Sunday, August 20, 2023

Links - 20th August 2023 (1 - China's 'Peaceful' Rise)

Comedian in China hit with S$2.56 million fine after making ‘inappropriate’ joke about military - "Shanghai Xiaoguo Culture Media Company was fined 14.7 million yuan (S$2.82 million) after a joke by one of its comedians was deemed as “inappropriate” and slandering the People’s Liberation Army (PLA) of China... he recounted his experience of coming across two stray dogs...   He had used a PLA slogan which meant “fine style of work, capable of winning battles” to describe the behaviour of the dogs... Chinese state-aligned media Global Times said that stand-up comedy in the country “has a red line”."

China Draft Law Bans Reporting by Privately-Funded News Orgs

China Suddenly Shuts Down Concerts, Events Without Explanation - Bloomberg - "One explanation is a scandal in which authorities fined production company Xiaoguo about $2 million and suspended its performances in two major cities “indefinitely” after comedian Li Haoshi joked about a Xi Jinping military slogan last weekend. Authorities later arrested a woman for defending the comedian’s joke.   Yet some of the cancellations seem to have little to do with perceived criticism of the government, such as a convention for female tech entrepreneurs in Shanghai or a concert by a Japanese band in Guangzhou... One Beijing-based musician, who asked for anonymity when discussing politically sensitive issues, said she believes the crackdown on live shows and cultural events is a result of the Xiaoguo incident, but that when such sweeps occur, foreigners and more popular bands and performers often become primary targets... A musician scheduled to perform at the folk-music event in Beijing said shows in China technically have to be approved ahead of time by the local bureau of the Ministry of Culture and Tourism, but in the past enforcement was not so strict and many shows went ahead without prior approval."

Hong Kong schools should set up CCTV cameras in classrooms, police say - "Hong Kong police have suggested that schools install CCTV cameras on campus to enhance security and prevent crime. A new police website called SafeCity.HK lists “school security tips” included the fitting of CCTV cameras to monitor corridors, staircases, reception areas and classrooms.  “The security of schools is very important. Take care of the safety of young students!” the website said, adding that schools should also install electric fences and infrared motion sensors...   In 2021, two primary schools were found to have placed CCTV cameras in classrooms without parents’ knowledge, possibly violating the city’s privacy ordinance... Speaking on an RTHK show on Sunday, police chief Raymond Siu said officers would promote national security education in schools. He added that authorities were considering mobilising more “stakeholders” to promote national security education. It was saddening that young people had been sentenced under the security legislation."

Xi’s Food Security Drive Could End Up Backfiring for Chinese Farmers - Bloomberg - "last year, following the advice of her local agricultural bureau, she grew soy alongside her regular corn crop, but the herbicide she used on the soybeans killed off the corn... China’s government for decades has struggled to balance competing demands when it comes to food production, with sometimes devastating consequences. The Great Famine of the late 1950s and early 1960s killed tens of millions after Communist Party Chairman Mao Zedong sought to mandate collective farming and food distribution... Today China relies on imports for over 80% of its soybean consumption, with those purchases concentrated in a few key countries led by Brazil and the US. The nation’s low self-sufficiency for a crop used in everything from animal feed to cooking oil is seen as a critical vulnerability, according to the government"

Sneaky Chinese ship caught red-handed - "A Chinese salvage ship has been caught red-handed looting the war graves of 840 men, ripping up the World War II wrecks of the battleship HMS Prince of Wales and the battlecruiser HMS Repulse for high-quality steel.  Malaysian media and maritime open-source intelligence analysts last week located a dredger sitting illegally over the designated war grave of the two British warships sunk by Japanese bombers in December 1941.  Royal Malaysian Police on Friday reportedly uncovered live ammunition, two British 5.25-inch anti-aircraft cannons, a ship’s anchor and sections of hull at a jetty in Kota Tinggi, Johor... it’s not the first time the Chinese-registered salvage ship has been caught looting war graves.  The Chuan 68 and its crew were temporarily detained in 2017 amid allegations it had removed three Japanese World War II wrecks near Usukan, Malaysia.  And the Indonesian navy had reportedly intercepted the ship in April of the same year while it was scavenging a shipwreck near the Anambas Islands. It allegedly fled to international waters.  The wrecks of the Australian light cruiser HMAS Perth and the US heavy cruiser USS Houston – both lost in the weeks after the fall of Singapore – have also been targeted. And two Dutch warships sunk days earlier have entirely disappeared. Indonesia’s Jakarta Post reported at the time that Chinese authorities claimed the Chuan Hong 68 had been chartered by a Malaysian firm. “It has been engaged in offshore engineering in the waters specified by the Malaysian side according to the contract,” it quoted the Chinese Foreign Ministry as saying.  Indonesian authorities say illegal salvage operations have become common in Indonesian waters, with foreign and domestic scrap firms seeking an easy profit.  Bronze propellers are a particularly valuable. As are copper boilers. But steel smelted before the atomic bomb tests of the 1940s is highly prised for advanced scientific measuring equipment due to the lack of even minute traces of interfering radioactive materials."

