PRC holds 'punishment' war games around Taiwan, the property crisis, and trade wars
PRC holds 'punishment' war games around Taiwan, the property crisis, and trade wars
+ 'Black Dog' wins Un Certain Regard at Cannes
Welcome back to What’s Happening in China, your weekly update on the latest news and developments from the country.
Whether you are a businessperson, investor, government official, academic, media outlet, or general reader, if you want to stay up-to-date on the latest developments in and related to China, I encourage you to subscribe.
Let’s jump into it.
THROUGH THE LENS
IN FOCUS
I. “There is just not enough land”
China, the world's biggest agriculture importer, has set targets to drastically reduce its reliance on overseas buying over the coming decade in line with its push for food security, but they will be exceedingly difficult to meet, experts say.
With limited land and water, China will have to sharply increase farming productivity through technology, including genetically modified crops, and expand area under cultivation to meet Beijing's 10-year projections.
The government envisions 92% self-sufficiency in staple grains and beans by 2033, up from 84% during 2021-2023, according to a document released in late April, on a path towards President Xi Jinping's goal to become an "agriculture power" by the middle of the century.
Cutting the country's imports would be a blow to producers from the U.S. to Brazil and Indonesia, who have expanded capacity to meet demand from China's 1.4 billion people, the world's largest market for soybeans, meat and grains.
[…]
Food security has long been a priority for China, which has a painful history of famine and must feed nearly 20% of the global population with less than 9% of its arable land and 6% of its water resources.
The urgency to cut dependence on imports grew after the country faced supply chain disruptions during the COVID pandemic and the Russia-Ukraine conflict.
A trade war with the U.S., its No.2 agriculture supplier after Brazil, and climate shocks such as heavy rains last year that damaged China's wheat harvest, have added to the challenge.
On June 1, China will implement a food security law that calls for absolute self-sufficiency in staple grains and requires local governments to include food security in their economic and development plans.
Read: China's food security dream faces land, soil and water woes
II. Eeny, meeny, miny, moe
China’s big election is right around the corner.
Otherwise known as the US Presidential election, it’s all but guaranteed to be a Trump-Biden rematch, ensuring that China will be dealing with a familiar face in the White House come next January.
The obvious question: Who does Beijing prefer?
Read: Trump, Biden, and China: What the 2024 election means for China-US relations
III. Zhongnanhai, Zhongnanhai, I can’t live without Zhongnanhai*
Above Beijing’s imperial center rises Jingshan, or Prospect Hill. From a pagoda at its modest peak, a panoramic view of the city presents itself.
To the south, the dull golden roofs of the Forbidden City crest and fall, pulling the eye southward to Tiananmen — the Gate of Heavenly Peace — and the vast square of the same name just beyond. To the east stand the smooth metallic skyscrapers of the city’s business district. To the north, at the top of Beijing’s central axis — its so-called dragon’s vein — sit the Bell and Drum Towers, which once acted as the city’s collective timepiece. And stretching all along the western periphery are the calm, tree-lined waters of the manmade lakes, dug by hand for the pleasure of past emperors.
It’s this aerial view of “Zhongnanhai,” meaning “middle and southern seas,” and the surrounding buildings that today’s Chinese leaders prefer you did not see. That’s because the 1,500-acre site of repurposed imperial pavilions and temples, along with gray modern offices has formed the leadership compound for the ruling Chinese Communist Party (CCP) since 1950.
Read: Zhongnanhai: The scenic garden that became China’s secretive seat of power
*Reference to the song 'Zhong Nan Hai' by indie rock band Carsick Cars. The song refers to a popular cigarette brand, not the central government compound.
XINJIANG
Last major Arabic-style mosque in China loses its domes
The Guardian
The last major mosque in China to have retained Arabic-style features has lost its domes and had its minarets radically modified, marking what experts say is the completion of a government campaign to sinicise the country’s Muslim places of worship.
The Grand Mosque of Shadian, one of China’s biggest and grandest mosques, towers over the small town from which it takes its name in south-western Yunnan province.
