Xi & the Double Support Policy - Tensions of US Investment Screening - Pushback on US-Taiwan Trade Agreement - No More Banquets for Quzhou Officials - France's EV Focus

Aug 11, 2023

Hi folks,

A few weeks ago, the good folks at The Economist had mused “What if China and became friends? This week, in an article for Money Control, I argue why this a highly unlikely proposition for the foreseeable future. Do read, and let me know what you think.

Cheers,

Manoj

Here are the key reports and articles that I found noteworthy from the People’s Daily's edition on Friday, August 11, 2023.

Page 1: It’s a really slow news day based on the front page today. One reason, as Katsuji Nakazawa reports for Nikkei, is that “China's summer political season has arrived. Chinese Communist Party leaders -- retired and incumbent -- have gathered at the seaside resort town of Beidaihe…”

“‘It is the first Beidaihe meeting from which all the powerful party elders have disappeared,’ said a veteran party member who for four decades has carefully observed Chinese politics. For Xi Jinping, who has been China's president and party general secretary for close to 11 years, it will be the first Beidaihe meeting in his tenure absent the most influential elders.In November, former top leader Jiang Zemin, long the most powerful of the elders, died at the age of 96.A month earlier, Xi's immediate predecessor, Hu Jintao, 80, was dramatically escorted out of the closing ceremony of the party's national congress. Hu has not been seen much since. Rumors are that he is no longer residing in Beijing. An appearance at this year's Beidaihe meeting seems unlikely.” The report says that Taiwan, the economy and ties with the US are likely on the top agenda for the leadership.

Anyway, on the front page today, there’s a long, long article about “double support” work under Xi Jinping. Double support implies “the government and the people support the military, and the military supports the government and the people.” The essence of this has been “developing social productive forces and improving military combat capabilities”, i.e., military-civil fusion. However, this “double support” movement goes back to the days of Yan’an. In 2019, updated guidelines were issued in this regard too. This year marks the 80th anniversary of the double support movement.

The PD article provides a more modern timeline for the advancement of double support work. What’s interesting is that this is largely about how Xi Jinping cares for and supports the armed forces, and how he has been at it for the longest time. This isn’t really around combat-effectiveness, training or equipment and technology-related military-civilian fusion. This is predominantly around leadership support for soldiers, addressing daily issues faced by troops, popular support/reputation of the PLA, veterans support and morale boosting activities.

The article informs that the first national double-support work conference since the founding of New China was held in Fuzhou, Fujian, in January 1991. Xi Jinping was then Secretary of the Fuzhou Municipal Party Committee. On the occasion, he wrote a poem, titled “seven laws of military-civilian feelings/sentiments” 军民情·七律, which was published in Fujian Daily.

General Secretary Xi Jinping once emotionally said that he composed this poem to express the deep affection between the people's army and the people, and the reciprocal love between the people's army and the people; it is a relationship akin to fish and water. ‘We must strengthen the unity between the military, the government, and the people, and continuously compose a new era of deep emotional connection between the military and the people.’ ‘In the new circumstances, the double support must only be strengthened and not weakened’.” 习近平总书记曾动情地说，作这首七律是为了表达人民军队爱人民、人民军队人民爱的鱼水深情。“要加强军政军民团结，不断谱写军民鱼水情时代新篇。”“新形势下，双拥工作只能加强、不能削弱.”