The Nazi Inspiring China's Communists - The Atlantic - "When Hong Kong erupted into protest this summer against a national-security law imposed by Beijing, the fact that Chinese scholars leaped to the Communist Party’s defense was perhaps predictable. How they argued in favor of it, however, was not.  “Since Hong Kong’s handover,” Wang Zhenmin, a law professor at Tsinghua University, one of China’s most prestigious institutions, wrote in People’s Daily, “numerous incidents have posed serious threats to Hong Kong’s prosperity and stability.” The city, Wang was effectively arguing, was in no position to discuss civil liberties when its basic survival was on the line. Qi Pengfei, a specialist on Hong Kong at Renmin University, echoed those sentiments, insisting that the security law was meant to protect the island from the “infiltration of foreign forces.” In articles, interviews, and news conferences throughout the summer, scores of academics made a similar case... Chinese President Xi Jinping has markedly shifted the ideological center of gravity within the Communist Party. The limited tolerance China had toward dissent has all but dissipated, while ostensibly autonomous regions (geographically as well as culturally), including Xinjiang, Inner Mongolia, and Hong Kong, have seen their freedoms curtailed. All the while, a new group of scholars has been in ascendance. Known as “statists,” these academics subscribe to an expansive view of state authority, one even broader than their establishment counterparts. Only with a heavy hand, they believe, can a nation secure the stability required to protect liberty and prosperity. As a 2012 article in Utopia, a Chinese online forum for statist ideas, once put it, “Stability overrides all else.”  Prioritizing order to this degree is anathema to much of the West, yet perspectives such as these are not unprecedented in Western history. In fact, China’s new statists have much in common with a faction that swept through Germany in the early 20th century.  That affinity is no accident.  China has in recent years witnessed a surge of interest in the work of the German legal theorist Carl Schmitt. Known as Hitler’s “Crown Jurist,” Schmitt joined the National Socialist Party in 1933, and, though he was only officially a Nazi Party member for three years, his anti-liberal jurisprudence had a lasting impact—at the time, by helping to justify Hitler’s extrajudicial killings of Jews and political opponents, and then long afterward. Whereas liberal scholars view the rule of law as the final authority on value conflicts, Schmitt believed that the sovereign should always have the final say. Commitments to the rule for law would only undercut a community’s decision-making power, and “deprive state and politics of their specific meaning.” Such a hamstrung state, according to Schmitt, could not protect its own citizens from external enemies... “Since Xi Jinping became China’s top leader,” Flora Sapio, a sinologist at the University of Naples, wrote, “Carl Schmitt’s philosophy has found even wider applications in China, in both ‘Party theory’ and academic life.” This shift is significant: It marks a move from what had been an illiberal government in Beijing—one that flouts liberal norms as a matter of convenience—to an anti-liberal government—one that repudiates liberal norms as a matter of principle."

