China News - 28 January 2022

International

Slovenia latest EU nation hit by China for backing Taiwan. Beijing has imposed trade sanctions on Slovenia over its support for Taiwan as the EU launched legal action against China for taking similar steps against Lithuania. China escalated the dispute by terminating contracts with Slovenian businesses and pulling out of investment deals after Janez Jansa, the prime minister, promised to build closer ties with Taiwan. The Times, 27 January

China says UN rights chief welcome in Xinjiang but not for investigation. According to a people familiar with the matter, Beijing also insisted UN rights chief Michelle Bachelet’s office hold off on publishing a report into Xinjiang ahead of the Games, as requested by Washington. SCMP, Reuters, 28 January

US bans telecom giant China Unicom over spying concerns. The Federal Communications Commission (FCC) said it had voted unanimously to revoke authorisation for the company's American unit to operate in the US over "significant" national security and espionage concerns. The announcement comes after larger rival China Telecom had its licence to operate in the US revoked in October. BBC, 28 January

France snubs China with its Indo-Pacific forum. As France prepares to roll out the red carpet in Paris next month for a forum where EU ministers will meet 30 Indo-Pacific foreign ministers, the absence of China will be all too conspicuous. The event will include discussion of the ‘Global Gateway’ initiative, the name given to the EU's aspirations of matching Beijing massive Belt and Road InitiativePolitico, 27 January

F-35C crash leaves US fighter jet sunken in hostile South China Sea. There are fears that submarines from China, which claims the area, could be first to reach wreckage that plunged from deck of aircraft carrier. The Guardian, 28 January

For Olympic sponsors, ‘China is an exception’. Pressure is mounting on companies to condemn the country’s human rights violations, but executives say the Games should not be politicised. NYT, 28 January

Xi extends congratulations on 2022 Chinese New Year celebration hosted by British trade organisation the 48 Group Club. Xinhua, 26 January

US, Taiwanese vice-presidents have ‘brief exchange’ in Honduras. SCMP, 28 January

Latvia slams Germany’s ‘immoral’ relationship with Russia and China. FT, 28 January

Number of Hong Kongers moving to Taiwan hits a record. Bloomberg, 27 January

Economy & tech

Reuters exclusive: China regulator talks to foreign banks to soothe economic concerns. The China Securities and Regulatory Commission (CSRC) met this week with the executives of top western banks and asset managers to reassure them about the country's economic prospects after regulatory crackdowns in 2021, three sources told Reuters on Friday. Reuters, 28 January

Overseas income doubles for UK consultants. International clients turned to UK-based remote workers in the pandemic, driving a boom in exports of skilled services. FT, 28 January

Oaktree risks showdown with Beijing over Evergrande debt. The Los Angeles-based asset manager has a secured loan to one of Evergrande’s most-prized projects in mainland China - a resort on the Yellow Sea coast called “Venice” - that would allow it to take control of the land in the event of a default, according to a letter to investors and a person close to the matter. FT, 27 January

Great Wall Motor ploughs $1.9bn into Brazil as global expansion picks up. Latin America is crucial to Chinese carmakers’ efforts to diversify markets and access resources. FT, 28 January

China halts scores of IPO plans amid probe into underwriters. Reuters, 28 January

Chinese Big Tech firms among world’s top-ranked filers of patent applications as metaverse interest surges. SCMP, 27 January

China focus

‘Common prosperity’ to squeeze cash-strapped local governments. Beijing has pledged to expand public services in education, healthcare and housing, but much of cost burden is expected to fall on heavily-indebted local governments. WSJ, 25 January

Xi Jinping puts focus on ‘clean’ technologies during trip to China’s coal heartland Shanxi. President Xi called for efforts to strengthen energy production and ‘accelerate green and low-carbon technological breakthroughs’. SCMP, 28 January

Beijing tightens Covid restrictions in parts of capital ahead of Olympics. FT, 27 January

Opinion & editorial

Hong Kong is on its knees and China must decide whether it lives or dies. China is gambling territory's status as an international hub by pursuing a hopeless zero-Covid strategy. Ben Marlow. The Telegraph, 27 January

The scramble for semiconductors is our era’s industrial Great Game. China and the US are battling over tech manufacturing supremacy - capacity as well as innovation will determine who wins. John Thornhill. FT, 27 January

EU gives China a nudge rather than a slap over Lithuania. Calling out China for illegal activity is significant but a WTO case lacks teeth. Stuart Lau and Sarah Anna Aarup. Politico, 27 January

What China thinks of possible war in Ukraine. Shared hostility to America makes China close to Russia, but cautious. Chaguan - The Economist, 28 January

Long reads

AUKUS: Strategic drivers and geopolitical implications. What are the geopolitical implications of the agreement? And where is it going? James Rogers. Council on Geostrategy, 27 January

The geopolitics of CPTPP enlargement. Three new applications to a Pacific-region trade deal are posing complex strategic choices and include a proxy battle between Washington and Beijing. Thitinan Pongsudhirak. GIS, 28 January

Will China dominate the world of semiconductors? America and its allies are crafting rules to try to prevent it. The Economist, 28 January

Book review - The Subplot: What China is Reading and Why it Matters. An illuminating insight into the web fiction, sci-fi and subtle dissent read by one-fifth of humanity. Isabel Hilton. FT, 27 January