Biden's tariff hike, Putin's visit to China, and the new property sector rescue package
Biden's tariff hike, Putin's visit to China, and the new property sector rescue package
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THROUGH THE LENS
IN FOCUS
Shocking!
Paul Krugman on why Biden is putting tariffs on Chinese imports.
So the first China shock was a real problem, and even generally pro-free-trade economists — economists who have no sympathy for crude, Trump-style protectionism — now worry about the effects of rapid increases in imports.
But wait: Why do I say the first China shock? Because there’s now clearly a second China shock building.
This new shock largely reflects China’s weakness rather than its strength. The Chinese economy is in trouble. Consumer spending is very low as a share of national income, and the high levels of investment spending that used to fuel the economy have become unsustainable as a declining working-age population and slowing technological progress lead to diminishing returns. China was able to mask these problems for a while with a huge housing bubble and a bloated real estate sector, but that game appears to be up.
The obvious solution is to transfer more income to households, strengthening consumer demand. But Xi Jinping, China’s leader, seems weirdly unwilling to do the obvious, still focused on production rather than consumption. I’ll leave it to China experts to explain this reluctance — is it geopolitics? Fear that the Chinese people will become lazy?
Whatever the ideology or strategy behind China’s refusal to increase consumer spending, the only way out given that refusal is to run giant trade surpluses, dumping the stuff China produces but can’t or won’t consume in other countries’ markets.
But what the Biden administration is basically saying is: No, you don’t get to do that. You’re too big a player in the world economy to dump the results of your policy failures in other countries’ laps.
Why can’t the United States just accept cheap goods from China? The concerns about community disruption caused by the first China shock still apply. But there’s also a new issue: climate change. The goods being subjected to new or increased tariffs are mainly products associated with the transition to green energy; electric vehicles have been getting the most press, but giant batteries — which are now starting to play a crucial role in solving the problem of renewable energy intermittence (the sun doesn’t always shine, the wind doesn’t always blow) — are an even bigger deal.
Why not just buy cheap Chinese batteries? Political economy. Given the existential threat posed by climate change, the political coalition behind the green energy transition shouldn’t be fragile, but it is. The Biden administration was able to get large subsidies for renewable energy only by tying those subsidies to the creation of domestic manufacturing jobs. If those subsidies are seen as creating jobs in China instead, our last, best hope of avoiding climate catastrophe will be lost — a consideration that easily outweighs all the usual arguments against tariffs.
So in imposing these new tariffs, Biden’s people are doing what they must. I don’t see any alternative.
Read: Preparing for the Second China Shock
XINJIANG
U.S. adds 26 Chinese cotton companies to import ban list
Nikkei Asia
The U.S. moved Thursday to block goods from 26 Chinese cotton traders and warehouse facilities believed to be linked to forced Uyghur labor, a step that stands to intensify pressure on supply chains.
Companies in provinces across China, including Henan, Jiangsu, Hubei and Fujian, have been added to the forced-labor Entity List, the Department of Homeland Security said. The list now has 76 entities.
Washington has taken steps against what it says is the use of forced labor in China's Xinjiang region, home to the predominantly Muslim Turkic Uyghurs and other minority groups subject to harsh human rights abuses. China denies these claims and says the labor programs are to alleviate poverty.
Beijing’s Culinary Crusade: Erasing Uyghur Identity through Food
ChinaFile
The CCP views many facets of Uyghur life as “backward,” so it seeks to refashion Uyghur cultural expression in a way it finds both intelligible and non-threatening, promoting a set of officially sanctioned “Han” tastes and habits as the standard for hygiene, modernity, and normalcy. In the case of food, Beijing often works to impose this standard through direct interventions with local women. Even when authorities extol the virtues of the cuisine of the region, they often speak not specifically of “Uyghur food” but of “Xinjiang food,” as though the dishes so many Han tourists enjoy have their origins in geography rather than the practices and culture of the Uyghur people. At the same time, officials consider ethno-cultural diets of Uyghurs—especially if they are shaped by Islamic law—as obstacles to ethnic unity at best and a gateway to extremism at worst. According to Mijit Qadir, a Public Security Bureau official in Kashgar, “Muslim halal customs create an unbridgeable gap between Uyghur and Han people and widen the distance between them as would an invisible wall.”
POLITICS & SOCIETY
Concerns grow for Chinese citizen journalist after supposed jail release
The Guardian
Concerns are growing about the wellbeing of one of China’s most prominent citizen journalists who has failed to make contact with the outside world after she was supposed to have been released from prison.