Mao Zedong thought Japan did the Communist Party a great favour by invading China. Can Hong Kong agree with that? | South China Morning Post - "Secretary for Education Kevin Yeung Yun-hung said there could only be one answer to the question in the Diploma of Secondary Education history exam regarding Sino-Japanese relations between 1900 and 1945: Japan had done China harm, and no good at all, during the second Sino-Japanese war.  On the face of it, few people could disagree with this. How could an invasion that resulted in the loss of millions of lives be good in any sense of the word? But this is to fail to take into account the strategic thinking of Chairman Mao Zedong.  As students of Sino-Japanese history know, Japan’s prime minister Kakuei Tanaka flew to Beijing in September 1972 to normalise diplomatic relations with China, and met premier Zhou Enlai and Mao. Before beginning a discussion of sensitive political issues, including the disputed islands called Diaoyu in China and Senkaku in Japan, Tanaka started to apologise for Japan’s invasion of China in the 1930s and 1940s.  Surprisingly, Mao told him there was no need to apologise. Japan, Mao said, had done the Communist Party a great favour. “We must express our gratitude to Japan,” Mao said. “If Japan didn’t invade China, we could have never achieved the cooperation between the Kuomintang and the Communist Party. We could have never developed and eventually taken political power for ourselves. It is due to Japan’s help that we are able to meet here in Beijing.”  In other words, had it not been for Japan’s aggression, the communists would have been wiped out by Chiang Kai-shek’s Kuomintang army. By forcing Chiang to focus on resisting Japan rather than eradicating the communists, the invasion gave Mao’s forces years to regroup and expand their territorial control... Whether communist control of the mainland is good or bad is another issue but, according to Hong Kong’s secretary for education, what Japan did was harmful, with no redeeming quality.  Mao’s analysis has been confirmed by one of the foremost historians today, Steve Tsang, director of SOAS China Institute, who wrote in 2015 that Chiang’s decision to confront Japanese aggression “dramatically changed the fortune of the exhausted and heavily depleted CCP (Chinese Communist Party) struggling to survive in the poor northwest of China”. It was a “turning point” for the communist forces... Surely, in view of Mao’s analysis, Yeung’s stance – that no good has come of the Japanese aggression – suggests it is a bad thing for the communists to have won the civil war, established the People’s Republic of China, and to be controlling China today, since all these flow from the Japanese invasion."
It's counter-revolutionary to question the Chairman. But it's also counter-revolutionary not to be Patriotic

Aussies banned from Australian island bought by Chinese developer - "A Chinese real estate company that bought an Australian island has blocked its Aussie residents from living in paradise.  Residents say they can’t go back to their homes since developer China Bloom bought a 99-year lease to take control of Keswick Island in 2019.  “I just don’t think they want Australians on the island,” former island resident Julie Willis told the news program “A Current Affair.” “I think that they want to have this island solely for the use of the Chinese tourism market.”  The Chinese developer has gone as far as banning residents from renting their homes on Airbnb, which residents say has ruined tourism, and blocking them from entering the island from air, land and sea...   Keswick Island, which is owned by the Queensland Government, was declared a national park."

TikTok tracked UK journalist via her cat's account - "What happened to Cristina - a Financial Times technology correspondent and a friend and former colleague of mine - is what TikTok and its parent company, ByteDance, have consistently denied happens at all... TikTok has confirmed members of its internal audit department looked at the location of Cristina's IP address - the unique number of a device - and compared it with the IP data of an unknown number of their own staff, to try to establish who was secretly meeting with the press. They "misused their authority" to do this and were acting unauthorised... Cristina's TikTok account was on her personal mobile handset - and in the name of her cat, Buffy. Her own name and occupation were not mentioned in the bio.  She had about 170 followers and over three years or so had uploaded some 20 videos of Buffy, viewed, on average, a couple of hundred times... Cristina had been talking to TikTok staff unhappy with company practices. The data breach had failed to identify her sources, TikTok said.  She says it may also have breached the EU's strict General Data Protection Regulation, which states users have to actively consent to how their data is used. There are large penalties for companies failing to comply.  For now, Cristina has kept her account open because she still needs to be able to access TikTok for work - but the app now lives on a dummy handset kept at her workplace. And she has curtailed both her own and Buffy's social-media use across other platforms as a result of what happened.  "I have really had to think about my safety - mostly my digital safety," she says.  "I'm super-careful now. I have to make sure that there is no chance that my devices are being tracked. I have to make sure that my sources are aware of the possible challenges to their safety as well." Cyber-security expert Prof Alan Woodward, from Surrey University, said this level of tracking "cannot be described as accidental or even incidental"."
Damn CIA!

