Violence in Iran, Afghanistan, and Pakistan

• Hours before China’s Vice Premier Hé Lìfēng 何立峰 touched down in Islamabad, the capital city of Pakistan, on July 30, a suicide bomber killed himself and 44 others near the country’s border with Afghanistan.
• The suicide bombing came hard on the heels of June 2023 counter-terrorism talks between China, Pakistan, and Iran, in Beijing, where the three countries said regular meetings would be held to address rising militancy in the region.

China plans to import oil from Iran and other Middle Eastern countries via the China-Pakistan Economic Corridor (CPEC), a key artery of the Belt and Road and China’s most direct route to the Indian Ocean.

• CPEC was inaugurated in 2013 with a $62 billion budget.
• In March 2021, China signed $400 billion in contacts with neighboring Iran to develop oil resources, despite U.S. sanctions on Tehran.

But regional instability threatens all of those projects: Get the full story from Jonathan Landreth and Akbar Notezai, reporting from Pakistan.

Akbar Notezai

Chinese state media: The People’s Daily top front page story today follows Xinhua News Agency’s report from yesterday on the Politburo Central Committee meeting about inspections of Party members and work units to root out corruption and ensure loyalty.

Xinhua today leads with a red headline (used for important Party and national occasions) about an early celebration of the 74th anniversary of the founding of the People’s Republic of China, which officially falls on October 1.

Xi gave a speech at the event (transcript here) in which he ran through some of his favorite themes. He praised China’s handling of COVID-19 and various natural disasters, and the country’s performance at the Asian Games. He talked of the world going through “changes unseen in a hundred years,” the Belt and Road Initiative, rural revitalization, and the need to ensure prosperity is evenly distributed.

He demanded adherence to the idea that “patriots” must run Hong Kong and Macao, and said that “achieving the complete reunification of the motherland,” i.e. taking over Taiwan, is “a historical necessity.”

In a nod, perhaps, to recent gloomy talk about China, Xi said that “confidence is more valuable than gold” in the march toward national rejuvenation.

China’s Communist Party has appointed a new finance ministry Party chief. Lán Fó’ān 蓝佛安 will replace Liú Kūn 刘昆, the ministry said in a statement today. Lan, 61, is a native of the prosperous southern province of Guangdong. He has extensive experience in public finance, with previous stints in the country’s finance ministry and then serving directly under Liu, who was the then-director of the provincial finance department, from 2002 to 2007.

Lan’s biggest responsibility in his new position will be to manage the growing “hidden debts” of local governments, as the country faces a cash crunch from a widening property crisis and increased spending on social services to prop up its aging population.

China’s Defense Minister Lǐ Shàngfú 李尚福 skipped a key Politburo meeting yesterday attended by Xí Jìnpíng 习近平. While Li doesn’t always attend the monthly study sessions of the Communist Party’s top-decision making body, he hasn’t been seen in public since August 29. His prolonged absence has fanned speculation from credible sources that he is under investigation by Chinese authorities, and may soon join the list of other top officials, such as former Foreign Minister Qín Gāng 秦刚, who have been swiftly and suddenly removed from their posts.

Qin Gang has not been deprived of his state councilor status, but he was also absent from yesterday’s meeting.

Meanwhile, China’s defense ministry announced today that it will host the Xiangshan Forum from October 29–31 for the first in-person meeting since the pandemic. There was no mention of Li.

Taiwan unveiled its first home-built submarine at a launch ceremony in the port city of Kaohsiung today, a landmark step in bolstering its defenses amid growing tensions with China. Named “Narwhal” in English and “Hǎi Kūn 海鯤” in Chinese after a giant mythical fish, the diesel-electric powered submarine took nearly seven years to make and cost about NT$49.4 billion ($1.5 billion), with another submarine slated for 2027.

China and Germany are resuming high-level talks delayed by the COVID pandemic. Chēn Wénqīng 陈文清, China’s secretary of the Central Political and Legal Affairs Commission, paid a trip to Berlin to attend the fourth bilateral security dialogue since 2017. Meanwhile, the two countries will host their third financial dialogue on October 1, the Chinese Foreign Ministry announced today.

A Chinese mining behemoth plans to invest $1.3 billion in Zambia over the next five years. China Non-Ferrous Metals Mining Company (CNMC) announced the wide-ranging investments which includes a $400 million investment in the Chambishi copper mine and another $600 million into reopening shafts at the Luanshya copper mine.

• On September 15, Li appeared in a government-sponsored video promoting entrepreneurship in the Chinese countryside.
• The message is very much in line with a campaign personally endorsed by Chinese leader Xí Jìnpíng 习近平 to encourage “youth to make greater contributions to rural revitalization.”
• While Li didn’t reveal what she’s been up to in the last two years, the 33-year-old influencer teases in the video that something new might be on the horizon.

Li was one of the biggest internet celebrities in China before she fell silent in 2021 amid the lawsuit.

