China Archives · Policy Print https://policyprint.com/tag/china/ News Around the Globe Tue, 26 Mar 2024 14:47:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://policyprint.com/wp-content/uploads/2022/11/cropped-policy-print-favico-32x32.png China Archives · Policy Print https://policyprint.com/tag/china/ 32 32 China’s government will no longer buy Intel or AMD chips, or Microsoft products, for its PCs https://policyprint.com/chinas-government-will-no-longer-buy-intel-or-amd-chips-or-microsoft-products-for-its-pcs/ Sun, 07 Apr 2024 14:44:44 +0000 https://policyprint.com/?p=4193 China’s government has reportedly started enforcing a new law that it passed in December this week. The law…

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China’s government has reportedly started enforcing a new law that it passed in December this week. The law bans the government from purchasing PCs with Intel and AMD chips inside, along with software products from Microsoft, including its Windows operating system.

According to The Financial Times (via PC World), the new rules on purchasing products for China’s government PCs were set in place in December by the country’s Information Technology Security Evaluation Center. They include all governments and agencies above what is considered to be the country’s township level.

China previously ordered its government offices and agencies to no longer use Microsoft’s Windows OS in 2022, in favor of a homegrown Linux-based OS. As a result, these new guidelines are not expected to affect Microsoft. However, the ban on Intel and AMD chips could result in a noticeable hit in the revenue numbers for both companies.

On the other hand, the ban on these products on China’s government PCs does not include their use in private businesses or by regular consumers in that country.

China previously banned the use of Apple’s iPhone products in its government buildings. It has also banned the use of products from Micron Technology for its infrastructure projects, citing security concerns.

These new moves come sometime after the United States government banned China’s Semiconductor Manufacturing International Corporation (SMIC) from exporting fabrication equipment to make certain chips in that country.

Late in 2023, the US government banned the export of some of Nvidia’s AI GPUs to China. Nvidia has instead developed AI chips, the H20, that were specifically made to conform to the restrictions of the US government’s export rules. The company started taking preorders for the H20 chips in early 2024, and are expected to begin large scale shipments of those China-specific AI GPUs sometime in the second quarter of 2024.

Source: Neowin

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U.S. and U.K. announce sanctions over China-linked hacks on election watchdog and lawmakers https://policyprint.com/u-s-and-u-k-announce-sanctions-over-china-linked-hacks-on-election-watchdog-and-lawmakers/ Thu, 04 Apr 2024 14:25:53 +0000 https://policyprint.com/?p=4190 The U.S. and British governments on Monday announced sanctions against a company and two people linked to the…

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The U.S. and British governments on Monday announced sanctions against a company and two people linked to the Chinese government over a string of malicious cyberactivity targeting the U.K.’s election watchdog and lawmakers in both countries.

Officials said those sanctioned are responsible for a hack that may have gained access to information on tens of millions of U.K. voters held by the Electoral Commission, as well as for cyberespionage targeting lawmakers who have been outspoken about the China threat.

The Foreign Office said the hack of the election registers “has not had an impact on electoral processes, has not affected the rights or access to the democratic process of any individual, nor has it affected electoral registration.”

The Electoral Commission said in August that it identified a breach of its system in October 2022, though it added that “hostile actors” had first been able to access its servers since 2021.

At the time, the watchdog said the data included the names and addresses of registered voters. But it said that much of the information was already in the public domain.

In Washington, the Treasury Department said it sanctioned Wuhan Xiaoruizhi Science and Technology Company Ltd., which it calls a Chinese Ministry of State Security front company that has “served as cover for multiple malicious cyberoperations.”

It named two Chinese nationals, Zhao Guangzong and Ni Gaobin, affiliated with the Wuhan company, for cyberoperations that targeted U.S. critical infrastructure sectors, “directly endangering U.S. national security.”

Zhao, Ni and five other Chinese nationals were hit with federal charges Monday. An indictment brought by federal prosecutors in Brooklyn alleges that the seven men were Chinese intelligence officers who engaged in a yearslong campaign targeting top White House officials, U.S. senators and the spouses of high-ranking members of the Justice Department, among others. 

The suspects are accused of sending tracking emails purported to be from prominent U.S. journalists, which contained legitimate news articles from publications like CNN and VOX. The emails also contained embedded hyperlinks that, when opened, would transmit information about the recipients to a server controlled by the suspects, the indictment says.

One of the group’s alleged campaigns took place from June to September 2018 when they sent more than 10,000 messages to a wide range of targets including Democratic and Republican senators from more than 10 states and the spouses of various government administrators including a high-ranking Department of Justice official, high-ranking White House officials and multiple United States senators.

“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists and academics; valuable information from American companies; and political dissidents in America and abroad,” U.S. Attorney Breon Peace said in a statement.

Chinese Embassy spokesperson Liu Pengyu said her government “firmly opposes and cracks down on all forms of cyberattacks in accordance with law.”

“Without valid evidence, the U.S. jumped to an unwarranted conclusion and made groundless accusations against China,” Liu added. “It is extremely irresponsible and is a complete distortion of facts.”

Separately, British cybersecurity officials said that Chinese government-affiliated hackers “conducted reconnaissance activity” against British parliamentarians who are critical of Beijing in 2021. They said no parliamentary accounts were successfully compromised.

Three lawmakers, including former Conservative Party leader Iain Duncan Smith, told reporters Monday they have been “subjected to harassment, impersonation and attempted hacking from China for some time.” Duncan Smith said in one example, hackers impersonating him used fake email addresses to write to his contacts.

