LAC Weapons & Infrastructure - HK Anniversary - Zero-Covid Policy - Yang Jiechi in Pakistan - G7 & NATO Meetings - Employment Woes - Infrastructure Boost - CPC Membership Break-up
I. China-India Ties
Another week gone by and there’s still no forward movement on the situation in Eastern Ladakh. Recall that in March, when Foreign Minister Wang Yi visited India, the Chinese readout after his meeting with NSA Ajit Doval had said that both sides had agreed to “speed up the resolution of individual remaining problems” in Eastern Ladakh. It’s well over three months, and there’s still no date for the next commander-level meeting.
Instead, The Hindu’s Dinakar Peri reports that the PLA has carried out “major upgrades” along the LAC. The report says:
In the western sector across the LAC, troop accommodation capacity, which was at 20,000 troops in 2020 before the stand-off began, has now been expanded to 1.2 lakh billets — infrastructure and accommodation-wise.
In terms of weapons upgrades, the report informs:
The has 4th Division of the Xinjiang Military Region has inducted the ZTQ 15 (Type 15) third generation modern light tank, replacing the ZTZ-88 first generation tanks in service.
In terms of technology upgradation, the fire control systems of the tanks have been upgraded.
Two mechanised brigades which operate wheeled armoured personnel carriers (APCs) have upgraded from the ZBL-08 to the latest ZTL-11 APCs.
Air defence and airbases closer to the LAC have been upgraded, including blast pens and extended runways.
The PLA has upgraded its artillery by replacing the towed howitzers with truck-mounted howitzers having a range of 50 km. This gives better mobility, faster shoot and scoot ability and less deployment time, officials noted.
The PLA has deployed the PHL-3 Multi-Rocket Launch Systems (MRLS) with a range of over 100 km and has better targeting than earlier versions.
In the eastern sector, opposite Arunachal Pradesh, China has moved artillery guns within 50 km range from the LAC.
Moving on, last week, I had covered the details from the BRICS summit, noting that the expansion issue will be a challenge for India. This week, HT’s Rezaul H Laskar, citing unidentified sources, reported that India is proceeding cautiously on the crucial issue of expanding BRICS because it does not want new memberships to skew the bloc towards any particular power centre. The report adds:
“‘Before any move to expand Brics goes ahead, there must be a clear definition of principles and criteria for membership. The expansion of membership must be balanced and based on consensus,’ one of the people cited above said. The Indian side is understood to be wary of the inclusion of new members who could gravitate towards a power centre and make the bloc more China-centric. There are also concerns about possible moves to include countries such as Pakistan in the name of bringing in emerging economies, the people said.”
Speaking of Pakistan and the BRICS, the country has not invited to last week’s High-level Dialogue on Development, which China chaired. The Foreign Office said Pakistan noted this week that while China had engaged with Pakistan before the BRICS meetings, “regrettably one member blocked Pakistan’s participation.”
All three countries were involved in another controversy this week. India will be hosting the G20 summit next year. The summit meeting itself is expected to be held in Delhi. But as Suhasini Haidar and Peerzada Ashiq report for The Hindu, a number of States including Jammu and Kashmir and north-eastern States have been asked to suggest venues for about 100 “preparatory” meetings expected to be held between December 2022 and November 2023 during India’s G-20 presidency. This led to Pakistan first and subsequently China commenting on a possible event in J&K. Zhao Lijian said:
“We have noted this latest development. China’s position on the Kashmir issue is consistent and clear-cut. The Kashmir issue, a dispute left from the past, should be peacefully and properly addressed in accordance with the UN Charter, Security Council resolutions and bilateral agreement. Parties concerned need to avoid unilateral moves that may complicate the situation. Efforts should be made to settle the dispute through dialogue and consultation so as to maintain regional peace and stability. The G20 is the premier forum for international economic and financial cooperation. We call on all major economies to focus on steady recovery of the world economy, avoid politicizing relevant cooperation and make positive contribution to improving global economic governance.”
Two other key stories to note. First, Reuters, citing three sources, reports that China’s Great Wall Motor has shelved plans to invest $1 billion in India and laid off all employees at its operations after failing to obtain regulatory approvals. The report adds that the Chinese automaker has been planning to enter the Indian market since 2020 but now becomes one of the biggest casualties of New Delhi’s increased scrutiny of investments from Beijing. Without directly commenting on the exit, a Great Wall statement said the company “would like to thank all the members of Indian team for their contribution”, adding that it would continue to study the Indian market and look for opportunities in the future. The report also informs that Great Wall's patience had been waning since last year. In August it allocated to Brazil a portion of its planned $1 billion India investment and reassigned some of its staff.
