China in Quotes
“Regarding the former U.S. military official’s statement on the “Philippine tool theory,” the international community has its own judgment. Whether it is the “Saigon moment” in history or the “Kabul debacle,” it reminds me of a famous quote by Mr. Kissinger: “It is dangerous to be America’s enemy, but to be America’s friend is fatal.” – Senior Colonel Wu Qian, Ministry of Defense Spokesperson, China
De/Cypher Data Dive📈
Activity on China’s equity capital markets on the mainland and beyond has slumped to multi-decade lows. At least 100 companies have withdrawn plans to list this year on exchanges in Beijing, Shanghai and Shenzhen, according to the regulator’s public records.
Quick China: Unmissable Stories 📜
A 100 Billion Dollar Bet on Chinese Logistics is Coming Undone
In many parts of China, the warehouses and industrial parks that used to be a magnet for international investors are grappling with a surprising slowdown in business activity.
Logistics hubs that were built in anticipation of a long-lasting boom in e-commerce, manufacturing and food storage are losing tenants, forcing building owners to slash rents and shorten lease terms. Shares of real estate investment trusts that own China commercial properties have plummeted, and some of their managers expect their rental income to fall further. Average vacancy rates at logistics properties in east and north China are approaching 20%, the highest in years, according to real estate consultancies. More warehouses are being built, which is making the problem worse. “We are looking at a supply glut in logistics and industrial properties in China,” said Xavier Lee, an equity analyst at Morningstar who covers the real—estate sector. (Bloomberg)
CATL Chief Suggests A New Way To Ensure Where Batteries Are Made, & It’s Not Tariffs
Rather than using tariffs to steer electric vehicle (EV) battery production capacity to different countries, it ought to be spread out based on each one’s stake in the sector, Contemporary Amperex Technology Co. Ltd.’s (CATL) chief said.
CATL Chairman Zeng Yuqun proposed that capacity should be distributed proportionately, with China taking 40% due to its technological edge and the high efficiency of its investments. The Europe and the U.S. together should have 30% and battery material suppliers 30%, Zeng said Tuesday at the 15th Summer Davos in Dalian, Northeast China’s Liaoning province.
China currently undertakes well over half of global raw material processing for lithium and cobalt and has almost 85% of global battery cell production capacity, according to the International Energy Agency. Europe, the U.S. and South Korea each holds 10% or less of the supply chain for some battery metals and cells, it said. Zeng said proportional distribution could offer governments a feasible alternative to depending solely on tariffs to limit imports of products they consider important. (Caixin)
Two Former Defense Ministers Of China Are Expelled From Communist Party and Stripped of CPC, 2022
Two former Chinese defense ministers have been expelled from the Communist Party of China (CPC) on allegations of corruption, state media reported. Li Shangfu, who was removed as defense minister in October 2023, is suspected to have offered and received bribes, a Central Military Commission (CMC) disciplinary body’s investigation found, according to state-run Xinhua News Agency. Wei Fenghe, Li’s immediate predecessor, is suspected of taking bribes, among other disciplinary violations. The actions of both former officials “caused serious damage to the party’s cause, national defense and military construction, as well as the image of the senior leading cadres,” the Xinhua reports said.
The announcements were made during a CPC Central Committee Politburo meeting Thursday. Li and Wei will face criminal prosecution by military authorities, the reports said. Li and Wei have also been stripped of their qualification as delegates to the current CPC National Congress, which was elected in October 2022, according to Thursday’s announcements. The two had been removed from the CMC, the country’s top military decision-making body, and lost their general titles, the announcements said. (Xinhua)
China Leads The US In Space Race for Now
There is a new space race, this time between the U.S. and China. On Tuesday, China took an important step forward. A Chinese spacecraft touched down on grasslands in China’s Inner Mongolia region, carrying the first-ever rock samples from the far side of the moon. A scientific breakthrough in itself, the success also advanced China’s plan to put astronauts on the moon by 2030 and build a lunar base by 2035. Such momentum is worrying American space officials and lawmakers, who have their own ambitions to build moon bases.
