China in Quotes
“Quantum, as a ‘bolting dark horse,’ has made a significant impact on the information age… and is poised to change the mechanisms of future military victories.”
Col. Gao Dongguang, Researcher, PLA Academy of Military Sciences
Quick China Fact
Illegal police stations run by the China around the world, 2022
Timeline: News From Asia
Friday
China launched its secret space plane for a third time on Thursday, while the US Space Force is still waiting for its X-37B to get off the pad after multiple delays. The Chinese “reusable experimental spacecraft” successfully lifted off atop a Long March 2F rocket from the Jiuquan Satellite Launch Centre in the Gobi Desert.(South China Morning Post)
The United States calls for an end to the war between Israel and Hamas. Israel vows to continue the war until victory against Hamas. The conflict has resulted in significant civilian casualties and destruction in Gaza. (Ground News)
In what will likely go down as the warmest year on record — one rife with catastrophic floods, scorching heat waves, devastating wildfires and enduring drought — leaders from nearly 200 countries gathered to chart a path forward in the fight against climate change. (NBC News)
Ahead of Taiwan’s presidential election next month, candidates are at loggerheads over moves to develop submarines domestically to counter the military threat from China, highlighting the island’s deep divisions over defense. (Nikkie Asia)
Thursday
At an event at the Chinese Embassy in the U.S. on Wednesday, Ambassador Xie Feng took off his jacket before showing off his table tennis skills. He was facing off against Connie Mae Sweeris, one of the nine players from a U.S. table tennis team that made a historic trip to China in 1971. (Nikkei Asia)
The Philippine central bank kept its benchmark interest rate steady at 6.50% for a second straight meeting on Thursday as price pressures have started to ease, but said policy would have to stay “sufficiently tight” to bring inflation back to target. (Reuters)
South Korea said it had scrambled its fighter jets in response to an incursion into its air defence identification zone on Thursday. The South Korean joint chiefs of staff said two Chinese and four Russian aircraft had entered the air defence zone in the Sea of Japan, also known as the East Sea, without notice.(South China Morning Post)
Russian President Vladimir Putin stated that Moscow’s goals in Ukraine remain unchanged and there will be no peace until they are achieved. Putin’s goals for Ukraine include “denazification, demilitarization and its neutral status. Putin discussed Russian relations with the United States and the EU, accusing the US of imperialism and expressing readiness to restore relations. (The Wall Street Journal)
Wednesday
Maor Sellek and Ziv Hava, two former employees of Israeli cyber-intelligence firm NSO Group, have teamed with business development specialist Oshrat Kakon Faribai to found the start-up IntelEye. (Intelligence Online)
Vietnam’s ministry of defence has issued new directives to regulate interactions with foreign entities, a way for its ambitious minister Phan Van Giang to clip the wings of intelligence chiefs. (Intelligence Online)
Olivier Brochet, France’s new ambassador in Hanoi, plans to capitalise on upbeat Franco-Vietnamese maritime relations to spur the two countries’ bilateral defence relationship. (Intelligence Online)
Tuesday
Under U.S. pressure, Israel allows Palestinian-Americans to travel from West Bank to enter its territory for the first time since the Oct. 7 Hamas attack.(Axios)
Israel’s defense minister rejects calls to end the military operation in Gaza and states that it will “take time” to complete the current phase of fighting against Hamas. (The Guardian)
Japan is experiencing an increase in bear attacks, with 71 reported in October alone, primarily affecting people over the age of 60. The bears’ search for food due to climate change impacting their natural sources is believed to be a contributing factor to the increase in bear sightings and attacks. (The Guardian)
Hackers affiliated with China’s People’s Liberation Army have infiltrated the computer systems of about two dozen critical entities, including power and water utilities, transportation systems, and communications, as part of a broader effort to disrupt key American infrastructure. The intrusions are part of China’s cyber campaign called Volt Typhoon, aimed at developing ways to sow panic, chaos, and snarl logistics in the event of a U.S.-China conflict in the Pacific. (The Washington Post)
Monday
Narges Mohammadi’s children are accepting the Nobel Peace Prize on her behalf in Oslo due to her imprisonment in Iran. Mohammadi denounces Iran’s government repression, lack of independent judiciary, and corruption in a speech read by her children.(BBC)
