Covid Crisis - Pakistan Bombing - Bo'ao Forum - Falling Credit - New Chip School - Party Building at Universities - China-Russia Moonshot - Wang Yi on US Policy & Xi's 'People's Leader'

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I. India-China Ties

It’s been a difficult few weeks with the COVID-19 pandemic spiralling in cities across India. The situation in India has been among the biggest international stories being covered in Chinese media. We should expect much more coverage of the situation over the next month or two, as the crisis unfolds. For instance, take a look at the image below from Guancha’s homepage today, along with snippets of coverage on other Chinese news sites. Sina, in particular, has a dedicated section for coverage, where the issue of the US’s faltering public diplomacy has been featured too.

A number of countries, including China, have issued statements of support. On Thursday, MoFA’s Wang Wenbin responded to a question by China National Radio, saying that “China takes note of the recent grave situation in India with a temporary shortage of anti-epidemic medical supplies. We stand ready to provide India with necessary support and assistance to get the epidemic under control.” A day later Zhao Lijian added that “China is ready to provide support and help according to India’s need, and is in communication with the Indian side on this.” This is welcome; and I sincerely hope that both governments can work something out with regard to immediate needs of oxygen, medical equipment and vaccines in the long term. For now, this doesn’t seem like this is happening at a government level. Times of India’s source-based report says that India is not looking at China to procure oxygen. Reports, meanwhile, inform that Russia, Germany, France and the UK have offered support when it comes to the oxygen shortage. Cryogenic oxygen tanks were airlifted by the Indian Air Force from Singapore this week and talks are also underway with the UAE. 

There are, however, private donations and commercial contracts for oxygen supply from what I understand. For example, Chinese smartphone maker Xiaomi has been quick off the blocks among Chinese businesses operating in India to offer support. On Thursday, it announced that it will donate Rs 3 crore to procure more than 1,000 oxygen concentrators for hospitals across states and will also partner with GiveIndia to raise Rs 1 crore for “Covid-19 warriors.” Global Times reports that “a Chinese logistics company plans to donate 300,000 KN95 face masks to India…A Chinese motorcycle company has donated more than 200,000 masks to a hospital in Delhi, and a Chinese company in the textile industry has purchased a ventilator in China and is sending it to a hospital in India.” None of the companies are named in the report. The piece also has Wang Guangfa, a respiratory expert at Peking University First Hospital, saying that “China could help India with testing equipment, testing reagents, construction materials for building makeshift hospitals as well as technical support.”

Anyway, let’s look at some of the commentary around the Chinese government’s offer for support. Niu Haibin, deputy director of the Institute for Foreign Policy Studies at the Shanghai Institute for International Studies, believes that the current situation provides an opportunity for both sides to “mend” bilateral ties. SCMP also quotes Li Hongmei, a research fellow at the Shanghai Institute for International Studies, as saying that “China’s statement shows that it does not link the border issue closely with overall relations with India, and that China expects bilateral relations can be improved.”

The other strand of commentary is about the West’s, particularly the US’s failure to come to India’s support. This fits into Beijing’s narrative of the US’ vaccine nationalism and the vaccine divide between the developed and developing world. For instance, on Tuesday, China’s MoFA took a question from Xinhua about Serum Institute of India’s Adar Poonawalla’s comments about US restrictions on raw material exports. Wang Wenbin said that “the widening of the ‘vaccine divide’ will harm the interests of all mankind. When developing countries are struggling with the epidemic, how can the US remain safe and sound?...We also urge the US to shoulder its due international responsibilities.”

If you are interested, the Indian Express has a good explainer on these raw materials and the restrictions imposed by the US government. Now, there have been some conversations between India and the US about the situation. For instance, Secretary of State Antony Blinken and India’s Foreign Minister S. Jaishankar spoke on April 19, But US public diplomacy on this has been abysmal. Ned Price’s comments defending export restrictions have done tremendous damage in terms of Indian public opinion. As I write, Blinken and NSA Jake Sullivan have put out the first statements of support. A day earlier, the US Chamber of Commerce issued a statement asking the Joe Biden administration to release millions of AstraZeneca vaccine doses “in storage” to India, Brazil and other such countries where the pandemic is raging. Let’s see what action is taken tangibly. There’s a lot to do as this thread by Milan Vaishnav demonstrates. But in terms of the popular mood on social media in India at the moment, this tweet below from a WION’s Palki Sharma Upadhyay provides a glimpse. As does this comment by former Foreign Secretary Kanwal Sibal to Sputnik News:

“The attitude of the Joe Biden administration is very self-centred and selfish. India has been very generous in exporting and donating vaccines to other countries during the COVID pandemic. The US, on the other hand, wants to create a stockpile to buffer itself against the next wave. Millions are being affected in India due to the virus and the US is effectively ignoring the plight of Indians.”