[…]
Ian Johnson, the author of The Souls of China, a book about religion, said: “Given the tragic history of this mosque – especially that within living memory Han chauvinism already led to its destruction once – the reconstruction and renaming of it is another effort to erase local people’s beliefs and their cultural heritage.”
In 2014, the Chinese government launched a “strike hard” campaign against Uyghurs, who live mainly in the north-western region of Xinjiang. The policies involved oppressive surveillance measures and harsh punishments for a wide array of expressions of Islamic faith, such as abstention from alcohol or the possession copies of the Qur’an or other Islamic materials.
The campaign eventually led to around a million Uyghurs and other minorities being imprisoned in extrajudicial detention centres, which the UN said may constitute crimes against humanity. The Chinese government has defended its policies as necessary for tackling extremism and separatism.
In 2018, the campaign officially spread to the sinification of Islamic architecture. An analysis published last year by the Financial Times found that three-quarters of more than 2,300 mosques across China had been modified or destroyed since 2018.
BMW imported Mini Coopers tied to banned Xinjiang supplier
CNBC
German automaker BMW imported at least 8,000 Mini Cooper vehicles into the United States with electronic components from a banned Chinese supplier, a U.S. Senate report released on Monday said.
Uyghurs, “Me Too,” and the CCP
Bitter Winter
Serious allegations hit two Uyghur leaders. Abuse, if ascertained, should not be condoned and all should be handled responsibly—but the CCP should not be allowed to exploit the incident either.
POLITICS & SOCIETY
Xi’s Unique Problem: Leading Through China’s Economic Slowdown, Property Crisis
Bloomberg
China’s economic miracle is ending, leaving President Xi Jinping with a challenge none of his predecessors faced: how to govern after the boom.
For four decades, China’s 1.4 billion population experienced unparalleled gains in income and wealth. But recently the blows have just kept coming. Real estate collapse, trade war with the US, a crackdown on entrepreneurs, and extended Covid lockdowns have stalled the prosperity engine.
Chinese incomes are still rising, but under Xi gains have been the slowest since the late 1980s. The property crisis is hammering household wealth. And the cautious opening-up of China’s society has gone into reverse too. For many people across the country, it feels like a different world.
Take for example Mr. Hu, a factory worker in Shanghai. For almost a decade after moving from his hometown, Hu was upwardly mobile. He earned enough to buy a car, drove passengers at the weekend to top up the family income, and in 2020 bought a big-city apartment. Hu felt good about the future. Now he feels “desperate.”
His home has lost almost a quarter of its value and demand for ride-shares has slumped. Chatting with his remaining passengers, the 37-year-old has noticed something: “Most of them are struggling, and complaining about the ineffective leadership.”
Xi’s Minister Probe Marks Biggest Shakeup to Cabinet in Years
Bloomberg
President Xi Jinping’s government looks set to oust its third minister since its new cabinet was introduced last year, a pace of removals not seen since the Chinese leader first came to power over a decade ago.
Agriculture Minister Tang Renjian is under investigation for suspected violations of discipline and law, the Central Commission for Discipline Inspection, China’s anti-corruption watchdog, said on Saturday [May 18]. The report didn’t provide details on the specific violations the 61-year-old is suspected of committing.
The latest probe shows the continued intensity of Xi’s signature campaign, which he has leveraged to discipline the party and purge political rivals since taking office in 2012. Tang is expected to lose his title after the disciplinary action, joining other cabinet officials that have been ousted from the State Council including former Foreign Minister Qin Gang and ex-Defense Minister Li Shangfu. The body is made up of 26 ministerial-level departments.
Zhang Zhan: Chinese journalist arrested for reporting on COVID released after 4 years
AP
Zhang Zhan, a citizen journalist, was released from prison after serving four years for charges related to reporting on the COVID-19 outbreak in Wuhan, China, according to a video statement she released Tuesday, eight days after her sentence ended, though there are concerns about how much freedom of movement she has.
