Xi Meets Biden, US House Panel Says China is Skirting Restrictions, Chinese Science Has Credibility Problems, Chinese Ports Will Now Have Adani to Contend With, & What Are Chinese Kids Reading? Read on to find out.

China’s economy is one of the largest in the world and has undergone significant transformation over the years. It is characterized by a unique blend of state-led capitalism, market-oriented reforms, and a strong role of the Chinese Communist Party (CCP) in economic decision-making. Here are some key points about China’s economy according to the report:

1. Growth and Size: China has experienced rapid economic growth over the past few decades, becoming the world’s second-largest economy. It has achieved impressive GDP growth rates, although recent years have seen a gradual slowdown. China’s economy is driven by a combination of factors, including exports, domestic consumption, and investment.
2. Manufacturing and Exports: China is known as the “world’s factory” due to its dominant position in global manufacturing. It is a major exporter of various goods, including electronics, textiles, machinery, and automobiles. China’s export-oriented manufacturing sector has played a crucial role in its economic growth, contributing significantly to GDP and employment.
3. State-Owned Enterprises (SOEs): China has a large number of state-owned enterprises, which play a significant role in key sectors of the economy, such as energy, telecommunications, and finance. These SOEs often receive preferential treatment and support from the government, which can create challenges related to market competition and efficiency.
4. Economic Reforms: China has implemented market-oriented reforms since the late 1970s, transitioning from a centrally planned economy to a more market-based system. These reforms have opened up the economy to foreign investment, encouraged private entrepreneurship, and led to the development of special economic zones and industrial clusters.
5. Debt and Financial Risks: China’s rapid economic growth has been accompanied by a significant increase in debt levels, both at the corporate and government levels. This has raised concerns about financial stability and the sustainability of China’s economic model. Efforts have been made to address these risks, including deleveraging campaigns and stricter financial regulations.
6. Consumption and Services Sector: China has been aiming to shift its economy from an export and investment-driven model to one that relies more on domestic consumption and the services sector. This transition seeks to rebalance the economy and reduce its dependence on external demand. However, challenges remain in boosting domestic consumption and addressing income inequality.
7. Innovation and Technology: China has made substantial investments in research and development, aiming to become a global leader in innovation and technology. It has made progress in areas such as artificial intelligence, e-commerce, and renewable energy. However, concerns persist regarding intellectual property rights protection and fair market competition.

China’s Legal Reach

China’s legal reach refers to its efforts to extend its influence and assert jurisdiction beyond its borders. The Chinese government has been increasingly utilizing its legal system and regulatory bodies to achieve strategic and political goals. Here are some key aspects of China’s legal reach:

(a) Extraterritorial Enforcement: China has been expanding its ability to apply Chinese laws outside its borders. This includes enforcing Chinese laws extraterritorially, sometimes without the knowledge of the host country. It has been penalizing foreign firms operating in China for their activities in other jurisdictions.

(b) Rule by Law System: China’s legal system operates under a concept known as “rule by law.” While using terms and practices consistent with a rule of law system, China’s reforms should not be confused with acceptance of the principles underlying that system. The Chinese Communist Party (CCP) leverages the judiciary as a tool to advance its policy and political goals, and the courts are not independent arbiters but rather serve the interests of the Party.

(c) Influence on International Law: China seeks to shape international law in its favor by discrediting established norms, exporting authoritarian elements of its legal system, and influencing the development of laws and norms in emerging fields like space and cyber governance. It aims to make international law function effectively without constraining its own actions.

(d) Intellectual Property Enforcement: China’s enforcement of intellectual property rights has been a subject of international scrutiny. While efforts have been made to improve intellectual property protection, concerns remain regarding the effectiveness of enforcement and the protection of foreign companies’ intellectual property rights in China.

(e) Anti-Suit Injunctions: China has increasingly used anti-suit injunctions in cases related to Standard Essential Patents (SEPs) to forestall litigation against Chinese companies. These injunctions aim to prevent foreign courts from adjudicating disputes involving SEPs, potentially impacting global FRAND (Fair, Reasonable, and Non-Discriminatory) litigation balance.

