Xi Wants Patriotic Academics - People's War Against Drugs - EU's EV Tariffs - New US Sanctions on Chinese Entities - Denying Taiwan 'Right of Self-defense'
Hi folks,
A brief note to share before we get to today’s paper. Later today, I will be testifying before the U.S.-China Economic and Security Review Commission.
The hearing’s theme is “China’s Stockpiling and Mobilization Measures for Competition and Conflict.” You can check out all the details, the written testimony and the live-stream at 19:00 Indian Standard Time.
Regards,
Manoj
Here are the key reports and articles that I found noteworthy from the People's Daily’s edition on Thursday, June 13, 2024.
Page 1: Let’s begin with the report on Xi Jinping’s speech to the opening ceremony of the celebration for the 60th anniversary of the United Nations Conference on Trade and Development (UNCTAD). He said that “the world today is undergoing faster changes unseen in a century, and peace and development is confronted with new challenges. All parties must assume their responsibilities for history and the people, keep to the right direction, and work together to build a community with a shared future for humanity.”
He then made three points:
We must create an international environment for peaceful development. All countries, especially major countries, must practice true multilateralism, advocate an equal and orderly multipolar world, abide by the purposes and principles of the UN Charter, and support multilateral institutions such as UNCTAD to play a better role.
We must follow the trend of the times of open development. We must advocate inclusive economic globalization, promote trade and investment liberalization and facilitation, solve problems such as unbalanced development, and promote the development of the global governance system in a more just and equitable direction.
We must harness the historic opportunity for innovation-driven development. It is important to build an open, inclusive and non-discriminatory environment for the digital economy, follow the people-centered, AI-for-good principle and strengthen AI-related rules and governance within the framework of the United Nations, actively advance green transition, and help developing countries join the trend of digital, smart and green development.
——要营造和平发展的国际环境。各国特别是大国要践行真正的多边主义，倡导平等有序的世界多极化，恪守联合国宪章宗旨和原则，支持联合国贸易和发展会议等多边机构更好发挥作用。——要顺应开放发展的时代潮流。倡导普惠包容的经济全球化，推进贸易和投资自由化便利化，解决好发展失衡等问题，推动全球治理体系朝着更加公正合理的方向发展。——要把握创新发展的历史机遇。打造开放、包容、非歧视的数字经济环境，坚持以人为本、智能向善，在联合国框架内加强人工智能规则治理，积极推进绿色转型，让广大发展中国家更好融入数字化、智能化、绿色化潮流。
He ended by saying that “China has always been a member of the ‘Global South’ and will always remain part of the developing world. China will actively expand imports from other developing countries, strengthen trade, investment and development cooperation, and help implement the UN 2030 Agenda for Sustainable Development.” 中国始终是“全球南方”的一员，永远属于发展中国家。中国将积极扩大从其他发展中国家的进口，加强贸易、投资、发展合作，助力落实联合国2030年可持续发展议程.
China Daily’s report informs that Xi also committed to donate $20 million over five years to UNCTAD to support the implementation of the UN's 2030 Agenda, ensuring that no country is left behind.
Next, there’s a report (English report) on Xi’s letter to Andrew Chi-Chih Yao, a professor of Tsinghua University. Yao, an academician of the Chinese Academy of Sciences, returned to China and commenced his teaching career at Tsinghua 20 years ago. Xi praised him by saying that “you have turned your patriotism into a journey of serving the country.”
He added: I hope “you will adhere to your original aspiration and leverage your strengths to further explore approaches to the cultivation of innovative talent, and foster interdisciplinary integration and cutting-edge innovation, in order to make more contributions to achieving high-level self-reliance and strength in science and technology and the building of a strong nation in both education and science and technology.” 你好！来信收悉。你回国任教二十年来，将爱国之情化为报国之行，在清华大学潜心耕耘、默默奉献，教书育人、科研创新都取得了丰硕成果，向你表示诚挚问候。希望你坚守初心使命，发挥自身优势，带领大家继续探索创新人才自主培养模式，推动学科交叉与前沿创新，打造高水平的人才培养和科技创新基地，为实现高水平科技自立自强、建设教育强国科技强国作出新的贡献.