The International Energy Agency (IEA) stated that new pledges made at the COP28 summit to address climate change will not be enough on their own to limit global warming to 1.5 degrees Celsius. (IEA)
Opposition supporters in Bangladesh protest for a non-partisan caretaker government ahead of the upcoming general election. The Bangladesh Nationalist Party, led by Khaleda Zia, will boycott the election, leaving little choice but to re-elect Prime Minister Sheikh Hasina’s Awami League. (The Washington Post)
Local-level debt across China has seen the focus shift to more profitable infrastructure projects, but economists warn this has come at the expense of livelihoods. Whether the central government fronts more of the cost for critical improvements and emergency facilities may be discussed at the upcoming central economic work conference. (South China Morning Post)
U.S. and Pakistan Seek Relationship Reset
This week’s key developments include Pakistani Army chief Asim Munir’s visit to Washington, signaling a potential reset in U.S.-Pakistan relations amid uncertainty post-Afghanistan. Munir, distinct from predecessors, aims to strengthen economic ties, emphasizing Pakistan’s reliance on the U.S. economically. Amid concerns over Afghanistan-based terrorism, discussions may shift towards non-security issues and the recent expulsion of undocumented Afghans. Read more Foreign policy
China’s Status of Sustainable Development Goals
Beyond The Great Wall
Exploring News About China in Depth
Decypher Analysis: The Hamilton Index of China
The Hamilton Index is a tool used to measure a country’s competitiveness in advanced industries, which are crucial for economic growth and innovation. According to the latest report from the Information Technology and Innovation Foundation (ITIF), China has taken the lead in strategically important industries, leaving other nations behind.
Over a span of 25 years, from 1995 to 2020, China expanded its share of the global advanced industry production from 3% to a significant 25%. On the other hand, the share held by OECD nations dropped from 85% to 58% during this period. China dominates in seven out of ten essential sectors listed in the Hamilton Index. The data from 1995 to 2020 reveals a significant decline in the global market share of OECD nations, particularly the G7, contrasted with China’s 21.9-point surge.
The report also emphasizes that it would be necessary for the United States’ output in Hamilton Industries to expand by almost $1.5 trillion (a 69% increase) in order to match China’s specialization. This significant expansion would require doubling output from all Hamilton industries except IT services. There is a sense of urgency regarding reversing U.S. advanced industry fortunes because once China secures adequate global market share, production from both U.S.-led nations risks permanent weakening.
China launches reusable spaceplane for the third time
In China, the third launch of an experimental reusable spacecraft took place on Thursday (14th December 2023) with secrecy surrounding the mission. Launched from the Jiuquan Satellite Launch Center using a Long March 2F rocket, the spacecraft, similar in function to the U.S. Air Force’s X-37B, entered low Earth orbit. Limited details about the mission suggest the spacecraft will operate in orbit before returning to China for reusable technology verification and space science experiments. The rapid seven-month turnaround between the second and third launches indicates progress in spacecraft reusability. The China Aerospace Science and Technology Corporation (CASC) has not disclosed project specifics or launch images, but the spacecraft may eventually integrate with a reusable suborbital first stage as part of CASC’s plan for a fully reusable, two-stage-to-orbit space transportation system. Funding for the spaceplane project was secured from the Natural Science Foundation of China last year.
In the broader context of space development, the U.S. is preparing for the seventh mission of its reusable X-37B, with objectives including testing new orbital regimes, space domain awareness technologies, and studying radiation effects on materials from NASA. The parallel development of China’s Shenlong spaceplane and Boeing’s X-37B reflects a potential security dilemma in space, with both nations perceiving the other’s spaceplane as a threat while asserting the benign nature of their own programs. China’s investment in reusable spacecraft aligns with its goal of becoming a major space-faring nation, emphasized by President Xi Jinping. The dynamic between the U.S. and China in space indicates a complex interplay of competition, security concerns, and national strategies, with China progressing in its space capabilities through projects like the TSTO spaceplane named Tengyun and the development of reusable launch vehicles.