(f) South China Sea Arbitration: China has taken a strong stance on its territorial claims in the South China Sea and has rejected the jurisdiction of international arbitration on the matter. It issued a position paper asserting its own jurisdiction and disregarding the arbitration initiated by the Philippines.

Chinese Education System According to The U.S.-China Economic and Security Review Commission Annual Report

China’s education system is characterized by a combination of strengths and weaknesses. The system consists of a vast network of schools and universities, with a focus on cultivating a skilled workforce, promoting technological development, and supporting economic growth.

Key features of China’s education system include:

1. Contrasts in Quality: There is a significant disparity between high-quality schools and universities in populous and prosperous cities and generally mediocre institutions in other areas. The most elite institutions rival peer institutions in the United States in terms of research and education quality, particularly in science, technology, engineering, and mathematics (STEM) fields.
2. CCP Control: The education system is subject to a high degree of control by the Chinese Communist Party (CCP). The party exercises influence over curriculum, faculty appointments, and ideological adherence, ensuring alignment with its goals and maintaining control over education.
3. Deficiencies and Inequalities: Despite significant expansion and areas of success, the majority of China’s education system still suffers from major deficiencies. Weak vocational education, inequalities in educational outcomes between rural and urban students, poor teacher quality, and limited integration with industry outside of elite institutions pose challenges to cultivating a skilled workforce and sustaining economic growth.
4. Research and Innovation: China’s top universities and research institutions contribute to breakthrough innovations, particularly in STEM fields. The government steers research output towards meeting national technology development goals, which can challenge U.S. security and economic competitiveness.
5. Early Childhood Development: Underinvestment and insufficient support for early childhood development hinder the cognitive development of rural Chinese infants, leading to a potential rural human capital crisis even before children reach school age.
6. Overall, while China’s education system has made significant strides in certain areas, it still faces challenges in addressing deficiencies, reducing inequalities, and fostering broad-based improvements in workforce productivity.

China’s Weapons Program

China has made significant advancements in its weapons programs and has been investing in the development and modernization of its military capabilities. Here are some key points about China’s weapons programs:

1. Ballistic Missiles: China possesses a wide range of ballistic missiles, including intercontinental ballistic missiles (ICBMs), medium-range ballistic missiles (MRBMs), and short-range ballistic missiles (SRBMs). These missiles are capable of delivering conventional or nuclear warheads and are considered a key component of China’s strategic deterrence.
2. Hypersonic Weapons: China is a world leader in the development of hypersonic weapons, which can travel at speeds greater than Mach 5. It has successfully tested hypersonic glide vehicles (HGVs) mounted on ballistic missiles, such as the DF-17, and is also exploring other hypersonic weapon systems.
3. Anti-Ship Missiles: China has developed a range of anti-ship missiles, including the DF-21D and DF-26, which are specifically designed to target aircraft carriers and other large surface vessels. These missiles have the potential to challenge the traditional dominance of the United States in naval operations.
4. Anti-Satellite Weapons: China has demonstrated capabilities in anti-satellite (ASAT) technology, conducting successful tests of direct-ascent kinetic kill vehicles and co-orbital ASAT systems. These capabilities pose a potential threat to critical space assets, including satellites used for communication, navigation, and reconnaissance.
5. Cyber Warfare: China has been investing in cyber warfare capabilities, including offensive and defensive capabilities. It has been accused of engaging in cyber espionage and hacking activities targeting foreign governments, organizations, and businesses.
6. Naval Modernization: China has been rapidly modernizing its naval forces, expanding its fleet of surface ships and submarines. It has also developed advanced naval technologies, such as aircraft carriers, advanced destroyers, and anti-submarine warfare capabilities.
7. Space Programs: China has made significant progress in its space programs, including the development of its own satellite navigation system (BeiDou), lunar exploration missions, and plans for a space station. It aims to become a major player in space exploration and satellite technology.
8. Defense Industry: China has a robust defense industry, including state-owned enterprises (SOEs) and private companies, involved in the research, development, and production of various weapons systems. The defense industry is supported by government funding and has made efforts to achieve self-sufficiency in defense technology.

