Search
Close this search box.

May 24, 2023

ICAS Bulletin (online ISSN 2836-3418, print ISSN 2836-340X) is published every other week throughout the year at 1919 M St NW, Suite 310, Washington, DC 20036.
The online version of ICAS Bulletin can be found at chinaus-icas.org/bulletins/.

- What's Going On? -

Diplomatic Engagements and Realigning Alliances

Prime Minister Rishi Sunak speaks with Ukrainian President Volodymyr Zelenskyy Prime Minister of Canada, Ursula von der Leyen, President of the European Commission and Joe Biden, President of the United States as he attends the G7 Summit in Japan. (Credit: Simon Dawson/Number 10 Downing Street, CC BY-NC-ND 2.0 via Flickr)

– China’s new ambassador to the U.S. Xie Feng has left China to fill the previous ambassador Qin Gang’s place in Washington, D.C. 
– Russia and China retaliate against the G7’s increasing concern over their global threats, accusing the group of hindering international peace.
– At a 3-day G7 summit in Japan, G7 leaders challenged China’s “economic coercion,” highlighting their dependence yet disputes with Beijing on issues like trade, human rights and Taiwan, a stance ignited by China’s “weaponisation of economic vulnerabilities.”
– Following the 3-day G7 summit in Japan, President Biden hinted at an impending shift in U.S.-China relations, suggesting de-risking and diversifying economic engagement while maintaining open communication.
– G7 leaders agreed on a joint approach to ‘de-risk’ and diversify economic engagement with China rather than decoupling, echoing U.S. Treasury Secretary Janet Yellen’s previous statement.
– While on a visit to the United Kingdom, U.S. Republican Mike Gallagher warns the UK that China aims to dominate and humiliate the West, predicting possible conflict over Taiwan. 
– As a G7 leaders summit was held in Japan, Xi Jinping hosted the inaugural China-Central Asia summit, seeking to strengthen partnerships and counter U.S. influence.
– The U.S. announced the new U.S.-Taiwan Trade Initiative which looks to stimulate trade between the U.S. and Taiwan by reducing trade restrictions. The initiative comes a few days before Chinese Commerce Minister Wang Wentao is expected to meet with the U.S. Trade Representative Katherine Tai.
– On May 16, Chinese Premier Li Qiang urged the Netherlands to maintain “strategic autonomy” and promoted cooperation across various sectors amid rising U.S.-China tensions impacting global supply chains and technology trade.
– U.S. National Security Adviser Jake Sullivan and Chinese official Wang Yi hold a meeting in Vienna, highlighting a strain in relations while trying to responsibly manage competition.
– Despite internal disagreements about the severity of measures, G7 nations plan to counter ‘economic coercion’ by China, signaling their intent to better coordinate responses to China’s economic practices.
– China dismissed the possibility of a meeting between its new Defense Minister Li Shangfu and U.S. Defense Secretary Lloyd Austin at a Singapore security forum due to ongoing sanctions.

Shaping the U.S.-China Economic Landscape Amid Disputes

An airplane flies over a group of national flags representing nations from around the world. (Source: Getty Images, Royalty Free)

– The U.S. and Taiwan agreed on the initial part of their “21st Century Trade” initiative, emphasizing collaboration on “customs and border procedures, regulatory practices, and small business,” with further negotiations on complex trade areas expected.
– U.S. Republican Sen. Todd Young outlined upcoming legislation to bolster U.S. competitiveness against China’s economic coercion, anticipating a unified stand by G7 leaders on Beijing’s influence.
– UK Prime Minister Rishi Sunak indicated possible stricter export controls and investment restrictions on British firms in China, expressing alignment with U.S. policy toward Beijing ahead of the G7 summit in Japan.
– Top Biden administration aides have highlighted the risk of budget cuts to the U.S. competition with China, amidst intense negotiations in the U.S. Congress to raise the debt ceiling.
– U.S.-listed Chinese companies are switching to American and Singapore auditors to comply with U.S. accounting standards and reduce delisting risk under the Holding Foreign Companies Accountable Act (HFCAA).
– Ford Motor Co. plans to cut over 1,300 jobs in China as sales plummet due to the rising popularity of electric vehicles from Tesla and local companies.
– U.S. solar product manufacturers criticize Biden’s tax credits for being lax on China, arguing that the rules do not sufficiently encourage manufacturing relocation from China.
– U.S. consulting firm Bain & Company is offering China-based staff six months of voluntary leave following police investigations into the company’s Shanghai offices.
– The U.S. Department of Homeland Security raided the premises of Chinese solar panel maker Jinko Solar as part of an ongoing federal investigation.
– In a move to diversify grain sources, China received its first corn shipment from South Africa, following cancellations of U.S. corn orders, signifying Beijing’s focus on securing critical grains.