Zhang Zhan, 40, a lawyer turned citizen journalist, was detained in May 2020 after she travelled to Wuhan to report on the early days of the Covid-19 pandemic. Her videos and social media posts drew attention to the government’s stifling of information about the spread of the disease and the harsh lockdowns that were being imposed.
China Is Reversing Its Crackdown on Some Religions, but Not All
Council on Foreign Relations
Beijing needs new sources of support, especially given China’s slowing economy. In addition, the disasters of communist rule in the twentieth century mean that for at least fifty years, few people have bought into the state’s main ideology, communism. Under Xi, China has pushed a return to communist values, urging the country’s nearly one hundred million CCP members to “return to the original mission.” Some of the party’s stated values include widely accepted virtues such as honesty, integrity, patriotism, and harmony. But belief in communism is low, forcing the state to turn to traditions.
In doing so, the CCP draws on China’s imperial past when ruling. Imperial officials often decided which faiths were orthodox and heterodox, regularly banning sects that violated norms. Indeed, traditional China was a religious state, with the emperor serving as the mediator between heaven and earth, and his main palaces—including the Forbidden City—representing the empire’s spiritual focal point.
China’s modern-day rulers have drawn on this past but also on the lessons of modern authoritarian states. Similar to how Russian President Putin evolved from KGB operative in Soviet times to defender of the Russian Orthodox Church today, Xi is positioning himself as a champion of Chinese traditional values. It’s unlikely Xi will ever be seen praying in a Buddhist temple, as Putin worships in churches. But in its own way, the Chinese Communist Party is taking a page out of the same authoritarian playbook, where endorsing traditions as a source of legitimacy is seen as a way to compensate for problems at home.
The State of Religion in China
Council on Foreign Relations
Amid an economic boom and rapid modernization, religion in China has been on the rise in recent decades. Experts point to the emergence of a spiritual vacuum as a trigger for the growing number of religious believers, particularly followers of Christianity and traditional Chinese religious groups.
While China’s constitution allows religious belief, Chinese Buddhism, Daoism, and folk practices are shown more leniency than other religions, such as Islam and Christianity, which are regarded as “foreign” by the Chinese Communist Party (CCP). In recent years, adherents across all religious organizations, including both state-sanctioned and underground and banned groups, face intensifying persecution and repression. They also face pressure to implement President Xi Jinping’s sinicization policies, which aim to make religious groups more aligned with Chinese culture, morality, and doctrines as defined by the CCP.
China says ‘multiple espionage cases’ have been uncovered in space sector
SCMP
China’s top intelligence agency on Friday said it had cracked down on “multiple” espionage cases in the space sector in recent years, amid an ongoing national security drive.
The Ministry of State Security said in a post on its WeChat account that it had “uncovered multiple espionage cases in the aerospace sector, exposing the despicable acts of certain countries’ intelligence agencies attempting to infiltrate and steal secrets from our aerospace field”.
The ministry said the cases involved the use of inducement and coercion to try to steal the country’s latest research findings in the sector, and that its efforts had prevented “core secrets” from being leaked.
“Certain countries regard our nation as a major competitor in the space field and spare no effort to contain and suppress us,” the agency said, adding that China had developed and was widely using satellite remote sensing, communication, navigation and positioning technologies.
The post did not identify which countries were involved in the cases or give any further details.
China Launches Campaign to Bring Order to Unruly Classrooms
Sixth Tone
China’s top education authority has vowed to take stronger action to protect the well-being of minors on school campuses, following a raft of high-profile incidents that have raised public concern.
In a notice published Tuesday, China’s Ministry of Education announced the start of a special campaign targeting a range of problems in schools, from bullying to disorderly management practices.
China’s Bullet Trains Are Raising Ticket Prices
The New York Times
China is taking the rare step of sharply increasing fares for riders on four major bullet train lines, in its broadest move to address rising costs and heavy debts since construction of the system began nearly two decades ago.
The higher prices for train tickets are part of a push to raise prices for public services. Earlier this year, water and natural gas bills started going up in some cities.
Public services in China are heavily subsidized by local governments. But huge municipal debts mean that these governments have less money on hand to keep prices down.
Increasing prices can stem losses at some giant state-owned enterprises that provide these services. And making consumers pay more helps offset the falling prices that are widespread in China’s economy as growth slows.
China has already pushed up electricity charges considerably since 2021 for many factories, although residential customers continue to pay low, subsidized electricity rates.
[…]
The rail system explained the fare increases, which will take effect on June 15, with a statement to the official Xinhua news agency, saying that “operating costs such as line maintenance, vehicle purchase, equipment updates, and employment of labor have undergone major changes.”