Chinese Measures for Strengthening Industry

China has been actively pursuing technological advancements and has implemented various programs to support its tech industry. Here are some key points about China’s tech programs:

(a) Made in China 2025: Launched in 2015, the Made in China 2025 program aims to transform China into a global leader in high-tech industries. It focuses on ten key sectors, including robotics, aerospace, information technology, new energy vehicles, and biopharmaceuticals. The program emphasizes domestic innovation, intellectual property protection, and upgrading manufacturing capabilities.

(b) Artificial Intelligence (AI) Development Plan: China has formulated a national strategy to become a world leader in AI. The plan, announced in 2017, outlines goals to develop core AI technologies, nurture AI-related industries, and promote the integration of AI in various sectors, including healthcare, transportation, and finance.

(c) Internet Plus Initiative: The Internet Plus initiative, launched in 2015, aims to integrate internet technologies with traditional industries to drive innovation and economic growth. It focuses on areas such as e-commerce, cloud computing, big data, and the Internet of Things (IoT). The initiative seeks to leverage digital technologies to enhance productivity and create new business models.

(d) National Integrated Circuit Industry Development Program: China has been actively promoting the development of its semiconductor industry through this program. The goal is to reduce reliance on foreign semiconductor imports and build a globally competitive domestic semiconductor industry. The program includes measures to support research and development, attract talent, and enhance manufacturing capabilities.

(e) Cybersecurity Law: China implemented a comprehensive Cybersecurity Law in 2017, which aims to safeguard national security and protect critical information infrastructure. The law includes provisions for data localization, cybersecurity reviews for certain products and services, and increased scrutiny of cross-border data transfers.

(f) Thousand Talents Program: The Thousand Talents Program is an initiative to attract and retain high-level overseas talent in various fields, including science, technology, and innovation. The program offers financial incentives, research funding, and other support to encourage overseas Chinese professionals and foreign experts to contribute to China’s development.

(g) Digital Silk Road: As part of its Belt and Road Initiative, China is promoting the Digital Silk Road, which aims to enhance digital connectivity and cooperation among countries along the Belt and Road routes. It involves the development of cross-border e-commerce, digital infrastructure, and information and communication technology (ICT) cooperation. These programs demonstrate China’s commitment to fostering technological innovation, developing strategic industries, and enhancing its global competitiveness in the tech sector.

How is China Skirting Restrictions Imposed on It? 

China has been known to employ various methods to circumvent import control restrictions. China stockpiled equipment by taking advantage of the lagtime between the United States’ October 2022 rules, and Japan and the Netherlands’ similar moves in July and September of 2023 respectively, the report details.

According to the document, between January and August 2023, China imported $3.2 billion (RMB 23.5 billion) worth of semiconductor manufacturing machines from the Netherlands, a 96.1% increase over the $1.7 billion (RMB 12 billion) recorded over the same period in 2022. China’s imports of semiconductor equipment from all countries totaled $13.8 billion (RMB 100 billion) over the first eight months of 2023, it added.

Here are some examples:

1. Transshipment: Chinese companies may use transshipment to reroute goods through third-party countries to avoid direct import control restrictions. By shipping goods to an intermediary country before sending them to their final destination, they can obscure the origin of the goods and potentially bypass import controls.
2. Mislabeling and False Declarations: Chinese companies may mislabel or falsely declare the contents or value of goods to evade import control restrictions. This can involve misrepresenting the nature of the goods, undervaluing them, or falsely categorizing them to avoid scrutiny or lower customs duties.
3. Splitting Shipments: Chinese companies may split a large shipment into smaller parcels to avoid triggering import control thresholds. By sending goods in smaller quantities, they can exploit loopholes in import control regulations that may apply to larger shipments.
4. Using Intermediate Countries: Chinese companies may route goods through intermediate countries with less stringent import control regulations before sending them to their final destination. This allows them to take advantage of more lenient controls or exploit gaps in the enforcement of import regulations.
5. Smuggling: In some cases, Chinese companies may resort to smuggling goods to bypass import control restrictions. This can involve illegal transportation methods, such as covert shipments or unauthorized border crossings, to bring goods into a country without going through official customs channels.

