China News - 22 August
International
British foreign minister to visit China this month after delay- sources. Cleverly was expected in China at the end of July, but the trip was postponed following Qin Gang’s departure. This is a long-awaited visit hoping to stabilise the turbulent relationship between the UK and China. Joe Cash, Martin Quin Pollard and Laurie Chen. Reuters, 21 August
Don’t say “hostile state”, Foreign Office tells staff. This phrase has been effectively banned in government documents and internal communications. The FCDO said “states aren’t inherently hostile themselves, they just do hostile things”. This change in language is thought to be part of an effort to improve UK-Chinese diplomatic relations. However, it also means that Russia, North Korea and Iran are no longer referred to as “hostile states”. Matt Dathan. TheTimes, 21 August
Beset by domestic economic woes, China’s Xi visits South Africa for his second trip abroad this year. Xi Jinping flew to Johannesburg on Monday as part of a three day visit for the BRICS summit. This is only his second trip abroad, as his last visit was to Moscow in March. Nectar Gan. CNN, 21 August
China and Iran pledge cooperation ahead of BRICS summit, as Tehran seeks to join bloc. Wang Yi met with Iran’s foreign minister, Hossein Amir-Abdollahian, two days before the summit, where Iran is hoping to become the sixth member. During their conversation, the Iranian foreign minister told Yi that Tehran hoped to strengthen cooperation with Beijing in both regional and international matters. Cyril Ip. South China Morning Post, 21 August
In Tanzania, Beijing is running a training school for authoritarianism. The CCP is making a clear attempt to export its model of governing and influence African politics. Beijing’s first overseas training school teaches African leaders its authoritarian alternative to Western democracy. Bethany Allen-Ebrahimian. Axios, 20 August
Beijing lets North Korea state airline resume flights to China. Three years after Covid put a stop to international travel, Air Koryo has resumed its flights to China. The approval comes amid increased contact between China and North Korea. Ella Cao, Lun Tian and Sophie Yu. Reuters, 21 August
China points to CIA again in second case of alleged spy recruitment. The Chinese Ministry of State Security announced a 39 year old official, Hao, as being a spy recruited by the CIA while at university in Japan. This is the second case of alleged espionage this month, where the CCP have directly pointed to the CIA. Yuanyue Dang. South China Morning Post, 21 August
Economy & Tech
China’s state banks seen mopping up offshore yuan liquidity- sources. This action effectively raised the cost of shorting the yuan, at a time when the local unit is under mounting deprecation pressure. Reuters, 21 August
Why China remains hungry for AI chips despite US restrictions. American AI chips on sale in China are considerably less effective than products available elsewhere in the world. China’s leading internet companies have continued to place orders of $5bn for Nvidia chips. The impact of soaring global demand for chips is likely to underpin their second-quarter financial results. Richard Waters and Qianer Liu. Financial Times, 21 August
BHP profits fall 37% as miner flags China uncertainties. The Australian group relies heavily on Chinese construction and iron ore. The group has reported $13.4bn in profits, down from $21.3bn recorded last year. This is the lowest annual profit in three years as the world’s largest miner by market capitalisation finds their success hinged on Beijing’s efforts to revive its property and steel sectors. Nic Fildes. Financial Times, 22 August
Mainland China bans Taiwanese mangoes in latest trade barb, Taipei hits out at “one-sided” act. Amid worsening political ties, this is China’s latest hit to the island’s agricultural sector. Beijing announced that “pests” were discovered on Taiwanese mango imports and could harm China’s “ecological safety”. Ralph Jennings. South China Morning Post, 21 August
Opinion & long-reads
China’s “whack-a-mole” economic playbook leads to confusion. As China is attempting to save its struggling economy, there is confusion over the diagnosis of the problem. Without the correct diagnosis, no sure solution can be reached. Stephen Roach. Financial Times, 21 August
China hits the East Asian demographic wall. China, like Japan and South Korea, has a declining population. The country’s economic success grew as a result of export-led industrialisation and low-cost labour; the current economic slowdown can be closely linked with the ageing and shrinking population. Gideon Rachman. Financial Times, 21 August