The second story is also a Reuters exclusive. This one says that based on an Indian customs document reviewed by Reuters, UltraTech Cement - one of India’s biggest cement firms - is importing a cargo of Russian coal and paying using Chinese yuan. The report adds: “UltraTech is bringing in 157,000 tonnes of coal from Russian producer SUEK that loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino, the document showed. It cites an invoice dated June 5 that values the cargo at 172,652,900 yuan ($25.81 million). Two trade sources familiar with the matter said the cargo's sale was arranged by SUEK's Dubai-based unit, adding that other companies have also placed orders for Russian coal using yuan payments.”
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India stops short of endorsing West’s $600bn infra push to counter China
EU seeks to boost ties with India as relations with China cool
Chinese fans pay rich tributes to China’s legendary Indian classical dancer Zhang Jun
II. Hong Kong Anniversary & Covid Policy
This week, Xi Jinping stepped out of the Chinese mainland for the first time since the lockdown of Wuhan in January 2020, which marked the start of the COVID-19 pandemic. Xi visited Hong Kong for a day to mark the 25th anniversary of the city’s return to Chinese rule and inaugurate the new HKSAR government.
In his speech (official English text), Xi said:
“First, we must fully and faithfully implement the principle of ‘one country, two systems.’ This principle embodies a complete system. Its top priority is to safeguard national sovereignty, security, and development interests. With this as a prerequisite, Hong Kong and Macao can keep the previous capitalist systems unchanged for a long time and enjoy a high degree of autonomy. Since the socialist system is the fundamental system of the People's Republic of China and leadership by the Communist Party of China is the defining feature of socialism with Chinese characteristics, all residents in the special administrative regions should willingly respect and uphold the country's fundamental system.”
Second, “the central government's overall jurisdiction over the SARs underpins their high degree of autonomy, and such autonomy bestowed by the law is fully respected and resolutely safeguarded by the central government. Only when the enforcement of the central government's overall jurisdiction dovetails with the fulfillment of a high degree of autonomy in the SARs, can the SARs be well governed.”
“Third, we must ensure that Hong Kong is administered by patriots…This is an essential requirement for Hong Kong's long-term prosperity and stability and must not be compromised under any circumstances.”
Fourth, “the fundamental interests of Hong Kong are in line with those of the country, and the central government and Hong Kong compatriots share the same aspirations. Hong Kong's close connection with the world market and strong support from the motherland are its distinctive advantages. Such favorable conditions are cherished by the people of Hong Kong and by the central government as well. The central government fully supports Hong Kong in its effort to maintain its distinctive status and edges, to improve its presence as an international financial, shipping, and trading center, to keep its business environment free, open, and regulated, and to maintain the common law, so as to expand and facilitate its exchanges with the world.”
The four other key points made in the speech essentially underscore not just greater political control from Beijing in terms of exercising authority over selection of officials but also a call for greater economic integration and physical connectivity between of Hong Kong and the mainland.
Xi’s speech was at an event swearing in the new HK government. You can watch all the proceedings below.
While in the city, Xi also met with a police delegation and visited to PLA garrison in Hong Kong.
Prior to arriving in Hong Kong, Xi visited Wuhan. You can read my detailed breakdown of to trip in my daily People’s Daily tracker. But the big points that Xi made during that visit were:
the need to strengthen the relevant technological research and development, master more core technologies with independent intellectual property rights, expand innovation chains, and improve industrial chains. Breaking through bottlenecks in core technologies in key fields…
high-end manufacturing is critical for high-quality economic development, and in order to promote the transformation and upgrading of China’s manufacturing industry and build a manufacturing power, it is necessary to strengthen technology research and development, increase the rate of localisation, and hold the lifeblood of science and technology in one’s own hands, so that the country can become truly powerful
If China had adopted the ‘herd immunity’ policy or a hands-off approach, given its large population, the country would have faced unimaginable consequences…Even if there are some temporary impacts on the economy, we will not put people's lives and health in harm's way, and we must protect the elderly and the children in particular,’ Xi said. ‘If we make an overall evaluation, our COVID-19 response measures are the most economical and effective…
Finally, on the country’s economic performance for the year, Xi said that it was important to “strive for a relatively good performance in this year's economic development” — that’s him easing expectations for local officials.
While Xi did back the zero-COVID policy, there are some adjustments being made. For instance, the quarantine time for international visitors is being adjusted.
Two other reports to note in this section. First, People’s Daily this week spent a lot of newsprint talking about self-revolution. This is important because it is indicative of the tough anti-corruption campaign being maintained at home, particularly heading into the 20th Party Congress. On Wednesday, there was a really, really long Ren Ping commentary in the paper, which talked about self-revolution. I’ve done a detailed breakdown here. But this chunk below maybe of particular interests to those outside China.