China’s Foreign Policy

China maintains relations with foreign militaries as part of its broader foreign policy objectives and military development goals. These relations serve multiple purposes and can encompass various activities. Here are some key points about China’s relations with foreign militaries:

1. Strategic Goals: China’s interactions with foreign militaries aim to advance its strategic goals, including diplomacy, shaping the international security environment, and promoting its overall foreign policy objectives. These interactions help China enhance its international image, build influence with key partners, and safeguard its national security.
2. Military Development: China’s engagement with foreign militaries also serves its military development goals. Through exchanges and cooperation, China seeks to learn from other militaries, compare its capabilities, and improve its own military technologies, operational methods, and management practices.
3. Office for International Military Cooperation (OIMC): The primary entity responsible for formulating and coordinating China’s relations with foreign militaries is the OIMC, which operates under the Central Military Commission (CMC). The OIMC manages foreign military exchanges, cooperation, and supervises the foreign affairs work of China’s armed forces.
4. Coordination and Institutions: China’s military diplomacy involves coordination among various entities. The OIMC works in conjunction with other departments, such as the Ministry of National Defense (MND), the PLA’s Joint Staff Department, and the PLA’s Foreign Affairs Office. These institutions play roles in managing military diplomacy, intelligence activities, and coordination with foreign counterparts.
5. Arms Sales: China is involved in arms sales to other countries, although there have been instances where China has been accused of selling arms to regimes involved in human rights abuses or internal conflicts. The approval process for arms sales involves multiple authorities, including the CMC and the State Council, with regulations formulated by the State Administration for Science, Technology, and Industry for National Defense (SASTIND) and the CMC’s Equipment Development Department (EDD).
6. International Military Education and Training (IMET): China engages in international military education and training programs with foreign countries. These programs aim to enhance cooperation, build military capacity, and promote understanding between China and its foreign partners. China’s military education programs have been perceived as an alternative to U.S. programs in some regions.

China’s Stockpiling Activities

China’s stockpiling efforts encompass various areas, including foreign exchange reserves, strategic commodities, and agricultural products. Here is some information on China’s stockpiling activities based on the available knowledge base:

1. Foreign Exchange Reserves: China has been known to accumulate significant foreign exchange reserves. As of August 2023, the People’s Bank of China (PBOC) officially reported holding around $3.2 trillion in foreign exchange reserves. However, it is worth noting that China may also have “shadow reserves” held by state-owned banks, policy banks, and sovereign wealth funds, which are estimated to be around $3 trillion. This brings the total estimated holdings to around $6 trillion.
2. Strategic Commodities: China has pursued stockpiling strategic commodities to ensure its energy security and mitigate supply disruptions. The specific details and quantities of these stockpiles may not be publicly disclosed, but China has reportedly stockpiled crude oil, natural gas, and strategic metals like rare earth elements.
3. Agricultural Products: China has also engaged in stockpiling agricultural products, particularly grains, to enhance its food security. In March 2023, China announced its intention to increase its grain production capacity by 50 million tons, indicating its efforts to improve self-sufficiency in the event of disruptions to global supply chains.

China’s Relationship with Taiwan

China’s relationship with Taiwan is complex and contentious, characterized by political, economic, and military tensions. Here are some key points about China and Taiwan:

1. One China Principle: China considers Taiwan to be an inalienable part of its territory and upholds the One China principle, which asserts that there is only one China, with the People’s Republic of China (PRC) as its legitimate government. China does not recognize Taiwan as a separate sovereign state.
2. One Country, Two Systems: China’s proposed framework for unification with Taiwan is the “one country, two systems” model, similar to the arrangement in Hong Kong and Macau. It suggests that Taiwan can retain a high degree of autonomy while being part of China. However, Taiwan has rejected this framework, citing concerns about eroding its democratic institutions and freedoms.
3. Cross-Strait Relations: Cross-Strait relations refer to the relationship between China and Taiwan. While there have been periods of relative stability and improved economic ties, tensions persist due to political differences and China’s military threats against Taiwan.
4. Military Threats: China has increased military activities and pressure on Taiwan in recent years. This includes frequent military exercises, airspace incursions, and diplomatic isolation campaigns aimed at diminishing Taiwan’s international presence.
5. International Recognition: China actively seeks to limit Taiwan’s international recognition and participation in international organizations. It pressures countries to adhere to the “One China” policy, which recognizes the PRC as the legitimate government of China and does not establish official diplomatic relations with Taiwan.
6. Economic Relations: Despite political tensions, Taiwan and China maintain significant economic ties. Taiwan has extensive investments in mainland China, and cross-Strait trade and economic exchanges play a crucial role in both economies.
7. United States and Taiwan: The United States has a longstanding relationship with Taiwan, providing political and military support. The U.S. acknowledges the One China policy but maintains unofficial relations with Taiwan, including arms sales and support for Taiwan’s participation in international forums.