Tuesday’s successful completion of the Chang’e 6 mission shows that, by one measure, China is ahead for now. Its lunar program has now soft-landed on the moon four times since 2013, the latest mission scooping up rocks near the south pole with robotic arms. Meanwhile, after a decadeslong moon-landing hiatus, two U.S. companies this year launched lunar-surface missions under NASA contracts. One lander tipped on its side after touching down. The other didn’t try to land because of technical problems. At least two more private missions, with funding from NASA, are slated to try to get to the moon later this year. (WSJ)
Against China The United States Must Play To Win. Argument from Foreign Policy.
As the 2024 U.S. presidential election approaches, many are asking what the United States’ goal is when it comes to strategic competition with China. The Biden administration has said that it aims to “responsibly manage the competition” with China, but some prominent Republicans have criticized this approach and have called for “victory” as the superior objective. Proponents of victory, however, have not clearly spelled out what winning means.
Washington’s goal in its contest with China should indeed be victory, and winning means getting to a point where the Chinese government no longer has the will or the ability to harm vital U.S. interests. In other words, Washington should aim for the capitulation or incapacitation of the Chinese threat. (Kroenig & Negrea, Foreign Policy, June 24th, 2024)
De/Cypher Insight: The new money laundering network fuelling the fentanyl crisis
by Joe Miller, New York & James Kynge, London. (Financial Times)
“The underground banks operate largely by selling the cartels’ dollars to wealthy Chinese who, alarmed at the political tightening under Chinese leader Xi Jinping, are looking to circumvent capital controls and transfer their money out of the country. In essence, the officials claim, a new global money laundering network has evolved that marries two powerful financial forces — the huge stockpiles of cash being accumulated by the Mexican drugs cartels from selling drugs in the US, and the rapidly growing volumes of capital seeking an escape route from China. “Chinese money launderers have taken over laundering for the Mexican drug cartels,” says Chris Urben, who worked at the DEA for 24 years, investigating traffickers around the world. This alliance, he adds, is “amazing to watch . . . a game-changer”. In interviews with the Financial Times over the past few months, more than a dozen current and former DEA agents and high-ranking law enforcement officials in the US, UK and Italy have raised the alarm about a method of money laundering that they say is evading standard forms of surveillance and is thwarting their efforts to pursue drug traffickers. They say that the arrangement is fuelling the fentanyl crisis in US towns and cities, which is killing thousands of Americans each month, while also playing a role in boosting organised crime across Europe. This enterprise is able to “move money faster, cheaper and at a fraction of what is usually charged [by money laundering organisations]”, warned Anne Milgram, head of the DEA, after announcing the indictment which was the result of a co-ordinated sting with authorities in the US, China and Mexico. The Sinaloa cartel, she added, now “relies on a network of Chinese money launderers to profit from selling drugs across the US”. (FT)
De/Cypher View: China’s Nuclear Arsenal and Its Implications
Written By Priyanka Garodia, Geopolitical Research Analyst – South Asia
China’s Nuclear Weapons
China’s nuclear programme was started in the 1950’s with the help of Soviet technology and assistance. The break in Sino-Soviet relations did not deter the Chinese ambition to obtain nuclear power, and China tested its first weapon in 1964 independently. The nuclear triad—ground-based intercontinental ballistic missiles, submarine-launched missiles, and air-launched nuclear weapons—make up the PRC’s nuclear arsenal. With over 500 nuclear heads presently, China is presumed to have one of the fastest-growing nuclear programmes in the world. According to The Bulletin of Atomic Scientists, China has produced a stockpile of about 440 nuclear warheads that can be delivered by bombers, sea-based ballistic missiles, and land-based ballistic missiles. In order to eventually equip more road-mobile and silo-based missiles and bombers, an estimated 60 more warheads have been produced, with more in production. The Pentagon suggests that China would likely be in possession of roughly 1000 nuclear warheads by 2030.
The Rationale
There are three main arguments around this buildup –
- Firstly, China and the United States have seen a considerable deterioration in their relationship in recent times. Chinese nuclear warheads are being stocked as a deterrent against a potential US attack, and this is frequently referred to as a security conundrum. Its nuclear programme then emerges as a strategic counterbalance to potential American aggression in the security dilemma with the USA.