After this, we get instances of the PLA supporting the people. It mentions the recent PLAN evacuation of Chinese citizens from Sudan, and earlier evacuations following conflicts in Libya and Yemen. It talks about the PLA’s work when it came to the pandemic. It praises the work of the “Good 8th Company on Nanjing Road”. It talks about the PLA’s support work in response to the 2013 Lushan earthquake, in regard to poverty alleviation work, floods and so on. The second section of the article says that:

“Since the 18th Party Congress, when General Secretary Xi Jinping conducted grassroots research, he has often visited local troops. He has walked along the borders, traversed through the Gobi, joined classroom/training sessions, and inspected guard posts ... The warmth and concern for the grassroots officers and soldiers have always been General Secretary Xi Jinping’s heart. General Secretary Xi Jinping once said: ‘I have an indissoluble bond with the army and have deep feelings for the army. Since I was a child, I have received a lot of education on the history of our army and witnessed the brilliance of many of the older leaders of our army. Since my youth, I have developed a sincere affection for the army’.” 党的十八大以来，习近平总书记到基层调研时，常会去当地的部队看一看。踏边关、走戈壁、入班排、看哨所……基层官兵的冷暖始终是习近平总书记深情的牵挂。习近平总书记曾经讲述心声：“我和军队有着不解之缘，对军队怀有深厚感情。从小我就较多接受了我军历史的教育，亲眼目睹了我军很多老一辈领导人的风采，从少年时代就形成了对军队的真挚感情。”

Then, the piece then quotes Xi as having said on August 1, 2014, that ‘Party committees and governments at all levels and the broad masses of the people should take it as their unshirkable responsibility to support army building and do more good things and practical things for the army’.” 2014年，在八一这个军民共同的节日，习近平总书记特意把来自不同岗位的11位双拥模范代表请到预备役高炮师机关，向长期关心支持国防建设、为双拥工作作出贡献的同志们表示衷心感谢和诚挚问候。习近平总书记强调：“地方各级党委、政府和广大人民群众要把支持部队建设作为义不容辞的责任，为部队多办好事、实事.”

After this, the article talks about Xi’s focus on addressing the challenges faced by soldiers during his time in Fujian. It concludes by saying that “Comrade Xi Jinping fully supports major issues related to the building of the combat effectiveness of the troops; Comrade Xi Jinping specially handles the ‘tricky/head-scratching matters’, such as the settlement of family members accompanying the army and the schooling of their children. At that time, the officers and soldiers stationed at the spot warmly praised Comrade Xi Jinping as the ‘Secretary Who Cares for the Army’. 对事关部队战斗力建设的大事，习近平同志全力支持；对随军家属落户、子女入学等军人关切的“挠头事”，习近平同志特事特办。当时，驻榕部队广大官兵都亲切地称赞习近平同志是“拥军书记”.

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Then the article discusses Xi’s “profound care” and “deep affection” for veterans. Some data points:

On April 16, 2018, the Ministry of Veterans Affairs was officially established
In 2021, the Veterans Law of the People's Republic of China and the Law on the Protection of the Status and Rights and Interests of Military Personnel of China came into effect
In recent years, more than 300,000 demobilized military cadres and 140,000 retired soldiers who meet the resettlement conditions meeting placement criteria have been received and placed, more than 70,000 family members accompanying the army have been managed, and more than 400,000 military children have been supported enter kindergartens and receive compulsory education.
The social participation of dual support is even more prominent; currently, there are over 100,000 social organizations dedicated to supporting the military nationwide, over 300,000 enterprises and institutions are engaged in this, and more than 30,000 streets and communities are paired with grassroots military units for joint construction

The final section of the article talks about steps taken from a morale boosting perspective. This includes activities like special visits during Spring Festival, sending letters and holiday gift packages, etc. It also talks about national defense education.