I’ve touched upon Chinese media coverage earlier, but here are some pieces that caught my attention. Global Times’ editorial, which was also published in Chinese language, is very critical of the West in general and the US in particular in terms of the response to the situation in India. And then it says this:

This pandemic shows that the West’s getting closer to India is more in a geopolitical sense. There is actually a gap of people's livelihoods and public interests between them. Their closeness to each other is fragile and superficial. China and India feel more empathy for each other. In terms of fundamental interests, including development and improvement of people's livelihood, the two countries should have been partners in the same camp. But it is a pity that the significance of border disputes is amplified, concealing the true bond of China-India relations and blurring the two countries' huge common interests.”

Here’s Hu Xijin’s Twitter appeal for India to accept Chinese support amid the pandemic:

And here’s Hu targeting Blinken after his Twitter statement of solidarity. So much for this not being about geopolitics.

Here’s Global Times coverage of Indian social media anger following Ned Price’s response on export restrictions. Here’s Sina covering angry Twitter reactions after Blinken’s tweet on Sunday. Chinese media have also been covering the story about the Indian government demanding the deletion of tweets critical of its handling of the pandemic.

Meanwhile, a few days before all of this, Lan Jianxue from the China Institute of International Studies, wrote a piece arguing that India could “turn to old tricks, such as initiating provocations on its borders with China or Pakistan, fanning nationalist sentiments at home, to distract people's attention” from the pandemic. This came in the context of Indian ambassador Vikram Misri’s remarks at the 7th ICWA-CPIFA Dialogue. Misri had criticised the “tendency in some quarters to sweep this situation (border tensions) under the carpet and characterize it as just a minor issue and a matter of perspective.” He said this was “inadvisable as it can only take us further away from a sustained solution to present difficulties and deeper into an unfulfilling stalemate. In fact, it would be tantamount to running away from the problem and in a direction opposite to that where the promise of our closer development partnership lies.”

But Lan also added that “against the backdrop of the pandemic deteriorating, New Delhi should open its mind and figure out a way to get Beijing's help to curb the grave spread of the disease. China should respond to India's appeal, maintain high-level communications, and step up exchanges of experience on epidemic prevention and control. It is of great significance to the world for China and India to strengthen solidarity and cooperation to overcome the pandemic as soon as possible.”

Finally, let’s take a look at some other reports around the India-China dynamic. First, Mint’s Elizabeth Roche reports that the Indian Army has issued a Request For Information for procurement of 350 light tanks weighing less than 25 tonnes. This development comes in the backdrop of the India-China stand-off in eastern Ladakh where the Indian Army felt the need for a light tank easily deployable in High Altitude Areas. The Hindu’s Ananth Krishnan reports that China’s Embassy in India has since Friday put in place curbs that have made it harder for its nationals to return to China, amid the surge in COVID-19 cases. The Embassy told Chinese travellers it will no longer issue “health codes” they need to return if they transit either through Nepal or Sri Lanka. Indian citizens and foreigners based in India have been barred from travelling to China since November last year. Third, Times of India reports that India and China are competing to fill the post of the WTO’s deputy director general. New Delhi is pitching for the appointment of former diplomat Mohan Kumar. China has suggested former ambassador to WTO Zhang Xiangchen. From what I understand, this tussle is for the Asian candidate for the post. The candidate will then have to compete with candidates from the US, EU and South America.

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II. Region Watch

Much has been said, analysed and written about the Bo’ao Forum for Asia held last week. President Xi’s remarks on the role of big powers were of particular interest. Delegations from across Asia including several heads of state engaged in four days of deliberations centred on global governance and the advancement of the Belt and Road Initiative (BRI). 

According to officials at Nepal’s Ministry of Foreign Affairs, however, the founding member and regular participant was not invited for this year’s event. However, sources at the Nepal Embassy in Beijing informed The Kathmandu Post that Ambassador Mahendra Bahadur Pandey and Deputy Chief of Mission Sushil Lamsal had left for Hainan for the annual conference, despite there being no formal invite.

“They [Chinese] do not invite all the countries every year. We had our participation at the highest levels in the past, but we did not get an invitation in 2019 too,” said Leela Mani Paudyal, Nepal’s ambassador to Beijing from 2016 to 2020.

Analysts suppose that there are many possible reasons behind Beijing's displeasure, 

  • How Nepal’s internal politics has unfolded 

  • Little progress in Nepal under the BRI since 2017

A spokesperson at the Chinese embassy in Kathmandu thinks there is no need to read into Nepal’s non-participation:

“If you see the list, each year the forum invites different leaders. So for our understanding, there is no permanent guest. And per my information, Ambassador Pandey has already confirmed his attendance.”

A high-profile visit is planned for next week with China’s Minister of Defence Wei Fenghe visiting Sri Lanka. This will be the second high-level visit from Beijing to Colombo in the past six months. Significant in the wake of heightened scrutiny within Sri Lanka over China’s presence in the country through infrastructure projects. The Lankan Supreme Court is currently hearing a case of petitions challenging a Bill of special laws to govern the China-funded $1.4- billion Port City. Petitioners and critics of the Bill are of the belief that the proposed laws could pave the way for the creation of a “Chinese colony” in Sri Lanka. 

