China News - 7 February 2023

Event today: Defeating the Dictators. A limited number of tickets have become available for tonight’s discussion of CSIS fellow Charles Dunst's latest book, Defeating the Dictators. The Spectator’s Cindy Yu and Wall Street Journal’s Joseph Sternberg will join Dunst on the panel. Palace of Westminster, 7th February (6-7pm). Register here.

International

Chinese balloon fallout

Second balloon over Latin America is ours - China. The Chinese government has admitted a balloon spotted over Latin America on Friday is from China - but claimed it is intended for civilian use. A similar balloon was shot down in US airspace by military jets on Saturday amid allegations that it was being used for surveillance. BBC, 6 February

US says it does not plan to return spy balloon debris to China. The US has said it does not plan to return the debris from the Chinese spy balloon shot down by the Pentagon on Saturday to Beijing, even after technical experts finish analysing the surveillance capabilities that were on board the craft. National security adviser Jake Sullivan said the US would “exploit” any parts of the balloon or payload that are salvaged to learn more about the system. FT, 7 February

White House on China balloon saga: Blinken to reschedule trip when time is right. Reuters, 6 February

UK PM expected to reshape government departments. UK journalists last night broke the news that Prime Minister Rishi Sunak plans to reorganise his top team and restructure multiple Whitehall departments today. Rumoured changes to departments including international trade, BEIS and DCMS could have significant implications for key China-related strategies and policy implementation. BBC, 7 February

China-sceptic leader of Solomon Islands largest province removed. Daniel Suidani, a vocal critic of China and leader of the Solomon Islands’s largest province, has reportedly been removed from office after a no-confidence vote in the provincial legislature. Suidani has long criticised the decision of Prime Minister Manasseh Sogavare to switch diplomatic allegiance to China from Taiwan in 2019. Al Jazeera, 7 February

Hong Kong 47: Democrats saw legislative majority as ‘lethal constitutional weapon,’ prosecutors argue. Seizing a controlling majority in Hong Kong’s legislature was seen as a potential “lethal constitutional weapon” against the government, prosecutors argued in a high-profile national security case involving 47 pro-democracy figures. HKFP, 6 February

New Zealand PM Hipkins says he’ll voice disagreements with China. Bloomberg, 7 February

Taiwan to speed drone development, take lessons from Ukraine war. Reuters, 7 February

Economy & tech

Sunderland car plant may lose out, Nissan warns. High energy costs and an eroding automotive supply chain in Britain are making Nissan Sunderland, the country’s largest car plant, uncompetitive, the carmaker has admitted. Executives at Nissan said the Sunderland plant needed “government support”. The Times, 7 February

China's Geely won't join Renault's EV company, says French carmaker. Nikkei Asia, 7 February

BYD is more likely to build its own factory in Europe than take one over. BYD Co. Ltd. is exploring setting up its own factory in Europe, a top executive has revealed, suggesting the Chinese carmaking giant is more likely to establish its own plant than take over one from Ford in Germany. Caixin, 7 February

EU and India announce new Trade and Technology Council. The TTC will deepen strategic cooperation on digital transformation, green technologies and trade. European Commission, 6 February

Hong Kong moves up rankings as a top global data centre but still trails Singapore. SCMP, 6 February

China focus

China eases housing curbs in Wuhan, paving way for other cities to follow. Wuhan, China’s eighth-most populous city, will allow local families to buy an additional home in areas with purchasing caps, according to a local government statement. The move paves the way for more cities to follow suit and prop up demand as the property slump in the world’s second-biggest economy drags on. Bloomberg, 7 February 

In a first, Chinese city unveils law for Internet of Vehicles. Wuxi, in the eastern Jiangsu province, has ordered officials to adopt the technology for public transport, traffic monitoring, logistics, and deliveries. Sixth Tone, 6 February

Chinese schools and universities finally ready to resume classes after end of zero-Covid policy. SCMP, 7 February

Long reads & opinion

China’s balloon dispute aims attention at Xi’s leadership. The flap with the United States raises concerns about how China wields its power in a climate where one wrong move could set off an accidental conflict. David Pierson. NYT, 6 February

China hasn’t given up on the Belt and Road. Beijing’s development aid plan is less flashy - but no less ambitious. Matt Schrader and J. Michael Cole. Foreign Affairs, 7 February

China’s tech rectification. What has really changed in the last few years, and what now? Rogier Creemers. The Wire, 5 February

As US-China rivalry heats up, can Australia defuse the risk of superpower conflict? Susannah Patton. The Guardian, 7 February