A weekly recap of the stories to watch in China this week, plus an exclusive analysis. Delivery on Wednesday.
May 19, 2021, 5:04 p.m.
Welcome to the China Foreign Policy Letter.
The highlights of this week: non-partisan US legislation against China Ropes in companies and stakeholders, Beijing answers on Israel's operation in Gaza and Taiwan faces an unexpected coronavirus outbreak after a year of success.
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Is the competition with China the new pork barrel?
A bill aimed at countering fears that China will technologically overtake the United States was passed by the U.S. Senate 86-11 on Monday, heralding the dawn of a new era of strategic competition – and companies and stakeholders that focus on that Let in game.
The Endless Frontier Act, backed by both parties and the White House, would provide $ 120 billion to fund new technologies that focus on artificial intelligence, superconductors, and robotics. It would also support new hubs to geographically diversify the US technology industry, which is heavily concentrated in Silicon Valley.
US competition with China is one of the few areas that remain open to bipartisan cooperation in Washington. The determination to counter Beijing's already existing influence in 2019 was sharpened by the coronavirus pandemic. The Endless Frontier Act is one of several China-related and co-sponsored by Republicans and Democrats, including Senate Majority Leader Chuck Schumer.
Legislature put many other measures, from endangered seafood bans to NASA funding, in the Endless Frontier Act to preview things to come. Competition with China will be the foreign policy priority for this and future governments, and special interest groups see the inclusion of its causes in the so-called new Cold War as a way of supporting the US government. This, in some ways, mirrors the political economy of China, where corporations use slogans like "Belt and Road" to win government favor.
That change is already happening in Silicon Valley, where big tech firms have argued that the US government should overlook its data breaches and step up cooperation if the US is to stay competitive. (At the same time, these companies are still trying to reach the Chinese market.) Concerns about China are a mainstay of the private space sector, where Beijing's accomplishments – like a vehicle landing on Mars earlier this week – are driven by the need for hefty US investment .
This competitive mood could be most explosive when, as in the Cold War, it transitions into ongoing culture wars in the United States. In the 1950s, anti-Soviet sentiment was used both to justify American racism by portraying its critics as communists and against it by pointing out that the United States could not demand fair elections abroad while it was in the country Domestically oppressed. The US right wing already often uses a largely imaginary version of China as a boogeyman, but experts of all kinds love to mobilize US-China competition on their pet concerns.
Expect a lot more rhetoric suggesting that since China is supposedly doing X, it must also do X to compete – or Y instead, not to be like the Chinese Communist Party.
China is responding to the Gaza Strip operation. Chinese Foreign Minister Wang Yi has put forward a four-point proposal for the Israeli-Palestinian conflict in which he reiterates the same plans that China had previously offered: an end to violence, humanitarian aid, international assistance and a two-state Solution. Although Beijing has traditionally supported Palestinian rights, relations with Israel have grown closer over the past two decades. China is Israel's second largest export market, particularly for military technology.
China has also relied on Israeli models of control over Gaza and the occupied West Bank to carry out its own colonial cruelty in Xinjiang and hired Israeli security guards to train its local counterparts at Beijing Public Security University. (Back in 2014, a senior US official informed me that there was a special interest in hiring staff from Shin Bet, Israel's notorious internal security service.)
Taiwan's COVID-19 outbreak. After over a year of success against the coronavirus, Taiwan is battling an unexpected community outbreak of over 1,000 cases – a droplet by Indian or US standards, but a shock to a population that seemed to be evading the worst of the pandemic. (Initium Media has an excellent summary of the crisis in Mandarin.)
Chinese state media are excited about the outbreak, especially given Taiwan rejection of Chinese COVID-19 vaccines. Similar outbreaks threaten previously successful nations across Asia, from Mongolia to Nepal. This is causing China to close further borders fearing the virus will return.
Shenzhen's Leaning Tower. One of China's tallest buildings, the SEG Tower in Shenzhen, started shaking on Tuesday, resulting in a panic evacuation. Construction standards came under scrutiny after the Wenchuan earthquake in 2008 when many public works, including schools, collapsed and thousands of children died. Locals who tried to investigate corruption and regulatory failures were persecuted and detained.
Building collapses are still relatively common in China. The most notable recent case was a coronavirus quarantine hotel in Beijing. Hot real estate zones fueled with Chinese money overseas, particularly in Southeast Asia, have similarly collapsed.
Apple concerns. Apple has always had a difficult relationship with China, trying to balance one of its largest markets against the constant demands of the Chinese state and the damage to its reputation at home. A New York Times investigation includes accounts of former employees who compromise the company has made with the Chinese government and make it “virtually impossible” to prevent the authorities from accessing data stored on Chinese servers. This applies to all Chinese Apple users under the laws of 2016.
With Big Tech's Beijing relationship under scrutiny in Washington, the story is politically embarrassing for Apple, which denies the claims.
Bitcoin flow. Bitcoin's price fell nearly 30 percent the day before the rally after three Chinese financial authorities issued a statement reiterating previous bans on trading or trading in cryptocurrencies. Cryptocurrencies have a paradoxical relationship with China: most of the currency mining, as well as many consortia that control large shares of various cryptocurrencies, are based in China, but the authorities are suspicious of the trade. Every time they signal this, the volatile bitcoin market reacts sharply.
Bitcoin is primarily an instrument for converting money beyond the Chinese government's tight export limits. Miners bought the electricity needed to run banks with yuan and sold the resulting bitcoins for dollars. Cryptocurrency enthusiasts regularly suggest that it will at some point be backed by the power of the state, which confuses the enthusiasm of Chinese miners for the state itself and activates misinterpretations of ideas like the digital yuan – a non-blockchain, yet underdeveloped project.
The Bitcoin mining process is a wasteful guessing game that requires massive processing power and is a major contributor to global carbon emissions. Chia, a recently launched and supposedly environmentally friendly alternative, uses hard drive space instead of wasting computing power, leading to a significant shortage of drives in China and around the world.
Titanic ambitions. A life-size replica of the Titanic valued at $ 150 million is due to open soon as the centerpiece of a theme park in Sichuan Province. As one of the first widespread Western films, the Titanic became a massive hit in China and a constant cultural touchstone. Theme parks are widespread in China and are experiencing a pandemic boom due to the lack of overseas tourism options. As in Japan in the 1990s, over-ambitious plans and construction work have left eerie landscapes in some regions.
Zibo, Shandong: 4.53 million people
Zibo is a classic second provincial city overshadowed to the west by Jinan, Shandong's capital, and to the east by Qingdao. The city's glory days were over two millennia ago when it was the capital of Qi State – the last competitor to be swallowed up by Qin, the despotic kingdom that would form the basis of the first short-lived Chinese empire. Zibo's global profile is so insignificant that Googling the US will take you to a US software company outside a city of more than 4 million people.
But that makes Zibo a classic study of how Chinese cities are trying to restore a cultural profile for themselves. The city calls itself the birthplace of football, based on the ancient sport of Cuju, a kickball game for nobles that was first mentioned in qi records. (The now disgraced former FIFA chairman Sepp Blatter endorsed the claim in 2005.) There's no real connection between Cuju and modern football, and every ancient culture seems to have played ball games, but Zibo takes what it can – too when the Cuju's real heyday was in a completely different city, Kaifeng.
Zibo's own soccer team called Zibo Cuju isn't even good. A local entrepreneur recently bought it and insisted on joining the team. It is currently in last place in the second division.