China News - 19 January 2023

International

UK to toughen China policy as MPs call for investment curbs. Ministers are in talks with senior MPs who want to see Chinese firms excluded from sensitive British industries with a “Sage-style” committee of experts screening proposals for infrastructure funding. Rishi Sunak is understood to have held talks with MPs who want a tougher line on China and is considering their recommendations. One proposal tabled by Alicia Kearns, chair of the CRG, would see the Procurement Bill amended to change how companies which may be a national security risk are excluded from sensitive industries. iNews, 19 January

Xi Jinping warns of Covid spread as millions travel for lunar new year. Xi Jinping has expressed concern about the spread of Covid-19 to rural China on the eve of the lunar new year, in the Chinese president’s most direct acknowledgment of the worsening health crisis since suddenly abandoning his zero-Covid strategy in early December. Officials have forecast that the country’s 1.4bn people will take 2bn trips to see family in the coming weeks — about two-thirds of pre-pandemic levels. FT, 19 January

Yellen, Liu avoid airing complaints as US-China tone warms. US Treasury Secretary Janet Yellen and China’s Vice Premier Liu He discussed points of disagreement during a break from official proceedings in their first face-to-face meeting, a sign that the world’s top economies are seeking to spotlight a constructive tone in their discussions. Yellen and Liu also discussed tech policy, with China “hoping the US side pays attention to the policies’ impact on both sides,” a readout said. Bloomberg, 18 January

Don’t appease China, warns Taiwan’s likely presidential successor. Appeasing China will not bring peace, Taiwan’s vice-president William Lai has said, days after he was elected head of the ruling party in a move that makes him a prime presidential contender at the next election. He urged Taiwanese people to unite in the face of “the expansion of China’s authoritarianism”. The Guardian, 19 January

China further supports foreign-funded R&D centers. China is rolling out a raft of measures to encourage foreign investors to set up innovation centres in the country and attract professional talent. The move comes amid the country’s stepped-up efforts to accelerate innovation across the board, with leaders and policymakers in the world’s second-largest economy repeatedly highlighting their intentions to turn it into a global tech powerhouse. SCMP, 19 January

Demand for oil to hit an all-time high, says energy agency. Global oil demand will hit a record high this year, driven by the lifting of Covid restrictions in China and threatening a supply shortage, the International Energy Agency has predicted. Almost half of the growth in global consumption will coming from China. The Times, 18 January

Ferdinand Marcos Jr says Taiwan tensions ‘very, very worrisome’ for Philippines. Philippine president Ferdinand Marcos Jr has described the rise in tensions between the US and China over Taiwan as “very, very worrisome for us”, but said he expected Manila’s military ties with Washington to intensify. FT, 19 January

Hong Kong police arrest six for sedition in fresh crackdown. Authorities arrested six people for sedition in a raid on a market selling pro-democracy books, trinkets and souvenirs, signalling there will be no letup in the crackdown on dissent in the city. WSJ, 18 January

India foreign minister visits Sri Lanka with stronger ties, China in focus. Reuters, 19 January

Asian-Americans welcome Biden’s first national strategy for their communities’ challenges. SCMP, 19 January

Economy & tech

Foreign investors pulled $91 billion from China’s bond market last year. Foreign investors reduced their exposure to China’s domestic bond market last year, the first time they have become net sellers since the central bank started releasing data a decade ago. WSJ, 18 January

China to launch state-owned ride-hailing app to take on Didi. State media on Wednesday reported that the app, called Strong Nation Transport and backed by the transport ministry and other government agencies, would launch soon and eventually allow users to book cars available through almost all of the country’s ride-hailing providers. FT, 18 January

Deutsche Bank prices ‘panda bond’ to raise Rmb1bn. FT, 19 January

Longi plans world’s largest solar factory in China’s Shaanxi province. SCMP, 18 January

Long reads & opinion

A shrinking, aging China may have backed itself into a corner. A demographics challenge has been building for years, but Beijing’s preparations are lagging. NYT, 18 January

Dell Me Something New: Ditching Chinese chips is great, but not enough. Emily de La Bruyere and Nathan Picarsic. Force Distance Times, 18 January

A tragedy pushed to the shadows: the truth about China’s Cultural Revolution. Tania Branigan. The Guardian, 19 January

China's Political-Economy, Foreign and Security Policy: 2023. Asia Society Policy Institute, 18 January