Li Shangfu: War with US would be unbearable disaster, says China defence minister - "China's defence minister has said war with the US would be an "unbearable disaster" for the world in his first major speech since taking on the role."
Vernon Chan - "Chinese diplomacy translated: "The US and the world should sit idly by while China invades Taiwan."

China is in a middle-income trap. And it can’t escape like Japan, South Korea, Singapore - "Japan, South Korea, and Singapore have escaped the trap by reskilling their population and becoming innovation-driven economies. China has taken a more aggressive approach to sector-oriented investment to improve the economy’s overall productivity. But the current geopolitical environment isn’t conducive to its plans of escaping the middle-income trap.   “The coming five years will be a crucial period in China’s endeavour to become a modern socialist country in all respects and to achieve breakthroughs in realising high-quality economic development. The main goal…is to elevate per capita GDP to the level of moderately developed countries,” said Wang Yiming, vice-chairman of China Centre for International Economic Exchanges.  Other experts agree...   If China were to escape the middle-income trap, it would need to increase its total factor of productivity to join the club of high-income countries – which remains dismal."   The transition from a manufacturing-driven economy to an innovation-driven economy will require retraining workers. But that will not be easy – there are multiple fault lines... The disconnect between what the central government in Beijing desires and the policies being pursued by local governments to promote their local companies can sometimes be at odds.   The low skilled factory workers who are now unemployed are going to be a liability as barriers exist for them to learn new skills.  Wang Xing, a sociologist, links the lack of stable housing as the root cause of Chinese businesses’ inability to retrain their employees... almost 61 per cent of the Chinese companies hadn’t even established an internal training program as the companies believed their rival would poach its employees if given advanced training. Growing anxiety among young people – from those with college degrees and those without one – can be seen among those lined up outside the temples in China. The educated youth are trying to find solace in the temple, as almost a fifth of the high-educated are unemployed. There has been a 310 per cent increase in temple visits this year as compared to 2022, according to travel booking platform Trip.com... The middle-income trap is a peppy and racy new money club that countries like Japan have found themselves in the past. You know you have got things going for yourself but levelling up to the big boy’s club requires a strategy – that’s where China finds itself stuck today.  The problem is also that China has managed to pick a tiff with a significant number of countries."