Zhang was sentenced to four years in prison on charges of “picking quarrels and provoking trouble,” a vaguely defined charge often used in political cases, and served her full term. Yet, on the day of her release, her former lawyers could not reach her or her family. Shanghai police had paid visits to activists and her former lawyers in the days leading up to her release.
In a short video, Zhang said she was taken by police to her brother Zhang Ju’s home on May 13, the day she finished her sentence.
China is accelerating the forced urbanization of rural Tibetans, rights group says
AP
China is accelerating the forced urbanization of Tibetan villagers and herders, Human Rights Watch said, in an extensive report that adds to state government and independent reports of efforts to assimilate rural Tibetans through control over their language and traditional Buddhist culture.
The international rights organization cited a trove of Chinese internal reports contradicting official pronouncements that all Tibetans who have been forced to move, with their past homes destroyed on departure, did so voluntary.
The relocations fit a pattern of often-violent demands that ethnic minorities adopt the state language of Mandarin and pledge their fealty to the ruling Communist Party in western and northern territories that include millions of people from Tibetan, Xinjiang Uyghur, Mongolian and other minority groups.
China claims Tibet has been part of its territory for centuries, although it only established firm control over the Himalayan region after the Communist Party swept to power during a civil war in 1949.
Work in Progress: The Changing Face of China’s Migrant Workforce
Sixth Tone
China’s migrant workers are on average older, better educated, and prefer to stick closer to home compared with 16 years ago, with many shifting away from the construction industry toward the service sector, according to the latest official data.
The annual Migrant Worker Monitoring Research Report, which the National Bureau of Statistics, or NBS, has published since 2009, tracks the scale, flow, and distribution of this vital section of the country’s workforce. It defines a migrant worker as an individual with rural hukou, or household registration, who is engaged in non-agricultural industries locally or has worked outside their hometown for longer than six months.
The report’s 2023 edition shows the number of migrant workers nationwide has continued to grow, although at a slower rate, and sheds fresh light on the evolving profile of the modern migrant worker. One noticeable trend is that far fewer are now engaged in construction, traditionally a core industry.
Off the Books: Inside the Struggle to Save China’s Preschools
Sixth Tone
Facing low admissions, fierce competition from public schools, and financial pressures, China’s private kindergartens are upping marketing efforts and offering nursery classes. To boost enrollments, teachers are also increasingly taking on roles as sales reps.
Beijing to Pilot Shared Electric Bikes in Southeast Suburb
Caixin
Beijing is to become the first major city to promote shared electric bicycles. It is launching a pilot program over a 65.7 square kilometer area in a southeast suburb starting on May 30.
The program aims to explore the feasibility of shared electric bikes as a safe and convenient travel option for citizens, said Beijing Economic-Technological Development Area.
Livestreaming banned at railway station after followers cause chaos
SHINE News
A once-deserted railway station in East China's Heze City has returned to calm after authorities banned livestreaming which had transformed the station into a bustling hotspot due to the unlikely success of a local livestreamer.
A Century Later, China’s First Female Architect Gets Her Due
Sixth Tone
On May 18, the University of Pennsylvania’s Weitzman School of Design awarded the architect and poet Lin Huiyin a posthumous Bachelor of Architecture degree, part of a broader effort by the school to recognize the achievements of female students who attended before the program was opened to women in 1934.
Lin, who was born in 1904 in the eastern city of Hangzhou, was among the first Chinese students to enroll at the University of Pennsylvania. Although she completed most of the coursework required for an architecture degree, she was barred from formally joining the program due to contemporary concerns about women’s ability to work late nights and conduct fieldwork.
In remembrance: Benjamin Kang Lim
Foreign Correspondents' Club of China
The Foreign Correspondents’ Club of China deeply mourns the passing of Benjamin Kang Lim, a veteran journalist who covered Greater China for almost four decades.
Born in Manila, Ben started his career with Reuters, eventually serving as the agency’s bureau chief in both Taipei and Beijing. In 2005, he broke the news of the death of Zhao Ziyang, the former Communist Party general secretary purged after the 1989 Tiananmen crackdown, and a decade later predicted the rise of Xi Jinping, when the current paramount leader was not on many China watchers’ radar.