Military Competition and Concerns Run High in the Pacific

South Korean navy ships are decorated to celebrate the 4th of July during a Rim of the Pacific exercise, Pearl Harbor, July 4, 2012. (Source: U.S. Navy, Public Domain via Flickr)

– Papua New Guinea will allow U.S. troops to have access to the nation’s ports and airports, as a part of a larger initiative from the Biden administration to boost Pacific ties in-lieu of U.S.-China competition in the region.
– The Chinese ambassador to Australia urged against an AUKUS decision to allow for nuclear-powered submarines, claiming the plan was “unnecessary consumption of the hardworking Australian taxpayers’ money.”
– The People’s Liberation Army released a statement that China is prepared to “resolutely smash any form of Taiwan independence” amid a possible acceleration of the sale of U.S. defense weapons to Taiwan.
– The Philippine ambassador to the U.S. has said that the lack of U.S.-Chinese talks has caused him to believe “the world is in trouble.”
– The Chinese People’s Liberation Army filed a report stating that the United States “self-destroyed” their own floating sonars to prevent the device from falling into Chinese hands, after a close encounter between the two militaries in 2021.
– Analysts are claiming that the warming ties between Japan and South Korea will raise serious concerns in the Chinese government, explaining that it will affect the countries’ ability to have trilateral cooperation. The warming ties between South Korea and Japan are reportedly a result of increased U.S. presence in the region.

Tensions at Digital Frontlines Escalate Between U.S. and China

A female engineer inspecting a wafer chip in a laboratory in China. (Source: Getty Images, Royalty Free)

– Amid security concerns, China urges discontinuation of Micron chips for sensitive computing applications, escalating a technology feud with the U.S.
– Montana becomes the first U.S. state to ban TikTok across the entire state, citing privacy concerns related to alleged Chinese intelligence gathering.
– U.S. technology advisory firm Forrester Research is closing its China office and laying off staff amid Beijing’s crackdown on foreign consultancies, coinciding with a tightening of national security scrutiny.
– Chinese brokerages Futu Holdings and Up Fintech to withdraw trading apps that allow overseas investments, complying with Beijing’s tightening controls.
– A lawsuit claims that the Chinese Communist Party had supreme access to U.S. data through TikTok parent company ByteDance.
– U.S. government probes Rockwell Automation over potential cybersecurity threats from its China operations that may expose U.S. infrastructure to cyberattacks.
– AI researchers debate future visions of AI at a conference in Rwanda amid concerns that U.S. and China dominance may leave other countries behind.

Espionage Claims Rattle U.S.-China Relations

Intelligence security concerns the bilateral relations (Source: Getty Images, Royalty Free)

– China, prioritizing security overgrowth, appoints “spymaster” Chen Yixin to oversee crackdown on foreign firms, triggering a concern in global businesses.
– U.S. government announces first cases from newly formed technology espionage team, with arrests linked to Russia, China, and Iran.
– A Hong Kong leader said that China’s sentencing of a 78-year-old U.S. citizen for spying exposes national security threats and urges vigilance.
– U.S. charges a former Apple employee for allegedly stealing technology for China, highlighting the efforts of the recently established “strike force”.
– China has sentenced a 78-year-old U.S. citizen to life in prison on spying charges.
– An American man from Boston is charged with working alongside Chinese officials to monitor local pro-democracy activists, suggesting Chinese influence in U.S. politics.

