CiCM 30th June 2023

NEWS IN CHINA

China’s Ministry of Foreign Affairs responded to the joint measures by the U.S. and the Netherlands to tighten the restriction of exports of semiconductor equipment to China. The new regulations are expected to come into force in September which further restricts “certain Chinese manufacturers" from getting semiconductor raw material from Netherlands companies such as ASML. News of the possible discontinuation of the sale of chip manufacturing equipment has been firmly opposed by China’s Ministry of Foreign Affairs as Mao Ning, the ministry's spokesperson, stated in a press conference that they are against U.S. generalization of national security notions, coercing other countries by using several pretexts to create a blockade for technology transfers. She further opposed using administrative means to obstruct trade and economic exchanges between companies which can disrupt the supply chain stability and affect global production. China has stated that it will closely monitor these developments and quickly take action toward safeguarding its interests and rights.

The Communist Party of China (CPC) has achieved a significant milestone as members of the party increased to 98.041 million as of 2022, announced by the Organization Department of the CPC Central Committee. The number of members increased by 1.4 percent from the previous year meaning 2.45 million individuals joined the party in 2022. Increasing from 129,000 in the year 2021, CPC had 5.065 million primary-level organizations at the end of 2022. Not just numbers but the composition and the quality of the members and their education have also seen growth as the data shows that the proportion of members holding junior college degrees or above increased to 54.7 percent, while the proportion of female members rose to 29.9 percent, and ethnic minority members reached 7.6 percent. Workers and farmers constitute the majority of CPC members, comprising 33.3 percent. The significance of primary-level party organizations has been reinforced, with 490,000 village secretaries and 211,000 first secretaries working in villages.

Opening of RMB Bank Accounts in Argentinian banks has been approved by the Central Bank of Argentina recently. It was announced that the renminbi (RMB) will be included as a currency option for deposits and withdrawals in the Argentine banking system. This step also allows domestic banking institutions in Argentina to offer RMB savings and current deposit accounts meaning this will allow financial institutions to open both checking and savings accounts denominated in Chinese currency. The National Securities Commission's step to allow the trading of negotiable securities in yuan in the local financial market is benefitted by this move. The plan focuses on facilitating the extensive use of RMB in Argentina's local financial markets and foreign trade. Recently, the National Securities Commission of Argentina has also approved the issuance of securities products settled in RMB within the local market. Additionally, Special Drawing Rights and freely available yuan will be used by the Argentine government to pay off an International Monetary Fund debt maturity. This strategy builds upon the efforts made by the Central Bank of Argentina since October 2020 to promote RMB spot and futures trading in the local foreign exchange market. Maintaining financial stability within the country and alleviating pressure on Argentina's foreign exchange reserves is the ultimate goal of these initiatives.

Shenzhen has unveiled its plan to construct 300 supercharging stations by 2025 with the aim to facilitate the charging of new-energy vehicles (NEVs). International Digital Energy Expo 2023, where the plan was announced, also showcased its first fully liquid-cooled supercharging demonstration station. With the aim of becoming the "City of Supercharging" by the year 2030, Shenzhen has planned to construct as many supercharging stations as there are traditional gas stations in the city by 2025. Developed in collaboration with the China Southern Power Grid, Huawei Technologies, and Shenzhen power supply bureau, the liquid-cooled supercharging demonstration station also provides other advantages, while also providing, quiet and more stable charging for NEVs along with minimal wearing down of charging equipment. These stations will be built in strategically important and highly populated areas like municipal parks, airports, commercial centers, and high-speed rail hubs to enable optimum utilization. With 860,000 NEVs and a penetration rate of over 60 percent, Shenzhen is already a center of digital energy and new energy enterprises, because of this the target has been set to grow the NEVs ownership to 1.3 million units by 2025.