- Secondly, the nuclear arsenal that China develops can lead to an increase in its regional clout in the Indo-Pacific. This will give it the ability to exert significant influence over the South China Sea situation, its tense relations with Taiwan, and other nations it believes are acting against its national interests.
- The development of China’s nuclear program, including its proliferation to use civil nuclear power plants to enhance weaponry, is evident when one considers the larger picture. These developments are clearly the result of Xi’s personal goals of enhancing China’s military might, projecting China as a credible global power, and achieving a balance of power worldwide.
What should be of concern to the international community is that China’s nuclear weapons are increasing while the global count of nuclear weapons is decreasing. However, this dismantling is taking place solely because the US and Russia are reducing there weapon stock. The aggression that China displays in nuclear development could possibly set off an international arms race.
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Beyond The Great Wall 🧱
Exploring News About China in Depth
Economy
China Premier Warns Decoupling Will Lead to ‘Destructive Spiral’
Bloomberg reports that Chinese Premier Li Qiang warned against economic decoupling at the World Economic Forum, stating it would lead to a “destructive spiral” and global competition for shrinking economic benefits. Li defended China against criticisms of overcapacity and cheap goods dumping, highlighting the nation’s advancements in science and technology. His remarks follow Canada’s restriction on Chinese electric vehicle imports and the EU’s planned tariff increases. Li remains optimistic about achieving China’s 5% growth target for the year, despite economic challenges, and emphasized the importance of technological innovation.
China to Limit ‘Low-End’ Solar Manufacturing Capacity
You Xiaoying writes in Caixin that China’s energy regulator plans to curb the rapid expansion of its solar industry by limiting the addition of “low-end” manufacturing capacity. This move aims to address overcapacity and falling profits caused by fierce competition and excessive investment. Li Chuangjun, an official at the National Energy Administration, highlighted the need for updated power infrastructure and more spot electricity trading. The agency also plans to set standards for the solar industry and promote technological advancements to ensure a balanced market and sustainable growth.
8th China-Eurasia Expo kicks off in northwest China’s Xinjiang
CGTN reports that the eighth China-Eurasia Expo began on Wednesday in Urumqi City, Xinjiang Uygur Autonomous Region, with Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan as guest countries. The event features participation from 23 countries, three regions, and one international organization, establishing national and regional pavilions. Themed “New Opportunities of Silk Road, New Vitality for Eurasian Cooperation,” the expo includes over 1,900 participants and showcases more than 6,000 products. Covering 140,000 square meters, the five-day expo focuses on investment cooperation, international exhibitions, special industries, and equipment manufacturing, facilitating investments in agriculture, textiles, energy, and chemicals between China and Eurasian nations.
China’s new graduates face job crunch with only 48% receiving offers
Kentaro Shiozaki writes in Nikkei that new college graduates in China are facing a tough job market, with only 48% securing informal job offers as of mid-April, down 2.4 percentage points from the previous year. Before the pandemic, the offer rate was around 75%. Major private-sector employers like tech companies, the real estate sector, and cram schools have reduced hiring due to government crackdowns and economic downturns. Consequently, many students are avoiding private-sector jobs, with only 13% seeking them compared to 25% in 2020. Instead, 48% prefer state-owned companies for job stability, with competition for civil servant exams intensifying. The record number of graduates, reaching 11.79 million in summer 2024, further exacerbates the job crunch.
Where Have All the Chinese I.P.O.s Gone?
Meaghan Tobin writes in The New York Times that Chinese companies are experiencing a significant decline in initial public offerings (IPOs), both domestically and on Wall Street. This drop stems from increased geopolitical tensions between China and the U.S., and stricter regulations in China. Beijing’s policies under Xi Jinping have tightened control over private enterprises, leading to fewer listings and decreased foreign investment. The shift marks a stark contrast from the IPO boom a decade ago when Chinese tech giants thrived on the U.S. stock market.
How Big Is CCP Inc.?
Bob Davis writes in Foreign Policy that China’s sovereign wealth funds (SWFs), managing over $2 trillion, play a crucial role in bolstering the economy and supporting Beijing’s global ambitions. Zongyuan Zoe Liu’s book, “Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions,” highlights how these funds, accumulated through trade, are used strategically, despite some ill-timed investments and political backlash. While China’s SWFs have financed domestic initiatives and tech startups, their international investments aim to strengthen geopolitical influence, notably through the Belt and Road Initiative.
