China News - 22 May 2023

International

G7 issues ‘strongest condemnation of China’. Member countries step up response to China, criticising everything from its militarisation of the South China Sea to its use of ‘economic coercion’, the G7 urged Beijing to push Russia to withdraw its troops from Ukraine. Financial Times, 21 May

PM Rishi Sunak: ‘Authoritarian China poses the biggest challenge of our age’. Sunak has stopped short of designating China a ‘threat’, joining calls for ‘derisking, not decoupling’ with China. The UK’s response, he said, is completely aligned with allies at G7 summit. Daniel Martin. The Telegraph, 21 May

Chinese embassy asks for London to stop slandering China to avoid further damage to China-UK relations. The statement was issued on Sunday following Sunak’s remarks at the G7 summit. Reuters, 22 May

President Biden expects imminent ‘thaw’ in US-China relations. The Biden Administration is considering lifting sanctions against Chinese defence minister Li Shangfu, said the President in a news conference at the end of G7 summit. Demetri Sevastopulo. Financial Times, 21 May

China wants to subordinate west, US politician claims on UK visit. Mike Gallagher, Republican chair of a newly created China committee in Congress, led a delegation of US politicians on a two-day trip to the UK. The delegation met with defence secretary Ben Wallace. Dan Sabbagh and Amy Hawkins. The Guardian, 19 May

US and Taiwan sign first phase of trade initiative. So far, the deal streamlines customs procedures for imports, establishes support for small to medium-sized businesses, and seeks to raise trade-linked transparency. The initiative lays the foundation for negotiations of a free-trade agreement between Washington and Taipei, according to the island’s premier. Ralph Jennings. South China Morning Post, 20 May

‘War is not an option’: Tsai Ing-wen vows to maintain status quo. On the seventh anniversary of her presidency, Tsai said that Taiwan would not provoke and would not bow to mainland Chinese pressure. South China Morning Post, 20 May

Wagner-linked group buys helmets from China despite sanctions. A Wagner-connected, Russia-based company called Broker Expert bought 20,000 polymer-based helmets from a small Chinese company called Hangzhou Shinerain Import And Export Co in November and December last year, according to customs declarations. Miles Johnson and Max Seddon. Financial Times, 19 May

China doubles down on controversial African oil pipeline. US$5 billion project has been abandoned by Western lenders after strong opposition from environmental and human rights groups. The Export-Import Bank of China and several other Chinese banks are set to finance the East African Crude Oil Pipeline, according to Uganda’s energy ministry. Jevans Nyabiage. South China Morning Post, 21 May

Coalition says Anthony Albanese should not go to China until trade sanctions are lifted. Australia’s shadow minister for foreign affairs, Simon Birmingham, said that China is acting in breach of its commitments under the China-Australia Free Trade Agreement. The country therefore deserves ‘absolute clarity’ that sanctions will be lifted before the prime minister entertains a formal state visit to Beijing. Amy Remeiki and Daniel Hurst. The Guardian, 21 May

Hong Kong student arrested over comments on social media while studying abroad. A Hong Kong student studying at a Japanese university was arrested upon returning home last month for violating the national security law. The student had voiced support for Hong Kong independence in a Facebook post two years ago. Karin Kaneko. Japan Times, 21 April

Singaporean comedian Uncle Roger has social media accounts suspended in China, as Chinese authorities crackdown on comedians. The comedian, real name Nigel Ng, posted a video making fun of the country’s authoritarian government. Chi Hui Lin and Helen Davidson. The Guardian, 22 May

Economy & tech

Beijing bans Micron products citing national security concerns. The Cyberspace Administration of China has announced that Micron has failed its national security review. Micron, which is the biggest US maker of memory chips, reportedly poses ‘serious network security risks’. As a result, the regulator has banned operators of key infrastructure from buying them. Eleanor Olcott and Demetri Sevastopulo. Financial Times, 21 May

Micron Technology announces US$3.6 billion investment in Japan. The Japanese government is ambitiously pushing semiconductor industry amid the rising tension between U.S. and China. Kate Park. TechCrunch, 18 May

Global investment banks’ profits drop in China. Credit Suisse, Deutsche Bank, Goldman Sachs and HSBC reported losses in their China-based units in 2022 and Morgan Stanley’s profits fell. The lenders cited US-China tensions, Covid-19 restrictions, China’s property crisis, reduced onshore stock trading, restructuring costs and fierce competition for the meagre returns. Kaye Wiggins, Cheng Leng and Thomas Hale. Financial Times, 22 May

US TikTok users file lawsuit to block Montana ban, cite violation of First Amendment rights. Governor Greg Gianforte has signed legislation making it unlawful for app stores to offer the video-sharing app within the state. TikTok users argue the state seeks to ‘exercise powers over national security that Montana does not have and to ban speech Montana may not suppress’. South China Morning Post, 19 May

Microsoft says China has approved plan to acquire video game-maker Activision Blizzard. China’s State Administration for Market Regulation has cleared the merger without conditions. The US$69 billion takeover was approved by the EU last week. South China Morning Post, 21 May

China faces ‘big’ debt risks in drive to narrow urban-rural gap. Addressing the Tsinghua PBCSF Global Finance Forum, officials and academics warned China’s campaign to push rural funding and infrastructure could give rise to big financial risks. Mandy Zuo. South China Morning Post, 21 May

Opinion & long reads

How ‘Decoupling’ From China Became ‘De-risking’. New terminology reflects an evolution in the discussion over how to deal with a rising, assertive China. Damien Cave. New York Times, 20 May

Don’t call it a Quint, but South Korea does have a future with the Quad. South Korea, Cynkin argues, is in the wrong place at the right time when it comes to the Quadrilateral Security Dialogue. Thomas Cynkin. Atlantic Council, 20 May

Can US rail plan woo Middle East states away from China’s belt and road? The ambitious proposal to connect Gulf and Arab countries with India via network of ports and railways labelled ‘hare-brained’ by a former US ambassador to Saudi Arabia. Kawala Xie. South China Morning Post, 21 May

The U.S. Needs Minerals for Electric Cars. Everyone Else Wants Them Too. The US is entering into an array of international agreements to secure the critical minerals necessary for the energy transition. Ana Swanson. New York Times, 21 May

Upcoming Presidential Election Will Clarify Taiwan's China Policy. The Kuomintang confirmed New Taipei Mayor Hou Yu-ih as its presidential candidate on May 17. He has said he neither supports Taiwan's independence nor Beijing's ‘One Country, Two Systems’ formula. Derek Grossman. RAND, 19 May

To invest or cut loose: western carmaker’s China conundrum. VW and Ford lay out rival approaches to the world’s largest auto market. Peter Campbell. Financial Times, 19 May