What China Reads? Analysis of Children’s Books for 2023 (Jan-Sep)

Instructive comics are becoming increasingly popular in China in 2023. “Manga Elementary School Student Psychology” is a Chinese manga series aimed at supporting children in understanding and dealing with the psychological challenges that they face in elementary school. China’s children face a variety of unique psychological challenges. For example, in Chinese culture, the emphasis on academic achievement can put a lot of pressure on children to succeed. Also, due to China’s one-child policy, many children are raised in single-parent households. This can lead to feelings of isolation and loneliness.

The “Butt Detective” series is a popular Japanese children’s book series written and illustrated by Troll. The “Butt Detective” series has been translated into Chinese and has become popular among Chinese children. The books are praised for their sense of humour, and their focus on bodily functions can be understood as a way to help children learn about their bodies in a fun and non-threatening way.

In China, “Fantastic Mr. Fox” by Roald Dahl is the most popular foreign children’s book. The story’s rural setting, with its emphasis on farming and nature, aligns with traditional Chinese values and provides a familiar setting for Chinese readers. Also, the themes of hard work, resourcefulness, and family loyalty are cultural ideals in China.

Bei Mao is the author of the series of bestselling children’s books Mi Xiao Quan School Experience – about a boy called Mi Xiao Quan. The books are popular among Chinese children because they are humorous, relatable, and educational. They provide children with a fun and engaging way to learn about Chinese culture while also developing important life skills. The books tend to be compared to the English series Diary of a Wimpy Kid.

Beyond The Great Wall

Exploring News About China in Depth

China’s fake science industry: how ‘paper mills’ threaten progress (FT Report) 

“Over the past two decades, Chinese researchers have become some of the world’s most prolific publishers of scientific papers. The Institute for Scientific Information, a US-based research analysis organization, calculated that China produced 3.7mn papers in 2021 — 23 per cent of global output — and just behind the 4.4mn total from the US. At the same time, China has been climbing the ranks of the number of times a paper is cited by other authors, a metric used to judge output quality. Last year, China surpassed the US for the first time in the number of most cited papers, according to Japan’s National Institute of Science and Technology Policy, although that figure was flattered by multiple references to Chinese research that first sequenced the Covid-19 virus genome.” 

Full FT article here.

The Nature Index provides absolute and fractional counts of publication productivity at the institutional and national level and, as such, is an indicator of global high-quality research output and collaboration. China has a count of 25948, compared with 28568 for the United States of America.

Adani Plots Expansion of Port Empire After US Funding in Sri Lanka With An Eye on China

India’s Adani Group, a multinational conglomerate, is keenly eyeing an ambitious strategy of international growth. This vision gained strong momentum following the receipt of a $553 million loan from the US government, earmarked for the expansion of a port terminal in Sri Lanka.

This substantial financial backing was viewed as a pivotal moment for the group, particularly after weathering a series of challenges, including a punishing assault by a short-seller and allegations of corporate fraud within this fiscal year. The US financing initiative is being interpreted as an endorsement of the Adani Group.