Internal Politics 🏛️
China’s Xi calls for ‘bridges’ amid trade, diplomatic frictions
CNA reports that Chinese President Xi Jinping called for building “bridges” in the global economy amidst ongoing trade and diplomatic frictions. Speaking at a conference marking the 70th anniversary of China’s Five Principles of Peaceful Coexistence, Xi emphasized China’s commitment to peaceful development and cooperation, not domination. He addressed the need for unity over division and cooperation over confrontation.
Xi: China-Vietnam community with shared future ‘off to a good start’
CGTN reports that Chinese President Xi Jinping stated that building a China-Vietnam community with a shared future has begun successfully during his meeting with Vietnamese Prime Minister Pham Minh Chinh in Beijing. Xi highlighted the rapid economic and social stability of both nations, emphasizing the benefits of their socialist systems. He expressed China’s commitment to deepening reform and modernization, which will create new opportunities for bilateral cooperation.
Xi Jinping calls for Chinese scientists to step up innovation in hi-tech ‘battlefield’
Jane Cai writes in SCMP that President Xi Jinping has urged Chinese researchers to accelerate innovation in six key hi-tech areas, which he describes as the “main battlefield” in the superpower rivalry. Speaking at a science and tech conference in Beijing, Xi emphasized the need for breakthroughs in integrated circuits, industrial machine tools, basic software, advanced materials, scientific research instruments, and seed sources. Highlighting the tech war with the West, Xi called for technological self-reliance and original innovation to secure China’s supply chain and maintain high-quality development and security.
China And The World🌐
China, Saudi military cooperation on ‘fast track’ as top defence officials meet
Yuanyue Dang writes in the SCMP that top Chinese generals met Saudi Defence Minister Prince Khalid bin Salman in Beijing to enhance military cooperation. Vice-chairman Zhang Youxia and Defence Minister Dong Jun discussed deepening ties, including joint exercises and personnel training. Salman emphasized strengthening the strategic partnership to promote international peace and security. This visit highlights China’s growing influence in the Middle East, with both nations expanding cooperation in military, AI, and infrastructure sectors.
Chinese scientists detect ‘spy balloon’ as small as F-35 stealth fighter on radar
Stephen Chen writes in SCMP that Chinese scientists have developed a method to detect spy balloons using common weather radar, addressing a challenge that has perplexed the US military. A test conducted by the Chinese military in January 2022 demonstrated the effectiveness of this technology, detecting a balloon with a radar cross-section similar to that of an F-35 stealth fighter. This innovation relies on upgrading signal processing software rather than hardware, making it cost-effective. The method can filter out background noise and accurately detect balloons, providing a solution that does not necessitate large-scale hardware upgrades.
FCA urged to block Shein London listing over forced-labour concerns
James Kynge writes in the Financial Times that UK-based human rights group Stop Uyghur Genocide has launched a legal campaign to prevent Shein from listing on the London Stock Exchange, citing forced labor concerns in its Xinjiang cotton supply. Represented by law firm Leigh Day, the group urged the Financial Conduct Authority (FCA) to block Shein’s IPO application, arguing it contradicts the UK’s International Labour Organization obligations. Shein, valued at about £50bn, denies the allegations and maintains a zero-tolerance policy for forced labor, requiring its suppliers to source cotton from approved regions.
Canada to Curb China EV Imports as Trudeau Responds to Biden Move
Brian Platt and Monique Mulima write in Bloomberg that Canada is moving to impose tariffs on Chinese-made electric vehicles (EVs), following the Biden administration’s lead. Finance Minister Chrystia Freeland announced a 30-day public consultation period as a preliminary step. The government will also review federal incentives for EVs and broader investment restrictions in the sector. This action responds to China’s state-directed overcapacity, which Canada claims undermines its EV industry. The move is part of a coordinated G7 effort to address trade imbalances with China, despite potential domestic and environmental concerns.
