CRG Weekly: Tech deal blocked, mortgage boycotts and Pelosi to visit Taiwan
News from the China Research Group
Podcast: ‘Lost in translation’ in Chinese foreign policy statements. Chris Cash was joined by Sabine Mokry to discuss the key differences between Chinese foreign policy statements and their English translations. Listen here.
The stories driving the week
Focus on strategic dependence as Government blocks Chinese tech acquisition
Kwasi Kwarteng, the UK Business Secretary, issued a Final Order under the National Security and Investment Act to prevent the acquisition of intellectual property from the University of Manchester by Beijing Infinite Vision Technology. This marks the first formal use of the Act, introduced earlier this year.
The deal would have enabled the Chinese firm to acquire intellectual property relating to vision sensing technology and was barred on the grounds that the technology could be used to build dual-use capabilities, presenting a national security risk to the UK.
In a congested industrial policy newsweek, BEIS launched the UK’s first Critical Minerals Strategy. The strategy pinpointed the need to make UK supply chains more resilient, incorporating recommendations from the China Research Group’s 2021 report on critical minerals dependence on China.
This week also saw the UK Government grant development consent for the new Sizewell C nuclear power station, after ministers moved to cut out the Chinese state-backed nuclear specialist CGN.
Meanwhile, the US Senate appears likely to pass a watered down bill that would include $54 billion in subsidies for US semiconductor companies to bolster supply chain resilience and competitiveness against China.
Mortgage strikes threaten continue to threaten economic stability; Didi receives major fine
For the first time ever, people across China are halting mortgage payments in protest against pre-paid homes failing to be completed.
Analysts at Deutsche Bank put the size of mortgages affected so far by the boycotts at 4-5% of the stock of mortgage lending, another sign that the faith of Chinese people in the property market and wider banking industry is beginning to dissolve, according to The Guardian’s Martin Farrer and Vincent Ni.
The government of Zhengzhou in Henan province is creating a property developer bailout fund, backed by the financing arms of the local government, in an attempt to alleviate public anxiety. All information about the boycotts has been rapidly censored.
In other news, the Cyberspace Administration of China (CAC) fined ride-hailing giant Didi $1.2bn for violating cybersecurity and data laws, putting an end to a year-long investigation.
Finally, HSBC has become the first foreign lender to install a Chinese Communist party committee in its investment banking subsidiary in the country, according to two Financial Times sources.
Nancy Pelosi’s planned visit to Taiwan prompts outrage in Beijing
Beijing has been angered by US Speaker of the House Nancy Pelosi’s plans to visit Taiwan in August. Pelosi has been a long-time supporter of Taiwan and would be the most senior US politician to visit the island in 25 years.
President Biden said the Pentagon did not support the visit, with China's foreign ministry spokesperson Zhao Lijian warning China would respond with “strong measures” if Pelosi went ahead.
CIA chief Bill Burns played down speculation that Chinese president Xi Jinping could move on Taiwan after the 20th Party Congress this year. He said that China is believed to have observed from the Ukraine conflict that “you don’t achieve quick, decisive victories with underwhelming force.”
Brookings scholar Ryan Hass offered his thoughts on the steps that could be taken to lower the likelihood of war over Taiwan, while The Telegraph’s Matt Oliver explored the risks to the global economy should “a forced Chinese subjugation of Taiwan” occur.
Document reveals China moves to block UN Xinjiang report
According to a Chinese letter seen by Reuters and confirmed by three diplomats, China is seeking to halt the publication of the UN rights report on Xinjiang.
Outgoing UN High Commissioner, Michelle Bachelet, has pledged to publish a report into the western Chinese region and is set to address China's treatment of its Uyghur minority.
Michael Clarke, Senior Fellow at the Centre for Defence Studies, analysed Xi’s recent inspection tour of Xinjiang, arguing that the apparatus of surveillance and “re-education” will remain firmly in place so long as the Party pursues the objective of reshaping “cultural identity”.
Meanwhile, the UK Government confirmed it would publish a blacklist of companies which are disbarred from public contracts on forced labour grounds.
EU-China trade talks continue amidst reports of landmark invitation
The EU and China resumed trade talks this week after months of delays due to China’s tacit backing of Russia's war in Ukraine. The talks reportedly produced few concrete outcomes, other than commitments to an ongoing dialogue.
The SCMP reported that an invitation for leaders from Germany, France, Italy and Spain to meet President Xi in China this November had sparked a ‘heated debate’. Beijing denied the report, saying that the invitations were ‘fake news’.
Journalist Finbarr Bermingham ponder over the explanations and implications of the proposed meeting on Twitter. The timing of the visit would likely fall just after the CCP’s 20th Party Congress, with European sources suggesting that it could act as a ‘coronation ceremony’ of sorts for Xi.
Weekend reads
China reckons with its first overseas debt crisis. The Financial Times finds the loans that finance China-led infrastructure projects and other transactions classified as “Belt and Road” are turning bad with increasing regularity.
Podcast: China’s Gold Rush Migrants. Andrew Liu talks to Thomas Jones about the Chinese workers who followed the gold rush to California, Australia and South Africa for the London Review of Books.
Why did MI5 name Christine Lee as an 'agent of influence'? The BBC’s Gordon Corera explores the events that led to MI5 issuing an alert earlier this year stating that a UK-based lawyer had been engaged in "political interference activities" for the Chinese state.