Xi Jinping’s new world order is collapsing before our eyes - "Xi Jinping is pushing brinkmanship to the edge in the Taiwan Straits and doubling down, as in Honduras, on its global efforts to isolate Taiwan.  Meanwhile, leading Western technology companies, alarmed by geopolitical uncertainty and facing hostile data “legislation,” are marching out of China in droves. Microsoft has already taken LinkedIn out and is moving an expert AI team to Canada to avoid local pressure on them.  Sub-par performance by the best-known Chinese stocks are compelling some seasoned Western asset managers to cut their exposure. Where is this debacle leading, and where might it end?... part of Xi’s aggressive haste stems from the realisation that the Chinese Communist Party state remains riddled with vulnerabilities.  China rapidly globalised its economic influence by exploiting the West’s illusion that, once admitted to the World Trade Organisation (WTO), it would engage in trade according to WTO rules and norms. But from the outset it denied foreign businesses free and fair access to its domestic market and used massive state subsidies to capture market dominance for its own products and systems across the world.  From 2018, the US has led a de facto trade war against this, while remaining uncomfortably tied to the Chinese economy by enduring debt and supply-chain dependencies.  A tipping point is rapidly approaching that the West can use to its advantage Matthew Henderson 15 June 2023 • 8:00am Matthew Henderson Xi Biden From 2018, the US has remained uncomfortably tied to the Chinese economy by enduring debt and supply-chain dependencies Credit: Kevin Lamarque/Reuters  While the UK and US, each embroiled in democracy’s perverse consequences, struggle to thwart Putin’s mad ambitions in Ukraine, their respective China strategies face forceful challenge from Beijing. Xi Jinping is pushing brinkmanship to the edge in the Taiwan Straits and doubling down, as in Honduras, on its global efforts to isolate Taiwan.  Meanwhile, leading Western technology companies, alarmed by geopolitical uncertainty and facing hostile data “legislation,” are marching out of China in droves. Microsoft has already taken LinkedIn out and is moving an expert AI team to Canada to avoid local pressure on them.  Sub-par performance by the best-known Chinese stocks are compelling some seasoned Western asset managers to cut their exposure. Where is this debacle leading, and where might it end?  Risk has been defined as exposure to hostile intentions and capabilities. This dictum omits one vital issue: whether the party at risk is aware of what is going on. Arguably much of the “free” world is either ignorant, or in denial, about Xi Jinping’s policy drivers, intentions and capabilities.  This in itself is acutely risky. A tipping point in China Risk is rapidly approaching, and with it an opportunity to turn this to the West’s advantage.  Xi Jinping is forging ahead with plans for a revisionist New Era in which China becomes the sole super-power in an authoritarian, post-democratic world order. His immediate tactics include expedient alliances with other enemies of the West to defeat sanctions and other preemptive counter-measures short of military conflict.  He is striving to exploit Western political and economic division and disarray, not least through his tacit support for Putin’s illegal invasion of Ukraine. His spuriously neutral Ukraine peace initiative lacks substance – indeed, this may be deliberate – but it symbolises his ultimate aspiration to global authority.  However, Xi is still a long way from achieving this. Though propaganda trumpets China’s triumph over the Covid virus and prospects for renewed growth, part of Xi’s aggressive haste stems from the realisation that the Chinese Communist Party state remains riddled with vulnerabilities.  China rapidly globalised its economic influence by exploiting the West’s illusion that, once admitted to the World Trade Organisation (WTO), it would engage in trade according to WTO rules and norms. But from the outset it denied foreign businesses free and fair access to its domestic market and used massive state subsidies to capture market dominance for its own products and systems across the world.  From 2018, the US has led a de facto trade war against this, while remaining uncomfortably tied to the Chinese economy by enduring debt and supply-chain dependencies.  Subsequent geopolitical and economic tensions have progressively worsened due to China’s human rights abuses, political interference, cyber espionage and IP theft, mistrust and sourcing disruption caused by the pandemic, alignment with Russia, and threats to Taiwan.  This has led to an accelerating exodus of major Western companies from China to more reliable regional bases in South-East Asia, India and Bangladesh. The low cost of factory labour in China, formerly a major draw for FDI, no longer applies. Factory wages in South China are now around three times higher than in equivalent South Asian industries.  The Chinese economy has long been struggling under Xi Jinping’s Marxist ideological chokehold. Covid lockdown early in the pandemic was a kneejerk CCP crisis management response to potential social disturbance. Imposed disastrously late, it slowed transmission but failed to boost immunity... Unsurprisingly, promised recovery has not been realised. Exports are depressed and the property market is in disarray, with more and more major players being delisted on the Shanghai stock exchange. The tech sector remains traumatised by Xi’s politically-motivated crackdown in 2021, which has wiped out many jobs for educated young workers at a time of serious youth unemployment.  Debt remains toxic, demographics are intractable (despite a huge surge in mortality among the under-immunised elderly soon after Zero Covid rules were abruptly relaxed). Environmental stresses, particularly water security, are worsening. Seemingly ignoring these headwinds, Xi Jinping’s model for economic resurgence is a distinctly ideological formula called the Dual Cycle economy. The idea is to stimulate domestic technical innovation and production, leveraging this to give China a lead in global markets for cutting-edge technologies, while concurrently driving down dependency on technical cooperation with the West.  This construct ties in existing nationalist, anti-market measures and a protectionist, sanction-proofing subtext, sitting badly with claims that China is now open to the world for “business as usual”.  Recent use of arbitrary data-protection legislation to seize records, detain staff and freeze important ESG and other compliance work done by foreign consultancies in Shanghai and elsewhere also undermines this claim.  Xi is hoarding gold, securing energy supplies and building up China’s military capabilities, in particular those used to threaten Taiwan. To argue that he will not, for some time at least, invade Taiwan for fear of the economic consequences misses the real point... Xi shows little capacity to tackle the fundamental unsustainability of the Chinese economy.  Failure to do so could sweep away his dreams of a revisionist New Era. There has been much talk lately of “de-risking” from China."

