, including 10 former ministers, calls on the trade minister Dominic Johnson to address the issue. Patrick Wintour. The Guardian, 10 May
New China-focused think tank launches in Westminster. The China Strategic Risks Institute (CSRI) is set to produce analysis on the strategic risks and opportunities posed by the rise of China, covering geopolitics, economics, and security. The think tank is led by executive director and former Hong Kong lawmaker Dennis Kwok. Twitter, 10 May
Hong Kong passes law to limit work of foreign lawyers in national security cases. The amendment, which was passed unanimously by the Legislative Council, gives the chief executive the power to veto any foreign lawyer from working on cases brought under the 2020 National Security Law. It marks the conclusion of a months-long effort to block a UK lawyer from defending Jimmy Lai. Helen Davidson. The Guardian, 11 May
US sanctions on Chinese defence minister jeopardise chances of top-level dialogue. US defence secretary Lloyd Austin wants to meet Li Shangfu, China’s new defence minister, at the Shangri-La Dialogue security forum in Singapore in June. However Li was placed under sanctions by the US in 2018 in relation to Chinese imports of Russian arms when he was serving as a general. Legally Li can meet Austin outside of the US, but China is unlikely to agree to a meeting while the sanctions remain in place. Demetri Sevastopulo. Financial Times, 11 May
Germany to proceed with Chinese port deal despite security concerns. The German government said yesterday it will proceed with a controversial plan to sell a 24.99% stake in Hamburg port terminal to China's state-owned Cosco. Hans von der Burchard. Politico, 10 May
Ecuador and China sign free trade agreement. The FTA, which still needs to be ratified by Ecuador’s national assembly, would allow preferential access for 99 per cent of exports to China. The deal is likely to face resistance in Ecuador’s opposition-led congress, where President Guillermo Lasso faces possible impeachment on embezzlement charges. Depending on the outcome of a trial next week, the president may no longer be in office when the deal reaches the legislature. Joe Daniels. Financial Times, 11 May
Australian budget outlines AUD 1.9bn package to expand engagement with Pacific Island countries. The Australian defence force will expand engagement with Pacific Island countries ‘including through the provision of security infrastructure and maritime security capability’. Daniel Hurst. The Guardian, 9 May
Conflict in Sudan puts Chinese loans at risk. The Sudanese conflict has disrupted an IMF-backed reform programme and further jeopardised Khartoum’s ability to repay its creditors, including China. Sudan’s outstanding debts to China stood at US$5.12bn in early 2022, according to Sudanese central bank documents. James Kynge and Andres Schipani. Financial Times, 10 May
China and US debt woes likely to dominate G7 talks. Other key themes to be discussed at this week's G7 gathering include ways to strengthen the global financial system, steps to prevent Russia from circumventing sanctions over its invasion of Ukraine, and global economic risks such as high inflation, say Japanese officials. Leika Kihara and Tetsushi Kajimoto. Reuters, 10 May
Economy & tech
Audits by PwC and KPMG in China contained ‘unacceptable’ flaws, US regulator says. The Public Company Accounting Oversight Board found deficiencies in audits it examined by KPMG Huazhen in mainland China and PwC’s Hong Kong operation. PCAOB inspectors had previously been blocked by Beijing until an agreement was reached last year. Stephen Foley. Financial Times, 10 May
Toyota plans big electric vehicle push in China. Forecasts predict a 10% increase in annual operating profit to US$22bn. Koji Sato, who took over as CEO this month, is tasked with maintaining its lead in an industry that is rapidly shifting to electric vehicles and navigating geopolitical risks posed by the US-China dispute. Kana Inagaki. Financial Times, 10 May
China urges big SOEs to play a key role in its drive to attain self-reliance in technology. China aims to turn state giants into leading tech companies with global influence. The science and technology ministry issued the announcement following a meeting with the state-owned Assets Supervision and Administration Commission. Reuters, 10 May
Opinion & long reads
The elusive fix for China’s budget crisis. Could property taxes rescue cash-strapped local governments in China? Keith Bradsher. New York Times, 10 May
Business in China just got riskier for Canadians – but this was going to happen anyway. An op-ed by senior members of the newly launched China Strategic Risks Institute. Dennis Kwok and Sam Goodman. The Globe and Mail, 10 May
‘The full treatment’: China sends a message with raid on consultancy. Crackdown on Capvision, Bain and Mintz is at odds with Beijing’s charm offensive to foreign investors back to the country. Joe Leahy, Ryan McMorrow and Edward White. Financial Times, 9 May
Just how good can China get at AI? The triple shortage of data, hardware and expertise has been a genuine hurdle for Chinese AI ambitions. The Economist, 9 May
Dealing with the threat of Chinese cellular (IoT) modules. The threat from Chinese cellular modules is far greater and more systemic than a danger posed by an individual company or sector, argues Parton. Charles Parton. Council on Geostrategy, 10 May
Meet the Texas startup that recycles rare-earth magnets, bypassing China. Noveon Magnetics one of several firms is building magnet factories in the US to meet demand for domestically manufactured magnets. Amy Feldman. Forbes, 10 May