From a global perspective, it has historically been a challenge for ruling parties around the world to deal with the test of being in power. After a party gains political power, due to the change in its status, the corrosion of power and the temptation of interests, it often loses its enterprising and fighting spirit, breeds passivity, laziness and corruption, and finally ends up losing its qualification to rule. Western political theory arbitrarily thinks that a ruling party cannot self-regulate, and it prescribes the implementation of a two-party system or multi-party system. But this leads to conflicts and constant disputes between parties. Some people tout the Western practice of multi-party governance in turn and separation of powers between the executive, legislature and judiciary. They do not believe that our Party is capable of turning the blade inward and extricating the rotten flesh. For these people, the CPC’s practice of being brave in self-revolution has provided a resounding and powerful reply. Our party has promoted self-revolution, and explored a successful path to solve its own problems and break out of the dynastic cycle amid its long-term rule. This has not only solved the global problem of self-supervision in national governance, but also contributed Chinese wisdom to the development of human political civilisation.
Looking at the political parties in various countries, it can be said that there are very few political parties like the CPC who can consistently face up to their own problems, form a complete system of self-regulation, and severely punish a large number of corrupt elements within the Party. From investigating and dealing with high-ranking officials' greed and beating tigers, to punishing grass-roots corruption and swatting flies, from pursuing fugitives internationally via Skynet and ‘Fox Hunt’ to strengthening inspections and auditing, how many ruling parties in the world dare to fight corruption on a such a large scale, so vigorously and so persistently like ours? We have embarked on a path of anti-corruption that relies on the strength of institutions and the rule of law, and written a new chapter in the history of mankind's fight against corruption…
Second, the fourth volume of ‘Xi Jinping: The Governance of China’ has been published by Foreign Languages Press in both Chinese and English. This contains a compilation of 109 pieces from February 3, 2020 to May 10, 2022, along with 45 photographs taken since January 2020. Interesting timing for this, with the Party Congress around the corner.
Also speaking of the 20th Party Congress, do check out this SCMP report on at least nine provincial party chiefs having written long articles in party publications extolling Xi Jinping and pledging loyalty to him. In addition, do note that Shanghai Party Secretary Li Qiang and Beijing Party Secretary Cai Qi were both re-elected at their provincial congress meetings this week. Both men are very close to Xi and both had been under pressure owing to the recent COVID outbreaks.
Also Read:
Also this is an interesting development:
III. Region Watch
by Shibani Mehta
Afghanistan’s humanitarian crisis, caused by widespread poverty and hunger and the Covid-19 pandemic, was compounded by a harrowing earthquake that led to the loss of life and property. With authorities struggling to help the thousands of people impacted, emergency aid is primarily the mandate of United Nations agencies. Of the neighbouring countries extending aid, China is foremost among them. Beijing chartered a flight carrying the first batch of aid, including 120 tents, 320 folding beds and more than 6,000 towels, and landed in Afghanistan on Monday. It also announced that six more flights with relief would arrive over the following three days. These are part of a US$7.4 million humanitarian aid package from China to Afghanistan.
State Councilor and Foreign Minister Wang Yi expressed condolences over the tragedy over a phone call with Acting Foreign Minister of the Afghan Interim Government Amir Khan Muttaqi. Wang also urged Afghanistan to protect Chinese citizens and institutions in the Islamic Emirate, referring to the East Turkestan Islamic Movement (now known as Turkestan Islamic Party). In response, Mr Muttaqi said that Afghanistan “fully understands the security concerns from the Chinese side and is willing to join efforts with China to fight against terrorism”.
Meanwhile, China is providing US$ 2.5 billion in assistance to replenish Pakistan’s drying foreign exchange reserves. The assistance is an add-on to rolling over US$ 4.5 billion debt due to be paid by Islamabad in March this year and US$ 2.5 billion given in 2019 to again, boost the diminishing foreign exchange reserves of Pakistan.
China also recently revealed the rollover of US$2 billion SAFE deposits and conveyed that it would export 200,000 metric tons of urea fertiliser to Pakistan. These commitments were part of many made during Yang Jiechi’s two-day visit to Pakistan. A member of the Political Bureau of the Central Committee of the Communist Party of China and director of the Central Committee on Foreign Affairs, Yang is considered the architect of Bejing’s 21st-century foreign policy and has a direct line with President Xi. Prime Minister Shehbaz, Foreign Minister Bilawal Bhutto Zardari and Chief of Army Staff (COAS) Gen Qamar Javed Bajwa had separate meetings with their gues over the two-day visit. Yang appreciated Pakistan's support for its Global Development Initiative and Global Security Initiative, adding that China is looking forward to “close coordination with Pakistan on multilateral affairs and safeguard the common interests of the developing countries”. Prime Minister Sharif underscored Pakistan’s willingness to speed up CPEC projects and take the strategic cooperative partnership to greater heights. The governments of Nawaz Sharif and Imran Khan have battled unsuccessfully with the CPEC, unable to appropriately handle coordinated surprise attacks - a pattern the current government is trying to break away from.