Sri Lanka detected radioactive material on a China-bound vessel at the Hambantota Port. According to officials, the shipping company failed to obtain prior clearance for “dangerous cargo”. The vessel was asked to leave the port as the company did not declare that the cargo was radioactive material, a requirement under Sri Lanka’s Atomic Energy Act.

The Tehreek-e-Taliban Pakistan claimed responsibility for a suicide bombing in Quetta last week. It was initially speculated that China was the target as the bomber attacked the hotel where Chinese ambassador Nong Rong was staying. Yasir Habib Khan, founder and president of the Institute of International Relations and Media Research in Pakistan believes

“ is premature to claim categorically that the attack was deliberately targeting Chinese people. It will take time to gather the pieces of clues to reach a conclusion.” 

There is no denying, however, that the timing of the attack could shake confidence in the BRI and its flagship China-Pakistan Economic Corridor (CPEC). Insurgent groups in Balochistan have previously claimed responsibility for attacks on Chinese targets, stating Pakistan and China had exploited local natural resources. In the latest attack, at least five people died and a dozen were wounded. No Chinese casualties were reported. Besides security concerns, BRI projects in Pakistan face other threats. According to projections by US-based news organisation Climate Central, the coastline surrounding the Gwadar port site will be underwater by 2060

III. Bo’ao & Climate Speeches

Xi Jinping delivered two key speeches this week. The first was at the Bo’ao Forum for Asia and the other at the Biden-led Climate Summit. At the Bo’ao Forum, Xi called China “an important member of the Asian family” and then talked about the systemic changes that are currently underway

“The combined forces of changes and a pandemic both unseen in a century have brought the world into a phase of fluidity and transformation. Instability and uncertainty are clearly on the rise. Humanity is facing growing governance deficit, trust deficit, development deficit, and peace deficit. Much remains to be done to achieve universal security and common development. That said, there is no fundamental change in the trend toward a multi-polar world; economic globalization is showing renewed resilience; and the call for upholding multilateralism and enhancing communication and coordination has grown stronger.”

Given all this, Xi proposed:

1. Need for “consultation on an equal footing”:

  • This means that “global governance should reflect the evolving political and economic landscape in the world.” 

  • “We need to safeguard the UN-centered international system, preserve the international order underpinned by international law, and uphold the multilateral trading system with the World Trade Organization at its core.”

  • “We must not let the rules set by one or a few countries be imposed on others...Big countries should behave in a manner befitting their status and with a greater sense of responsibility.”

2. Need for “openness and innovation”: 

  • “In this age of economic globalization, openness and integration is an unstoppable historical trend. Attempts to ‘erect walls’ or ‘decouple’ run counter to the law of economics and market principles. They would hurt others’ interests without benefiting oneself.”

3. Need more focus on health and security: 

  • Here he talks about supporting the WHO.

  • The need to “bolster international cooperation on the R&D, production and distribution of vaccines and increase their accessibility and affordability in developing countries so that everyone in the world can access and afford the vaccines they need.”

  • On climate change, he said that the “principle of common but differentiated responsibilities must be upheld, and concerns of developing countries on capital, technology and capacity building must be addressed.”

4. A “commitment to justice”: 

  • We must reject  the cold-war and zero-sum mentality and oppose a new ‘Cold War’ and ideological confrontation in whatever forms.”

  • In state-to-state relations, the principles of equality, mutual respect and mutual trust must be put front and center. Bossing others around or meddling in others’ internal affairs would not get one any support.

He then focussed on BRI; and under this framework, he spoke about expanding:

  • health cooperation

  • “hard connectivity” of infrastructure and “soft connectivity” of rules and standards

  • green development

  • openness and inclusiveness when it comes to BRI. In other words, folks who want to join, can do so, using it as a “pathway to poverty alleviation and growth.” Here he also quotes a World Bank report talking about BRI potentially lifting 7.6 million people from extreme poverty and 32 million people from moderate poverty by 2030.

He concluded by a couple of pledges, captured in the final paragraph:

“China will stay committed to peace, development, cooperation and mutual benefit, develop friendship and cooperation with other countries on the basis of the Five Principles of Peaceful Coexistence, and promote a new type of international relations. China will continue to carry out anti-COVID cooperation with the WHO and other countries, honor its commitment of making vaccines a global public good, and do more to help developing countries defeat the virus. However strong it may grow, China will never seek hegemony, expansion, or a sphere of influence. Nor will China ever engage in an arms race. China will take an active part in multilateral cooperation on trade and investment, fully implement the Foreign Investment Law and its supporting rules and regulations, cut further the negative list on foreign investment, continue to develop the Hainan Free Trade Port, and develop new systems for a higher-standard open economy. All are welcome to share in the vast opportunities of the Chinese market.”