The politicians are members of the Inter-Parliamentary Alliance on China, an international pressure group focused on countering Beijing’s growing influence and calling out alleged rights abuses by the Chinese government.

Ahead of that announcement, Prime Minister Rishi Sunak reiterated that China is “behaving in an increasingly assertive way abroad” and is “the greatest state-based threat to our economic security.”

“It’s right that we take measures to protect ourselves, which is what we are doing,” he said, without providing details.

China critics including Duncan Smith have long called for Sunak to take a tougher stance on China and label the country a threat — rather than a “challenge” — to the U.K., but the government has refrained from using such critical language.

Responding to the reports, China’s Ministry of Foreign Affairs said countries should base their claims on evidence rather than “smear” others without factual basis.

“Cybersecurity issues should not be politicized,” ministry spokesperson Lin Jian said. “We hope all parties will stop spreading false information, take a responsible attitude, and work together to maintain peace and security in cyberspace.”

Source: NBC News

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Probing EU Mineral Policy: Can Mining Become Sustainable? https://policyprint.com/probing-eu-mineral-policy-can-mining-become-sustainable/ Tue, 30 Jan 2024 16:54:27 +0000 https://policyprint.com/?p=4165 Finland is an old mining country, and minerals have been extracted from the land for hundreds of years.…

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Finland is an old mining country, and minerals have been extracted from the land for hundreds of years. The seminar series provided by the Ecosystems and Environment Research Programme showed what used to be possible in mining is not so any longer, and we need drastic changes to remain within our planetary boundaries.

The European Commission published its proposal for an EU raw materials initiative (Critical Raw Materials Act, CRMA) in March 2023. The proposal contains plans to open new mines in Europe and to utilize minerals found in the waste materials of closed mines. Permitting procedures for new mines are additionally proposed to be shortened, and mining companies will be required to report their environmental footprints to the EU. The European Parliament approved the Act last September. To scrutinize the proposed Act, along with its implications to mining practices and our planetary boundaries, we held a seminar series with invited experts during autumn 2023.

The seminar series revolved around crucial questions that are expected to fundamentally shape our future: do we have enough minerals in the world for a green transition? What will be the environmental impact of increasing the number of mines? Is circular economy the solution, or should we reduce our consumption?

Europe depends on imported critical raw materials for its green transition

The autumn seminars were kicked off with a thoroughly informative presentation by Henna Virkkunen, Member of The European Parliament (MEP), working on the Committee on Industry, Research and Energy (ITRE). MEP Virkkunen laid out the facts: the EU is currently dependent on China when it comes to critical raw materials. While Europeans consume around 20% of the world’s critical raw materials, only approximately 2% are produced in Europe. The proposed Act supports the plan to shift this balance towards a more self-sufficient and supply-secure future. The audience raised concerns about environmental safety and environmental degradation due to the increasing volume of mining, especially considering the simplified permitting process for critical raw material projects.

Tackling biodiversity loss while increasing mining is a conundrum

Transitioning from a fossil fuel-based economy is argued to be dependent on mining more (critical) raw materials. But how to do it sustainably with minimal environmental damage, and how well are natural values considered in the short and long term when decisions are made regarding new mines? The Chairman of the Finnish Nature Panel Professor Janne Kotiaho, from the University of Jyväskylä, and environmental activist Riikka Karppinen from Sodankylä further reflected on these questions.

Professor Kotiaho’s message was grimly realistic: biodiversity loss continues at an accelerated rate in both Europe and Finland, and we are all responsible for it. He argued that at the current state of affairs, to truly halt biodiversity and nature loss, we need to implement restorative, nature-positive solutions instead of solutions based on the principle of no net loss. Karppinen expressed shock and discontent regarding the aims to facilitate the opening of new mines in currently protected areas in the name of a green transition. Karppinen has frequently spoken out against a global mining company that is planning on opening a new nickel mine near her home in an area protected by Finnish law and the EU Natura framework. During her presentation, she kindly shared her experiences regarding the residents’ struggles.

The critical raw materials are not renewable

The green transition’s burden on the natural environment may indeed be enormous. But do we have enough materials to fully shift to renewables, or are we about to reach the limits of the planet’s boundaries? Research Professor Simon Michaux, from the Finnish Geological Survey, provided astounding figures on the amounts of minerals actually required for the green transition. According to his estimates, at current energy use rates, we simply do not have enough minerals in the world to fully shift to renewables, and in fact, minerals are “the new oil”. Professor Michaux’s presentation left us thinking: if we do not have enough materials in the world to substitute fossil fuels with renewables, are our current consumption patterns simply doomed?

To better understand how the new Critical Raw Materials Act may look like in Finland, we listened to a presentation by Jarkko Vesa, Special Advisor at the Finnish Ministry of Economic Affairs and Employment. He provided a thorough overview on how the implementation process began. As the Director of Sustainable Development of the mining company Terrafame, Veli-Matti Hilla further underscored: it is clear that mining has received a substantial boost from the EU institutes.

A mix of solutions is needed for a sustainable future

Director Lasse Miettinen from Sitra gave the closing presentation to our seminar series, and it ended on a rather optimistic note. He argued – in line with most of our presenters, along with our own concerns – that we are currently exceeding the limits of our planet. To imagine a more sustainable future, we need to learn to think about ecosystems in a more nuanced and interconnected way. The climate crisis, biodiversity loss, and natural resource depletion cannot be solved separately. Both biotic and abiotic resources are part of nature and managing them should be reframed accordingly. Director Miettinen argued that transitioning to a circular economy is a crucial part and precondition of the solution to our multiple crises. To reduce supply risks and ensure positive environmental outcomes, we need circular solutions, diversified supplies, and more local production beside aiming for sustainable lifestyles and biodiversity offsets. He encouraged us to think that building a more sustainable future is indeed possible.