It can provide a substantial counterbalance to China’s increasing maritime dominance in the crucial waters of the Indian Ocean, indicating a strategic geopolitical dimension to this funding. Adani Ports and Special Economic Zone Ltd., an integral part of the Adani Group, is concurrently mapping out potential enterprises in Bangladesh, East Africa, and Southeast Asian nations, such as Tanzania and Vietnam. This strategic posture has been depicted by industry analysts as an intentional measure to counterbalance China’s formidable chain of ports stretching from Sri Lanka to Pakistan. Challenges notwithstanding, observers underline that the Adani Group demonstrates a profoundly committed long-term vision and has plans to continue making persistent investments both in South Asia and other global locations. (Bloomberg)

EU leader Ursula von der Leyen urges states to begin economic de-risking from China or face trouble

European Commission President Ursula von der Leyen has warned the EU’s 27 member states to get moving with de-risking economic ties with China or prepare for their businesses to be steamrollered by unfair Chinese competition. During two pointed speeches in Berlin on Thursday, von der Leyen painted a bleak picture of bilateral relations, with few notes of optimism, as she prepares to travel to Beijing next month for the EU-China Summit. In an address to conservative lawmakers at the German Bundestag – the national parliament – she tried to drum up support for her de-risking agenda, suggesting that European businesses in China will eventually run into trouble if governments do not take action.

“Entire industries and value chains for which China used to rely on the rest of the world are being increasingly relocated domestically. Many European investors like to call this ‘in China for China’. However, this only works until European companies are squeezed out by Chinese competition or get caught up in political turmoil/ (Finbarr Bermingham in Brussels for SCMP)

On 14th November 2023 China Launched World’s Fastest Internet Way Ahead of Forecasts

The Backbone Network: a collaboration between Tsinghua University, China Mobile, Huawei Technologies, and Cernet Corporation – smashes expert forecasts that 1 terabit per second ultra-high-speed networks would not emerge until around 2025. The optical cable spans a total distance of 3000 KM and can transmit 1.2 TBPS data between Beijing and Guangdong. The Beijing-Wuhan-Guangzhou connection is part of China’s Future Internet Technology Infrastructure (FITI), a project 10 years in the making and the latest version of the national China Education and Research Network (Cernet).

CCP China Plenum: What To Expect? 

“China Plenum” refers to the plenary sessions of the Central Committee of the Communist Party of China (CPC). These plenums are important meetings where key party decisions and policies are discussed and formulated. Here are some key points about China Plenums:

1. Purpose: China Plenums serve as a platform for the top leadership of the CPC to discuss and make important decisions on various issues, including party building, ideology, economic reforms, and policy directions. They play a crucial role in shaping China’s political and economic landscape.
2. Frequency: Typically, seven plenums are held over the five-year term of each Central Committee. The plenums are usually held in Beijing, and their timing and duration are determined by the party leadership.
3. Themes and Agendas: Each plenum may have a specific theme or focus, although the fourth and sixth plenums do not have fixed themes and are often related to party building or ideology. The third plenum is considered particularly significant as it is when major decisions on China’s economy and reforms are usually made.
4. Attendees: The plenums see the attendance of the Central Committee, which consists of over 370 full and alternate members holding key party and state positions. This includes members of the Politburo, ministers, provincial party secretaries, senior generals, and heads of state-owned enterprises.
5. Decision-Making Process: The decisions and goals announced at the plenums are followed up by various government agencies, which develop specific policies and timelines for implementation.
6. Leadership Role: Chinese President Xi Jinping has taken on a prominent role at the plenums since 2012. He has been involved in leading the discussions and decision-making process, particularly at the fourth and sixth plenums.

It is important to note that the specific details and outcomes of each China Plenum may not be readily available in the public domain, as these meetings are often held behind closed doors. 

China aims to build ‘financial powerhouse’ led by Communist party

China just concluded twice in a decade Central Financial Work Conference, this is sixth such conference since 1997. It has decided to “accelerate building a financial powerhouse”. The meeting was held towards the end of October and chaired by President Xi Jinping, the conference decided to build a unified leadership under the party, the discussions involved how to support property sector, get finance streamlined to the real world, and how to help the local government. get out of debt.

China House Prices Continue To Fall, Go Below 2015

Prices of new homes tracked in 70 Chinese cities fell 0.4 per cent month on month in October, the most since a 0.5 per cent decline in February 2015. 56 cities reported price drop since last month. 

Beschloss: Entrepreneurial Spirit is Waning in China 

Afsaneh Beschloss, RockCreek CEO says that spirit of risking it and being a businessperson is really waning. She also pointed out that subsidies pose challenges for people willing to look at China as the next frontier in climate investment and innovation. 