HONG KONG & MACAO
Death of man charged in UK with spying for Hong Kong not being treated as suspicious
The Guardian
Earlier on Friday, a hearing at the Old Bailey heard that the case against Trickett had been formally closed. The prosecutor, Alistair Richardson, said the Crown Prosecution Service had notified the court that the case against Trickett would be formally “discontinued”.
He said: “As has widely been reported, Matthew Trickett died on May 19 this year. The cause of his death is currently given as unexplained. His death has been confirmed by the coroner.”
University of Hong Kong Probes Suspected Fraudulent Student Applications
Caixin
The University of Hong Kong’s Business School is investigating students believed to have submitted fraudulent admission materials such as fake degrees, with a person familiar with the case stating it involves some 200 students.
The school also found some agencies were involved in the fabrication process, suspected of forging documents for their clients to whom they claim to provide “guaranteed admission,” the school said in a statement published Wednesday.
HK police arrest 100 over scams totalling HK$180 million in losses
HKFP
Sham Shui Po district police said on Wednesday they had arrested 75 men and 25 women, aged 17 to 75, in a two-week operation between May 6 and May 20. The suspects were linked to 82 cases of deception and money laundering involving 295 victims.
The biggest single loss was HK$23.7 million, police said. The cases involved fraudulent activities related to investment, online job-seeking, online dating, e-commerce, and phone scam, they added.
TAIWAN
Lai to Take Helm in Key Flashpoint of US-China Rivalry
Bloomberg
New Taiwan President Lai Ching-te urged China to stop its intimidation of the democratic island, comments aimed at calming a dispute at the heart of a geopolitical rivalry involving the world’s two biggest powers.
“I call on China to stop intimidating Taiwan verbally and militarily, and, together with Taiwan, to shoulder our responsibility to the world to do our utmost to maintain peace and stability in the Taiwan Strait and the region,” Lai said Monday in his inaugural address on an overcast day in Taipei. It was up to Beijing “to ensure that the world is free from the fear of war,” he said.
The 64-year-old former kidney doctor and ex-vice president said Beijing should hold talks with his government on an equal basis, while acknowledging that China was unlikely to give up its attempt to annex the island. He reiterated his previous pledges to maintain the status quo with China.
Lai also repeated Tsai’s position that the Republic of China — Taiwan’s formal name — and the People’s Republic of China are not subordinate to each other. That line got the biggest cheer of his speech from the crowd of dignitaries.
Analyzing Lai Ching-te’s Inaugural Address: More Continuity Than Difference
Council on Foreign Relations
In his inaugural speech, Lai sought to reassure audiences that he would be a source of stability and continuity on cross-strait issues and would not provoke Beijing or seek to change the status quo. Despite frustrations within Taiwan on domestic issues – rising housing prices, stagnating wages, and growing youth unemployment – Tsai still left office as the only president since Taiwan’s democratization to enjoy an approval rating of over 50 percent and is widely credited with ably managing cross-strait relations. It is thus little wonder that Lai sought to embrace and build on her legacy. His personnel appointments in senior national security positions similarly project continuity.
In his address, Lai regularly returned to the language of continuity and stability. “Peace is the only option,” he stressed, “and prosperity, gained through lasting peace and stability, is our objective.” Lai called Taiwan’s leaders “pilots for peace” and indicated he would “neither yield nor provoke” and would instead “maintain the status quo.” Elsewhere in his speech, Lai spoke of providing “stable and principled cross-strait leadership.” Such reassurances are important given Lai’s 2017 statement that he was a “pragmatic worker for Taiwan independence” and questions in Beijing about his intentions.
Inaugural Address of ROC 16th-term President Lai Ching-te
Office of the President of the Republic of China (Taiwan)
On the morning of May 20, ROC 16th-term President Lai Ching-te, the first lady, and Vice President Bi-khim Hsiao attended inaugural celebrations in the plaza fronting the Presidential Office Building. President Lai delivered his inaugural address titled “Building a democratic, peaceful, and prosperous new Taiwan.”