“National defense education is a matter of long-term significance and comprehensive importance. General Secretary General Secretary Xi Jinping has a far-sighted vision and a far-reaching purpose. More than 3,000 party schools and administrative colleges are now offering national defense education courses, making it a conscious action of leading cadres at all levels to acquire national defense knowledge and fulfill national defense obligations; every year, tens of millions of college and middle school students carry out military training to enhance their perseverance in hard work; border guards and primary and secondary schools ‘raise the same national flag’, encouraging children to strive to be good teenagers in the new era who respect soldiers and care about national defense ... National defense education with patriotism as the core has been widely carried out throughout the country, and the social atmosphere of patriotism and support for national defense and army building has become increasingly strong, and national cohesion has been continuously enhanced.” 3000多所党校和行政学院开设国防教育课程，使学习国防知识、履行国防义务成为各地各级领导干部的自觉行动；每年上千万大中学生开展军训，增强艰苦奋斗的坚强毅力；边防部队和中小学“同升一面国旗”，激励孩子们争做尊崇军人、关心国防的新时代好少年……在全国广泛开展以爱国主义为核心的全民国防教育，在潜移默化中厚植爱国拥军情怀，关心支持国防和军队建设的社会氛围日益浓厚，民族凝聚力向心力不断增强.

Another report on the front page informs that in H1:

China’s machinery industry achieved a cumulative operating income of 13.6 trillion yuan, a year-on-year increase of 9.4%, and a total profit of 775.17 billion yuan, a year-on-year increase of 12.2%. 上半年机械工业累计实现营业收入13.6万亿元，同比增长9.4%，实现利润总额7751.7亿元，同比增长12.2%。
Within the machinery industry, the category of strategic emerging industries enjoyed a cumulative operating income of 10.9 trillion yuan and a total profit of 607.92 billion yuan, a year-on-year increase of 10.4% and 15.6%, respectively. 上半年机械工业战略性新兴产业相关行业累计实现营业收入10.9万亿元、利润总额6079.2亿元，同比分别增长10.4%、15.6%.
The total import and export volume of the machinery industry reached $536.1 billion, up 5.1% year-on-year. 对外贸易保持增长。上半年机械工业累计实现进出口总额5361亿美元，同比增长5.1%.

Page 3: There are reports based on remarks by the Chinese foreign ministry in response to some developments.

First, on August 9, President Biden signed an Executive Order to screen investments in certain national security technologies and products in countries of concern.” The order says that “certain United States investments may accelerate and increase the success of the development of sensitive technologies and products in countries that develop them to counter United States and allied capabilities. I therefore find that advancement by countries of concern in sensitive technologies and products critical for the military, intelligence, surveillance, or cyber-enabled capabilities of such countries constitutes an unusual and extraordinary threat to the national security of the United States, which has its source in whole or substantial part outside the United States, and that certain United States investments risk exacerbating this threat.”

The order creates a system of Notifiable and Prohibited Transactions. Under this: “the Secretary of the Treasury (Secretary), in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant executive departments and agencies (agencies), shall issue, subject to public notice and comment, regulations that require United States persons to provide notification of information relative to certain transactions involving covered foreign persons (notifiable transactions) and that prohibit United States persons from engaging in certain other transactions involving covered foreign persons (prohibited transactions).”

Note that in the Annex with the order, the People’s Republic of China (PRC), including the Special Administrative Region of Hong Kong and the Special Administrative Region of Macau, as a country of concern.”

Key definitions:

the term “covered foreign person” means a person of a country of concern who or that is engaged in activities, as identified in the regulations issued under this order, involving one or more covered national security technologies and products;
the term “covered national security technologies and products” means sensitive technologies and products in the semiconductors and microelectronics, quantum information technologies, and artificial intelligence sectors that are critical for the military, intelligence, surveillance, or cyber-enabled capabilities (Comment: The attempt is narrow targeting, but let’s see) of a country of concern, as determined by the Secretary in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant agencies. Where applicable, “covered national security technologies and products” may be limited by reference to certain end-uses of those technologies or products;
the term “person of a country of concern” means: (i) any individual that is not a United States person and is a citizen or permanent resident of a country of concern; (ii) any entity organized under the laws of a country of concern or with a principal place of business in a country of concern; (iii) the government of each country of concern, including any political subdivision, political party, agency, or instrumentality thereof, or any person owned, controlled, or directed by, or acting for or on behalf of the government of such country of concern; or (iv) any entity owned by a person identified in subsections (e)(i) through (e)(iii) of this section;