Vice President Wang Qishan’s appearance at the forum created some buzz about potential political infighting. PD says (English report) that Wang met with forum directors and strategic partners collectively, and had a discussion with representatives of Chinese and foreign entrepreneurs. He told them that the world is currently undergoing new, complex and profound changes, and all parties need to strengthen exchanges, build consensus and cooperate to find ways to respond. Meeting entrepreneurs, he reiterated that reform and opening will continue but added that “glory and suffering accompany each other. People must stay calm and sober through historical, cultural and philosophical thinking and build confidence and patience.”

Now all this is fine, but what’s created some buzz is Wang’s brief appearance on stage during the event. He walked up to the podium and said that he wasn’t there to deliver a speech but is rather just a “temporary host” who is making “an announcement for President Xi Jinping” who would be giving the keynote address. 

Next at the climate summit, Xi called for fostering “a community of life for man and nature with ‘unprecedented ambition and action’.” State media has picked up the phrase “community of life,” as the buzzword from the speech. Here’s more from his speech:

  • We need to “ride the trend of technological revolution and industrial transformation, seize the enormous opportunity in green transition, and let the power of innovation drive us to upgrade our economic, energy and industrial structures.”

  • Xi wants “systemic governance” keeping the entire ecology in mind.

  • “We need to look for ways to protect the environment, grow the economy, create jobs and remove poverty all at the same time, so as to deliver social equity and justice in the course of green transition...”

  • “We need to uphold the UN-centered international system, comply with the objectives and principles laid out in the UN Framework Convention on Climate Change (UNFCCC) and its Paris Agreement, and strive to deliver the 2030 Agenda for Sustainable Development.”

  • “In this process, we must join hands, not point fingers at each other; we must maintain continuity, not reverse course easily; and we must honor commitments, not go back on promises.”

  • “We must be committed to the principle of common but differentiated responsibilities.”

Xi reiterated the plan to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. He also added that China will “strictly limit the increase in coal consumption over the 14th Five-Year Plan period and phase it down in the 15th Five-Year Plan period.”

Finally, this:

“China has done its best to help developing countries build capacity against climate change through various forms of results-oriented South-South cooperation. From remote sensing satellites for climate monitoring in Africa to low-carbon demonstration zones in Southeast Asia and to energy-efficient lights in small island countries, such cooperation has yielded real, tangible and solid results. China has also made ecological cooperation a key part of Belt and Road cooperation.”

IV. Economy & Technology

Let’s begin with the State Council’s weekly meeting, which ended with a decision to continue  implementing the direct allocation of fiscal funds on a regular basis in order to amplify the role of public money in benefiting businesses and the public. Last year, the central government directly channeled 1.7 trillion yuan of much-needed fiscal funds to prefecture and county-level governments, to support their tax and fee cuts. The report further informs that this allocation will now be expanded and the central government’s subsidies for public well-being will all be included in the mechanism. 

  • The total amount of funds under the mechanism will reach 2.8 trillion yuan. 

  • So far, the central government has directly transferred a total of 2.6 trillion yuan to local governments.

  • Of this more than 2.2 trillion yuan has been allocated to the fund users.

The report adds that the funds should be used for: 

  • offsetting the impact of phasing out some provisional support policies

  • support employment, people’s basic needs and market entities

  • help ensure salary payment and normal functioning of primary-level governments

And there’s a warning:

  • Stringent oversight will be enforced over the directly-funneled funds.

  • Local authorities and officials in charge will be admonished. 

  • Any irregularity such as fraudulent claims, withholding funds or diverting funds for non-designated purposes, will be seriously dealt with. 

Next, Caixin reports that the People’s Bank of China (PBOC) has listed 285 rural commercial banks, cooperative banks and credit unions as high risk after assessing the risk exposure of 4,399 banking institutions nationwide in the fourth quarter of 2020. An additional 127 smaller, village-level banks were also labeled high-risk, according to the PBOC. Meanwhile, Xinhua reports that China’s local governments have issued 895.1 billion yuan (about $137.85 billion) worth of bonds in the first quarter of this year. Out of this, special bonds are worth 374.1 billion yuan. By the end of March, China’s outstanding local government debt stood at around 26.2 trillion yuan (around 25% of GDP), within the official limit of 33.28 trillion yuan for this year. The Financial Times, however, reports that credit growth is slowing in China. It argues that total social financing, the country’s main gauge of credit growth which measures lending across the domestic financial system, rose by 12 per cent year-on-year in March, its slowest pace since April last year, according to official data released this month.

The report talks about measures such as the PBOC expressly asking lenders to reign in credit in February and, of course, efforts to draw red lines for the property sector. It adds that while Chinese officials are concerned about debt, they are taking a “sector-specific approach rather than raising rates — which would ripple across the whole economy — in part because the recovery is patchy.”