In fact, an agreement is reached between Chinese company Shandong Hi-Speed and Pakistan’s Transport Ministry to initiate a new bus service in Karachi. This follows the April 26 terror attack at the University of Karachi which had sharpened that anti-China sentiment.
Several Chinese media carried a bulletin about Liu Jianchao, the chief of the ILD, speaking to Foreign Minister Dr Narayan Khadka. So far only the following has been reported:
The two sides exchanged views on implementing the consensus reached by the leaders of the two countries, strengthening exchanges between the two parties, and promoting pragmatic cooperation between China and Nepal in various fields.
Last week, Liu held talks with CPN (Maoist Centre) chair Pushpa Kamal Dahal and CPN-UML chair KP Oli too.
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IV. Employment, Infrastructure & Foreign Investment
As noted above, Xi was clear that the economic cost of China’s COVID-19 lockdowns was acceptable, Premier Li Keqiang is clearly very concerned about employment.
Li was on an inspection tour of the Ministry of Civil Affairs and the Ministry of Human Resources and Social Security this week. The report of his visit has Li saying that “employment stability is an important symbol of economic operation being in a reasonable range.” He added that “China’s economy has made progress in recovery, but the fundamentals for recovery are not yet sufficiently solid and the tasks to stabilise employment remain arduous.”
“Development is the foundation and key to solve all problems in China. It is very important for the policy measures to stabilise the economy to focus on ensuring market players in order to stabilise employment. It is necessary to further enhance the sense of urgency, continue to implement various policies, push economic operations back to the normal track as soon as possible, promote employment through development, protect people’s livelihood through employment, and reduce and control the unemployment rate as soon as possible. Efforts should be made to increase market-based job opportunities, improve career services for university graduates, and expand employment for migrant workers as a form of social relief.” 发展是解决我国一切问题的基础和关键。稳经济大盘政策措施很重要的是着力以保市场主体来稳就业。要进一步增强紧迫感，继续落实各项政策，推动经济运行尽快回归正常轨道，以发展促就业、以就业保民生，尽快把失业率降下来、控制住。用改革的办法拓展市场化社会化就业渠道、增加就业岗位，实现可持续。抓实抓细高校毕业生就业促进服务工作，扩大面向农民工的以工代赈规模.
Further, “while paying a visit to a technical guidance center for employment training of the Ministry of Human Resources and Social Security, Li urged efforts to further catalyze entrepreneurship and innovation and provide equal support for market entities of all types, including those in the private sector and self-employed individuals. Vocational training must adapt to market demand, Li said, underscoring the importance of maximizing the country's advantages in human resources.”
Finally, Xinhua English summarises:
“During his visit to the Ministry of Civil Affairs, the premier was provided with information about the low-income population and the implementation of social assistance policies. He called for efforts to coordinate social assistance policies with employment policies and to encourage people to work hard for better lives. Li said that the current COVID-19 resurgence and natural disasters have triggered an increase in the number of people facing difficulties. He stressed the urgency of incorporating people in need into social assistance systems, expanding the scale of social assistance and relief, and preventing China's once-impoverished population from falling back into poverty in large numbers. Efforts should also be made to ensure that pensions are paid in full and on time, and government work on compulsory education and basic healthcare and housing must be carried out well, Li said. Governments at all levels need to practice fiscal frugality and shoulder their responsibilities for safeguarding people's basic livelihoods, Li added.”
The concern on employment is likely to remain high, with new reports informing of tech companies continuing to lay off employees. WSJ reported this week that companies including Tencent and ByteDance are implementing fresh layoffs affecting thousands of employees in their latest round of cost-cutting. The report adds that “previous job cuts were mostly focused on restructuring loss-making businesses and noncore segments. But as the Omicron variant of Covid-19 prompts harsh lockdowns, roiling the Chinese economy, some companies are extending layoffs to core businesses. The fresh round of layoffs points to the scars that the regulatory assault and macroeconomic headwinds have left on some tech companies—a worrisome development for Chinese officials as they turn in part to tech giants in hopes of salvaging a slowing economy and worsening employment landscape… ‘Macroeconomic risk has overtaken regulatory risk,’ said Kelvin Ho, an analyst focused on Chinese internet companies at Fitch Ratings. ‘As growth slows, companies will have to rethink their appropriate business structure,’ he said.”
Another report from Yicai says that:
“Chinese companies, particularly small firms, are scaling back their hiring plans and some are even giving up on recruiting new staff amid the uncertainty brought about by Covid-19, according to the findings of a new survey. Sixty-three percent of employers have delayed, reduced, or stopped recruiting, a report published by Chinese careers website 51Job showed. It polled 950 companies between May 25 and June 5. Twenty percent of small and medium-sized enterprises have suspended hiring, while more than 30 percent have cut or are planning to cut their headcounts. SMEs are mainly trying to get by and have little interest in attracting new employees in the next three months, the report said.”