• At the peak of her fame, Li was followed by some 100 million worldwide. The hiatus cost her millions of fans.
• The void she left behind was filled by “a surge in imitators both on a local and international scale,” according to MingYii Lai, a senior analyst at Daxue Consulting, a market research and strategy consulting firm focusing on the Chinese market.

Read all about Li’s comeback and details of her many new competitors.

Zhao Yuanyuan

• Xiao wrote about it in his classic memoir, Traveller Without a Map.
• The book traces Xiao’s hardscrabble origin in Beijing in the early years of the Chinese Republic, details his life as a foreign correspondent in Europe during World War II, and discusses his decision — unlike many of his contemporaries in London and elsewhere — to return to the People’s Republic after the revolution, rather than stay abroad or go to Taiwan.

Check out Book No. 38 in Paul French’s Ultimate China Bookshelf.

Paul French

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

Chinese airlines are buying Chinese planes
China Eastern Airlines to buy 100 C919 planes, aircraft’s largest ever order / Reuters
“China Eastern Airlines said on Thursday it will buy another 100 C919 airplanes in a deal worth $10 billion at list prices, in what would be the largest ever order for the jet made by the Commercial Aircraft Corporation of China.”

Belt and Road banking

Chinese banks should expand in Belt and Road countries, central banker says / Caixin (paywall)
“A senior central banker called for Chinese banks to set up branches in the Belt and Road region to provide comprehensive services where Chinese businesses have investments.”

Electric vehicles
Chinese EV battery parts maker Londian mulls US IPO via Citigroup, Goldman Sachs: sources / SCMP (paywall)
“Chinese copper foil maker Londian Wason Energy Tech is planning an initial public offering in the U.S., people familiar with the matter said.”
China’s EV makers look west as Huawei puts in overtime / Nikkei Asia (paywall)

Semiconductors
TSMC chip fab site in Arizona, touted last year by Joe Biden, struggles with delays and skepticism / SCMP (paywall)
“As local unions and Taiwanese semiconductor giant negotiate elusive labor deal, some wonder who will benefit in U.S. push for manufacturing primacy.”

Youth unemployment
Opinion: Why China’s soaring youth unemployment doesn’t signal an economic apocalypse / SCMP (paywall)
Nancy Qian writes: “China’s youth unemployment rate, after rising every month this year, reached a record high of 21.3 per cent in June. Faced with hyper competitive work environments and grim job prospects, many of the country’s young workers and middle-class professionals have embraced the ‘lying flat’ movement –— which means opting out of the culture of overwork and consumerism – while others have quit to become ‘full-time children.’”

Private equityInvesting
China jitters turn private equity investors toward India, Indonesia / Nikkei Asia (paywall)
“Investors disappointed by China’s slow recovery and lack of new growth drivers are turning to India and Southeast Asia for deals, even as experts warn they face a steep learning curve and potentially limited choice of exit routes in many of these markets.”

Foreign businesses want out of China
IBM’s former IT services group plans to separate its China business / FT (paywall)
“IBM’s former IT services unit is planning to split off its China business in the latest sign of how geopolitical tensions and Chinese data laws are forcing multinationals to rethink their global footprint.”

Transportation
China launches first cross-sea bullet train line near Taiwan Strait / Reuters
“China launched its first high-speed rail line that will travel across several bays and skim along the coast of the southeastern province of Fujian near the Taiwan Strait, state media reported on Thursday.”

Inner Mongolia needs money to pay its businesses
China’s Inner Mongolia to borrow $9 billion to pay bills owed to businesses / Caixin (paywall)
“The government of China’s Inner Mongolia autonomous region plans to issue 66.3 billion yuan ($9 billion) of refinancing bonds October. 9 to pay off debts owed to businesses, authorities said Monday.”

Nomura banker remains in China
Senior Nomura banker Charles Wang Zhonghe can move freely in China. He just can’t leave. / WSJ (paywall)
Charles Wang (王仲何 Wáng Zhònghé), the “The Japanese lender’s China investment banking chairman can’t return to Hong Kong, where he is based.”

Wanda in trouble
China’s Dalian Wanda in talks to avert $4 billion IPO repayment, Bloomberg reports / Reuters
“China’s Dalian Wanda Group has started negotiations on a proposal to avoid repaying about 30 billion yuan ($4.11 billion) to investors in its commercial property management business if it fails to complete its initial public offering (IPO) this year, Bloomberg News reported on Thursday.”

Evergrande
Evergrande shares halted as concerns mount about developer’s prospect / Reuters
“Trading in shares of China Evergrande Group was suspended on Thursday after a report that its chairman had been placed under police watch, as concerns mounted about the cash-strapped developer’s future amid growing liquidation risk.”
China Evergrande halts shares trading in its group and units amid scrutiny of its chairman Hui Ka-yan’s whereabouts / SCMP (paywall)
“China Evergrande Group halted the trading of its shares, along with two of its subsidiaries, amid intense scrutiny of the troubled property developer’s chairman and founder Hui Ka-yan (许家印 Xǔ Jiāyìn).”
China Evergrande shares suspended after reports of founder’s disappearance / WSJ (paywall)

SCIENCE, HEALTH, AND ENVIRONMENT:

Advancements made in desalination
Chinese scientists set record in water desalination with solar power / SCMP (paywall)
“Chinese scientists have set a record in desalinating water through solar steam evaporation – a method they say is ‘green and efficient’ and capable of filtering more water per day than similar methods.”