Moving on, there’s a report on Li Xi meeting with a delegation of the Communist Party of Cuba (PCC) led by Gladys Martinez Verdecia. Xinhua says:
Li “said that China and Cuba are both socialist countries led by communist parties and share common ideals and convictions. The two sides should firmly implement the important consensus reached by the top leaders of the two parties and countries, intensify strategic communication, deepen pragmatic cooperation, strengthen the exchange of experience in governance, guide the better development of their respective socialist causes, and work together to build a community of shared future between China and Cuba, Li said. The PCC thanks the Chinese side for its firm support and valuable assistance to Cuba's just cause, Martinez said, expressing the willingness to work with the CPC to implement the consensus reached by the top leaders of the two parties and countries, deepen the exchange of experience on party and state governance, promote practical cooperation in agriculture and other fields, and push for greater development of China-Cuba relations.”
Next, there’s a report on China’s services trade. It says that the total import and export of services for the January to May period was 2.432 trillion yuan, a year-on-year increase of 16.8%. Among them, exports were 984.69 billion yuan, a year-on-year increase of 11%; imports were 1.447 trillion yuan, a year-on-year increase of 21.2%.
Finally, there’s a report informing that the HH-100 unmanned cargo aircraft developed by AVIC has completed its maiden test flight. The aircraft has a maximum take-off weight of 2,000 kg, a payload of 700 kg, a full-load range of 520 km, a maximum cruising speed of 300 km/h, and a maximum operating altitude of 5,000 meters. Sharing a video below in case you are interested.
Page 2: There’s a report on comments by Wang Xiaohong, who is also the Director of the National Narcotics Control Commission, during his visit to Hubei. He called to “solidly advance the fight against drug control, innovate drug control work mechanisms and measures, severely crack down on drugs-related illegal and criminal activities in accordance with the law, strengthen rehabilitation and assistance for drug users, do a good job in drug control propaganda and education, do a good job in basic work at the grassroots level of drug control…” 国务委员、国家禁毒委员会主任王小洪在湖北调研禁毒工作，看望慰问一线禁毒工作者。他强调，要深入学习贯彻习近平总书记关于禁毒工作的重要指示精神，深刻认识毒品的危害性和做好禁毒工作的重要性，坚定不移走中国特色毒品问题治理之路，扎实推进禁毒斗争，创新禁毒工作机制措施，依法严厉打击毒品违法犯罪活动，加强对吸毒人员的戒治帮教，抓好禁毒宣传教育，做实禁毒基层基础工作，不断推动禁毒工作取得新成效，为实现禁绝毒品目标而不懈努力.
He added that “drug control work is crucial to national security, the rise and fall/prosperity and decline of the nation, and the well-being of the people. It requires a highly responsible attitude towards the country, the nation, the people, and history to unwaveringly win the people's war against drugs.” 王小洪指出，禁毒工作事关国家安危、民族兴衰、人民福祉，要以对国家、对民族、对人民、对历史高度负责的态度，坚定不移打赢禁毒人民战争.
“It is necessary to always maintain ‘zero tolerance’ towards drugs, taking early and decisive action to combat any emerging drug issues.
It is necessary to innovate on services provided to support drug addicts, improve the rehabilitation system, implement support and guarantee measures, and effectively carry out rehabilitation, recovery, and assistance work to minimise the number of drug users and their associated harm.
It is necessary to focus on young people, promote drug prevention education within schools, workplaces, families, public places, communities, and rural areas, continuously enhancing the public’s awareness and ability to recognize, prevent, and resist drugs.
It is necessary to adhere to collective wisdom and efforts, joint prevention and treatment, solidify work responsibilities, and coordinate resources and strengths from all sides to form the greatest synergy in tackling drug issues.”
要始终保持对毒品的“零容忍”，切实做到打早打小、露头就打。要创新吸毒人员服务管理，完善戒毒康复体系，落实帮扶保障措施，扎实做好戒治、康复、救助等工作，最大限度减少吸毒人员及危害。要以青少年为重点，推动毒品预防教育进学校、进单位、进家庭、进场所、进社区、进农村，不断增强全民识毒防毒拒毒意识和能力。要坚持群策群力、群防群治，压实工作责任，统筹各方资源力量，形成毒品问题治理攻坚的最大合力。
Page 3: A couple of reports to note. First, there is a comment from yesterday’s MoFA press conference discussing the tariffs that the EU was then expected to impose on Chinese EVs. Since then, a decision was announced by the European Commission.
It said that “the Commission has provisionally concluded that the battery electric vehicles (BEV) value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers”. The Commission disclosed “provisional countervailing duties” that will be imposed on Chinese EVs. “Should discussions with Chinese authorities not lead to an effective solution, these provisional countervailing duties would be introduced from 4 July by a guarantee (in the form to be decided by customs in each Member State).” The duties are as follows:
BYD: 17,4%;
Geely: 20%; and
SAIC: 38,1%.