One of the solutions for these woes for the Chinese government appears to be more infrastructure spending. The weekly State Council meeting this week “decided to employ policy-based and developmental financial instruments with a combined scale of 300 billion yuan (about 44.7 billion U.S. dollars) by issuing financial bonds. The funds are designed to replenish the capital for major projects such as new infrastructure without exceeding half of the total investment, or to provide bridge financing for projects funded by special-purpose bonds.”
Apart from this, the meeting “decided to expand public works programs in key projects, in an effort to create more jobs and increase the income of rural migrant workers ... A set of public works programs funded by central budgetary investment will be launched in the building of supporting facilities under key projects. The share of work remuneration in the central budgetary funding will be increased from the previous 15 percent to over 30 percent. Requirements will be specified for project preparations, construction and other stages. Steps will be taken to ensure that work remunerations be paid on time and in full…A number of new projects will be launched this year to connect national expressways, address congested sections of provincial highways, develop inland waterways and upgrade the functions of ports. Financial institutions will be encouraged to provide long-term, low-interest loans.”
Soon after this, the People’s Bank of China said that the new funds will be used in three main ways:
transport and water facility infrastructure, information technology and logistics, urban development, agricultural and rural infrastructure, and national security infrastructure;
funding major science infrastructure and innovation; and
other projects that can be invested in by local government special bonds.
The PBoC will take the lead in supporting China Development Bank and Agricultural Development Bank of China to raise 300 billion yuan by issuing financial bonds. The central government will give a two-year interest subsidy to the banks as appropriate for the actual equity investment made.
Next, the NPCSC has launched an inspection of the enforcement of the Foreign Investment Law. Xinhua English reported this week that:
an “inspection team is set to carry out related work in eight provincial-level regions from July to mid-August…In the meantime, the standing committees of local people's congresses in another eight regions will be assigned to carry out their own respective inspections. The inspection work will focus on aspects including the implementation of pre-establishment national treatment plus a negative list for foreign investment, the establishment and optimization of a foreign investment facilitation mechanism, and the building of a stable, transparent, predictable and fair market. The team will also inspect the protection of foreign investors' legitimate rights and interests, the implementation of the foreign investment management system, and the Foreign Investment Law's connection and coordination with other related laws and rules. Attention will also be paid to the opinions and suggestions of all parties concerning the law…The inspection team said it will hold another plenary session in mid-September this year for analysis and discussion. The NPC Standing Committee will hear and deliberate a report on the enforcement inspection in October.”
Finally, a new survey by the PBoC has found that the Chinese public’s inclination to save has hit a new record high. Rather than spend or invest, 58.3% of survey respondents said they preferred to save their money. That’s a jump from 54.7% in the first quarter, which already marked the highest on record for the data which goes back to 2002. CNBC’s report on this adds:
“By several measures, the PBOC’s survey pointed to falling income expectations. The study’s index for the job outlook fell to 44.5%, the lowest since the first quarter of 2009′s 42.2% print, according to the CEIC database. The overall share of respondents most inclined to spend rose slightly from the first quarter by 0.1 percentage points to 23.8%. If Chinese consumers did plan to increase spending in the next three months, the most popular choice was education, followed by health care and big-ticket items, the survey found. However, consumers’ inclinations to invest fell by 3.7 percentage points to 17.9% in the second quarter, with stocks the least attractive asset.”
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China Is Updating Its Formula for Building Itself Out of a Slump
Chinese city desperate for home buyers entices villagers with job prospects
China regulator proposes new rules to improve anti-monopoly governance
V. The G7 Summit & China
by Megha Pardhi
The 48th G-7 Summit was held between 26-28 June at Krun, Germany. Every year, the leaders of the seven wealthiest countries in the world - the United States (US), the United Kingdom (UK), Canada, France, Germany, Italy, and Japan - meet and discuss issues of international importance like trade, security, economics, and climate change. This year, India's Prime Minister Narendra Modi participated in the summit at the invitation of Germany.
The summary of key outcomes of the Summit with the theme of “Progress towards an equitable world” are:
Financial, humanitarian, military, and diplomatic support for Ukraine
Establish an Open and cooperative Climate Club by the end of 2022 as a global response to the climate crisis.
The decision to accelerate the international climate action agenda. For example, the G-7 leaders committed for the first time to achieving a decarbonised electricity supply by 2035 and pledged to end coal-fired power generation.
The decision to combat hunger with the "Alliance for Global Food Security." The G-7 countries will mobilise additional funds of 4.5 billion US dollars for this initiative.
The G-7 seek energy security by reducing dependence on Russian coal and oil, price caps, and commitment to end direct international public financing of fossil fuels by the end of 2022.