Professor of Practice in Environmental Responsibility and Chair of the seminar series, Hannele Pokka further noted that while observing how mining in Finland has developed over the years, ordinary people tend to support mining but under no circumstances do they want a mine near their homes. Finland is an old mining country, and minerals have been extracted from the land for hundreds of years. Public opinion in Finland has taken a more critical stance on mining in recent years, which has been reinforced by the Talvivaara mine environmental disaster. It has been difficult for new mining projects to gain social acceptance, and several mining projects, especially in Northern Finland are pending. If mining companies want to seek approval for their projects, mining should be reformed to incorporate a more comprehensive notion of sustainability, including new approaches and technological solutions in water management.

The seminar series, above all, taught us that what used to be possible in mining is not so any longer, and we need drastic changes to remain within our planetary boundaries.

Seminar recordings and further reading materials are available via the links embedded in the text.

Source: Mirage News

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China Woos Foreign Tourists With Visa-Free Policy, but Will They Come Back? https://policyprint.com/china-woos-foreign-tourists-with-visa-free-policy-but-will-they-come-back/ Tue, 26 Dec 2023 00:48:50 +0000 https://policyprint.com/?p=4090 BEIJING – Since March 2023, when China started to issue tourist visas again, business has picked up for Beijing tour…

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BEIJING – Since March 2023, when China started to issue tourist visas again, business has picked up for Beijing tour guide Vivie Pan, who organises small group tours for English-speaking visitors.

But the numbers are nowhere near the levels of 2018 and 2019, before the Covid-19 pandemic. Back then, she received up to three or four bookings a day, and had to rope in other guides to help.

“For this year, I have enough bookings only for myself. I was quite busy from June until November almost every day, with three or four rest days per month, but still there’s no comparison to 2019,” said Ms Pan, who drove part-time for private car-hire company Didi to make ends meet during the pandemic.

“The overseas tourists are coming back, but their main purpose is not sightseeing or leisure – it’s usually business or visiting friends.”

In the first half of 2023, travel agencies received 477,800 inbound tourists, compared with more than 8.56 million for the same period in 2019, according to statistics released by the Chinese Ministry of Culture and Tourism.

The sluggish recovery has been on the government’s radar – it has implemented a series of measures to ease potential pain points of visitors. For instance, in August, the authorities did away with the need for travellers to have a negative Covid-19 test to enter the country.

The latest move came on Nov 24, when China unilaterally announced a year-long visa-free policy for visitors from France, Italy, Germany, the Netherlands, Spain and Malaysia from Dec 1.

This saves them the hassle of filling up pages of forms that include planned itinerary and travel history.

On Dec 1, more than 2,000 people from these six countries entered China – an increase of 12.5 per cent over the previous day, said China’s immigration authorities.

Industry players have welcomed the move, but noted that difficulties remain in persuading tourists to come back. These include limited availability of flights and tightened purse strings, as well as geopolitical tensions that affect perceptions of China.

Veteran industry observer Oliver Sedlinger, who is chief executive of tourism consultancy Sedlinger & Associates, said a short-term challenge is flight availability, noting that China’s international flights have recovered to only about 57 per cent since the start of 2023.

“The recent new visa policies introduced by China are a very smart move and will make travelling there easier,” he said, adding that this would likely provide a strong boost to visitor numbers from these markets.

The Chinese government has implemented a series of measures to ease potential pain points of visitors. PHOTO: REUTERS

Dr Liu Simin, vice-president of the tourism branch of the China Society for Futures Studies research institute, likewise said the move would spur growth.

But he pointed out that the major source countries before the pandemic, such as the United States, Japan and South Korea, were not included in the visa-free policy.

“Although the pandemic is over, the negative effects of pandemic controls have yet to completely disappear. Foreigners may not yet be fully aware of the situation in China today,” he said.

Western countries have also, in general, experienced inflation after the pandemic and consequently a decrease in disposable incomes, with less to spend on travelling, he added.

Geopolitics is yet another factor.

Associate Professor Chong Ja Ian of the National University of Singapore said the squabbles China has with other countries are a dampener on tourist visits from there.

For one thing, China-Japan relations hit a rough patch after Beijing strongly criticised Tokyo for releasing treated radioactive water from the Fukushima nuclear plant, starting from August 2023.

Adding to the problem are China’s exit bans and detentions of individuals associated with particular states, as well as raids on business, said Prof Chong, who specialises in Chinese foreign policy.

For example, Chinese investigations into US-related firms earlier in 2023 spooked the business community.

The authorities had visited the offices of Capvision, Bain & Company and Mintz Group, in what was seen as a crackdown on consulting and due diligence firms.

Memories of the sudden closure of borders and the zero-Covid policy are also relatively fresh, said Prof Chong, and this is reinforced by recent reports of an outbreak of an unidentified disease with flu-like symptoms in China.

“For leisure travellers, the world is a big place with many attractive sites, many of which offer better value and comfort than the PRC,” he said, referring to China’s official name, the People’s Republic of China.

Still, some industry players are already looking forward to 2024.

A spokeswoman for Trip.com Group, a major travel service conglomerate headquartered in Shanghai, said demand for travel to China is expected to rise in the near future. She said Trip.com data showed that global search results for inbound travel to China increased in the third quarter by nearly 40 per cent compared with the previous quarter. 

Some believe that more publicity could be the answer to raising tourist numbers.