Other BEV producers in China, which cooperated in the investigation but have not been sampled, would be subject to the following weighted average duty: 21%.
All other BEV producers in China which did not cooperate in the investigation would be subject to the following residual duty: 38,1%.
Beijing responded angrily. The Ministry of Commerce said that “the EU side has ignored China's repeated strong objections, as well as the appeals and dissuasions from the governments and industry in EU member states.”
“‘China is deeply concerned and strongly dissatisfied with this development. China's related industries are profoundly disappointed and firmly oppose this,’ said the Ministry’s spokesperson. The findings by the European side in the pre-disclosure lacks both factual and legal basis, the spokesperson said, adding that the European Commission has ignored the fact that the Chinese EV industry's advantages stem from openness and competition. The European Commission also disregarded WTO rules, and failed to acknowledge the full cooperation of relevant Chinese enterprises during the investigation, said the spokesperson. The European Commission, by arbitrarily creating and exaggerating China's ‘subsidy items’ as well as abusing the ‘facts available’, ruled that China offered subsidies at excessively high levels, according to the spokesperson. Such an action is ‘blatant protectionism’ that will create and escalate trade frictions, said the spokesperson, adding that the move not only undermines the legitimate rights and interests of China's EV industry, but also disrupts and distorts the global automotive industrial and supply chains, including those in the EU. While holding high the banner of green development in one hand, the European Commission wields the stick of trade protectionism in the other, politicizing economic and trade issues and using them as tools, said the spokesperson. ‘This violates the consensuses reached by the leaders of China and the EU countries to strengthen cooperation, and will affect the atmosphere of bilateral economic and trade cooperation between China and the EU. It does no good to the interests of EU consumers, and will eventually undermine the overall progress of the EU's green transformation and global cooperation on climate change.’ China urges the EU to rectify its wrong-doing immediately, implement the important consensuses reached during the recent China-France-EU trilateral meeting, and address economic and trade frictions through dialogue. The spokesperson said that China will take all necessary measures to defend the legitimate rights and interests of Chinese enterprises.”
China Daily’s report has some other useful points to note.
“Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said in an exclusive interview with China Daily that the EU's latest tariff move is ‘rare and unreasonable’, and does not conform to WTO principles. ‘China has abundant corresponding countermeasures, but the country is more willing to negotiate with the EU to avoid a trade war as much as possible,’ he emphasized. Sun said that the European Commission's motive is not for trade development at all. For example, Tesla has been temporarily excluded from the temporary tariff and is pending for supplementary materials, which reflected how ‘targeted’ the tariff is at China's electric vehicle industry, he said. China Chamber of Commerce to the EU pointed out in their latest statement that the move was ‘politically motivated and protectionism-driven’, as several Chinese enterprises and stakeholders have reported misuse of investigative power and misconduct by the European Commission during the investigation.”
Also note this comment by Cui Dongshu, secretary general of the China Passenger Car Association: “The EU's provisional tariffs come basically within our expectations, which won't have much of an impact on the majority of Chinese firms”...Those exporting China-made EVs including Tesla, Geely and BYD still have huge potential for development in Europe in the future, he said.
Moving on, although it is not in the paper today, ahead of the G7 summit, the US Department of State has announced “sanctions on more than 100 individuals and entities”, including seven China-based entities, for their support to the Russian war effort in Ukraine. These include:
Poly Technologies Incorporated (PTI) is a PRC defense company and state-owned enterprise that has shipped dual-use and defense-related equipment to numerous U.S.-designated Russian defense sector entities since February 2022. PTI has previously been subject to Department of State nonproliferation-related sanctions and was added to the Department of Commerce’s Entity List in June 2014.
Beijing Deepcool Industries Co. Ltd is a PRC-based company involved in the supply of over $1 million worth of CHPL items to Russian companies, including the U.S.-designated, Russia-based Aktsionernoe Obshchestvo Taskom and OOO Novyi AI Ti Proekt.