The General Administration of Customs released the China-Africa Trade Index showcasing a fast-track and productive development trend, ascending to new heights. The index, based on a value of 100 points in the base period of 2000, reached 990.55 points in 2022. China's trade value with Africa has increased more than 20 times, climbing from less than 100 billion yuan to 1.88 trillion yuan. For 14 consecutive years, China has remained Africa's largest trading partner. The index emphasizes numerous significant trends in the growth of China-Africa trade. Starting from pointing out how the scale of trade has consistently increased, with the total export and import volume calculated to reach a historical rise of a year-on-year increase of 14.5% with 1.88 trillion yuan in 2022. The report highlights how the trade links between China and Africa have strenghtened, with China becoming Africa's largest export destination and Africa accounting for a significant share of China's exports. Additionally, there are notable advancements in the trade framework, with China exporting mainly electrical and mechanical products, steel products while importing agricultural, energy, and metal ore products from Africa. Moreover, the trade potential between China and Africa continues to increase, boosted by rapid economic development and closer economic and trade cooperation. Lastly, the index highlights the enhanced vitality of enterprises involved in China-Africa trade, with a notable increase in the proportion of import and export value from large enterprises, as well as a significant rise in the number of small enterprises engaged in trade.

SOCIAL MEDIA CHATTER IN CHINA

Rumors about Tsinghua University debunked- False statements about Tsinghua University that 80 percent of Tsinghua University graduates deciding to go overseas have become a hot topic on social media among the netizens. Netizens have claimed that only a few students can attain marks high enough for these universities. Other netizens discussed how the top students who are nationalist and have a sense of patriotism opt for other universities as the majority of the students prefer to go abroad through these top universities like Tsinghua and Peking. Tsinghua University Student Journalists Association has denied these rumors and stated that in reality, the percentage of students going abroad has declined to only 7.1 percent in the last year. Another inaccurate statement was that over 1000 students work in Space X after graduating from Tsinghua University, which was also debunked. A further false rumor was spread about the guarantee of admission to the university through paid training classes and the claim that 43 percent of Tsinghua courses are taught in English. These were all false declarations. The association stated that rumors were spread to grab the netizens’ attention to generate revenue, and anything related to the university attracts traffic in the era of the internet economy.

INDIA WATCH

As the rift between China and the U.S. rise over the exports of semiconductor equipment, India has reinvigorated its technological ties with the U.S., which could mean India can become a significant player in the global manufacturing of chips in the coming decades. During Prime Minister Narendra Modi's visit to Washington DC, the technological partnership has been given a boost. As mentioned before, the U.S. has restricted these semiconductors from exporting to China starting in 2020 all while increasing their domestic manufacturing and capabilities of the chip. India has great significance of semiconductors as they are critical components in various sectors like defense systems, and smartphones. Thus, the Indian government has announced a 10-billion-dollar incentive plan which aims to boost the manufacturing of semiconductors in India. Promotion of the development of a semiconductor ecosystem in India, resilient supply chains, and fostering a skilled workforce for the industry is the aim of the collaboration of the U.S.-India partnership. In the near future, Micron Technology, Applied Materials, and Lam could make investments with US semiconductor firms including an MoU on Innovation Partnership and Semiconductor supply chain between the two countries. India still remains far behind in the manufacturing of these chips and faces difficulties in establishing a strong industry. India also faces challenges as there is limited power and water supply, an urgent need for a highly skilled workforce, and most importantly, lack of a comprehensive chip manufacturing ecosystem. However, the technological connections between the United States and India are already starting to reshape the semiconductor manufacturing industry in India, positioning it on a trajectory of development that has the potential to create new opportunities and further strengthen the ties between the two countries.

Prepared By

Akshita Pant

Akshita Pant is a post-graduate research scholar with a degree in Masters in International Relations from Amity University. Her expertise lies in the field of geopolitics, particularly focusing on China and East Asia. With a keen interest in India's foreign policy, national security, and culture, with a deep passion for understanding the complexities of international relations.