Sharp China with Bill Bishop
(Free) A New Blinken Visit?; US-China Drama in Singapore; The Post-Covid Stimulus Calculus; Travel to the PRC in 2023
Thu Jun 08 2023
Virtual Reality Podcasting and Censorship Concerns in China
- Andrew Sharp and Bill Bishop discuss the potential of virtual reality podcasting in the future.
- They briefly mention a review of the Vision Pro headset, which caused Apple supplier-related stocks in China to drop due to poor reviews.
- The conversation shifts to the smoke-filled air around DC and how it compares to Beijing's air pollution.
- They briefly discuss censorship concerns if virtual reality were to be launched in China.
Secretary of State Blinken's Visit to China
- The exact timing of Secretary of State Blinken's visit to China is still uncertain.
- Assistant Secretary Daniel Krittenbrake visited China on June 4th and 5th, paving the way for Blinken's visit.
- There has been no official confirmation from either side regarding the rescheduling of Blinken's trip.
- Talks between the US and China are important, but it is also important not to concede things just to talk.
- Talks themselves should not become the main objective before any outcomes are achieved.
- The timing of Krittenbrake's visit on June 4th, the anniversary of Tiananmen Square, was unfortunate and caused upset among some people.
- It would have been better if the US delegation had arrived in China on June 5th instead.
Delays in Implementing Outbound Investment Screening and Other Actions
- The screening rules have been delayed and it is unclear if they will be released before the upcoming visits of Secretary of Treasury Allen and Secretary of Commerce Ramondo.
- There may be delays in actions such as outbound investment, refining semiconductor controls, closing loopholes for server company Inspir, and taking action against Huawei.
- Capitol Hill may start questioning the Biden administration's actions if there are continued delays.
- The Treasury Department announced sanctions on Chinese citizens and companies related to defense technology help for building ballistic missiles.
- It is problematic if the US is giving away too much to convince China to have conversations.
- Many countries in Asia want the US and China to talk.
Tensions Between US and China in the South China Sea
- Conversations between the US and China are unlikely to have a serious impact on core structural issues in their relationship.
- Blinken going before other officials is a victory, as it shows that China cannot dictate who visits first.
- The US has harassed visitors to China, including American scholars and members of official government delegations.
- Tensions between the US and China have been highlighted by recent military incidents and events such as the Shangri-La dialogue.
- Encounters between US and Chinese naval vessels are not uncommon, but there is concern about the risk of accidents.
- The containment of any accidents is important to prevent escalation into a conflict.
- Regional countries do not want a conflict between the US and China.
- There is concern that some incidents may be rogue situations rather than government-sanctioned actions.
- China has a different understanding of what counts as waters in the South China Sea, which can lead to tensions with other countries exercising freedom of navigation.
- The phrase "hegemony of navigation" is used by China to delegitimize US presence in Asia and reshape understandings of international law.
- The Chinese propaganda campaign portrays the US as a big bad hegemon.
Status Quo and Cross-Strait Relations
- China is trying to revise the agreement made 40 years ago and redefine Taiwan straits as a domestic waterway.
- Close encounters with PLA Navy ships are expected if other countries try to run freedom navigation operations through the straits.
- Videos of aggressive maneuvers by Chinese fighter pilots are popular on Chinese internet and play well domestically.
- The one China policy lacks clarity but has succeeded in achieving peace and stability across the Taiwan Strait for decades.
- The US opposes unilateral changes to the status quo by either Taiwan or PRC, but also criticizes China's military buildup and aggressive posture towards Taiwan.
- The US policy towards Taiwan is to maintain a stable cross-strait dynamic that benefits both territories and prevents a conflict that could harm the global economy.
- The Chinese side may not want to continue with the status quo, which has held for 50 years, and Xi Jinping may not be happy with it either.
- Experts suggest that the best solution is to kick the can down the road and hope that Xi Jinping does not decide to take aggressive action against Taiwan.
- There is no acceptable solution to the status quo that would satisfy both the US and Taiwan.
Desertification in China and Scientific Exploration
- Chinese officials are making efforts to curb desertification in Inner Mongolia, Ningxia, Gansu, and Xinjiang.
- Sandstorms have been hitting parts of China, including Beijing, and Mongolia is the main source of recent sandstorms according to the Ministry of Ecology and Environment.
- Xi Jinping has called for more international cooperation in controlling desertification and supporting sand control in Belt and Road countries.
- Desertification is a problem in China due to the large amount of desert in northwestern parts of the country.
- The Chinese government has made efforts to combat desertification by building a "green great wall" with trees and vegetation to prevent sand from being lifted up and blown across the country.