China Floats Perks for German Carmakers to Prevent EV Levies
Kamil Kowalcze and Alberto Nardelli write in Bloomberg that China has proposed reducing tariffs on large-engine European cars to persuade Germany to help block the EU’s planned tariffs on Chinese electric vehicle (EV) imports. Beijing currently imposes a 15% fee on European passenger vehicles. The EU plans to introduce tariffs up to 48% on Chinese EVs, citing state subsidies. This move aims to balance the competitive landscape but faces political pressure.
Germany’s Vice Chancellor Tours China
Caixin reports that Germany’s Vice Chancellor and Minister for Economic Affairs and Climate Action, Robert Habeck, embarked on a three-day visit to China, covering Beijing, Shanghai, and Hangzhou. Habeck met with Chinese officials, visited a BMW research center, and spoke at Zhejiang University. He also addressed the EU’s provisional tariffs on Chinese-made electric vehicles, impacting German automakers. This trip marks Habeck’s first official visit to China.
Germany, China sign declaration on data sharing
The Business Times reports that Germany and China have signed a declaration of intent to discuss cross-border data transfers, marking a significant step toward allowing carmakers to transfer data to Germany. This follows an April cooperation deal on autonomous driving. German Digital Affairs and Transport Minister Volker Wissing emphasized the importance of data flow while balancing privacy and security concerns.
Chinese envoy urges major countries to aid de-escalation for lasting peace in Syria
CGTN reports that China’s deputy permanent representative to the United Nations, Geng Shuang, has called on major countries to help de-escalate Middle East tensions and promote lasting peace in Syria. At a Security Council briefing, Geng expressed concerns over Israel’s airstrikes on Syria and urged all parties to exercise restraint. He emphasized the importance of a Syrian-led political resolution and condemned terrorism.
PetroChina International America to Pay $14.5M Fine, Forfeiture for Export Violations Following HSI Houston, Federal Partner Investigation
Homeland Security Investigations (HSI) reports that PetroChina International America Inc. has agreed to pay $14.5 million in fines and forfeitures for violating U.S. export law. The company, a subsidiary of one of the world’s largest oil and gas firms, misclassified over $32 million of ultra-low-sulfur diesel fuel as mineral oil mix in exports to Mexico. The violations were discovered after Mexican authorities found discrepancies in import documents in 2019 and 2020. PetroChina International America has since enhanced its compliance program and will provide annual updates to the U.S. Attorney’s office for three years.
US Probing Cloud Arms of China’s Big Three Telcos, Reuters Says
Edwin Chan writes in Bloomberg that the US Commerce Department is investigating whether China’s largest state-controlled telecom carriers—China Mobile Ltd., China Telecom Corp., and China Unicom—are providing American data to Beijing through their US cloud services. The probe includes subpoenaing information and conducting risk-based analyses, with the investigation into China Unicom being less advanced. This follows longstanding US government concerns over security risks posed by these telcos, leading to previous bans on China Mobile and the ejection of Unicom from the US market in 2022.
China’s subsea cable drive defies U.S. sanctions
Cheng Ting-Fang, Lauly Li, Tsubasa Suruga, and Shunsuke Tabeta write in Nikkei that despite U.S. sanctions, Chinese undersea cable maker Wuhan FiberHome International Technologies has seen its business thrive. Blacklisted by the U.S. in 2020, FiberHome has benefited from China’s drive for self-sufficiency in undersea cable technology, with increased orders from domestic producers. The company claims full capability to manufacture all components of submarine communication cables without foreign technologies. These cables, vital for global communications, carry over 95% of the world’s data.
Chinese smuggled into Italy in luxury cars, police say
CNA reports that Italian police have dismantled a Chinese trafficking network that smuggled migrants into Italy using luxury cars. The operation involved migrants posing as well-dressed Asian tourists traveling in expensive vehicles driven by long-term Chinese residents of Italy. The network was uncovered after a Chinese citizen was stopped at the Italy-Slovenia border in April with four undocumented migrants. The investigation revealed a route through Serbia, Bosnia, Croatia, and Slovenia to Italy. Migrants were held in near-slavery conditions in a safehouse near Venice, deprived of their passports and basic freedoms. Police arrested nine traffickers and identified 77 undocumented migrants, including minors.