Finally, let’s take a look at some key stories with regard to China’s technology sector. First, Bloomberg reports that Jidu Auto, a joint venture between Chinese giants Baidu Inc. and Zhejiang Geely Holding Group, aims to spend 50 billion yuan ($7.7 billion) over the next five years on developing smart-car technology. The first model from Jidu will be an electric vehicle (EV) to launch within three years and designed to look like a robot to appeal to a young clientele, Chief Executive Officer Xia Yiping said.

Second, Tesla is the latest Western business that finds itself in the middle of a PR storm in China. CNBC reports that on Monday, a woman who claimed to be a Tesla customer stood atop one of the company’s cars at the Shanghai auto show with a T-shirt that read “brakes don’t work.” She was protesting an alleged brake failure in her car — an issue other Chinese social media users claiming to be Tesla drivers have complained about in the last several months. A video of the incident went viral on Chinese social networks and was picked up by state media. Tesla says that the woman had been involved in an accident in February due to “speeding violations,” and refused third-party inspection while demanding a refund for her car. State-run news outlets published a string of editorials, while the Chinese government’s central disciplinary commission issued a warning statement. Soon after, Tesla apologised for not solving the car owner’s problems in a timely manner and said it would work with regulators. The company said it will carry out “self-examination and self-correction” to “rectify” problems with its customer service process. Tesla later in the week released data prior to the crash incident. It said that the car was traveling at 118.5 kilometers per hour (around 73.6 mph) when the driver, the woman’s father, hit the brake for the final time before the crash. It added that the brakes functioned properly throughout with the car continuously slowing down to 48.5 kms per hour before the crash occurred.

Third, Sun Yu and Tom Mitchell report for the Financial Times that the People’s Bank of China “wants Ant to turn over its data, one of the most valuable assets in Ma’s internet empire, to a state-controlled credit scoring company that would be run by former executives of the central bank, according to people close to the negotiations. The entity would also serve other financial institutions, such as state-owned banks, that compete with the fintech group’s lending operations. Ant has insisted that it should lead the new company...”

Fourth, Chinese officials published new rules targeting the livestream e-commerce space in the country. Technode reports that these rules go into effect on May 25. They require livestream platforms to establish risk management systems to guard against suspicious or illegal marketing tactics; platforms must also verify the identity of livestream hosts prior to every session and forbid minors under the age of 16 from hosting livestream e-commerce sessions.

Fifth, ByteDance Ltd.’s plans for an initial public offering have reportedly been put on hold as it seeks to comply with regulatory demands from both China and the US. SCMP’s reporting says that the issues for ByteDance range from Sino-US technology competition to separating Douyin’s China-based operations from TikTok’s global operations because both apps share the same algorithm. The report quotes ByteDance Friday statement, saying that it was not ready to file an IPO “at this stage” and it has no imminent IPO plans.

Sixth, Caixin reports that Chinese government has cancelled import taxes on a range of scientific, technological, medical and analytical equipment and publications for the next five years as part of the government’s strategy to boost innovation and technology self-reliance. Research institutions, schools and libraries are now exempt from three types of import tariffs — customs duty, consumption tax and value-added tax — for purchases of scientific research and development as well as teaching equipment that cannot be produced in China, according to a notice published on Tuesday jointly by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs.

Finally, Tsinghua University this week established a new School of Integrated Circuits. Global Times reports that the school aims to help the country resolve the so-called “bottlenecks” that the US is restricting high-tech products to China. The report adds that the school will be the first in China to offer a specialised major in the subject, which has an important meaning for the industry’s development and acts as an incubator for the development of talent. While we are at it, do check out this new Rhodium Group report in China’s chip challenges by Jordan Schneider. He concludes with this:

“Beijing has no magic bullets when it comes to developing its semiconductor ecosystem, and its industrial and more assertive foreign policy actions appear to be complicating the challenge of turning China into a world-class, self-sufficient chip producer that is immune to foreign chokeholds. If China is leveling the semiconductor playing field with the rest of the world, we should expect progress beyond the design and packaging spaces and into trickier areas like EDA tools and SME. In the current environment, Chinese firms are incentivized to tout breakthroughs whether they can back them up or not. So outside observers should look to tangible increases in market share as opposed to press announcements or developments in test labs. Though progress may occur on a far longer time horizon than Beijing would like, China is unlikely to abandon its push for self-sufficiency anytime soon.”


V. China-US Ties

Let’s begin with two different takes from Beijing. First, Foreign Minister Wang Yi spoke at a Council of Foreign Relations event this week. He talked about the Biden-Xi call setting a new tone for the relationship but then added: “we have noted that the new U.S. administration has described China as its ‘most serious competitor’. The United States still interferes in China's internal affairs, including Taiwan, Xinjiang and Hong Kong-related matters. To be frank, the United States, in shaping its China policy, has not stepped out of the shadow of the previous administration, has not got over its misperception of China, and has not found the right way to engage with China.