Global partnership for infrastructure and investment: G-7 countries will mobilise up to 600 billion US dollars in public and private investment over the next five years through national and regional initiatives. G-7 is also implementing a Joint Energy Transition Partnership (JETPs) with South Africa. This initiative is being touted as an alternative to China's Belt and Road initiative (BRI). Zhao Lijian, China's Foreign Ministry Spokesperson, responded to the news as follows:
G-7 agreed to coordinate on the global economy and inflation risks and coordinate closely on acute economic risks such as rising prices and increasing debt, providing targeted support where it is needed.
To strengthen global health, G-7 agreed on concrete steps to improve pandemic preparedness and response with the G7 Pact for Pandemic Readiness. Other measures include supporting the replenishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria.
G-7 is supporting actions based on shared values to strengthen equality between women and men and trans and non-binary people.
G7, along with partner countries Indonesia, India, Senegal, South Africa and Argentina, sent out a joint signal to strengthen resilient democracies. They resolved to protect and promote open and pluralistic civil society spaces and open discourse.
This year's G7 Leaders' Communiqué heavily features China and Russia. Russia is mentioned 32 times in the statement, while China is mentioned 14 times (including references to the East and the South China Sea).
While reiterating support for Ukraine, China's refusal to overtly condemn Russian aggression and perceived hidden support drew criticism from G-7 leaders. Taiwan, East and the South China Sea also feature in the statement.
Here are some excerpts from the G7 Leaders' Communiqué that refer to China.
On East and South China Sea
"We remain seriously concerned about the situation in the East and South China Seas. We strongly oppose any unilateral attempts to change the status quo by force or coercion that increase tensions."
"We stress that there is no legal basis for China's expansive maritime claims in the South China Sea. In this regard, we urge China to fully comply with the arbitral award of 12 July 2016 and to respect navigational rights and freedoms enshrined in UNCLOS."
On Taiwan
"We underscore the importance of peace and stability across the Taiwan Strait and encourage a peaceful resolution of cross-Strait issues."
On Climate Change, Biodiversity, and International Security
"In the context of our cooperation with the largest economies, including in the framework of the G20, it is necessary to cooperate with China on shared global challenges, in particular addressing climate change and biodiversity loss and other relevant multilateral issues. We continue to call on China to uphold its obligations under international law and to contribute to international security. "
"We remind China of the need to uphold the principle of the UN Charter on peaceful settlement of disputes and to abstain from threats, coercion, intimidation measures or use of force."
On Hong-Kong
"We call on China to honour its commitments made in the Sino-British Joint Declaration and the Basic Law, which enshrine rights, freedoms and a high degree of autonomy for Hong Kong."
On Economy
"We will build a shared understanding of China's non-transparent and market distorting interventions and other forms of economic and industrial directives. We will then work together to develop coordinated action to ensure a level playing field for our businesses and workers, to foster diversification and resilience to economic coercion, and to reduce strategic dependencies."
On Human Rights
"We are gravely concerned about the human rights situation in China. We will continue to promote universal values, including by calling on China to respect universal human rights and fundamental freedoms, including in Tibet and in Xinjiang where forced labour is of major concern to us."
Referring to China Indirectly
"We also commit to further strengthening our internal security in light of transnational threats including those posed by Russia and other authoritarian regimes, particularly in the field of cyber security, illicit finance and law enforcement."
China has long been accused of cyber espionage and cyber attacks by the US. On the other hand, China has also increased its rhetoric about Cyberattacks originating in the US. I had written about China's focus on US cyber activities a while ago. Do read it to understand intensifying US-China narrative war in cyberspace.
The shadow of the Ukraine war and, consequently, the actions of Russia and China remained prominently visible in the actions and statements of the leaders at the Summit. The joint statement of G-7 also indicated the deepening of the rift between the West and Russia-China. Suhasini Haidar wrote that "the G7 statement indicates a point of no-return between the two blocs."
China's Response to the G-7
Responding to the CCTV's question on G-7 during a daily press briefing, China's Foreign Ministry spokesperson Zhao Lijian criticised G-7 for "interfere in China's internal affairs, attack and smear China, and incite confrontational sentiments."
He said, "I must also point out that for a group which accounts for about one tenth only of the world's population, the G7 has no authority to speak for the whole world, still less to present its own values and standards as universal values and standards. We urge the G7 to earnestly step up to its responsibility and due international obligations, uphold true multilateralism, and stop applying double or even multiple standards, stop causing confrontation and division, stop discrediting and slandering China, and stop all forms of meddling in China's domestic affairs."
VI. NATO’s Madrid Summit & China
by Megha Pardhi
On June 29-30, 2022, NATO held its Summit in Madrid, Spain. This Summit is said to be a historic summit where Russia and China again featured heavily in the shadow of the Ukraine war. Finland and Sweden were also invited to the Summit.