China’s miraculous growth machine is juddering to a halt - "By the middle of 2022, China’s top leadership had stopped mentioning their target for GDP growth. It was already clear that they’d fall short of the 5.5 per cent figure set at the beginning of that year, with the Politburo instead saying that they strove for “the best possible results”. In the end, a series of fierce nationwide lockdowns combined with the global impact of the Russian invasion meant that the economy grew by a measly 3 per cent in the year. The bottom had fallen out of China’s miraculous growth machine... As recently as 2011, Beijing expected around 10 per cent GDP growth each year. You can question the accuracy of the numbers, but the reality is that everyone who lived in China could see and feel the breakneck progress. They include my family, who went from farm to city in one generation. Economists like Joseph Stiglitz started talking about how this would be the “Chinese century”, when the People’s Republic overtakes the US to be the world’s largest economy.  But now the optimism of those years is a relic. Young Chinese say they want to “lie flat” rather than enter an increasingly competitive jobs market, while billionaires tunnel as much money out of the country as they can. Homeowners are concerned about a potential housing market crash, with unprecedented boycotts on mortgage payments across dozens of cities last summer.  These less happy tales are reflected in this week’s numbers too, though the Global Times isn’t talking about that. Private investment has barely grown compared to Q1 2022 – an indictment on the lack of business confidence in the country. Real estate investment actually fell, by almost 6 per cent, suggesting the property market is still in the danger zone. And, perhaps most worrying of all for the CCP, youth unemployment continues to be at near record highs, with almost a fifth of 16 to 24 year olds out of work. Beijing may have bought acquiescence from my parents’ generation with economic competence, but that argument is difficult to make to younger Chinese when their prospects are so thin. Some of these are symptoms of structural issues, like the debt racked up by government and companies alike (driving growth through infrastructure spending or building new homes). Some reflect long term changes, such as the rapidly ageing population, made worse by almost four decades of the now-defunct one child policy. India will officially overtake China as the world’s largest country this year.  But others come from more recent and self-inflicted blows, like Beijing’s crackdown on the country’s highly successful tech entrepreneurs or the zero Covid years which shuttered so many businesses. The US-led campaign to decouple has also stung, judging by the 15 per cent drop in China’s output of semiconductors after Washington’s introduction of the CHIPS Act.  Even the most bullish economists are rethinking their forecasts."

China's youth unemployment hits a fresh record high in May, major data disappoint - "The unemployment rate for young people ages 16 to 24 rose to 20.8% in May, a record and above the high set in April. The jobless rate for people of all ages in cities was 5.2% in May."

China Investigates Children’s Math Textbooks - The New York Times - "A little boy pulling up a girl’s dress. Another grabbing a classmate from behind, his hands across her chest. Bulges protruding from male students’ pants. Suspiciously pro-American images.  The illustrations can be found in a Chinese state-run publisher’s mathematics textbooks for elementary school students — books that have been used for years. They set off a furor in China after they were flagged on social media last week by angry commenters as crude, sexualized and anti-China. The controversy has prompted the textbook publisher to apologize. China’s Ministry of Education at first said that it was ordering an inspection of illustrations in primary and secondary school textbooks. Then, on Monday, as anger spread online, the ministry announced a sweeping, nationwide investigation of all primary, secondary and university textbooks... The outcry over what some viewed as lewd and otherwise offensive images in math books meant for impressionable minds comes as China has tightened its grip on ideological content and sensitive history in textbooks. Universities have been ordered to emphasize the study of Marxism and the writings of China’s top leader, Xi Jinping. In 2015, Yuan Guiren, China’s education minister, ordered a closer examination of foreign textbooks and said that those that promote Western values should be banned from classrooms... Some of the drawings are odd or silly, like children sticking out their tongues. But others show children appearing to grope classmates on a playground. Another showed a schoolgirl with her underwear exposed as she played a game. Many critics said the drawings made the children look ugly, with wide-set, droopy eyes.  Others argued that the schoolbooks also had anti-China messages, such as an incorrectly rendered Chinese flag. Still some found allegedly pro-foreign images, like a boy flying in a biplane similar to Japanese and American planes. Some even pointed to images of children wearing clothes with what looked like stars and stripes in the colors of the American flag."

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