He wants the US to look at China’s growth in an “objective and rational way.” China, he says, wants “mutual respect and equality” and “a new path of peaceful co-existence and mutually beneficial cooperation.” Basically, from Wang’s perspective, it’s the US that needs to adjust its policies to China. Beijing’s been on the right path all along.

He added:

“China-U.S. relations are at a new crossroads. The key is whether the United States can accept the peaceful rise of a major country with a different social system, history and culture, and in a different development stage; whether it can recognize the Chinese people's right to pursue development and a better life. The future of China-U.S. relations largely hinges on the answer of the United States to these two questions.”

He then talked about multilateralism and finally chided the US for interference in China’s internal affairs.

“Multilateralism should not be used to form new opposing blocs or exclusive circles. Some in the United States often talk about strengthening "rules-based international order". The question is: what rules? And who makes them? If it means the rules made by Western countries only, then they are made by only 12 percent of the world population, and they should not be the common rules for all. China's view is clear – we must uphold the UN-centered international system and the international order underpinned by international law. This represents the shared aspiration of all countries and true multilateralism in practice.”

Chinese Vice President Wang Qishan delivered a speech at an event in Beijing, marking the 50th anniversary at China-US ping-pong diplomacy. People’s Daily reports, noting that China-U.S. relations are now at a critical juncture, Wang remarked that, as the world’s two largest economies and permanent members of the UN Security Council, China and the U.S. should strengthen cooperation as the two “stand to gain from cooperation and lose from confrontation”. Both countries need to draw wisdom and strength from history, focus on cooperation, manage differences, and step up exchanges and cooperation in multiple areas to promote sound and stable bilateral relations, he added. There are some pieces talking about the potential of climate change engagement to become this era’s ping-pong diplomacy equivalent. But even these have analysts acknowledging that this is more wishful thinking than reality.

Because the fact is that it doesn’t seem like US policy towards China is softening anytime soon. This week the US Senate Foreign Relations Committee cleared the Strategic Competition Act of 2021. Reuters reports that the committee added dozens of amendments to the bill. One would force a boycott of the 2022 Beijing Olympics by U.S. officials, not athletes, which was also recommended by the U.S. Commission on Religious Freedom. SCMP reports that among the other additions include more aid for Africa and Latin America, greater funding for technology industries and a more robust US development bank. It adds, the bill as written would add new sanctions on Chinese officials accused of human rights violations in Hong Kong and Xinjiang; strengthen US ties with Taiwan; and try to further limit Beijing’s military operations and territorial claims in the South China Sea and beyond.

Separately, a group of Senate and House of Representatives lawmakers have also introduced the “Endless Frontier Act,” calling for $100 billion over five years for basic and advanced technology research and $10 billion to create new “technology hubs” across the country.

Reacting to these developments, You Wenze, a spokesperson for the Foreign Affairs Committee of the National People's Congress, said the Strategic Competition Act of 2021 is full of Cold War mentality and ideological bias and wantonly distorts and attacks China's development strategies as well as its domestic and foreign policies. It has grossly interfered in China's internal affairs.

MoFA’s Wang Wenbin added that 

the act “also exposes the hegemonic idea of the US to pursue supremacy and deprive others of the right to development. China strongly deplores and rejects this. Relevant acts talks nothing other than China being an opponent of the US. Is the sole purpose of the US development to out-compete China? Such a distorted and narrow-minded mentality is beneath the US in its capacity as a major country. I would like to reiterate that China is committed to developing China-US relations featuring non-conflict, non-confrontation, mutual respect and win-win cooperation. That said, we will continue to resolutely safeguard national sovereignty, security and development interests.”

Finally, WSJ reports that Beijing plans to appoint Qin Gang, a diplomat who has acted as President Xi Jinping’s chief protocol officer, as the next ambassador to Washington, according to officials with knowledge of the matter. Washington is widely expected to name R. Nicholas Burns, a veteran diplomat who has served in both Democratic and Republican administrations, as its ambassador to Beijing.

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VI. The Long & Short of It…

a. China-Russia: The Moon’s the Limit

Xi and Vladimir Putin sent congratulatory letters to the ninth meeting of the dialogue mechanism between the ruling parties of China and Russia. Xinhua reports that “Xi called on China and Russia, as major powers of global influence, to deepen comprehensive strategic coordination in the new era, and to play an underpinning role in safeguarding international fairness and justice, maintaining world peace and stability, and promoting common development and prosperity. Xi expressed his hope that participants from the two parties can engage in in-depth exchanges and build consensus to open a new chapter of strategic cooperation between the two parties and contribute wisdom and strength to comprehensively deepening bilateral relations in the new era, promoting the establishment of a fairer and more reasonable international order, and building a community with a shared future for humanity.” 