One of the key outcomes of the Summit was the 'NATO 2022 Strategic Concept' (PDF link), which has been updated for the first time since 2010. This strategic concept names China a 'systemic challenge' and Russia an 'aggressor.'
The factsheet released by the Whitehouse reads, "The new Strategic Concept outlines NATO's transformation in line with the NATO 2030 agenda adopted at the 2021 Summit. It will also guide efforts to safeguard Euro-Atlantic security in response to Russia's aggression, as well as the systemic challenges posed by the People's Republic of China, and the deepening strategic partnership between Russia and China."
China's Response
Responding to Bloomberg's question on being named 'systemic challenge' at a regular press conference, Zhao Lijian said, "NATO's so-called new Strategic Concept is just "old wine in a new bottle". It still has not changed the Cold War mentality of creating imaginary enemies and bloc confrontation."
In June 29 press briefing, Zhao Lijian stressed, “in recent years, NATO has repeatedly made forays into the Asia-Pacific region. Some NATO member states keep sending aircraft and warships to carry out military exercises in China's nearby waters, creating tensions and fanning up disputes. NATO has sought to make advances into new areas and domains and clamored for bloc confrontation.”
Additional Reading
VII. CPC Membership Details
This week marked the 101st anniversary of the founding of the Communist Party. So, the Organisation Department issued its latest data about the Party’s membership structure. The CPC had over 96.71 million at the end of 2021. This is a net increase of 3.434 million members over the 2020 figure, a 3.7% increase, and a 15.9 percent increase compared to the 2012 figure. Around 21.594 million people joined the Party since the 18th Party Congress.
In terms of the overall situation,
51.461 million party members have college graduate degrees or higher qualifications, accounting for 53.2% of the total membership, an increase of 1.3 percentage points over the previous year;
There are 28.431 million female party members, accounting for 29.4% of the total membership, an increase of 1.0 percentage points over the previous year;
There are 7.285 million ethnic minority party members, accounting for 7.5% of the total membership, an increase of 0.1 percentage point over the previous year
Compared with data at the end of 2012, the proportion of college graduates or higher degree holders, female members and minority party members increased by 13.2, 5.6 and 0.7 percentage points respectively.
Workers and peasants are still the main body of Party members, accounting for 33.6% of the total.
In terms of Party study and learning, “taking the study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the main line, combined with the study and education of the party history and improving the education system for party members…around 1.773 million training courses were held at all levels…also the party's organisational life is today more strictly regulated, with 4.248 million party branches holding special organisational life meetings and conducting democratic appraisals of party members. 党员教育管理不断加强。以学习贯彻习近平新时代中国特色社会主义思想为主线，结合开展党史学习教育，健全党员教育工作体系，深入开展讲党课和学习榜样活动，加大党员教育培训力度，各级举办培训班177.3万期，县级以上党委集中轮训基层党组织书记430.4万人次，教育质量持续提升.党的组织生活更加严格规范，424.8万个党支部召开专题组织生活会、开展民主评议党员.
The full bulletin by the Organisation Department was published in the People’s Daily this week. I am providing some additions to the data above from that:
Age distribution:
12.624 million party members are aged 30 and below,
11.535 million party members aged 31 to 35,
9.780 million party members aged 36 to 40,
8.775 million party members aged 41 to 45,
9.364 million party members aged 46 to 50, 8.776 million party members aged 51 to 55,
8.648 million party members aged 56 to 60,
27.210 million party members aged 61 and above.
Occupation distribution:
6.594 million workers (skilled workers)
25.923 million farmers, herdsmen and fishermen
15.487 million professional and technical personnel in enterprises, institutions and social organisations
10.948 million management personnel in enterprises, institutions and social organisations,
7.805 million workers in party and government organs
3.052 million students
7.482 million other professionals
19.421 million retirees
Also, there are 3,198 local party committees at all levels in China. Among these:
there are 31 provincial (regional and municipal) committees, 397 municipal (prefectural) committees and 2,770 county (city, district and banner) committees.
Party organisations have been established in 9,034 urban streets, 29,649 townships, 114,065 communities (neighbourhood committees) and 491,129 administrative villages, with a coverage rate of over 99.9%.
There are 745,000 grass-roots party organisations in government organs, 949,000 grass-roots party organisations in public institutions, 1.532 million grass-roots party organisations in enterprises and 171,000 grass-roots party organisations in social organisations all over the country.