Beijing rejects Taiwan leader’s offer on tourism and student exchanges, saying Lai is ‘insincere, more radical’
SCMP
Beijing has rejected the offer by William Lai Ching-te to resume tourism and student exchanges, saying the new Taiwanese leader lacked sincerity in his inauguration speech and that his stance had become “more radical”.
The mainland’s Taiwan Affairs Office (TAO) released another strongly worded statement on Tuesday evening, saying Lai’s attitude in his inauguration remarks was “extremely rampant” while “his advocacy is even more radical” than before.
“The entire speech was filled with antagonism and provocation, lies and deception – the ‘Taiwan independence’ stance is even more radical and risky,” according to the 1,200-word statement.
China rebukes South Korea, Japan lawmakers visiting Taiwan
Reuters
China on Tuesday scolded South Korean and Japanese lawmakers for visiting Taiwan despite its strong opposition, chiding both neighbours for attending Taiwan's "so-called inauguration ceremony of the leader".
How Is China Responding to the Inauguration of Taiwan’s President William Lai?
ChinaPower Project
China’s MND published a map showing that operations would occur in five different zones around the island as well as four smaller zones surrounding Taiwan’s outlying islands (Kinmen, Wuqiu, Matsu, and Dongyin).
The publication of this map is different than before. When China conducted large-scale exercises in August 2022, Chinese authorities issued specific coordinates for seven exercise zones and warned ships and aircraft not to enter those zones.1 During the April 2023 exercises, China did not announce any specific zones. This time, China again announced zones for the exercises, but it did not issue coordinates and warn ships and aircraft not to enter.
The placement of the five zones around Taiwan is significant, and there are notable differences between these five zones and the seven zones that were announced during the August 2022 exercises.
Mainland China’s military wraps up Joint Sword-2024A drills near Taiwan
SCMP
The People’s Liberation Army ended two days of military drills that observers said were the biggest and closest exercises ever held near Taiwan.
While there was no official announcement of the drills’ end, mainland Chinese media and PLA social media accounts said they lasted two days from Thursday.
In a post on the WeChat account of the PLA’s Eastern Theatre Command on Saturday, the command said the exercises by its land, navy, air force and missile forces were “punishment” for “Taiwan separatists” and a “severe warning” to outside forces intent on interference and provocation.
The drills, called Joint Sword-2024A, involved “advancing”, “besieging”, “blockading”, “attacking”, “destroying” and “cutting off”, according to the post.
They were launched three days after Taiwanese leader William Lai Ching-te made an inauguration speech that Beijing denounced as a “confession of independence”.
The battlegrounds that could decide a US-China war over Taiwan
Financial Times
There are many permutations for how Washington and Beijing could use nuclear weapons in a Taiwan conflict. This could include limited strikes in the theatre or threatening to strike mainland China or the US in order to convince the other to back off.
The US could target Chinese ships that are trying to conduct an amphibious landing on Taiwan. China could use the threat of nuclear weapons to pressure US allies who provide critical logistical support, including access to bases.
Some defence experts are concerned that because Washington does not enjoy a conventional military advantage over China in its backyard, it raises the spectre of the US deciding that nuclear weapons would give it the edge.
“What worries me is that the US could consider limited nuclear use because it cannot bring enough bullets to the fight,” says Taylor Fravel, an expert on the Chinese military at MIT. “If you cannot match China ship for ship, you can sink 10 ships with one nuclear weapon.”
Taiwanese perceptions of conflict: Continuity in the face of change
Brookings
Despite the significant increase in PRC military activity in the Strait—a trend foreign observers worry could lead to war—we find a modest increase in worry about war in the Strait among our Taiwanese respondents. In 2021, 57.4% of respondents said they were worried, while in 2023 64.8% of respondents reported that same worry. While this increase of 7.4 percentage points is meaningful, we don’t see it as a spike or sea change in the level of concern among Taiwanese respondents.