Mr Tang Gang, president of Chongqing-based Century Cruises, said “vigorous promotion and publicity” is needed to further stimulate demand, adding that his Yangtze river cruise firm served tourists mainly from Hong Kong, Macau, Singapore, Malaysia and Thailand in 2023.

Ms Pan, the tour guide, believes the outlook for 2024 will be better.

“I’ve already received a handful of clients for March, as well as a few inquiries. There are also a few coming from Malaysia and Singapore in December,” she said.

“But I’m sure it will not be as buoyant as before the end of 2019.” 

Source : The Straits Times

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South Korea’s Surprisingly Successful China Policy https://policyprint.com/south-koreas-surprisingly-successful-china-policy/ Sun, 24 Dec 2023 00:26:14 +0000 https://policyprint.com/?p=4084 When South Korea’s president, Yoon Suk-yeol, entered office last year, the odds rose that a frostier bilateral relationship…

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When South Korea’s president, Yoon Suk-yeol, entered office last year, the odds rose that a frostier bilateral relationship with China might take hold. After all, Yoon on the campaign trail talked tough on China, and conservative South Korean politicians typically deepen the US alliance and are suspicious of Chinese support to the Democratic People’s Republic of Korea (DPRK or North Korea). Even despite the growing closeness of DPRK-China ties, Yoon has been able to effectively manage his government’s relationship with Beijing, potentially setting a template for how other small and medium-sized nations might do the same.

Yoon’s Carrots and Sticks ApproachIndeed, as I have previously argued, Yoon and his government, to some extent, have taken a harder line on China. For example, Yoon became the first South Korean leader to attend the North Atlantic Treaty Organization (NATO) Summit, during which he criticized not only Russia, but China as well. In April, before his state visit to Washington for a summit at the White House with President Joe Biden, Yoon railed against any “attempt to change the status quo by force” in the Taiwan Strait. He further offered that South Korea would cooperate with the international community to prevent such an outcome. Yoon’s comments predictably angered China and sparked a monthslong diplomatic tit-for-tat that stretched into the summer.As part of that summit, Biden and Yoon jointly issued the “Washington Declaration,” which includes measures to enhance extended deterrence, such as the establishment of a nuclear consultative group, the exchange of nuclear-related information and visits by nuclear-powered military assets like the B-52 and submarines, which could be leveraged not only for a North Korea, but China-related contingency as well.But Yoon has simultaneously tried to keep an even hand in dealing with Beijing. For instance, when then-House Speaker Nancy Pelosi visited South Korea after her highly controversial visit to Taiwan to meet President Tsai Ing-wen, Yoon was nowhere to be found. The presidential office said he was on a five-day vacation and had no plans to meet with Pelosi, though he eventually did hold a last-minute phone call with her. His administration has also treaded softly in the country’s debut Indo-Pacific strategy statement in December, referring to China as a “key partner” with which Seoul “will nurture a sounder and more mature relationship as we pursue shared interests based on mutual respect and reciprocity, guided by international norms and rules.”Such moves have probably contributed to a gradually stabilizing and normalizing of the South Korea-China relationship. For example, this week, South Korea resumed trilateral talks with China and Japan, a mechanism that had been dormant since 2019. This foreign ministers-level meeting is paving the way for a trilateral summit soon. In a surprising new pact that goes into effect in May, Beijing relented to Seoul this month and will mandate that its fishing boat (and presumably fishing militia forces) keep their trackers on to help the South Korean coast guard combat illegal fishing within its exclusive economic zone.China’s Likely Considerations/CalculationsYoon’s foreign policy, however, is probably only one part of the story. Dismal Chinese economic numbers—including a collapse in exports, leveling off of inflation, rising unemployment, and slowing consumption, production, and investment—may be prompting Beijing to achieve a better partnership with Seoul. The same could be true for Chinese President Xi Jinping’s decision to meet with US President Joe Biden earlier this month at the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco.Another factor is probably Yoon’s push to open and strengthen ties with Japan, which has a strained relationship with China. Earlier this year, Yoon held a summit with his counterpart, Japanese Prime Minister Fumio Kishida—the first of its kind in over a decade. Since then, Seoul and Tokyo have agreed to resuscitate a military information-sharing agreement, and in August, Biden met with Yoon and Kishida at Camp David in the first-ever standalone trilateral summit between the three nations. Earlier this month, Secretary of Defense Lloyd Austin sat down in another unprecedented trilateral with South Korean and Japanese defense ministers to share information relevant to “severe security environments,” suggesting that North Korea isn’t the only target. Hence, Beijing probably seeks to undermine and ultimately end the strengthening South Korea-Japan partnership possibly aimed at it.Yet another factor may have more to do with China’s military modernization than anything South Korea is doing. When I visited Seoul earlier this month, I spoke with an interlocutor who believed that Beijing’s calculus is rapidly changing on the so-called “Three No’s” demanded of Seoul in 2017, including no new deployment of Terminal High Altitude Area Defense (THAAD) batteries, no South Korean integration into US regional missile defenses, and no trilateral military alliance with Japan and the United States. His theory was that Beijing’s rapid progress in developing a credible nuclear triad (capable of nuclear attacks from land, air, and sea) reduces the salience of pressuring Seoul to follow the Three Nos—a commitment Seoul denies actually exists anyhow.ConclusionAlthough South Korea is arguably inching closer to a trilateral military alliance with the US and Japan, now featuring, for example, joint military exercises, China can still rationalize that the partnership is still too new and possibly ephemeral, likely circumscribed and strained by lingering mistrust from World War II legacy issues, such as the comfort women.In the end, Yoon’s China policy has been unexpectedly successful thus far. He is also buoyed by the South Korean public’s increasingly negative views on China, with the nation now reportedly holding the most anti-China sentiment worldwide. Of course, Yoon is still a relatively new president—he is less than two years into his five-year term—and much could still go wrong, especially if he pursues the Taiwan issue more assertively. But for now, at least, Yoon and his government have successfully managed China, and perhaps offered a road map for how others can too.