VIII. The Long & Short of It…
a. Wang Qishan in the Philippines
Chinese Vice President Wang Qishan was in the Philippines to attend Ferdinand Romualdez Marcos’ inauguration. Xinhua reported:
“At a meeting with the new Philippine president, Wang said President Marcos and his family have made great contributions to enhancing the China-Philippines friendship. The Chinese side has always given priority to the Philippines in its neighborhood diplomacy, and is ready to work with the new Philippine government in carrying on their friendship, boosting mutual trust and deepening cooperation so as to usher in a new ‘golden age’ in bilateral ties, he said.” Wang then outlined a four-point proposal:
both sides should develop bilateral relations under the guidance of the two heads of state
the two countries should dovetail their development strategies so as to foster new growth points of pragmatic cooperation in the new era
The two sides should properly resolve differences and jointly safeguard peace and tranquillity in the South China Sea
the two countries should uphold international equality and justice, and jointly promote peace and development in Asia, as well as the well-being of humanity
Interestingly, last week, the outgoing Philippines government terminated talks with China over joint oil and gas exploration in the South China Sea. The Philippines and China had in 2018 signed a memorandum on joint resource exploration. China later proposed a joint project in the Philippines’ exclusive economic zone. One condition set by Beijing was to put aside an international arbitration ruling that rejected China’s claim over most of the South China Sea.
b. 100-day Police Action
This week, it was reported that China’s national public security organs have launched a 100-day action (百日行动) in order to crack down on prominent illegal crimes, vigorously rectify social security problems, tackle all kinds of potential safety hazards, resolutely safeguard social stability and safeguard peace ahead of the 20th Party Congress.
“The meeting pointed out that it is necessary to accurately grasp and actively respond to the public security situation through the summer, put all combat and rectification measures in place and ensure overall social stability. It is necessary to bear in mind that the interests of the masses are no small matter and severely crack down on and rectify crimes that are of the most concern to the masses in accordance with the law, and earnestly make the people feel safe. It is necessary to strengthen the investigation and resolution of contradictions and disputes, adhere to and develop the ‘Fengqiao Experience’ in the new era, work closely with relevant departments under the leadership of the Party Committee, carry out in-depth investigation and mediation of contradictions and disputes, and strive to solve contradictions and problems at the grassroots level and nip them in the bud…It is necessary to protect women, children, the elderly, the disabled, primary and secondary school students and other groups, focus on being ‘quick, accurate and ruthless’ and resolutely crack down on crimes that infringe upon their legitimate rights and interests. Promote the standardisation of the fight against evil, resolutely eradicate gangs and severely punish the ‘protective umbrella’ of evil forces. Quickly investigate and deal with illegal crimes, such as picking quarrels and provoking trouble, gathering a crowd to fight/gang fights, and resolutely crack down on crimes involving the underworld or evil forces, according to law. 会议指出，要准确把握、积极应对夏季治安形势，把各项打击整治措施抓到底、落到位，确保社会大局持续稳定；要牢记群众利益无小事，依法严厉打击整治群众反映强烈的突出违法犯罪，切实让人民群众感到安全触手可及、就在身边；要强化矛盾纠纷排查化解，坚持和发展新时代“枫桥经验”，在党委领导下，同有关部门密切协作，深入开展矛盾纠纷大排查大调解，努力将矛盾问题解决在基层、化解在萌芽状态；要深入推进公安信访突出问题攻坚化解工作，严格落实领导干部包案接访制度，切实解决好群众合理合法诉求。会议强调，要强化突出违法犯罪打击治理。坚持依法严打方针，坚持问题导向，采取雷霆手段，发起凌厉攻势，更快破大案、更多破小案，打出声威、治出成效。要保护妇女、儿童、老年人、残疾人、中小学生等群体，针对侵害他们合法权益的违法犯罪，突出“快、准、狠”，坚决依法打击。推动常态化扫黑除恶斗争向纵深发展，坚决铲除黑恶势力团伙，严惩黑恶势力“保护伞”。快查快处寻衅滋事、聚众斗殴等违法犯罪，对构成涉黑涉恶犯罪的，坚决依法从严打击.
SCMP’s report on this initiative adds that:
“The authorities will “maximise the display of police force on a street and community level” as part of a 100-day campaign to step up protection for women, children, and the elderly, the Ministry of Public Security announced on Saturday, ahead of the Communist Party’s 20th party congress. On Saturday the new public security minister Wang Xiaohong announced plans at a planning conference to consolidate control over social order this summer, the ministry said in a notice. “We must use hard fists to protect the legal rights of women, children, the elderly, the disabled and students with fast, accurate and fierce measures according to law,” the ministry said. “We must comprehensively deepen the battles against criminal forces and maintain a zero-tolerance approach to actively eliminate organised crime and severely punish their protectors…At the conference on Saturday, Wang vowed that the 100-day “hard-fist” campaign would enhance public social order ahead of the party congress later this year by targeting hidden security risks at a community level. The ministry said in the notice that it would link up police and armed police patrols and activate a swift response mechanism of no less than five minutes. Civil powers will also be mobilised to strengthen community levels to target crimes rampant in the summertime, while night patrols and crackdowns against guns and explosives would also be stepped up.”
c. Pew Survey
I thought we could end today with a snapshot of the latest PEW Survey on China and America’s favourability ratings. The full report is here.
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