Chinese telecoms giant Huawei signs deal to train thousands of Peruvians in new technology
Kawala Xie writes in the SCMP that Chinese telecom giant Huawei has signed an agreement with Peru to train 20,000 Peruvians in new technologies, particularly artificial intelligence. The deal was signed during President Dina Boluarte’s visit to Huawei’s headquarters in Shenzhen, part of a week-long trip to China aimed at attracting investment. Boluarte’s visit, which includes meetings with Huawei chairman Liang Hua and discussions with BYD about building an electric car plant in Peru, also involves talks with Cosco and China Railway Construction regarding infrastructure projects. Peru hopes to strengthen ties with China, despite U.S. concerns over Chinese investments in the region.
Japanese woman and child stabbed at school bus stop in China
Nikkei reports that a Japanese woman and her son were injured, along with a seriously injured Chinese woman, in a knife attack at a bus stop and on a school bus in Suzhou, China. The Japanese Consulate General in Shanghai confirmed the injuries were not life-threatening. The attacker, believed to be Chinese, was subdued at the scene. The attack has raised concerns among the local Japanese community, prompting the closure of the school and a safety alert from the Japanese Embassy in Beijing. Recent similar incidents in China have heightened security concerns.
Tech🧑💻 in China
Tencent’s New Blockbuster Game Exceeds $270 Million in 30 Days
Zheping Huang writes in Bloomberg that Tencent’s Dungeon & Fighter Mobile doubled the first-month sales of its top-selling game, Honor of Kings, on iOS in China. The game, produced by Nexon Co., generated $270 million within 30 days of its May 21 launch, leading in both downloads and revenue. Tencent expedited its release after positive testing feedback, heavily promoting it to boost growth in its domestic games division. Despite delays due to Beijing’s game approval pause, the game has quickly gained popularity in China’s vast gaming market.
China’s AI Strength Suggests US Curbs Could Backfire
Catherine Thorbecke writes in Bloomberg that U.S. efforts to stifle China’s AI development may backfire, as such actions often spur innovation. Restrictions have driven China to advance its homegrown AI ecosystem. Huawei’s rapid progress in AI processors and High-Flyer Capital’s impressive open-source AI model underscore China’s resilience. U.S. semiconductor curbs have prompted Beijing to enhance self-sufficiency in chips and AI. While the U.S. leads in AI, China’s strides in talent and innovation highlight its growing competitive edge.
China’s Economic Downturn Sparks Wave of Violent Incidents and Public Anxiety
Written By De/Cypher Team
Recent violent attacks in China have sparked widespread concern on social media, reflecting growing anxiety about the country’s economic downturn. A recent example is a knife attack on a Japanese mother and her child at a school bus stop in Suzhou, near Shanghai. The attacker, who had also injured a Chinese woman, was apprehended on the scene. The incident, which resulted in the Japanese boy receiving a deep stab wound, has alarmed both the local and international communities.
Economic Strain and Social Reactions
China’s economic problems are complex. The real estate market is in turmoil, with falling home prices, developer defaults, and rising public dissatisfaction. The collapse of the real estate sector threatens to drag down the entire economy. According to Freedom House’s China Dissent Monitor, economic protests, particularly the housing crisis, accounted for 80% of all publicly recorded dissent last year. According to recruitment platform Zhaopin, nearly a third of office workers saw salary cuts during this time period.
The Suzhou stabbing comes after a string of violent incidents across the country. A man in Jilin stabbed four teachers from a college in the United States last week. Earlier this month, a political consultative body chairperson in Shanxi was killed in a dispute over illegal state housing. In May, two people were killed in a knife attack at a Jiangxi primary school.
Mental Health and Economic Pressures
The rising demand for mental health services in China highlights a troubling trend. Psychological counsellor Huang Jing has seen her business, Better Family, thrive since its inception in Shanghai in 2022, despite the city’s severe lockdowns. The rapid growth of her business, now expanded to Hangzhou, reflects increasing anxiety and depression among the Chinese middle class, who are particularly impacted by economic and social pressures.