Source : 38 North

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How the US’ Exceptional Industrial Policy is Killing Globalisation https://policyprint.com/how-the-us-exceptional-industrial-policy-is-killing-globalisation/ Sat, 02 Dec 2023 23:18:04 +0000 https://policyprint.com/?p=3866 Time can make a huge difference. This is certainly true of the US’ stance on industrial policy. Just…

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Time can make a huge difference. This is certainly true of the US’ stance on industrial policy. Just a few years ago, “industrial policy” was a derogatory term that Washington reserved almost exclusively for China as if it had forgotten that it was a pioneer of the practice.

In the 1980s, the Reagan administration set annual ceilings for Japan’s car exports to the US, and forced Tokyo to accept rules that limited Japanese chip exports while extracting improved US access to the Japanese market.

With the US emerging victorious from the Cold War, Washington saw a reduced need for industrial policy. Meanwhile, it frowned on the countries that adopted the practice, blasting China’s industrial policy as “non-market”.

Some 30 years on, industrial policy is back in fashion in the US. While continuing to censure China, Washington passed the Inflation Reduction Act and the Chips and Science Act in 2022.

Industrial policy is commonly defined as measures taken by a government to shape the economy by targeting specific industries, firms or economic activities through tax incentives, subsidies, protective regulations and research and development support.

China was a latecomer on the scene. Taking its cue from the East Asian countries that transformed their economies through industrial policy, Beijing put in place something of its own in 1986.

China’s industrial policy is similar to that of Japan, South Korea and the European Union, albeit more pervasive. For this reason, it has withstood challenges the US brought before the World Trade Organization.

In contrast, US industrial policy is one of a kind. What sets it apart from the pack is, first and foremost, its purpose. Conventional industrial policy is internally focused, aimed at developing national capacity. However, US industrial policy has, as well as investing in American workers and science, an important additional goal: suppressing competitors, especially those perceived to be narrowing the gap with the US.

The Reagan administration’s “managed trade”, since outlawed, was intended to clamp down on Japanese automobile and semiconductor industries. The exercise was hugely successful, and contributed in no small part to Japan’s three lost decades.

Washington’s industrial policy for semiconductors today is designed to cripple Chinese competition or to ensure the US maintains, as National Security Adviser Jake Sullivan put it, “as large of a lead as possible”.

US industry policy distinguishes itself in another important aspect: approach. The Biden administration says its industrial policy is rooted in national security concerns, and maintains that there is no room for compromise on such matters.

It is easy to see why Washington links its industrial policy with national security: to justify the measures it wishes to take. Consequently, US industrial policy includes extreme measures outside the realm of conventional industrial policy.

The US’ “high fence” around its semiconductor sector, for example, includes export bans, investment curbs and blacklists of competing companies.

On top of an arsenal already swollen with trade, the Swift global payments system and the dollar, Washington is now using industry policy as a weapon to achieve its geopolitical objectives – not unlike an unscrupulous sportsman tripping up a competitor to win a race.

While conventional industrial policy operates behind the border, America’s industrial policy extends its reach beyond US territory, adversely affecting foreign governments and companies. Foreign companies deemed to have violated US sanctions are subject to heavy fines, while foreign nationals on the wrong side of US rules face prison terms.

In an aberration from conventional industrial policy, the US calls for allies and like-minded economies to align against its competitors. The Biden administration has formed a “ Chip 4” alliance with South Korea, Japan and Taiwan, and seeks to set up a “critical minerals buyers club” with the European Union and the Group of 7.

It pressured Japan and the Netherlands into enforcing semiconductor export curbs against China, while prohibiting funding recipients under the Chips and Science Act from expanding capacity there. Moreover, the US is pushing “friend-shoring” to isolate China.

In addition, US industrial policy is likely to have contravened global trade rules. China has filed a suit with the WTO over the US’ chip export bans. Some in the EU have threatened WTO action against the US over an Inflation Reduction Act subsidy scheme that excludes electric vehicles made outside North America.

US President Joe Biden tours the building site for a new plant for Taiwan Semiconductor Manufacturing Company on December 6, 2022, in Phoenix. The Biden administration has formed a “Chip 4” alliance with South Korea, Japan and Taiwan. Photo: AP

To allay similar Japanese concerns about the implementation of the Inflation Reduction Act, the Biden administration concluded an agreement with Tokyo on critical minerals for electric vehicle batteries, which was presented as a sort of free-trade agreement. But such narrow sectors “do not count as a free trade area”, according to Inu Manak, a trade policy expert at the Council on Foreign Relations.

Washington’s industrial policy has serious consequences for the world. It is creating new trade barriers. Market distortion at its worst, it threatens to dismantle the current global supply chains, which would lead to substantial inefficiency and loss of economic output.

Some of the effects of US industrial policy are already evident in the semiconductor sector, where it is no longer possible to freely source or sell raw materials, products, manufacturing machines or technology. As Taiwan Semiconductor Manufacturing Company (TSMC) founder Morris Chang put it, “in the chip sector, globalisation is dead”.

President Joe Biden has stressed on numerous occasions the necessity of US global leadership. However, on industrial policy at least, the world would be much better off without it.