Beijing’s public response to this was through MoFA and the Ministry of Commerce It said:

“China strongly deplores and firmly opposes the US’s single-minded rollout of restrictions on investments in China. We have made serious démarche to the US. Restricting US companies’ investments in China with national security as a front is a clear act of overstretching the concept of security and politicizing business engagement. The move’s real aim is to deprive China of its right to develop and selfishly pursue US supremacy at the expense of others. This is blatant economic coercion and tech bullying, an act that seriously violates the principles of market economy and fair competition, undermines the international economic and trading order, destabilizes global industrial and supply chains and hurts the interests of both China and the US and the global business community. This is de-globalization and a move to phase China out. President Biden committed to not seeking to “decouple” from China or halt China’s economic development. We urge the US to follow through on that commitment, stop politicizing, instrumentalizing and weaponizing tech and trade issues, immediately cancel the wrong decisions, remove the restrictions on investments in China and create an enabling environment for China-US business cooperation. China will follow the developments closely and resolutely safeguard our rights and interests.”

Xinhua’s report on the Ministry of Commerce’s reaction says:

“The United States imposing limits on its own companies investing abroad is an act of decoupling and severing industrial and supply chains under the guise of de-risking in the investment sector, a spokesperson with the MOC said. The act gravely deviates from the principles of market economy and fair competition advocated by the United States, affects the normal business decisions of enterprises, undermines the international economic and trade order, and seriously disrupts the security of global industrial and supply chains. China is seriously concerned about it and reserves the right to take measures, according to the spokesperson. ‘We hope that the U.S. side will respect the laws of market economy and the principle of fair competition, refrain from artificially impeding global economic and trade exchanges and cooperation, as well as setting obstacles for the recovery of world economic growth,’ the spokesperson said.”

(Comment: Basically, although there exists a difference between de-risking and decoupling, Beijing doesn’t see it. And to be fair, it is not in its interests to acknowledge this distinction. Therefore, countries seeking to de-risk should likely be prepared for a disproportionate pushback from Beijing, particularly if these are products of government actions. Recall Li Qiang’s recent visit to Germany, where he stressed that de-risking is something that companies should be doing and not governments.)

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Staying with China-US ties, MoFA also remarked on Biden signing into law the US-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act. It said:

“China strongly opposes official interaction of any form between China’s Taiwan region and countries that have diplomatic relations with China. That includes negotiating or signing any agreement with implication of sovereignty or of official nature. The US move violates the one-China principle and the three China-US joint communiqués, contravenes the US’s own commitment of maintaining only unofficial relations with Taiwan, and sends a wrong message to separatist forces seeking “Taiwan independence”. China is unwavering in its resolve to safeguard its sovereignty and territorial integrity. We urge the US to change course immediately, revoke the so-called “Act”, stop pushing forward the negotiations on the so-called “initiative”, and stop going further down the wrong path.”

Meanwhile, Reuters reports that:

“10 Chinese air force aircraft entered Taiwan's air defence zone on Wednesday accompanying five Chinese warships engaged in "combat readiness" patrols, the island's defence ministry said, the second such incursion this week…Taiwan's defence ministry said that starting at around 9 a.m. (0100 GMT), it detected a total of 25 Chinese aircraft engaging in operations out at sea, including J-10 and J-16 fighters, as well as H-6 bombers. Of those aircraft, the ministry said 10 had either crossed the median line of the Taiwan Strait, which previously served as an unofficial barrier between the two sides, or entered the southwestern part of Taiwan's air defence identification zone, or ADIZ. Those aircraft were acting in coordination with five Chinese warships engaging in "combat readiness" patrols, it said…On Sunday, Taiwan reported a similar level of activity by Chinese warplanes and warships…Taiwan Vice President William Lai leaves for the United States this week on his way to Paraguay on what is officially only a transit but which has angered China. It was China's ‘priority’ to stop Lai from visiting the United States, Beijing's ambassador to the U.S. said last month.”