The dialogue between the CCP and United Russia, meanwhile, ended with a five-point consensus. This is covered on Page 7. It says that:

  • Given the changes in the world, “the promotion of a comprehensive strategic partnership of cooperation between China and Russia in the new era on a larger scale, broader field and deeper level is essential to safeguarding international fairness and justice and maintaining world peace and stability.”

  • The two parties will participate in the celebrations for the 100th anniversary of the founding of the Communist Party of China and the 20th anniversary of the founding of the United Russia Party.

  • “At this meeting, representatives of the two sides actively contributed to the development of China-Russia relations against the backdrop of major changes, exchanged ideas and reached a broad consensus on the development of ruling parties in the new era, experience and strategic planning of national development, opposing external interference and maintaining national security, and local cooperation between the two countries.”

  • Depending on the development of the epidemic, the two sides will hold the sixth China-Russia Political Parties Forum in Russia at an appropriate time. The focus will be on synching BRI and Eurasian Economic Union plans.

And here’s the last point:

“The two sides firmly support each other’s independent development path in line with their national conditions, uphold the international system with the United Nations at its core and the international order based on international law, promote the international community’s adherence to the principles of open, equal and non-ideological multilateralism, and jointly address global challenges and threats. We will resolutely oppose the attempts and actions of some countries to interfere in the internal affairs of sovereign states, impose unilateral sanctions, engage in hegemonic bullying and create turmoil and chaos on the pretext of democracy and human rights. To achieve these goals, the two parties will coordinate their positions in bilateral contacts and multilateral occasions, increase their mutual support, and fully demonstrate the strategic value and unique role of bipartisan cooperation.”

Also this week, the China National Space Administration (CNSA) and its Russian counterpart Roscosmos announced that they will be working together to build an International Lunar Research Station. They two sides have invited others to join in this endeavour. The joint declaration issued by the two sides says that the “ILRS is a complex set of experimental research facilities created on the surface and/or in the orbit of the moon with possible involvement with other countries and international organizations and partners, said the joint declaration. It is designed to carry out multidisciplinary and multipurpose research activities, including the exploration and use of the moon, lunar observations, fundamental research experiments and technology verification with the possibility of long-term unmanned operation with the prospect of ensuring human presence.”

b. Xi’s Tsinghua Visit

Xi Jinping visited his alma mater Tsinghua University on Monday. Xi studied chemical engineering there in the late 1970s. The visit dominates the front page. This comes as the university prepares to mark its 110th anniversary, which was discussed in the piece on world class universities that I had covered in yesterday’s edition.

Anyway, the key points from Xi’s visit; here’s Xinhua English’s report:

  • He said that “the need for higher education, scientific knowledge and outstanding talents for the development of the party and the country's undertakings is more urgent than ever.” 

  • Xi underlined the importance of strengthening basic research and independent innovation. New ideas and theories should be drawn from China's reform and development.

  • In building “world class universities,” he urged efforts to uphold Party leadership and the guiding role of Marxism at such universities.

  • Also world-class universities should also have the courage to tackle problems in core technological research that hinder the country’s development.

  • “Socialist education in China is to train socialist builders and successors with all-round development of morality, intelligence, physical education and labor.”

Here’s a quote that’s useful to keep in mind:

We must “refine moral character, consciously establish and practice the core socialist values, consciously use the excellent Chinese traditional culture, revolutionary culture, advanced socialist culture to forge the soul and enlighten the mind, strengthen moral cultivation, distinguish right from wrong, strengthen self-determination, and and aspire to pursue a higher, more realistic, life of character.”

In this context, SCMP also reports that Xi praised Tsinghua for its tradition of training students who were “both red and professional,” a phrase coined during the Mao Zedong era.

c. Party’s Influence at Universities

This week, we learned about new regulations issued by the central committee on the work of grassroots organizations in colleges and universities. It calls for party committees to focus on party building in colleges and universities and improve the party’s organisational system, institutional system and working mechanism there. Party committees should promote the “deep integration of party building and the development of higher education.” The committees should also “promote colleges and universities to educate people for the party” while cultivating talents for the country.

A press conference with officials from the Organization Department of the Central Committee and the Ministry of Education shed further light. They explain that the first such regulations date back to 1996, after which they were revised in 2010, with Xi Jinping then a member of the PSC under Hu Jintao, leading the effort. They then ran through an entire process of revision again since Xi became General Secretary. The officials mentioned Xi attending the two National College Ideological and Political Work Conferences in December 2016 and September 2018. Then there’s a process of soliciting opinions from grassroots committees and framing new guidelines. These were cleared by the PSC and Politburo in February this year and then issued on April 16.

While the primary goal of the regulations is party building, there are certain key principles to do this.

  • First, “adhere to the guidance of Xi Jinping’s thoughts on socialism with Chinese characteristics in the new era.”

  • Second, “adhere to the Party constitution as the fundamental basis and the party’s political construction.” This, of course, is a good time to remind everyone of what the additions to the constitution were in October 2017.

  • Third, “adhere to the problem orientation, focus on solving the problems of weakening of party leadership in some colleges and universities...”