The People’s Liberation Army (PLA) developed Strategic Support Force (SSF) base 37, charged with boosting missile early warning capabilities and identifying, tracking and analyzing foreign space objects
China created PLASSF in 2015, much before any other space organisation. It has now been tasked with space, cyber, and electronic warfare. Neighboring countries of China need to pay heed to this with alacrity.
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Decypher Opinion: The 14th Plan: Mid-point Analysis
China’s 14th Five-Year Plan introduced in 2021 marks a critical turning point in the country’s history, as it attempts to navigate the tension between socialist ideals and capitalist realities. The plan highlights the urgency that China places on achieving five key goals: transforming its population dividend into a talent dividend, shifting from a “made in China” to a “created in China” model, focusing on attracting human capital rather than foreign capital, emphasizing the importance of “software” over “hardware,” and promoting high-quality development.
Midway between the five-year plan, it’s worth questioning: Where is China on this path it had set for itself?
Economic Outlook
For the first time since economic reforms began in 1978, China did not set a specific target in the 14th Five-Year Plan (2021-2025) for GDP growth for the year 2020. This decision was due in part to uncertainties posed by the COVID-19 pandemic.
China’s economic picture is more complicated than the buoyant GDP growth of 5.2% suggests. Critical sectors such as real estate are facing downturns, with a 9.1% decrease in investment. Despite a rise in industrial output by 6.6%, retail sales growth missed expectations at 10.1% instead of the predicted 12.5%. Fixed-asset investment grew by just 2.9%, indicating a cautious approach to capital investment. Furthermore, the urban unemployment rate stayed at 5%, but withholding data on youth unemployment adds an uncertainty layer. However, it mentions a slowdown in China’s export industry in 2022 and 2023, with exports decreasing by 2% year-on-year in H1 2023, then by 10.8% in Q3 2023. Sales of Chinese goods to the US also fell by 16% year-on-year over the first nine months of 2023. China’s share of total world exports decreased to 14.4% in H1 2023 compared to 15.2% in 2021. Additionally, rising domestic debt, up to 284% of GDP in mid-2023 from 247% in 2019, creates challenges for economic policy, inhibits the ability to stimulate new loans and discourages demand from households and enterprises.
China’s targeted significant boost to the digital economy, aiming for expansion on all fronts by 2025 and core industries contributing 10% to China’s GDP. Progress is evident as provincial and municipal governments implemented 216 policies in 2021, spanning digital infrastructure, innovation, and support for businesses transitioning to digital platforms. In 2022, China’s research and development expenditure saw a 7.7% increase, surpassing the annual growth target of 7% set for the 14th Five-Year Plan period (2021-2025). The total number of insured urban and rural residents stood at 547.97 million in 2021, constituting 53.3% of the nationwide recipients of basic old-age insurance. This shows partial progress towards their 14th Five-Year Plan target of achieving 95% coverage.
China’s urbanisation rate reached 64.72% in 2021, marking an accelerated trend of rural residents moving to cities, up from 60% in 2019. This is on track with their target of reaching an urbanization rate of 65% between 2021 and 2025. In 2020, China achieved a significant milestone by eliminating absolute poverty for the first time in history.
While indicative of progress, a comprehensive assessment awaits more detailed statistics over time. Bloomberg in one article says that numbers may look good relative to lockdown-hit 2022, masking weakness. The contradictory trajectories of various facets of the economy present a scenario that’s more complex and challenging than the GDP growth alone suggests.
Innovation Outlook
China’s 14th Five-Year Plan prioritises modernisation through innovation, emphasizing the pivotal role of science and technology in national development. Key measures include optimising resource allocation, establishing national laboratories, and upgrading innovation bases. The plan targets breakthroughs in core technologies like quantum information, artificial intelligence, and biomedicine, while instituting deeper reforms for improved science and technology governance and intellectual property protection.