Source : SCMP

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China Pledges to Accelerate Introduction of More Economic Policies https://policyprint.com/china-pledges-to-accelerate-introduction-of-more-economic-policies/ Mon, 09 Oct 2023 16:23:36 +0000 https://policyprint.com/?p=3518 China will speed up the introduction of more policies to consolidate its economic recovery, state media CCTV reported…

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China will speed up the introduction of more policies to consolidate its economic recovery, state media CCTV reported on Wednesday, citing a cabinet meeting chaired by Premier Li Qiang, after the economy showed tentative signs of stabilising.

With a flurry of support steps kicking in, the $18 trillion economy showed better-than-expected figures including bank lending, industrial production and consumption gauges last month, but the wobbling property sector still weighs on its economic outlook.

China will stick to deepening reforms and further opening up and will fully mobilize the enthusiasm of businesses, CCTV said.

“China will accelerate the introduction of relevant policies and work implementation, as well as further consolidate the economy’s upward trend,” CCTV said.

Feedback from an inspection and survey of the country’s economic recovery was presented at the meeting, according to state media.

Local governments and government departments must attach great attention to problems found during the inspection and survey, and push for policy measures already released to take effect, CCTV reported, citing the meeting.

Responding to the advice gathered during the survey, relevant government departments should make plans and carry out in-depth research considering 2024’s economic work, the state media said.

The world’s second-biggest economy lost steam since April as its rebound from COVID reopening missed expectations by markets and economists.

China should step up policy support for the economy while promoting reforms to help achieve the annual growth target of around 5%, Yi Gang, former governor of the People’s Bank of China (PBOC), said in remarks published on Wednesday.

The Asian Development Bank on Wednesday trimmed its growth forecast of China to 4.9% from 5.0% in July due to the weakness in the property sector.

Source: Yahoo

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The US and China may be ending an agreement on science and technology cooperation https://policyprint.com/the-us-and-china-may-be-ending-an-agreement-on-science-and-technology-cooperation/ Wed, 30 Aug 2023 19:40:12 +0000 https://policyprint.com/?p=3425 A decades-old science and technology cooperative agreement between the United States and China expires on Aug. 27, 2023. On the…

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A decades-old science and technology cooperative agreement between the United States and China expires on Aug. 27, 2023. On the surface, an expiring diplomatic agreement may not seem significant. But unless it’s renewed, the quiet end to a cooperative era may have consequences for scientific research and technological innovation.

The possible lapse comes after U.S. Rep. Mike Gallagher, R-Wis., led a congressional group warning the U.S. State Department in July 2023 to beware of cooperation with China. This group recommended to let the agreement expire without renewal, claiming China has gained a military advantage through its scientific and technological ties with the U.S.

The State Department has dragged its feet on renewing the agreement, only requesting an extension at the last moment to “amend and strengthen” the agreement.

The U.S. is an active international research collaborator, and since 2011 China has been its top scientific partner, displacing the United Kingdom, which had been the U.S.‘s most frequent collaborator for decades. China’s domestic research and development spending is closing in on parity with that of the United States. Its scholastic output is growing in both number and quality. According to recent studies, China’s science is becoming increasingly creative, breaking new ground.

As a policy analyst and public affairs professor, I research international collaboration in science and technology and its implications for public policy. Relations between countries are often enhanced by negotiating and signing agreements, and this agreement is no different. The U.S.’s science and technology agreement with China successfully built joint research projects and shared research centers between the two nations.

U.S. scientists can typically work with foreign counterparts without a political agreement. Most aren’t even aware of diplomatic agreements, which are signed long after researchers have worked together. But this is not the case with China, where the 1979 agreement became a prerequisite for and the initiator of cooperation.

A 40-year diplomatic investment

The U.S.-China science and technology agreement was part of a historic opening of relations between the two countries, following decades of antagonism and estrangement. U.S. President Richard Nixon set in motion the process of normalizing relations with China in the early 1970s. President Jimmy Carter continued to seek an improved relationship with China.

China had announced reforms, modernizations and a global opening after an intense period of isolation from the time of the Cultural Revolution from the late 1950s until the early 1970s. Among its “four modernizations” was science and technology, in addition to agriculture, defense and industry.

While China is historically known for inventing gunpowderpaper and the compass, China was not a scientific power in the 1970s. American and Chinese diplomats viewed science as a low-conflict activity, comparable to cultural exchange. They figured starting with a nonthreatening scientific agreement could pave the way for later discussions on more politically sensitive issues.

On July 28, 1979, Carter and Chinese Premier Deng Xiaoping signed an “umbrella agreement” that contained a general statement of intent to cooperate in science and technology, with specifics to be worked out later.

In the years that followed, China’s economy flourished, as did its scientific output. As China’s economy expanded, so did its investment in domestic research and development. This all boosted China’s ability to collaborate in science – aiding their own economy.

Early collaboration under the 1979 umbrella agreement was mostly symbolic and based upon information exchange, but substantive collaborations grew over time.

A major early achievement came when the two countries published research showing mothers could ingest folic acid to prevent birth defects like spina bifida in developing embryos. Other successful partnerships developed renewable energy, rapid diagnostic tests for the SARS virus and a solar-driven method for producing hydrogen fuel.

Joint projects then began to emerge independent of government agreements or aid. Researchers linked up around common interests – this is how nation-to-nation scientific collaboration thrives.

Many of these projects were initiated by Chinese Americans or Chinese nationals working in the United States who cooperated with researchers back home. In the earliest days of the COVID-19 pandemic, these strong ties led to rapid, increased Chinese-U.S. cooperation in response to the crisis.