Earlier this week, vice president of Japan’s ruling Liberal Democratic Party, Taro Aso, also visited Taiwan. The Asahi Shimbun reports:

“In an Aug. 8 speech in Taipei, Aso, vice president of the ruling Liberal Democratic Party, said Japan, the United States and other countries should be “prepared to put a very powerful deterrence into action.” “It is the resolve to fight,” he said about maintaining peace and stability in the Taiwan Strait. Aso was the first sitting LDP vice president to make an official visit to Taiwan since Tokyo severed diplomatic relations with Taipei in 1972, according to the LDP. In a meeting on Aug. 8, Aso and Taiwanese President Tsai Ing-wen agreed that cooperation between Japan and Taiwan is essential for the situation surrounding the Taiwan Strait and other issues. Aso’s trip to Taiwan on Aug. 7-9 follows visits by Koichi Hagiuda, chairman of the LDP’s Policy Research Council, and Hiroshige Seko, secretary-general of the party’s Upper House caucus, in December.”

In response, China’s MoFA said:

“Despite China’s strong opposition, certain Japanese politician visited China’s Taiwan region and made irresponsible remarks that sought to hype up cross-Strait tensions, stoke antagonism and confrontation, and blatantly interfere in China’s internal affairs. This seriously violates the one-China principle and the spirit of the four political documents between China and Japan and tramples on the basic norms governing international relations. China has made serious démarches to Japan and strongly condemns this. Taiwan is an inalienable part of China’s territory and the Taiwan question is entirely China’s internal affair that brooks no external interference. For half a century, Japan exercised colonial rule over Taiwan, brutally suppressed its people’s resistance and committed atrocious crimes. As a country responsible for the historical crimes it committed against China, Japan needs to all the more draw lessons from history and act prudently. The Japanese politician, however, kept raising the possibility of “a war” whilst in Taiwan—an obvious attempt to stir up trouble in the Taiwan Strait and push the people in the Taiwan region over the edge of an abyss. Today’s China is no longer what it was when the Qing government signed the Treaty of Shimonoseki in 1895. What makes this Japanese politician think he is in a position or has the confidence to make such unwarranted remarks on Taiwan? I want to stress that the complete reunification of the motherland is the common aspiration of all the sons and daughters of the Chinese nation and an unstoppable historical trend. No one shall underestimate the strong resolve, will and capability of the Chinese people to defend the nation’s sovereignty and territorial integrity. We seriously urge Japan to deeply reflect on its history of aggression, abide by the one-China principle and its commitments regarding the Taiwan question, and stop meddling in China’s internal affair and lending support to the “Taiwan independence” separatist forces in any form. We also have a clear message for the Taiwan authorities: “Taiwan independence” has no future, soliciting Japan’s support and selling Taiwan away will only harm the people in Taiwan, and any attempt to collude with external forces in seeking independence and provocations will only fail.”

Finally, do note two stories with regard to the Indian view on developments related to Taiwan.

First, Nitin Gokhale reports that “Chief of Defence Staff (CDS) Gen Anil Chauhan late last month ordered the study during a conclave of top military commanders convened in Lucknow. The idea, according to sources, is to be ready with options in case a conflict over Taiwan breaks out. This decision was taken in the wake of persistent reports and possibly inputs shared by US and Japanese intelligence agencies on Chinese plans over its Taiwan policy. It is seen as essential since India has recalibrated its relations with the United States and is a member of the Quad. This grouping consists of the US, Japan and Australia.”
Second, do note that Admiral Karambir Singh, General M.M. Naravane and R.K.S. Bhadauria—the former Navy, Army and Indian Air Force chiefs, respectively-were in Taipei recently for the Ketagalan Forum—2023 Indo-Pacific Security Dialogue.

Moving on, there’s a Zhong Sheng commentary on the page around the Fukushima wastewater issue. This one basically argues that Japan has launched a “public relations offensive” with regard to the disposal of the wastewater.