Wuhan Tianyu Information Industry Co Ltd. is a PRC-based company involved in the supply of over $900,000 worth of CHPL items to Russia, including to the U.S. designated, Russia-based Joint Stock Company Alfa-Bank
Asialink Shanghai Intl Logistics Co Ltd (Asialink) is a PRC-based company involved in the supply of CHPL items to several U.S.-designated Russia-based companies, including Limited Liability Company Kvazar, Limited Liability Company Mdikam Ek, Limited Liability Company Spetsvoltazh, Petersburg Intelligent Transport Logistics, and Limited Liability Company Galika Servis. Asialink sent at least 1,350 shipments of CHPL items to LLC Mdikam Ek, 800 shipments of CHPL items to LLC Spetsvoltazh, and 400 shipments of CHPL items to Petersburg Intelligent Transport Logistics. Products shipped include electronic integrated circuits, and other controlled electronic components.
3Nod Digital Hong Kong Limited is a Hong Kong-based company involved in the supply of over $1 million worth of CHPL to Russian companies, including the U.S.-designated, Russia-based Obltransterminal.
Mile Hao Xiang Technology Co Ltd is a PRC-based company involved in the supply of components to Russian customers.
Guangdong Pratic CNC Technology Co Ltd is a PRC-based company involved in the supply of over $1.9 million CHPL items to Russian customers, including the U.S.-designated, Russia-based UMAC LLC. UMAC LLC has a public history of supplying machine tools – both domestic and foreign-produced – to the Russian military-industrial base, and its past customers include U.S.-designated, Russia-based battle tank manufacturer JSC Research and Production Corporation Uralvagonzavod named after F.E. Dzerzhinsky.
Earlier in May, the State Department had imposed sanctions on 20 companies based in China and Hong Kong.
In addition, this week, the US Treasury has expanded “the definition of Russia’s military-industrial base to include all persons blocked pursuant to Executive Order (E.O.) 14024. This means that foreign financial institutions risk being sanctioned for conducting or facilitating significant transactions, or providing any service, involving any person blocked pursuant to E.O. 14024, including designated Russian banks such as VTB Bank Public Joint Stock Company (VTB) and Public Joint Stock Company Sberbank of Russia (Sberbank). This expanded definition reflects Treasury’s assessment that Russia has re-oriented its economy and marshalled all parts of its government toward supporting its reprehensible war effort. Foreign financial institutions face sanctions risk for continuing to facilitate transactions involving Russia’s military-industrial base.”
Reuters also reports that Japan “is considering imposing sanctions on companies, including Chinese firms, supporting Russia's war on Ukraine by supplying materials that can be used by Moscow's military…possible sanctions could target ‘groups that are suspected of providing material aid including domestic Chinese companies’ and would forbid them from exporting from Japan.”
Finally, back to PD, there’s a report on Peng Qinghua, Vice Chair of the NPC Standing Committee, attending the Russia Day reception at the Russian embassy in Beijing on Wednesday. Peng said China is ready to work with Russia to follow the consensus reached by the two heads of state, take the celebration of the 75th anniversary of diplomatic relations as the main line of the development of bilateral relations this year, seize opportunities and promote cooperation, to contribute to the development and revitalization of respective countries.
That’s it for the paper today. But let me highlight some other reports:
First, China has agreed to renew currency swap tranches worth 35 billion yuan (about US$5 billion) with Argentina’s central bank until July 2026, the South American country’s monetary authorities announced on Wednesday.
Second, Beijing says that Taiwan does not have the “right of self-defense”. “Chen Binhua, a spokesman for the State Council Taiwan Affairs Office, said at a news conference in Beijing that ‘Taiwan is an integral part of China, and where does the 'right of self-defense' come from?’ He criticized the Democratic Progressive Party authorities in Taiwan for drawing so-called lines and setting ‘restrictions’ on the mainland's just actions to safeguard national sovereignty and territorial integrity, calling it an act of overestimation.”
Third, SCMP reports that a bipartisan bill seeking to counter Beijing’s narrative about China’s control over Tibet and promote dialogue between the Chinese government and the Dalai Lama is heading to US President Joe Biden’s desk. The House of Representatives voted 391-26 on Wednesday to approve the Promoting a Resolution to the Tibet-China Dispute Act, which passed the Senate last month. The bill, introduced in the Senate by Oregon Democrat Jeff Merkley, would direct funds to counter what it calls ‘disinformation’ from Beijing about Tibet’s history, people and institutions. The bill refutes the Chinese government’s claim that Tibet has been part of China since ancient times, and would make it US policy that the dispute over Tibet’s status is unresolved. It would also make it US policy that ‘Tibet’ refers not only to the Tibet autonomous region as defined by the Chinese government, but also Tibetan areas of Gansu, Qinghai, Sichuan and Yunnan provinces.”