The fare increases have drawn considerable commentary on social media in China. Much of it has been negative, as salaries have stagnated in the last several years and real estate prices have plunged.
“Everything is going up, except wages,” one person complained.
Fares are going up for peak travel along routes from Hangzhou to Shanghai, Changsha or Ningbo and Wuhan to Guangzhou. Many of the cities are fairly affluent communities near the Yangtze River and its tributaries in central China. But the price increases will also affect travelers in smaller, less prosperous towns in between.
The peak fares will rise almost 20 percent for first- and second-class tickets at peak times except for the route between Hangzhou and Changsha, where the increases will be smaller. Fares will jump as much as 39 percent for the luxurious V.I.P. business-class seats, which feature lie-flat seats resembling those in business class on intercontinental flights.
Survey seeks views on allowing pets to travel on high-speed trains
China Daily
A survey of people's opinions on allowing pets to ride on China's high-speed trains has ignited a lively discussion online, with some arguing it would greatly benefit pet owners and others raising concerns about hygiene and practicality.
Although pets are currently not allowed on high-speed trains, the railway operator has begun exploring the possibility of permitting small pets to travel under specific conditions.
China Allows Visa-Free Entry for Overseas Groups on Cruise Ships
Caixin
China will allow visa-free entry for foreign tour groups that arrive via cruise ships in a further bid to attract international visitors and boost tourism.
Overseas groups on cruise boats will be able to stay in China without a visa for up to 15 days, according to the National Immigration Administration, with the policy coming into effect from May 15.
China’s Capital Loosens Work Permit Requirements to Attract Overseas Talent
Caixin
Beijing has rolled out new measures to attract more foreigners graduating from overseas and domestic universities to work and live in the Chinese capital, including scrapping the two-year work experience requirement for obtaining work permits.
The “10-measure initiative” aims to make it easier for foreign graduates to find jobs and for foreign students to do internships in Beijing, while helping them set up businesses and integrate into life in the Chinese capital, the Beijing Overseas Talents Center said in a statement Wednesday.
The Exit-Entry Administration of the Beijing Municipal Public Security Bureau, the government-backed center and local universities jointly launched the initiative at a recent forum, the statement said.
Under the initiative, foreigners with university degrees are no longer required to have two years of work experience when applying for a work permit, but “in principle” their majors should match the job requirements.
For the first time, international students who have graduated in the last two years from one of the world’s top 500 universities, or from a Chinese university officially recognized as “world-class,” or in a first-class academic discipline, will be allowed to apply for a work permit valid for up to three years.
Freezers Full of Dead Tigers Found Inside Chinese Zoo
Sixth Tone
A wildlife park in east China’s Anhui province is facing accusations of keeping animals in horrifying conditions, causing more than a dozen Siberian tigers to die of unnatural causes.
The shocking investigation — undertaken by a magazine owned by the state-run China News Service — has sparked outrage in China since its publication on Monday, leading to calls for the park’s owners to face legal consequences.
Fuyang Wildlife Park is accused of a litany of malpractices, including illegally breeding protected species, selling animals without a license, keeping animals in inhumane conditions, allowing many to die due to neglect, and failing to dispose of their bodies.
HONG KONG & MACAO
UK charges three with working for Hong Kong intelligence
Al Jazeera
The British police have charged three men with assisting Hong Kong’s foreign intelligence service.
The men were detained alongside several others during a series of raids across the United Kingdom last week, the police said on Monday. The operation is the latest in a spate of action against suspected Russian and Chinese spies across Europe.
Beijing warns of ‘firm response’ if UK further jeopardises ties as Hong Kong spying row deepens
SCMP
The Chinese embassy in London has warned of a “firm response” if Britain further jeopardises ties after its top diplomat was summoned by the UK foreign office over the prosecution of three men accused of spying on behalf of Hong Kong.
The Foreign, Commonwealth and Development Office (FCDO) said on Tuesday Chinese Ambassador Zheng Zeguang had been summoned on the instructions of foreign minister David Cameron.
Hours earlier, Hong Kong’s leader warned that any attempts by countries to interfere in the work of its overseas economic offices would harm their own interests given the city’s trade surpluses with those nations.
“The FCDO was unequivocal in setting out that the recent pattern of behaviour directed by China against the UK, including cyberattacks, reports of espionage links and the issuing of bounties is not acceptable,” a spokesman said.
On Monday, China’s embassy in London said Beijing had lodged “serious” representations with Britain over the case, urging it to immediately stop all “anti-China political manipulation” and ensure the legitimate rights and interests of the Chinese citizens in the country.