Huang notes that many clients are struggling with the economic slowdown, disillusionment among the youth, and intense parental pressure. The World Health Organization estimates that 54 million people in China suffer from depression, and 41 million from anxiety disorders. The number of counselling institutions in China has surged, indicating a growing need for psychological support. The Guangdong Police College’s analysis of high-profile violent cases from 2000 to 2021 found that most perpetrators did not have prior criminal records but were socially disadvantaged, often turning to violence out of frustration.
Government Response and Public Safety
Despite a general drop in severe violent crimes, Chinese authorities are focusing on preventing extreme violence and ensuring public safety. According to Brookings, this entails broad social governance strategies for maintaining public order. The Chinese government has stepped up efforts to combat violent crime by addressing the underlying causes, such as mental health and economic instability.
Also, China has implemented community-based interventions to combat violence. These measures include mobilizing local residents for conflict resolution and improving community organization to keep minor disputes from escalating. This is consistent with the government’s broader strategy of involving grassroots efforts in maintaining social stability and resolving social grievances.
Social and Political Implications
The economic downturn poses significant challenges for the Chinese government, particularly for President Xi Jinping, whose administration faces increasing public dissatisfaction. The economic policies and the ongoing housing crisis threaten to undermine social stability and could have broader implications for Xi’s leadership.
The recent violent incidents and the public’s reaction reflect deeper societal issues. As China grapples with economic challenges, the government’s ability to maintain social order and address the underlying causes of unrest will be critical in the coming months.
News From Asia
Friday
- Japan and the Philippines are finalizing a defense pact to be signed in Manila amid escalating tensions with China over the South China Sea on July 8. Read more: AP
- The Aurus car, showcased by Russian President Vladimir Putin and North Korean leader Kim Jong-un in Pyongyang, relies heavily on imported parts, including from South Korea. Read more: Reuters
- Thailand has completed its first senate election in a decade, following a multi-round selection process. The new senate, now 50 members smaller, will no longer vote to approve the prime minister after an election. Read more: CNA
- Iraq’s Commission of Integrity (COI) has stalled its collaboration with European investigators on pursuing alleged fraud by the previous government of Mustafa al-Kadhimi. Despite initial outreach for assistance, contracts with Western asset tracing experts remain unsigned. Read more: IO
Thursday
- North Korea successfully tested a multiple-warhead missile, with state media claiming the missile’s warheads hit their targets accurately. Read more: Arab News
- The United States, Japan, and South Korea have pledged to enhance cooperation on strategic issues such as AI safety, export controls, clean energy, and semiconductor supply chains. Read more: TBS
- Arms exports from Singapore-based entities to Myanmar’s junta dropped dramatically from over $110 million to just over $10 million following a government investigation. Read more: CNA
- Macedonian munitions manufacturer ATS Group is being closely watched by a number of Gulf states. The firm has formed a new advisory board with US and British veterans familiar with Gulf defence establishments, while expanding its products that could prove useful in Ukraine. Read more: IO
Wednesday
- The yen fell to over 160 against the U.S. dollar, its lowest in over 37 years, despite Japanese authorities’ warnings of market intervention. Read more: Mainichi
- Sri Lanka reached a debt restructuring deal with bilateral creditors, including China and France, a crucial step in economic recovery after defaulting in 2022. Read more: AP
- Myanmar junta leader Min Aung Hlaing issued a rare apology for the killing of a senior monk by security forces, attempting to defuse tensions in the predominantly Buddhist nation. Read more: Bloomberg
- More than 40 Indonesian agencies, including the ministry overseeing immigration, were hit by a significant cyberattack on the country’s data centers, disrupting immigration services and operations at major airports for days. Read more: Kontan
Tuesday
- South Korean investigators are examining the ruins of a Hwaseong factory fire that killed 23 people, mostly Chinese migrant workers, making it one of the deadliest blazes in years. Read more: AP
- The UN World Food Program condemned the looting and burning of its warehouse in Maungdaw, Rakhine, where 1,175 metric tons of food were destroyed, exacerbating the humanitarian crisis. Read more: ABC
- Malaysia has extended the contract of the company behind the IT systems which control migrant workers’ entry into the country, though under stricter terms, according to a senior government official. Read more: CNA
- Lebanese whistleblowers claim Hezbollah is using Beirut’s international airport to store Iranian weapons, including ballistic missiles and RDX explosives. Read more: The Times of Israel
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