In an Australian Strategic Policy Institute (ASPI) report, China surpasses the US in high-impact research across critical and emerging technologies. Leading in 37 of 44 sectors, including defence, space, energy, and biotechnology, China’s research dominance raises concerns for democratic nations. The emphasis on technological advancement, a robust domestic economy, and leadership in strategic emerging industries reduce reliance on foreign resources and technology to position China as a global leader.
“China’s Strategic Approach to Hong Kong, Macau, and Taiwan Outlined in Five-Year Plan”
In the 14th Five-Year Plan, China expects Hong Kong and Macau to solidify their positions as global hubs (Hong Kong in finance and Macau in tourism) while deepening their integration into the mainland’s economic and technological development, all within the framework of “One Country, Two Systems.”
In 1997, Hong Kong shifted to Chinese sovereignty under the “One Country, Two Systems” policy, with autonomy at its core. Concerns mount over Beijing’s actions, notably the 2020 national security law criminalising dissent, and Hong Kong leader John Lee’s 2024 plan for a local security law. A record low turnout of 27.5% was recorded in a recent “patriots only” district election in Hong Kong, which excluded opposition Democrats. This reflects widespread dissatisfaction with the poll’s undemocratic nature, with many voters questioning its relevance. Beijing’s national security law and electoral restructuring are being blamed for the decline.
Gulf states express interest in Hong Kong’s megaprojects, with Saudi Arabia’s sovereign wealth fund committing to annual investment summits. The Guangdong-Hong Kong-Macao Greater Bay Area, a high-quality development model envisioned by President Xi Jinping, supports innovation and the Belt and Road Initiative. Hong Kong’s surge in arbitration cases, reaching 344 in 2022, aligns with China’s trade expansion. John Lee’s plans for the East Kowloon Cultural Centre emphasise innovation and position Hong Kong as a hub for arts and technology.
Macau diversifies its economy, leveraging its Portuguese colonial history. Despite challenges, tourism emerges as an alternative, necessitating solutions for labour shortages. Simultaneously, Guangdong’s three-year plan aims to enhance digital connectivity with Hong Kong and Macau, expanding the “one-hour living circle” and fostering economic activities.
Based on the 14th Five-Year Plan, China seeks deeper economic integration with Taiwan through cross-strait cooperation platforms and market access while simultaneously upholding its “One-China” principle and striving for peaceful reunification.
China’s relationship with Taiwan is characterised by complex dynamics, as evidenced by recent developments. Expressing hope for cross-Strait peace and stability, China commented on Taiwan’s upcoming elections, emphasising adherence to the 1992 Consensus and opposing ‘Taiwan secession.’ The mainland’s Ministry of Agriculture seeks deeper ties, recommending policies for convenience in land use, financing, and market development. Despite potential benefits, periodic bans on agricultural shipments have strained trust.
The 14th Five-Year Plan unveils China’s strategy for a more powerful CCP, emphasising centralised leadership, unwavering ideological commitment, and enhanced efficiency in executing national goals.
The Communist Party of China (CCP) has stepped up its anti-corruption campaign, penalising over 110,000 officials (as per a report by the Indo-Pacific Centre for Strategic Communications (IPCSC)) in the first quarter of this year, including high-ranking figures such as Du Zhaocai and Li Xiaopeng. The CCP’s official WeChat handles released monthly reports indicating increased petitions and reports, revealing a heightened focus on corruption. Notably, individuals close to Xi Jinping, such as former foreign minister Qin Gang, have seen their fortunes change due to allegations of misconduct. Concurrently, the CCP has seen a growth rate of 1.4 percent in 2022 marking a significant drop from figures in 2021 due to a stringent screening process and organisational restructuring. Notably, President Xi is reportedly favouring high-speed trains for domestic tours, as official reports indicate he chose the train for visits to Shanghai and other regions in 2023. Historical context reveals previous leaders, such as Mao Zedong and Deng Xiaoping, preferred trains for official travel.
Decypher Lighthouse: Did Putin’s tip lead Xi to purge his foreign minister?