Some of the new amendments in the regulations pertain to:

  • Improving the guiding ideology, objectives and principles for the work of grassroots party organisation. This relates to the goal of creating “socialist builders and successors.”

  • Organisational restructuring to improve overall Party control over these committees

  • Improving the leadership system and mechanism for discipline inspection.

  • Strengthening political education and party history education among the rank and file

  • Building “a loyal and clean team of high-quality professional cadres, and strengthen(ing) the political guidance and political absorption of talents.”

  • Strengthen the ideological and political work of party organizations in colleges and universities and to lead the mass organizations.

  • A separate chapter on leadership and guarantee was added to consolidate the work responsibilities of party committees at all levels and strengthen assessment ideological and political work teams.

The People’s Daily also carried a pretty strong commentary on all of this in its Friday edition. You can check out my breakdown of it here.

d. China, ASEAN & Myanmar

Ahead of the ASEAN meeting this week, Chinese Foreign Minister Wang Yi spoke to Don Pramudwinai, Thai deputy prime minister and foreign minister, and Erywan bin Pehin Yusof, second minister of foreign affairs of Brunei. Wang outlined China’s goals from the meeting.

  • The ASEAN meeting “should be conducive to promoting political reconciliation in Myanmar.” He, however, added that “whether the Myanmar issue can be properly resolved mainly depends on the country itself.”

  • He “hopes that the meeting can encourage the Myanmar side to put first the overall interests of the country and the people, and send out signals on peaceful reconciliation, with all concerned parties exercising restraint and moving toward each other.”

  • He wants ASEAN “to stick to the ‘ASEAN way’ featuring unity, inclusiveness and consensus through consultations” when discussing Myanmar.

  • And he wants that “the meeting should be conducive to fending off external interference.” Of course, China giving advice like this is not external interference.

  • Finally, he said that China “expects this meeting to make a good start for the ‘soft landing’ of the situation in Myanmar.”

Later in the week, ASEAN leaders put out a five-point plan after a meeting, which was attended by Myanmar’s Senior General Min Aung Hlaing.

  • First, there shall be immediate cessation of violence in Myanmar and all parties shall exercise utmost restraint.

  • Second, constructive dialogue among all parties concerned shall commence to seek a peaceful solution in the interests of the people.

  • Third, a special envoy of the ASEAN Chair shall facilitate mediation of the dialogue process, with the assistance of the SecretaryGeneral of ASEAN.

  • Fourth, ASEAN shall provide humanitarian assistance through the AHA Centre.

  • Fifth, the special envoy and delegation shall visit Myanmar to meet with all parties concerned.

Malaysian Prime Minister Muhyiddin Yassin told reporters that the agreement was “beyond our expectation.” Singapore’s Prime Minister Lee Hsien Loong was much more guarded, saying that while General Min Aung Hlaing listened and wasn’t opposed to the proposals, “there’s one thing to say you’ll cease violence and release political prisoners; it’s another thing to get it done.”

e. Xi’s ‘People’s Leader’

There was a long report in the People’s Daily and PLA Daily this week about the Party history education campaign in the military. It talked about the focus of the campaign being on “leading cadres at the regiment level and above.” The campaign began on March second with a meeting in Beijing. Eventually, the Military Party History Study and Education Leading Group met on March 19, with people then traveling to different areas to execute the campaign. From what I can understand, there’s basically a lot of lectures, studying and discussions that are part of the campaign. The aim is to improve political judgment, political insight and political execution; in other words, enhance the Party’s control over the PLA. 

There’s also this:

“It is widely believed that President Xi's important speech at the mobilization conference on Party history study and education serves as the general guidance for Party history study and education. It is also a ‘great Party lesson’ for the whole Party by the core of the Party, the commander in chief of the armed forces, and the people’s leader. It points out the direction and provides a fundamental guideline for Party history study and education.” (大家普遍感到,习主席在党史学习教育动员大会上的重要讲话,是搞好党史学习教育的总动员总指导,也是党的核心、军队统帅、人民领袖为全党上的一堂“大党课”,为开展好党史学习教育指明了方向、提供了根本遵循.)

The different activities in the campaign entailed focussing on theoretical study, i.e., the importance of Marxism. So different theory study groups were created and the Academy of Military Sciences and the National Defense University organized seminars and symposiums. There were lots of lectures. Then there’s this:

“The Western Theater Command has made great efforts to convert the Party’s political and organizational advantages into winning advantages by intensifying the campaign of ‘studying Party history, studying battle examples, practicing command, and strengthening capability’ with the emphasis on war resources from history. (I wonder if this included the 1962 experience with India.) 

  • The folks with the Strategic Support Force got off light; they enjoyed field visits to revolutionary historical sites and museums. 

  • The PLA Rocket Force launched online activities under the theme “Forever Loyalty to the Party," arranging online quiz contests to study and educate the Party’s history.

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