CiCM 16th August 2023

NEWS IN CHINA

Xi Jinping’s speech on Chinese style modernization was released as an article in the official Party journal Qiushi on Wednesday at a time when China’s economic situation appears to take a turn for the worse. The speech comes amidst concerns of sluggish economy, weak industrial production and a slump in property investment. The recent floods have only added to the woes. In the article Xi made 5 points regarding Chinese style of modernisation. He emphasised the distinctive nature of modernisation with a huge population that provides a lot of opportunities but also comes with its own set of challenges that will take time to resolve. Second, he distinguishes between western style of modernisation and the Chinese style by claiming that Western style is too focused on capital whereas the Chinese style is focused on people and common prosperity of the masses. Third, he talks about spiritual wealth and claims that material wealth should be seen in conjunction with spiritual health and people should strive for values that are beneficial both materially and spiritually. Fourth, he requests everyone in China to respect the natural environment around them while striving for sustainable development. Finally, Xi asks people to strive for self-reliance and self-development while holding close the ideals of international peace.
The Ministry of Finance and Ministry of Industry and Information Technology jointly issued a notice to carry out the digital transformation of small and medium sized enterprises. The measures aim to help local governments to inculcate best practices like targeted subsidies, high quality service providers, precise digital solutions, and integration of digital economy with physical economy. Rewards will also be handed to pilot projects in cities that display good results which will not exceed 150 million yuan for provincial capital cities or cities under separate state planning and 100 million yuan for prefecture-cities and municipalities directly under central government. The pilot period for each city is two years, the notice emphasised these pilot cities to focus on those SMEs that belong to one of the key areas of manufacturing industry. At the end of the two years the SMEs in the sub-sectors “should make all the changes” and the sub-standard SMEs “willing to make changes” with reference to digitalisation.
In the second plenary meeting of the State Council, Premier Li Qiang, presiding over the meeting, made arrangements for further work to be done in order to achieve “annual work goals” and to promote “high quality development.” Li Qiang emphasised the need to modernise industry, promote domestic consumption, accelerate the digitisation of manufacturing sector, promotion of emerging industries, and maintaining stability while striving for progress. He further claimed that reforms will be made in both private and state owned enterprises that will enable the country to further open-up to outside world. The need to enhance and optimize foreign trade in line with the working environment of private enterprises was also emphasised while noting the problems faced by the economy and the resoluteness of the government in the face of it.
The Seventh China-South Asia Expo took place in Kunming in Yunnan province of China. Wang Yi was in attendance for the opening ceremony. Wang Yi gave a speech asking all south Asian countries to work with China and “share the benefits of China growth.” He also commemorated the 10th anniversary of the Belt and Road initiative claiming that the connectivity projects have done wonders for the region with trade and investment progressing swiftly. He stressed the need for south Asian nations to stand united and work in solidarity to ensure deeper connectivity and mutual cooperation in order to enable collective peace and prosperity in the region.
China’s fertility rate reached a record low of 1.09 in 2022 according to data released by China’s Population and Development Research Centre. The rate is reported to be among the lowest in countries with a population more than 100 million people. It is even lower than Korea, Taiwan, Singapore etc. China has been deploying measures to increase birth and support its ageing population, but these figures indicate that the problem is much bigger than anticipated. China already ranks in world’s least fertile countries and this is the first time the population has shrunk since 1961. The fallout of a raging pandemic, combined with deeply rooted gender stereotypes have done massive harm to a country already managing an ageing population. Despite incentives and benefits provided by the government most people in China do not wish to have children citing social and economic reasons.

Intel has scrapped its deal to buy Tower Semiconductor after long delays by Chinese regulators over decisions regarding the deal. The deal worth 5.4 billion USD is understood to have fallen apart over Chinese laws that mandate review of merger deals where both parties earn at least 55 million dollars in revenue from mainland china and the combined annual revenue is over 1.4 billion dollars. It is understood that the government was concerned that if Intel acquired Tower it will be difficult for China to collaborate with it given the restrictions put in place by United States over companies engaging in technological cooperation with China. Intel will be paying Tower 353 million USD in damages for reneging on the deal.
The 19th commander level talks between China and India took place on August 13-14 on the Chushul-Moldo border meeting point. The meeting was held on the Indian side and after two days of talks, a joint statement was released by both sides.. Both sides also agreed to sustain the momentum of talks through diplomatic and military channels. The statement comes a week before the leaders of both the countries are to meet for the annual BRICS summit in South Africa and subsequently for the G20 submit in Delhi in September. In the meantime, both sides agreed to maintain peace on the border.

SOCIAL MEDIA CHATTER IN CHINA

Graffiti in London has evoked mixed reactions from people on social media in China. In Brick Lane, London the wall was plastered with white paint and on it some Chinese students from the Royal College of Art painted 24 characters that collectively form the 12 core socialist principles of the Communist Party of China. Some netizens in China criticised the move as unnecessary, provocative, arrogant and self-serving that are hurting the art community and Chinese people living overseas. Some others applauded the move as standing up for what they considered as their patriotic duty and some saw this as an exercise in testing the limits of free speech in Britain.

INDIA WATCH

The joint statement from the 19th India-China commander level border talks came as yet another in a long series of engagement between both sides with no immediate breakthrough. India has been pushing for disengagement along Despang and Demchok to de-escalate but China has not shown any signs of flexibility. Denial of patrolling rights along the 10, 11, 12, 12A and 13 patrolling points in the Despang area occupied by the PLA has been India’s point of contention during these talks. The 18^th talk did not result in any immediate withdrawal of troops or disengagement nor did it result in a joint statement. Since 2020, the commander level talks have resulted in disengagement in only 5 places, Pangong Tso lake, Galwan, along patrolling points 15 and 17 and in the Gogra area. It seems both countries are adopting a softer approach to this problem in view of the upcoming BRICS summit on August 22-24 in South Africa and the subsequent G20 summit in Delhi in September. India has made several statements regarding its inability to have normal relationship with China if border issues continue to persist. These comments were made after India’s foreign minister met with the Chinese foreign minister on the sidelines of the Shanghai Cooperation Organisation meeting in Goa. The Chinese side has stated that India should take a long term view and place the border talks within the larger bilateral relationship. Within the last three months both the foreign ministers have met twice and have agreed that the border situation must be resolved quickly for the bilateral relationship to move forward. The Indian political leadership is also looking for a diplomatic victory on the international front in view of the general election scheduled for the next year.

Prepared By

Alok Kumar Chaurasia

Alok has recently finished his M. A. In Politics with International Studies from Jawaharlal Nehru University. He is currently a China Studies fellow at Takshashila Institution.