POLITICS AND FOREIGN AFFAIRS:

The Communist Party, elite politics, and government
China appoints Lan Fo’an as new finance ministry party chief / Reuters
“China’s Communist Party has appointed Lán Fó’ān 蓝佛安 as the new finance ministry party chief, the ministry said in a statement on Thursday, a move that puts him on track to become the next finance minister.”
China appoints new finance head as government debt, revenue shortfalls threaten growth prospects / SCMP (paywall)
China appoints new finance ministry chief / Caixin (paywall)
CSRC names Chen Huaping to fill Vice Chairman vacancy / Caixin (paywall)
“Chén Huápíng 陈华平 was named a vice chairman of the China Securities Regulatory Commission (CSRC), the commission said Wednesday.”

Taiwan
Taiwan unveils ‘Narwhal,’ its first home-built submarine / Nikkei Asia (paywall)
“Taiwan’s leader touted the first domestic-built submarine as a major breakthrough in defense and deterrence as she presided over the vessel’s launch ceremony on Thursday.”
Taiwan says China knows armed threats backfire on influencing elections / Reuters
“China’s leadership knows that saber rattling around Taiwan to force an outcome to its liking in elections does not work and Beijing is not likely to try such actions ahead of January’s presidential vote, the Taiwanese foreign minister said Thursday.”
Chinese activist camps out at airport in Taiwan in bid for asylum / NYT (paywall)
“Chén Sīmíng 陳思明 fled China and awaits refugee assistance in Taiwan, which is wary of raising tensions with Beijing by being seen as a haven for China critics.”

U.S.-China competition and tensions
China’s U.S. envoy urges ‘practical’ steps to help restore ties / Reuters
“China’s ambassador to the United States said the Biden administration could help restore fraught relations by starting with ‘practical’ steps, such as renewing a decades-old pact on science and technology.”
China-U.S. ties: ambassador to U.S. calls for ‘concrete, small steps’ in relations but silent on whether Xi will attend APEC / SCMP (paywall)
A hidden US-China decoupling / FT (paywall)
“One illustration of how financial ties between the U.S. and China are breaking down comes from the recent experience of private equity’s ‘placement agents.’ These are companies hired by buyout groups to help them raise new funds.”

Germany
China, Germany resume high-level financial talks after COVID-19 / Reuters
“China and Germany will co-host a third financial dialogue in Germany on October. 1, the Chinese foreign ministry said on Thursday, resuming high-level talks that had stalled for several years due to COVID-19.”

Australia
China drops barriers to Australian hay as trade relations improve / Reuters
“The Australian government said on Thursday that China was removing barriers to imports of hay from Australia, the latest step towards normalizing trade relations.”
Chinese ambassador says Australian lawmakers who visit Taiwan are being utilized by separatists / AP
“China’s ambassador to Australia on Thursday criticized Australian politicians who visit Taiwan, saying they are being utilized by separatists on the self-governing island.”

Japan
Japanese seafood exports to China slumped 76% in August after ban / Nikkei Asia (paywall)
“Shipments of seafood from Japan to China fell 76% in August from a year earlier, reflecting Beijing’s ban on imports of such goods since Tokyo began discharging treated water from the crippled Fukushima Daiichi nuclear power plant.”
China risk growing, say 60% of Japan’s corporate heads: poll / Nikkei Asia (paywall)
“More than 60% of Japanese business leaders expect the risks of operating in China to increase in the future amid the crumbling real estate sector and geopolitical concerns, a Nikkei survey has found.”

Philippines
South China Sea: Beijing says it removed sea barrier voluntarily despite Manila’s claim ‘special operation’ cut cordon / SCMP (paywall)
“Beijing has insisted it voluntarily removed a floating barrier in the South China Sea to resume ‘regular control’ on Wednesday night, in a tit-for-tat with the Philippines over the disputed Scarborough Shoal.”

SOCIETY AND CULTURE:

Tourism
Holidays at home for record number of Chinese as economic slowdown bites / Reuters
“A record number of Chinese are choosing to travel at home this Golden Week holiday, potentially boosting domestic consumption but disappointing travel agents who have been waiting for big-spending tourists to go back abroad since the pandemic ended.”
China’s Golden Week to fuel domestic tourism as foreign travel lags / Nikkei Asia (paywall)
“One of China’s biggest annual holiday periods begins Friday amid mounting hopes the break will pep up sluggish household spending in the world’s No. 2 economy.”