Hong Kong leader hits out after UK charges three with spying for city
CNN
On Tuesday, Hong Kong Chief Executive John Lee claimed the British charges against thre three men were a “fabrication.”
“The Chinese side firmly rejects and strongly condemns the UK’s fabrication in the so-called case and its unwarranted accusation against the Hong Kong government,” Lee said, referring directly to a statement from the Chinese Embassy in London that was also issued in response to the charges.
YouTube blocks protest anthem in Hong Kong after court order banning the song
The Guardian
YouTube has said it will comply with a court decision and block access inside Hong Kong to 32 videos deemed prohibited content, in what critics say is a blow to freedoms in the financial hub amid a security clampdown.
Hong Kong opens digital yuan wallets in a first for non-mainlanders
Nikkei Asia
Residents of Hong Kong can now open e-wallets with four major mainland state-owned banks -- Bank of China, Bank of Communications, China Construction Bank and Industrial and Commercial Bank of China -- using their mobile phone numbers in the city.
Foreign nationals living in Hong Kong are also eligible for the service, according to Kitty Lai, head of financial infrastructure development at the HKMA, as long as they have a valid local mobile phone.
"We expect the main use case to be in the Greater Bay Area," Lee said, referring to an economic region encompassing Hong Kong, Macao and nine cities in Guangdong province. Both the central government and the city's authorities are promoting this geographic concept to foster a sense of cohesion in an apparent attempt to bring the three regions together.
Curtailing Real-Time Stock Connect Data Will Make Market More Stable, Insiders Say
Caixin
The Hong Kong Stock Exchange’s decision to stop disclosing certain real-time data for northbound trading under the Stock Connect program will make the market less transparent but more stable, market insiders said.
Real-time figures for sales, purchases and total turnover through the northbound link, which allows overseas investors to trade Chinese mainland-listed stocks through Hong Kong, have been unavailable since Monday, according to a circular issued by the Hong Kong exchange.
TAIWAN
Taiwan’s incoming president faces tough balancing act, analysts say
VOA
When Taiwan’s President-elect Lai Ching-te is sworn into office on May 20, he will be facing what is perhaps the toughest first term of any leader the democratically ruled island of 23 million has ever elected since 1996.
Analysts say that Lai will not only need to carefully manage relations with China but also need to work to maintain steady ties with Washington during an election year.
US to Send Delegation to Inauguration of Taiwan’s Next President
Bloomberg
The US will send a delegation of former government officials to Taiwan for the inauguration of President-elect Lai Ching-te, casting the visit as keeping with longstanding practice in an effort to manage tensions between the self-governing island and China.
The delegation is scheduled to be in Taiwan from this weekend for meetings with leaders and to attend the May 20 inauguration, according to a senior administration official who briefed reporters on condition of anonymity to discuss diplomatic issues.
The representatives include Brian Deese, the former director of President Joe Biden’s National Economic Council; Richard Armitage, deputy secretary of State in the George W. Bush administration; Richard Bush, a Taiwan analyst at the Brookings Institution in Washington; and Laura Rosenberger, chair of the American Institute in Taiwan, the senior official said.
Australian MPs will attend Taiwan president-elect Lai Ching-te's inauguration in Taipei
ABC News
A bipartisan delegation of Australian politicians will attend the inauguration of Taiwan's President-elect Dr Lai Ching-te, drawing a forceful warning from China and complicating Australia's relationship with Beijing.
The ABC understands the delegation of up to four federal parliamentarians, including senators Claire Chandler and Raff Ciccone, is among more than 400 foreign politicians and officials welcomed by Taipei for the event on Monday.
Beware forecasts of doom for Taiwan under Lai
Brookings
Lai is not a wild-eyed zealot with a one-track-minded focus on Taiwan independence. He is a professional politician who has organized his career around becoming Taiwan’s president. Now that he has ascended to Taiwan’s top elected position, he will want to win reelection. To do so, he almost certainly will need to tack to the center of Taiwan’s political spectrum rather than cater to the wishes of a small minority of Taiwan voters who favor throwing caution to the wind in service of Taiwan independence or unification. Indeed, less than 6 percent of Taiwan’s voters support “the immediate pursuit of independence from, or unification with, the People’s Republic of China.”
China Sanctions Political Pundits in Taiwan to Pressure Lai
Bloomberg
China said it would sanction five Taiwanese political commentators and roll out a law to punish “separatists,” moves aimed at piling pressure on incoming president Lai Ching-te just days before he takes office.
The pundits’ remarks “deceived some people on the island, incited hostility and confrontation between the two sides of the Taiwan Strait, and hurt the feelings of compatriots on both sides,” Chen Binhua, spokesman for the government department in Beijing that handles affairs related to Taiwan, said at a press briefing on Wednesday.