China’s UN mission had earlier this week issued a working paper on the issue. The paper made 9 broad points, essentially arguing that:

“Japan should fully respond to the concerns of China and the international community, and dispose of the nuclear contaminated water in a responsible manner in line with its obligations under international law, stop pushing through the discharge plan, fully consulted with stakeholders including neighbouring countries, make sure to handle the nuclear contaminated water in a science-based, safe and transparent way, and subject itself to rigorous international oversight.”

Page 10: There’s an interesting story about local officials in Quzhou, Zhejiang Province, dealing with the issue of “illegal/excessive eating and drinking at official receptions”. I am sure local cadres aren’t really thrilled about this. The use of the world illegal might sound odd, but it is right because there’s a 2021 law on food waste in China, which says:

“Article 6 Government organs, people’s organizations, state-owned enterprises, and public institutions shall specify and improve the standards for official receptions, meetings, training sessions and other official activities in accordance with relevant state regulations, strengthen administration, and take the lead in saving food and opposing waste. Where meals are required for official activities, the number and form of meals shall be arranged according to the actual situation, and shall not exceed the prescribed standards.”

Anyway, the report informs that now there is an official app that’s been developed. Local officials are required to use this for their meals during work visits.

In July last year, a reform was initiated. Under this, “apart from meals for meetings, training, and receiving external guests, all government staff in the city, at all levels, are required to dine at designated dining points, such as government canteens at local agencies or town (street) canteens; they can have meals after scanning the QR code and paying 15 yuan. No longer relying on official letters to arrange official receptions, the system uses a unified QR code and payment for government employees throughout the city.” 去年7月，衢州市纪委监委为进一步严格落实中央八项规定精神，会同市财政局等部门围绕“厉行节约、反对浪费”，在全市域推行“公务餐”一件事改革。改革明确规定，除会议、培训用餐和市外来宾接待等事宜外，全市各级机关单位工作人员在市域范围内开展公务活动一律在本地机关食堂、乡镇（街道）食堂等指定用餐点，扫码缴纳15元后即可用餐，相关单位不再凭公函安排公务接待，全市范围内实现一码通用、一码支付.

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Page 11: There’s a report informing that from January to July this year, the national railway completed a fixed asset investment of 371.3 billion yuan, an increase of 7% over the same period last year.

Page 15: On the international page, there’s a report on the surge in illegal employment of child labour in the United States. For instance, the report cites a CNN report:

“:From October 1, 2022 to July 20, 2023, the US Department of Labor concluded 765 child labour cases involving 4,474 children, and fined employers more than $6.6 million. Compared with the same period last year, the number of illegal child labour increased by 44%. In addition, the Ministry of Labor is investigating more than 700 cases of child labour, most of which involve violating working hours and engaging in dangerous work.” “这一案件并非孤例。”美国有线电视新闻网近日指出，近年来美国国内非法雇用童工的现象激增，美国劳工部于2022年10月1日至2023年7月20日期间共审结765起童工案件，涉及4474名儿童，对雇主处以超过660万美元的罚款。与去年同期相比，非法童工数量增加了44%。此外，劳工部正在调查的童工案件还有700多宗，大多数涉及违反工作时长和从事危险工作等.

Another report on the page argues that since the beginning of this year, “the number of criminal cases in Japan has increased significantly, and the public security situation has continued to deteriorate, causing public concern.” It cites official Japanese data to say that more than 333,000 criminal cases have been reported in H1 2023, an increase of 21.1% year-on-year. “The National Police Agency in Japan has stated that if the trend of rising crime continues, this year could become a ‘turning point’ in the deterioration of public safety in the country.”

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Xi & the Double Support Policy - Tensions of US Investment Screening - Pushback on US-Taiwan Trade Agreement - No More Banquets for Quzhou Officials - France's EV Focus

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