Chinese Foreign Minister Qin Gang’s abrupt removal may have resulted from a Russian tip-off alleging that Qin was a U.S spy. Notably, this happened following China’s perceived shift in stance on the Russia-Ukraine war which seemed unfavorable to Russia. In Nikkei Asia’s report, they speculate that concerns about Qin’s alleged affair with a Chinese TV presenter, potential U.S. links, and possible intelligence leaks may have exacerbated this situation. Post Qin’s exit, China reportedly reverted to its pro-Russia stance on the Ukraine issue. Read more: Nikkei Asia
CCP leadership holds meeting on 2024 economic work, anti-corruption work, Party discipline
The Political Bureau of the Communist Party of China (CPC) Central Committee met to discuss economic plans for 2024, as well as reports on anti-corruption efforts and Party discipline. Read more: Xinhua
China keeps economy in focus, but numbers belie optimism.
- First, lead the construction of a modern industrial system with scientific and technological innovation 一是以科技创新引领现代化产业体系建设;
- Second, focus on expanding domestic demand. 二是着力扩大国内需求;
- Third, deepen reforms in key areas. 三是深化重点领域改革;
- Fourth, expand high-level opening up to the outside world. 四是扩大高水平对外开放;
- Fifth, continuously and effectively prevent and resolve risks in key areas. 五是持续有效防范化解重点领域风险;
- Sixth, persistently and diligently work on agriculture, rural areas, and farmers (‘three rural issues’). 六是坚持不懈抓好“三农”工作;
- Seventh, promote the integrated development of urban and rural areas and regional coordination. 七是推动城乡融合、区域协调发展;
- Eighth, deeply promote the construction of ecological civilization and green, low-carbon development. 八是深入推进生态文明建设和绿色低碳发展;
- Ninth, effectively guarantee and improve people’s livelihoods 九是切实保障和改善民生
The meeting also calls for creating an “Invest in China ‘投资中国’品牌” brand. Promoting the “Invest in China” brand should be a business opportunity for ad agencies, PR firms and foreign media, though nothing in this readout appears to address clearly a key concern of foreign investors and businesses – risks related to an expanding definition of national security.
Xi calls state visit to Vietnam successful culmination of China’s diplomatic efforts in 2023
Chinese President Xi Jinping described his state visit to Vietnam as the successful culmination of China’s diplomatic efforts in 2023. Following the 20th National Congress of the Communist Party of China, General Secretary of the Communist Party of Vietnam Nguyen Phu Trong became the first foreign leader to visit China. Read more: Xinhua
Russian Deputy PM Novak to visit China this week
Russian Deputy Prime Minister Alexander Novak, a key figure in Russia’s energy sector, will lead a delegation of up to 20 officials to China for an energy intergovernmental commission. Read more: Reuters
China’s former railway head sentenced to 15 years in prison for corruption
Former Chinese railway minister Sheng Guangzu was found guilty of accepting bribes totaling 63.8 million yuan ($8.9 million) from 2004 to 2022 by the a court in the Shanxi province and sentenced to 15 years in prison for corruption. Read more: South China Morning Post
China’s November consumer prices fall the fastest in 3 years
Consumer prices in China fell significantly in November, the fastest fall in three years reflecting increased deflationary pressures amid weak domestic demand. Read more: CNBC
Chinese forces approached close to Taiwan coast to ‘intimidate’ voters before key elections – sources
In November, Taiwan’s military reportedly thwarted four Chinese attempts to approach the island’s sensitive contiguous zone. This is part of a larger “multi-front campaign of voting interference,”. Read more: Reuters
Chinese state media drops ‘Tibet’ for ‘Xizang’ after release of Beijing white paper
Chinese state media has significantly increased its use of the term “Xizang” instead of “Tibet” in English articles following the release of a white paper by China’s State Council which marks the first in a series to use “Xizang” as the English translation for Tibet. Read more: South China Morning Post
Xi Jinping’s anti-corruption Christmas campaign
In the name of the Common Prosperity policy, Chinese civil servants have been asked to show restraint and humility, including in their choice of gifts for the festive season. The country’s leading banks have set up an internal chat allowing employees to report on each other. Read more: Intelligence Online
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