Scenario for Collapse of CCP: Taipei Times

James J.Y. Hsu is a retired professor of theoretical physics who has written a political opinion based on metaphysics, we are reproducing a section here. 

“The ultimate end of a situation in which communists are in charge of a capitalist economy is economic depression, with China’s economic woes the prime example. The Chinese Communist Party (CCP) regime has suspended monthly reports on youth unemployment, which had previously been at a record high, going beyond 20 percent and rising.

The manifestation of China’s economic depression would most likely cause the demise of the CCP, not dissimilar to the collapse of the Soviet Union. Less scientific, more metaphysical predictions came from the prophecies of ancient Chinese mystical books, Iron Plate Diagrams (鐵板圖) and Tui Bei Tu (推背圖).
It has been quipped that Chinese military leaders understand it is easier to attack the Zhongnanhai — the center of power in Beijing — than to cross the Taiwan Strait, just as a Russian counterpart found it easier to attack Moscow than invade Kyiv.”

Dragon is the new meme stock in advance of the Year of the Dragon

Companies with “dragon” in their names have jumped in the last month. The top 10 performers in Shanghai Composite Index had 6 which had “dragon” in their names. The meme mania will be regulated by the CCP, the outcome for the market will be interesting to watch. 

EU wants to level the playing field with China in the summit in December

European Commission President Ursula Von der Leyen said that the summit with China in December is to level the playing field in trade, and technology.

Tech leakage to China can’t be stopped but can be delayed, says Professor Heigo Sato, noted expert of export controls to Nikkei, we excerpt the most interesting question/answer.

“What solutions are there? (Regarding weak export controls)

A: The question is how to delay access to important technologies by countries that raise security concerns. We need to remind ourselves again of this major goal in export controls. It is difficult to fully prevent technology drain. All we can do is delay it as much as possible, and while doing so work to improve the technologies we already have.

We should also find allies. It is important to increase the number of countries that can alert us whenever they notice a Japanese product being resold to a country or entity that poses risk. We must coordinate public- and private-sector efforts to get such countries to cooperate with Japan on export controls.”

Full interview here.

How Chinese e-commerce fuels counterfeit fashion in Nigeria

The rise of Chinese e-commerce has undeniably had far-reaching impacts on global markets, including the proliferation of “fake originals” – counterfeit products designed to mimic popular brands – in Nigeria.

In marketplaces like Lagos’s bustling Balogun Market, these imitation goods are becoming increasingly common, sourced directly from online Chinese platforms like AliExpress, Taobao, and DHgate. This trend raises numerous complex issues. On one hand, it has provided a considerable economic boon for Nigeria’s small-scale entrepreneurs. With the opportunity to purchase low-cost goods from Chinese manufacturers and subsequently re-sell within their home market, many entrepreneurs have embraced the trend and turned substantial profits. In a sense, the Chinese e-commerce expansion has democratised business opportunities, requiring minimal investment for aspiring entrepreneurs to get a foot in the door.

However, this lucrative business model has spurred significant legal and ethical challenges. Counterfeit products undermine the integrity of brand names and infringe upon intellectual property rights. In Nigeria, state laws and enforcement mechanisms have been insufficient in curbing the trade of counterfeit goods. Even with ongoing attempts to cooperate with Chinese authorities, the issue continues, reflecting the persistent stubbornness of the problem.

Moreover, the popularity of these knockoffs raises questions about consumer culture and societal norms. According to Ochije Nnani, a co-founder of Fazsion, a Lagos-based wholesale fashion marketplace, over 90% of the fashion brands sold in Nigeria are knockoffs primarily from China or other Asian countries. With an expected rise in revenue to US$8.50 billion by 2023 in the Nigerian apparel sector and a projected annual growth rate of 9.43% till 2028, the market is evidently thriving. Interestingly, the demand for non-luxury items is at a full 100%, indicating a vast consumer appetite for reasonably priced yet trendy goods (Statista). This speaks to a large-scale consumer demand for affordable, yet fashionable products. It seems that affordability trumps authenticity when it comes to the taste of Nigerian consumers.