- Mongolia does not have as many resources or initiatives to fight desertification compared to China.
- Desertification is expanding southward into areas that do not have enough water.
- Chinese scientists have started drilling a 10,000-meter borehole in the Xinjiang region, which will penetrate more than 10 continental strata and reach the Cretaceous system in the Earth's crust.
- The project aims to provide data on the Earth's internal structure and test deep underground drilling technologies.
- The drilling is expected to take 457 days.
- China is investing heavily in scientific exploration, including space, earth, and ocean.
- Researchers are also drilling at a spot in the Atlantic where they have access to rock from the Earth's mantle that has come up closer to the sea bed.
- Collaboration between countries on such projects would be beneficial for scientific advancement.
Economic Stimulus and Real Estate Crisis in China
- Kevin asks why the CPC is not stimulating the economy more aggressively despite weak inflation and fiscal space.
- The CPC may be hesitant to use aggressive means of stimulus due to concerns about following the path of other developed economies.
- The conditions under which they may have a change of heart are if things spiral out of control.
- Xi Jinping's signature policy is shifting China's growth model towards high quality growth and avoiding overinvestment in infrastructure and debt accumulation.
- The CPC could signal that local government finances are problematic, but they believe that going back to letting it rip on infrastructure spending and real estate markets will make problems worse in the medium to long term.
- Momentum has slowed in China's COVID exit wave recovery, and exports are not where they want them to be.
- Xi Jinping prioritizes different political goals than super fast growth, but shifting the growth model on paper makes sense.
- There is a significant problem with youth unemployment that is unlikely to get better in the near term.
- China's local level and certain sectors economy create constraints for what they want to do.
- They don't seem concerned about bailing out the local government despite trillions of debt.
- The conditions that might induce a change of heart are already present, but it's complicated due to the economy's many agents.
- China has a different toolbox than the US to manage economic downturns, including administrative and security measures.
- The question is how they define crisis for taking action.
- Real estate presales in China caused a crisis last year.
- Developers ran out of money and left complexes unfinished, causing a crisis where people were paying for houses that were never completed.
- People went on strike and stopped paying the bank, leading to a lack of access to finance for developers.
- Some progress was made in resolving the crisis, but not enough due to insufficient funds.
Cyber Operations and Travel Risks in China
- Microsoft's report on PRC cyber operations signals a potential shift towards destructive cyber operations.
- The report was part of a coordinated disclosure with government and industry reports released at the same time.
- There is no evidence to back up Microsoft's assessment that the hacking group was pursuing capabilities to disrupt critical communications infrastructure between the US and Asia region during future conflict.
- It is unclear why PRC policy is shifting now towards investing in cyber operations and destructive capacity.
- The PRC's alleged actions have raised concerns about their intentions and whether this is the first time they have done something like this.
- There is speculation that the hardening of preparations for worst-case scenarios, including war, could be a reason for these actions.
- The need for vigilance in the region has been underscored by the Five Eyes intelligence alliance's concern about how things are evolving.
- Traveling to China now carries increased risks, and people are having conversations about whether it makes sense to go or not.
- Women may not necessarily be exempt from being subject to scrutiny or hassle at the border based on gender alone.
- It is an individual decision whether to travel to China, but bigger institutions or companies may have policies or risk management work in place to help decide.
Changing Bilateral Relationship Between US and China
- Ling Ling Way's editorial in the Wall Street Journal reflects on her journey to becoming an American citizen and the changing bilateral relationship between the US and China.
- Xi Jinping has a different view of national security and is more concerned about foreigners than his predecessors were, which has led to the empowerment of security services.
- The reopening of China has led to extreme measures such as foreigners having to register with personal information at bars, which is unsettling.
- Membership in the CCP is a selective process that involves recommendations, vetting, and multiple attempts before being accepted. Xi Jinping has tried multiple times before being accepted into the party.
- There is potential for cynicism towards China due to attacks from all sides, but it could also work in someone's favor when trying to join the CCP.
Speculation and Criticism
- Seymour Hersh faced criticism after his Nord Stream 2 theories were undermined by reporting in The Washington Post.
- CCTV online published an article claiming that a US Navy diver's boot was found near the site of explosions, suggesting that the US Navy was involved.
- Tucker Carlson made claims on Twitter that Ukrainians blew up a dam, implying that the US was responsible.
- The hosts discuss the limited functionality of Twitter and plan to test advertising for their podcast on the platform.
- They end with a reminder to subscribe to their newsletter or Strictech Rate Plus for full access to their shows.