The five are regulars on political talk shows on the island of 23 million people that Beijing has pledged to bring under its control someday, by force if necessary.
The moves by Beijing are an early signal that its relations with Lai, the current vice president who will be sworn in as the new leader on Monday, are likely to be as fraught as they have been under President Tsai Ing-wen for the past eight years.
Taiwan lawmakers exchange blows in bitter dispute over parliament reforms
Reuters
Taiwanese lawmakers shoved, tackled and hit each other in parliament on Friday in a bitter dispute about reforms to the chamber, just days before President-elect Lai Ching-te takes office without a legislative majority.
Even before votes started to be cast, some lawmakers screamed at and shoved each other outside the legislative chamber, before the action moved onto the floor of parliament itself.
In chaotic scenes, lawmakers surged around the speaker's seat, some leaping over tables and pulling colleagues to the floor. Though calm soon returned, there were more scuffles in the afternoon.
Lai, who is to be inaugurated on Monday, won January's election, but his Democratic Progressive Party (DPP) lost its majority in parliament.
The main opposition party, the Kuomintang (KMT), has more seats than the DPP but not enough to form a majority on its own, so it has been working with small Taiwan People's Party (TPP) to promote their mutual ideas.
The opposition wants to give parliament greater scrutiny powers over the government, including a controversial proposal to criminalise officials who are deemed to make false statements in parliament.
The DPP says the KMT and TPP are improperly trying to force through the proposals without the customary consultation process in what the DPP calls "an unconstitutional abuse of power".
U.S. lawmakers reject China's mischaracterization of U.N. resolution 2758
Focus Taiwan
U.S. Republican Senator Jim Risch, a ranking member of the Senate Foreign Relations Committee, and Democratic Jeanne Shaheen proposed the resolution, reaffirming that the "one China policy" of the United States is not equivalent to the "One China Principle" of the Chinese Communist Party (CCP).
"The passage of United Nations General Assembly resolution 2758 in 1971 does not mean the world accepts China's claimed sovereignty over Taiwan. Moreover, the United States' 'one China policy' is not the same as China's 'One China Principle'," Risch said in a statement.
"Chinese leaders know this, but spread this propaganda to deny Taiwan's ability to engage with international organizations. This resolution sets the record straight. The United States can and should push back on China's false narratives at every opportunity," Risch added.
Taiwan is selling more to the US than China in major shift away from Beijing
AP
In a stark illustration of the shift, the U.S. displaced mainland China as the top destination for Taiwan’s exports in the first quarter of the year for the first time since the start of 2016, when comparable data became available. The island exported $24.6 billion worth of goods to the U.S. in the first three months, compared with $22.4 billion to mainland China, according to Taiwan’s official data.
Meanwhile, the island’s investments in mainland China have fallen to the lowest level in more than 20 years, dropping nearly 40% to $3 billion last year from a year earlier, according to Taiwan’s Ministry of Economic Affairs. Yet, Taiwan’s investments in the U.S. surged ninefold to $9.6 billion in 2023.
Washington and Taipei signed a trade agreement last year, and they’re now negotiating the next phase. U.S. lawmakers also have introduced a bill to end double taxes for Taiwanese businesses and workers in the U.S.
Taiwan, on China’s Doorstep, Is Dealing With TikTok Its Own Way
The New York Times
About 80 miles from China’s coast, Taiwan is particularly exposed to the possibility of TikTok’s being used as a source of geopolitical propaganda. Taiwan has been bombarded with digital disinformation for decades, much of it traced back to China.
But unlike Congress, the government in Taiwan is not contemplating legislation that could end in a ban of TikTok.
Officials in Taiwan say the debate over TikTok is just one battle in a war against disinformation and foreign influence that the country has already been fighting for years.
Taiwan has built an arsenal of defenses, including a deep network of independent fact-checking organizations. There is a government ministry dedicated to digital affairs.
And Taiwan was early to label TikTok a national security threat. The government issued an executive order banning it from official devices in 2019, along with two other Chinese apps that play short videos: Douyin, which is also owned by ByteDance, and Xiaohongshu.
[…]
Legislators in Taiwan are considering measures that tackle internet threats — fraud, scams and cybercrime — broadly enough to apply to all these existing social media platforms, including TikTok, as well as whatever might replace them in the future.
Cannes 2024: Taiwan hot projects
Screen Daily
Romantic dramas, a horror comedy and the first Taiwan-India co-production are being introduced by Taiwanese sellers at the market.
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