China News - 21 September 2022
This newsletter is a little longer to provide a round-up of key stories from summer recess. 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.
UK-China
Leadership race sees candidates compete to take tougher stance on China. The race to become prime minister saw candidates clash over who would take the toughest stance on China, suggesting that whoever won would usher in a rocky new phase of Sino-British relations. Victor Liz Truss made a number of China-related pledges throughout the campaign and is set to adjust the Integrated Review to combat new threats from Russia and China. The Spectator’s Cindy Yu analysed what it would mean for UK foreign policy should Truss put China on the same footing as Russia. Politico, FT, 21 September
Truss vows to speed up Commonwealth trade deals to curb China’s ‘malign influence’. The Telegraph, 27 July
UK government blocks Chinese takeovers under National Security and Investment Act. The first use cases of the NSIA by the Department for Business, Energy and Industrial Strategy (BEIS) included blocking a takeover of a Bristol-based electronic design company and a computer-vision technology from Manchester University, both by China-based entities. A decision on the takeover of British semiconductor manufacturer Newport Wafer Fab is expected to be made by early October. Bloomberg, 17 August
Beijing-backed Chinese language schools in UK to be replaced with teachers from Taiwan. Under a new proposal being seen by MPs, Confucius Institute funding could be redirected to alternative programmes such as those from Taiwan. Improving China capabilities remains a key focus for some British policymakers, with new data revealing only 14 Foreign Office officials are being trained to speak fluent Mandarin each year on average. The Observer, The Times, 18 September
UK Foreign Affairs Committee to visit Taiwan later this year. The Guardian, 1 August
Government extends Hong Kong visa route to young people born after handover to China. Sky News, 3 August
Growing political scrutiny over TikTok as UK Parliament closes its account. FT, 3 August
International
Pelosi visit to Taiwan heightens cross-Strait tensions. US House Speaker Nancy Pelosi’s visit to Taiwan plunged China-US relations to a new low, prompting a muscular and protracted Chinese military response and a new white paper on the ‘Taiwan Question’. China’s Ambassador to the UK, Zheng Zeguang, was summoned to the Foreign Office to explain his country’s reaction. Since the US speaker’s visit, groups from the US, Japan and Lithuania have arrived in Taipei, vowing they won’t be bullied by Beijing. The Guardian, 27 August
Joe Biden says US would defend Taiwan if China attacks. The Times, 19 September
Xi in Central Asia for first foreign trip in two years. Chinese President Xi Jinping this week called on Russia and other members of the Shanghai Cooperation Organisation (SCO) to support each other in preventing foreign powers from instigating "colour revolutions". He also met Russian President Vladimir Putin in Uzbekistan – their first encounter since the war in Ukraine started. Analysts have contested that readouts from the meeting make the relationship look unbalanced, with Russia increasingly dependent on China. Reuters, 16 September
China faces pressure at United Nations after Xinjiang report. Diplomats and human rights advocates are stepping up pressure on the UN to act over China’s treatment of the Uyghurs and other ethnic groups after the UN Human Rights Council found in a landmark report that China had potentially committed “crimes against humanity” in Xinjiang. Al Jazeera, 20 September
China’s spending on Russian energy climbs to record $8.3 billion. Bloomberg, 20 September
Leaders commit to regional unity at Pacific Islands Forum as China and climate dominate. FT, 13 July
China forgives matured interest-free loans to 17 African countries. Bloomberg, 23 August
China focus
China sticks to ‘zero-Covid’ policy as lockdowns continue to cause disruption. China placed millions of its citizens in key cities, such as Chengdu, Shenzhen and Guangzhou, under renewed lockdown after fresh outbreaks of Covid-19 over the summer. Since August 20, at least 74 cities with a combined population of 313 million have imposed lockdowns that cover entire cities, districts or multiple neighborhoods. The Chinese government persists in its hardline policy on containing the virus in the face of more evidence that it is suffocating the economy. The Guardian, 31 August
China grapples with economic slowdown ahead of 20th Party Congress. China recorded its slowest quarterly growth since 2020 as the State Council promised a number additional policies to “promote economic stabilization and upturn”, including additional $44bn in credit support and more infrastructure projects. Meanwhile, China's ruling Communist Party opens its 20th congress on October 16, with Xi Jinping poised to secure an historic third leadership term. The Times, BBC, 17 August
Historic droughts and heatwaves hit China, damaging industry and agriculture. China announced a national drought alert for the first time in nine years, with temperatures reaching a high of 43.4C in Chengdu. The extreme summer weather led to increased household energy consumption, limits to industrial and commercial electricity supplies and strains on China’s climate commitments. FT, 22 August
Anger in China after 27 people killed in Covid quarantine bus crash. The Guardian, 19 September
Economy & tech
Landmark US CHIPs Act signed into law. President Biden signed the CHIPs Act into law, aimed at improving US competitiveness against China. The $250 billion bill provides science funding and subsidies for US semiconductor manufacturers. Washington also imposed new restrictions on exports of chips with AI-related applications to China and Russia. SCMP, 10 August
China securities regulator says will implement Sino-US audit deal. The agreement between China and the United States will allow US regulators to vet accounting firms in mainland China and Hong Kong, potentially ending a long-running dispute that threatened to banish more than 200 Chinese companies from US exchanges. Reuters, 2 September
China hits Big Fund chip executives with corruption probes. China’s top anti-corruption watchdog launched investigations against several executives linked to the country’s largest chip investment fund, as Beijing stepped up scrutiny of the sector in its race for technological self-sufficiency. FT, 11 August
China ride-hailing giant Didi fined $1.2bn after probe. BBC, 21 July
HSBC rejects call from top shareholder to split Asia Pacific business from London headquarters. FT, 2 August
Key analysis:
‘On a par with the Russians’: rise in Chinese espionage alarms Europe - The Financial Times discusses the concerns about Beijing’s intelligence operations among Western spy chiefs. FT, 30 August
The China threat our politicians don’t seem to have noticed. Charles Parton used an article in The Spectator to urge British policymakers to take the threat of Chinese internet of things (IoT) devices more seriously. The Spectator, 30 July
Xi Builds a Security Fortress for China, and for himself - Chris Buckley and Steven Myers analyse the expansion of national security under Xi in an attempt to protect his position and the CCP’s grip on power. NYT, 10 August
Beyond blocs: global views on China relations - Think tank MERICS collated a range of global perspectives on China and US-China competition to cast light on views outside of the ‘systemic rivalry framework’ adopted by Euro-Atlantic countries. MERICS, 18 August
CRG podcasts. Catch up on all our podcasts from the summer here.