Editor’s note for June 30, 2023
A note for Access newsletter readers from Jeremy Goldkorn.
Dear reader,
Two stories about China that have global ramifications are in today’s newsletter: one by noted economist Brad Setser on how China is holding a lot more foreign currency than its official numbers suggest, and another on the underappreciated challenge to the U.S. of Beijing’s diplomacy in the Global South by Cobus van Staaden — scroll down for summaries or click through.
The biggest China news of the last day or two is the country’s new foreign policy law, which is partly in response to various U.S. sanctions and other perceived threats to China’s sovereignty and development. You can read the full text of the law here, or an English translation here, from China Law Translate.
The law takes effect on Saturday, July 1, which will also be celebrated as the 102nd anniversary of the founding of the Chinese Communist Party.
State-owned nationalist tabloid Global Times said the law provides a “legal basis for the diplomatic struggle against sanctions” and is also a “warning and deterrence against Western hegemony.”
Bloomberg says the law extends Xí Jìnpíng’s 习近平 “combative stance on asserting Beijing on the world stage,” and “gives Beijing’s existing toolkit more weight by embracing it in a legal document alongside two of Xi’s signature foreign policy initiatives,” the Global Security Initiative and Global Civilization Initiative, which “are baked into the law.”
Today, just after the new law was promulgated, the Dutch government announced new restrictions on exports of certain advanced semiconductor equipment, in line with U.S. curbs on high-tech sales to China.
Decoupling is not dead yet!
Finally, will the enormous size of China’s electric car market and the intense competition between domestic manufacturers mean that they will miss out on global opportunities? One new report on the Chinese EV industry warned of this danger, using our Phrase of the Week:
Be blinded by a single leaf and not see Mount Tai
一叶障目，不见泰山 yíyè zhàngmù bújiàn Tài Shān.
If you’re interested in EVs, don’t miss our subscriber-only webinar on July 11 which considers the question: “Has the West lost the electric vehicle race to China?”