However, despite efforts by Chinese authorities to regulate counterfeiting within their e-commerce space, the market for knockoffs is far from diminishing. Low-priced counterfeit products attract resellers, particularly those operating via social media, contributing to the cycle of knockoff proliferation.

To chalk it all up, the relationship between Chinese e-commerce and Nigerian entrepreneurs is multifaceted. On the positive side, it enables Nigerian entrepreneurs to engage in international trade, helps to democratise business opportunities, and caters to a market demand for affordable and fashionable products. However, it also fuels the proliferation of counterfeit goods, raises legal and ethical issues relating to intellectual property rights, and alters consumer behaviours and attitudes towards authenticity.

While these cheap counterfeits cater to the masses who may not be able to afford the original high-end products, they dilute the value associated with the original brands and can potentially harm their market reputation. Consumers becoming more accepting of counterfeit goods may also create long-term problems for the local industries that are trying to establish their original brands, as they would have to compete with these affordable knock-offs. Hence, while global e-commerce, notably from China, has opened numerous opportunities for small-scale entrepreneurs in Nigeria and altered consumer demands, it also brings to light the urgent need for effective regulatory measures to control the quality of products available in the market and safeguard the interests of both the producers of original goods and the consumers. It also underscores the need to create consumer awareness about the implications of purchasing counterfeits and instill the value of authenticity in consumer behaviour.

While there is hope for a more ethical and legal business environment, it will be a difficult road. In the end, as long as there is a market for counterfeit goods, someone will be willing to provide them. The history of counterfeit products is a testament to the resilience of this market. (RestoftheWorld)

Short seller Hindenburg targets Chinese flying taxi startup Ehang

Chinese flying taxi manufacturer EHang faces accusations from U.S. short seller Hindenburg Research of improprieties regarding type certification and preorders for its aerial vehicles. EHang’s Nasdaq-listed shares fell 12.7% after Hindenburg’s report, alleging the company misled investors about flight restrictions and questioned the authenticity of over 1,300 preorders. EHang denied the allegations, pledging to protect its and shareholders’ interests. Last month, the company gained type certification from China’s Civil Aviation Administration for its electric vertical takeoff and landing aircraft, boosting its stock value. Hindenburg, however, claims the certification has undisclosed flight restrictions. (Nikkei Asia)

What Russia’s embrace of North Korea means for America

In September, North Korean leader Kim Jong Un met with Russian President Vladimir Putin, signaling the end of Kim’s diplomatic isolation due to the COVID-19 pandemic. The summit aimed to leverage geopolitical discord, with Russia potentially providing crucial resources and support at the UN Security Council. Despite the Biden administration’s policy review advocating a “calibrated, practical approach,” North Korea’s pursuit of advanced nuclear capabilities persists. The conventional strategy of pressuring Pyongyang has failed, and the evolving Northeast Asian security landscape necessitates a shift toward proactive risk reduction and conventional deterrence. North Korea’s alignment with Russia amid their shared interests against the U.S. and its allies prompts concerns. Pyongyang’s nuclear advancements, including tactical weapons, challenge the efficacy of traditional approaches. Kim’s meeting with Putin underscores a strategic shift, emphasising technical cooperation and potential benefits for both nations. The U.S., while condemning Russia’s support for North Korea, hasn’t adjusted its policy. The Biden administration’s attempt at diplomatic engagement has seen little reciprocation from North Korea, which strengthens ties with Moscow and Beijing. As the threat from North Korea normalises, the U.S. must rethink its strategy. Prioritising risk reduction over immediate denuclearisation, Washington should propose transparency measures, nuclear doctrine discussions, and strategic stability talks with North Korea. Limited sanctions relief could incentivise compliance with risk reduction initiatives. Shifting the focus from nuclear to conventional aspects of deterrence with South Korea is crucial, emphasising flexibility in crisis management. Historical analogies may be misleading, and adding more nuclear capabilities could escalate tensions. Despite Kim’s alignment with Russia, the U.S. must recognise the coexistence with a nuclear-armed North Korea and prioritise minimising nuclear risks. A bold revaluation of the approach could encourage diplomatic engagement without compromising security objectives. Article Available at: (Foreign Affairs)