Time of conflict

Throughout the 2000s and 2010s, scientific collaboration between the two countries increased dramatically – joint research projects expanded, visiting students in science and engineering skyrocketed in number and collaborative publications received more recognition.

As China’s economy and technological success grew, however, U.S. government agencies and Congress began to scrutinize the agreement and its output. Chinese know-how began to build military strength and, with China’s military and political influence growing, they worried about intellectual property theft, trade secret violations and national security vulnerabilities coming from connections with the U.S.

Recent U.S. legislation, such as the CHIPS and Science Act, is a direct response to China’s stunning expansion. Through the CHIPS and Science Act, the U.S. will boost its semiconductor industry, seen as the platform for building future industries, while seeking to limit China’s access to advances in AI and electronics.

A victim of success?

Some politicians believe this bilateral science and technology agreement, negotiated in the 1970s as the least contentious form of cooperation – and one renewed many times – may now threaten the United States’ dominance in science and technology. As political and military tensions grow, both countries are wary of renewal of the agreement, even as China has signed similar agreements with over 100 nations.

The United States is stuck in a world that no longer exists – one where it dominates science and technology. China now leads the world in research publications recognized as high quality work, and it produces many more engineers than the U.S. By all measures, China’s research spending is soaring.

Even if the recent extension results in a renegotiated agreement, the U.S. has signaled to China a reluctance to cooperate. Since 2018, joint publications have dropped in number. Chinese researchers are less willing to come to the U.S. Meanwhile, Chinese researchers who are in the U.S. are increasingly likely to return home taking valuable knowledge with them.

The U.S. risks being cut off from top know-how as China forges ahead. Perhaps looking at science as a globally shared resource could help both parties craft a truly “win-win” agreement.

Source: The Conversation

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US Looks to Restrict China’s Access to Cloud Computing to Protect Advanced Technology https://policyprint.com/us-looks-to-restrict-chinas-access-to-cloud-computing-to-protect-advanced-technology/ Thu, 20 Jul 2023 08:00:00 +0000 https://policyprint.com/?p=3317 The Biden administration is preparing to restrict Chinese companies’ access to U.S. cloud-computing services, WSJ reported Tuesday, citing people familiar with…

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The Biden administration is preparing to restrict Chinese companies’ access to U.S. cloud-computing servicesWSJ reported Tuesday, citing people familiar with the situation, in a move that could further strain relations between the world’s economic superpowers. From the report:The new rule, if adopted, would likely require U.S. cloud-service providers such as Amazon.com and Microsoft to seek U.S. government permission before they provide cloud-computing services that use advanced artificial-intelligence chips to Chinese customers, the people said. The Biden administration’s move would follow other recent measures as Washington and Beijing wage a high-stakes conflict over access to the supply chain for the world’s most advanced technology.

Beijing Monday announced export restrictions on metals used in advanced chip manufacturing, days ahead of a visit to China by Treasury Secretary Janet Yellen. The proposed restriction is seen as a means to close a significant loophole. National-security analysts have warned that Chinese AI companies might have bypassed the current export controls rules by using cloud services. These services allow customers to gain powerful computing capabilities without purchasing advanced equipment — including chips — on the control list, such as the A100 chips by American technology company Nvidia.

Source: Slash Dot

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Yellen’s China Visit Aims to Ease Tensions Amid Deep Divisions https://policyprint.com/yellens-china-visit-aims-to-ease-tensions-amid-deep-divisions/ Mon, 17 Jul 2023 08:00:00 +0000 https://policyprint.com/?p=3307 The last time a U.S. Treasury secretary visited China, Washington and Beijing were locked in a trade war, the…

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The last time a U.S. Treasury secretary visited China, Washington and Beijing were locked in a trade war, the Trump administration was preparing to label China a currency manipulator, and fraying relations between the two countries were roiling global markets.

Four years later, as Treasury Secretary Janet L. Yellen prepares to arrive in Beijing, many of the economic policy concerns that have been festering between the United States and China remain — or have even intensified — despite the Biden administration’s less antagonistic tone.

The tariffs that President Donald J. Trump imposed on Chinese goods are still in effect. President Biden has been working to restrict China’s access to critical technology such as semiconductors. And new restrictions curbing American investment in China are looming.

Treasury Department officials have downplayed expectations for major breakthroughs on Ms. Yellen’s four-day trip, which begins when she arrives in Beijing on Thursday. They suggest instead that her meetings with senior Chinese officials are intended to improve communication between the world’s two largest economies. But tensions between the United States and China remain high, and conversations between Ms. Yellen and her counterparts are likely to be difficult. She met in Washington with Xie Feng, China’s ambassador, on Monday, and the two officials had a “frank and productive discussion,” according to the Treasury.

Here are some of the most contentious issues that have sown divisions between the United States and China.

Chinese officials are still smarting at the Biden administration’s 2022 decision to place significant limitations on the kinds of advanced semiconductors and chip-making machinery that can be sent to China. Those limits have hampered China’s efforts to develop artificial intelligence and other kinds of advanced computing that are expected to help power each country’s economy and military going forward.

The government of the Netherlands, which is home to semiconductor machinery maker ASML, on Friday announced new restrictions on machinery exports to China. On Monday, China placed restrictions on exports of germanium and gallium, two metals used to make chips.

The Biden administration is mulling further controls on advanced chips and on American investment into cutting-edge Chinese technology.

Semiconductors have always been one of the biggest and most valuable categories of U.S. exports to China, and while the Chinese government is investing heavily in its domestic capacity, it remains many years behind the United States.

