China News - 8 March 2023

International

China shakes up government with finance and tech to move under direct party oversight. Beijing is set to create new regulatory bodies to oversee broad segments of China’s financial system, as well as the use of data and related digital technologies. Other state institutions, including the Ministry of Science and Technology, would be restructured or have some of their powers redistributed to other departments. Central government agencies would cut their head count by 5% across the board. WSJ, 7 March

Biden administration backs new TikTok bill, wants swift passage. The White House endorsed a bipartisan ‘Restrict Act’ introduced on Tuesday that would give the president the ability to force the sale of foreign-owned technologies, applications, software or e-commerce platforms if they present a national security threat to US users. Bloomberg, 7 March

TikTok meets GCHQ to soothe security concerns. Representatives from TikTok have held what it considers to be productive discussions with the National Cyber Security Centre (NCSC). NCSC is understood to be reviewing the app, though a government source stressed TikTok had not yet been given a clean bill of health by spooks. The Telegraph, 7 March

Opinion: Don’t ban TikTok, put it on probation. Minxin Pei. Bloomberg, 8 March

UK should send more students to China to reduce geopolitical tensions, says head of universities sector. Britain should send more students to study in China in a bid to reduce geopolitical tensions between the two countries, said Vivienne Stern, chief executive of Universities UK. Stern cautioned that the move would have to tread a fine geopolitical balance, as British universities attempt to disentangle themselves from their over-reliance on Chinese students. iNews, 7 March

G7 eyes joint effort to turn e-waste into rare earths, other metals. G7 countries are bolstering cooperation on urban mining, a process that turns electronic waste into a source of rare-earth elements and other industrially important rare metals as they seek to reduce dependence on major producers like China. The UK Foreign Affairs Committee is visiting Chile as part of a critical minerals inquiry. Nikkei Asia, 8 March

UN human rights chief urges China to address issues in Tibet, Xinjiang and Hong Kong. Volker Turk, the new United Nations human rights chief voiced “grave concerns” on Tuesday over conditions in Tibet, Xinjiang and Hong Kong, urging Beijing to take “concrete steps” to address its recommendations for the regions. SCMP, 8 March

China offers Sri Lanka debt moratorium, promises deal on debt treatment. The Export-Import Bank of China has told Sri Lanka it will not seek immediate repayment of debt for 2022 and 2023 and expedite negotiations on "medium- and long-term debt treatment" to finalise specifics in the coming months, according to a letter seen by Reuters. Reuters, 8 March

Beijing official tells Hong Kong deputies to ‘preach the spirit of the central government. HKFP, 7 March

Studying Ukraine war, China's military minds fret over US missiles, Starlink. Reuters, 8 March

Economy & tech

China’s cities struggle under trillions of dollars of debt. China’s economy is being weighed down by the colossal debts of its local governments, which swelled during the pandemic and are starting to come to a head.   About a third of China’s major cities are struggling to pay just the interest on debt they owe, according to a survey by Rhodium Group. WSJ, 7 March

ASML chief warns of IP theft risks amid chip sanctions. The head of ASML, a key supplier to the world’s largest semiconductor manufacturers and Europe’s biggest tech company, said he was guarding against intellectual property theft more fiercely than “ever before”, as a geopolitical tussle forces China to bolster its homegrown semiconductor industry. FT, 8 March

Xiaomi-backed fund raises nearly $1.4 billion for chip investment. An equity investment fund backed by Chinese smartphone maker Xiaomi launched a second funding round with a group of investors led by the Beijing municipal government, moving closer to its 10 billion yuan ($1.4 billion) target to finance the chip industry. Caixin, 8 March

Huawei looks to Middle East and Southeast Asia for growth as headwinds in West gather strength. SCMP, 7 March

Semiconductor industry demands UK strategy to attract investment. CityAM, 7 March

Long reads & opinion

Technology companies are collateral damage in the US-China divorce. Katie Prescott. The Times, 8 March

Return of the wolf warriors? China’s fiery foreign minister Qin Gang. The trusted ally of President Xi says China has to face the west’s ‘jackals and wolves’ head on. Amy Hawkins and Helen Davidson. The Guardian, 7 March

China’s new State Council: What analysts might have missed. Cheng Li and Mallie Prytherch. Brookings, 7 March

Fractured foundations: Assessing risks to Hong Kong’s business environment. Logan Wright. Atlantic Council, 7 March