This finding is consistent with what many Taiwan analysts have come to know about Taiwanese perceptions of war: Taiwanese have been concerned about war for decades, but that worry does not dominate their daily lives. Even though the likelihood of war objectively appears much higher now than it was in 2021, Taiwanese are not panicking. Given the rising tensions, we may also be seeing a “diminishing marginal return” effect for PRC military pressure.
Tens of thousands protest against contentious Taiwan parliament reforms
Reuters
Tens of thousands of people took to the streets around Taiwan's parliament on Friday to demonstrate against contested parliamentary reforms, in a protest also marked by anger over China's perceived influence on the island's democracy.
The rally outside parliament, following one on Tuesday, came on the same day China, which claims Taiwan as its own territory, carried out a second day of war games around the island Beijing has said were launched to punish Taiwan's new president, Lai Ching-te, who it calls a "separatist".
Lai's Democratic Progressive Party (DPP) is trying to stop the opposition, who together have a majority of seats in the parliament, from forcing through measures to give lawmakers more oversight over the government. The DPP says more debate is needed.
The reforms will give lawmakers the power to ask the military, private companies or individuals to disclose information deemed relevant by parliamentarians.
They will also criminalise contempt of parliament by government officials and make the offence punishable with prison terms. But the DPP says there is no clear definition of contempt of parliament.
Taiwan's main opposition party the Kuomintang (KMT), which supports closer ties with China but denies being pro-Beijing, says it is trying to bring more accountability to government.
Friday night's protesters, many of them students or young professionals, listened to speeches and carried banners accusing the opposition of trying to ram through the reforms, and even working in concert with China.
Senior DPP lawmaker Wang Ting-yu told the chamber the legislation would illegally expand the power of lawmakers, including the power to punish companies and individuals who failed to comply with parliamentary inquiries.
Who actually uses Instagram’s Threads app? Taiwanese protestors
Rest of World
While young Taiwanese users discuss everything from relationships to celebrity gossip on Threads, the app has gradually become a gathering space for progressives, who favor independence from China to defend the island’s democracy. Despite Meta’s pledges to tame down political content on its platforms, Taiwanese users are flocking to Threads specifically for that purpose. Meta did not immediately respond to a Rest of World request for comment.
ASML and TSMC Can Disable Chip Machines If China Invades Taiwan
Bloomberg
ASML Holding NV and Taiwan Semiconductor Manufacturing Co. have ways to disable the world’s most sophisticated chipmaking machines in the event that China invades Taiwan, according to people familiar with the matter.
Officials from the US government have privately expressed concerns to both their Dutch and Taiwanese counterparts about what happens if Chinese aggression escalates into an attack on the island responsible for producing the vast majority of the world’s advanced semiconductors, two of the people said, speaking on condition of anonymity.
ASML reassured officials about its ability to remotely disable the machines when the Dutch government met with the company on the threat, two others said. The Netherlands has run simulations on a possible invasion in order to better assess the risks, they added.
Spokespeople for ASML, TSMC and the Dutch trade ministry declined to comment. Spokespeople for the White House National Security Council, US Department of Defense and US Department of Commerce didn’t respond to emailed requests for comment.
The remote shut-off applies to Netherlands-based ASML’s line of extreme ultraviolet machines, known within the industry as EUVs, for which TSMC is its single biggest client. EUVs harness high-frequency light waves to print the smallest microchip transistors in existence — creating chips that have artificial-intelligence uses as well as more sensitive military applications.
China sanctions Boeing, two U.S. defense contractors for Taiwan arms sales
AP
China’s Ministry of Commerce announced sanctions against Boeing and two other defense companies Monday for arms sales to Taiwan, on the day of Taiwan’s presidential inauguration.
The move is the latest in a series of sanctions Beijing has announced in recent years against defense companies for weapons sales to Taiwan, a self-ruled island that China considers as part of its own territory.
Keep reading with a 7-day free trial
Subscribe to What's Happening in China to keep reading this post and get 7 days of free access to the full post archives.