The Biden administration’s subsidy program to strengthen the U.S. semiconductor industry has also rankled Chinese officials, especially since it includes restrictions on investing in China. Companies that accept U.S. government money to build new chip facilities in the United States are forbidden to make new, high-tech investments in China.

And while Chinese officials — and some American manufacturers — were hopeful that the Biden administration would lift tariffs on hundreds of billions of dollars of Chinese imports, that does not seem to be in the offing. While Ms. Yellen has questioned the efficacy of tariffs, other top officials within the administration see the levies as helpful for encouraging supply chains to move out of China.

The administration is employing both carrots and sticks to carry out a policy of “de-risking” or “friend-shoring” — that is, enticing supply chains for crucial products like electric vehicle batteries, semiconductors and solar panels out of China.

President Biden talks with three construction workers at a building site.
President Biden during a visit to a Taiwan Semiconductor Manufacturing Company plant under construction in Phoenix. The Biden administration’s efforts to assist the U.S. semiconductor industry have rankled Chinese officials.Credit…T.J. Kirkpatrick for The New York Times

Companies doing business in China are increasingly worried about attracting negative attention from the government. The most recent target was Micron Technology, a U.S. memory chip maker that failed a Chinese security review in May. The move could cut Micron off from selling to Chinese companies that operate key infrastructure, putting roughly an eighth of the company’s global revenue at risk. In recent months, consulting and advisory firms in China with foreign ties have faced a crackdown.

American officials are growing more concerned with the Chinese government’s use of economic coercion against countries like Lithuania and Australia, and they are working with European officials and other governments to coordinate their responses.

Businesses are also alarmed by China’s ever-tightening national security laws, which include a stringent counterespionage law that took effect on Saturday. Foreign businesses in China are reassessing their activities and the market information they gather because the law is vague about what is prohibited.

“We think this is very ill advised, and we’ve made that point to several members of the government here,” said R. Nicholas Burns, the U.S. ambassador to China, in an interview in Beijing.

In the United States, companies with ties to China, like the social media app TikTok, the shopping app Temu and the clothing retailer Shein, are facing increasing scrutiny over their labor practices, their use of American customer data and the ways they import products into the United States.

China’s currency, the renminbi, has often been a source of concern for American officials, who have at times accused Beijing of artificially weakening its currency to make its products cheaper to sell abroad.

The renminbi’s recent weakness may pose the most difficult issue for Ms. Yellen. The currency is down more than 7 percent against the dollar in the past 12 months and down nearly 13 percent against the euro. That decline makes China’s exports more competitive in the United States. China’s trade surplus in manufactured goods already represents a tenth of the entire economy’s output.

The renminbi is not alone in falling against the dollar lately — the Japanese yen has tumbled for various reasons, including rising interest rates in the United States as the Federal Reserve tries to tamp down inflation.

Chinese economists have blamed that factor for the renminbi’s weakness as well. Zhan Yubo, a senior economist at the Shanghai Academy of Social Sciences, said the decline in the renminbi was the direct result of the Fed’s recent increases in interest rates.

At the same time, China has been cutting interest rates to help its flagging economy. The interest rate that banks charge one another for overnight loans — a benchmark that tends to influence all other interest rates — is now a little over 5 percent in New York and barely 1 percent in Shanghai. That reverses a longstanding pattern in which interest rates were usually higher in China.

The Fed’s rate increases have made it more attractive for companies and households to send money out of China and invest it in the United States, in defiance of Beijing’s stringent limits on overseas money movements.

China pledged as part of the Phase 1 trade agreement with the United States three years ago not to seek an advantage in trade by pushing down the value of its currency. But the Biden administration’s options may be limited if China lets its currency weaken anyway.

China has provided more than $500 billion to developing countries through its lending program, making it one of the world’s largest creditors. Many of those borrowers, including several African nations, have struggled economically since the pandemic and face the possibility of defaulting on their debt payments.

The United States, along with other Western nations, has been pressing China to allow some of those countries to restructure their debt and reduce the amount that they owe. But for more than two years, China has insisted that other creditors and multilateral lenders absorb financial losses as part of any restructuring. That has slowed the loan relief process at a moment when millions of people in developing countries are facing food insecurity and risk being thrown deeper into poverty.

In June, international creditors including China agreed to a debt relief plan with Zambia that would provide a grace period on its interest payments and extend the dates when its loans are due. The arrangement did not require that the World Bank or International Monetary Fund write off any debts, offering global policymakers like Ms. Yellen hope for similar debt restructuring in poorer countries.

Tensions over national security and human rights have created an atmosphere of mutual distrust and spilled over into economic relations. The flight of a Chinese surveillance balloon across the United States this year deeply unsettled the American public, and members of Congress have been pressing the administration to reveal more of what it knows about the balloon. Mr. Biden’s recent labeling of China’s leader, Xi Jinping, as a “dictator” also rankled Chinese officials and state-run media.

American officials continue to be concerned about China’s human rights violations, including the suppression of the democracy movement in Hong Kong and the detention of mainly Muslim ethnic minorities in the Xinjiang region of northwestern China. A senior Treasury Department official, speaking on the condition of anonymity before Ms. Yellen’s trip, said the United States had no intention of shying away from its views on human rights during the meetings in China.

Chinese officials continue to protest the various sanctions that the United States has issued against Chinese companies, organizations and individuals for national security threats and human rights violations — including sanctions against Li Shangfu, China’s defense minister. The Chinese government has cited those sanctions as a reason for its rejection of high-level military dialogues.

Source: The Newyork Times

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