In Other News

One of the two 7th-century carvings that the U.S. returned to China. (Source: National Cultural Heritage Administration website)

- What Are We Reading? -

- What's Happening Around Town? -

Past Events

May 23 hosted by Center for Strategic and International Studies

May 23 hosted by National Committee on U.S. China Relations

May 22 hosted by Center for Strategic and International Studies

May 22 hosted by Wilson Center

May 22 hosted by Wilson Center

May 16 hosted by Center for Strategic and International Studies

May 12 hosted by Center for Strategic and International Studies

May 12 hosted by Foreign Policy

May 11 hosted by Carnegie Endowment for International Peace

May 10 hosted by Peterson Institute for International Economics

Upcoming Events

- What ICAS Is Up To -

TnT Event Summary

Digital Trade and the Indo-Pacific Economic Framework (IPEF): New Rules, New Opportunities, New Challenges

Wednesday, May 10, 2023

On May 10, 2023, the Institute for China-America Studies (ICAS) hosted a virtual public event to discuss digital trade and cross-border data flows in the context of the ongoing Indo-Pacific Economic Framework (IPEF) negotiations. The event was titled “Digital Trade and the Indo-Pacific Economic Framework (IPEF): New Rules, New Opportunities, New Challenges.” The panelists were introduced by Dr. Hong Nong, Executive Director of ICAS, and the event was moderated by Mr. Sourabh Gupta, Head of ICAS’ Trade n’ Technology Program. The featured panelists were: Dr. Susan Aaronson, Research Professor and Director, Digital Trade and Data Governance Hub at the George Washington University; Mr. Zennon Kapron, Founder and Director of the consultancy Kapronasia; and Dr. Patrick Leblond, CN-Paul M. Tellier Chair on Business and Public Policy at the University of Ottawa.

The panelists were in broad concurrence that given the dynamism and fluidity of innovation, processes and practices in the digital sphere, there were more questions than answers with regard to locking down cross-border data flow rules in digital economy agreements…

ICAS L.E.A.D. Issue Brief

L.E.A.D. Project Brief: US-China Effort to Set “Guardrails” Fizzles with Balloon Incident

By Sourabh Gupta.
May 11, 2023

Summary:

The proposed “guardrail” that Joe Biden and Xi Jinping sought to erect last fall in Bali failed to emerge in the bitter aftermath of a wayward Chinese surveillance balloon that overflew the United States and violated its sovereignty. Though Antony Blinken and Wang Yi met on the sidelines of the Munich Security Conference afterward, aspersions cast by each side against the other, including a series of disparaging Chinese government reports, fed the chill in ties. Taiwan President Tsai Ing-wen’s meeting with House Speaker Kevin McCarthy during the return leg of her US transit added to bilateral and cross-strait tensions and were met with Chinese sanctions. Issues pertaining to Taiwan, be it arms sales or a speculated Chinese invasion date of the island, remained contentious. The administration’s attempt to restart constructive economic reengagement with China, including via an important speech by US Treasury Secretary Janet Yellen, appears to have fallen on deaf ears in Beijing.

*This Brief is part of the newly-established ICAS U.S.-China L.E.A.D. Project and includes a detailed ‘Chronology of U.S.-China Relations (January-April 2023)’ which will be updated once every four months as part of the L.E.A.D. Project.*

Note: This article is extracted from Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific, Vol. 25, No. 1, May 2023.

Special Project Announcement

Announcing the U.S.-China Legislative and Executive Actions Directory (L.E.A.D.) Project!

In May 2023, the Institute for China-America Studies (ICAS) launched the U.S.-China Legislative and Executive Actions Directory (L.E.A.D.) Project to track and summarize trending critical issues and developments on China, emanating from both the White House and Capitol Hill. ICAS will continue to update the L.E.A.D. Project with new summaries, analyses and collections of legislative and executive actions on China as time and circumstances allow. 

The goal of this project is to closely track the key issues and developments on China within the Beltway for scholars and policymakers, and thereby provide a framework for the better understanding of this critical and consequential bilateral relationship.

ICAS Expert Voices Initiative Interview

Expert Voices Initiative Interview – André Aquino

May 25, 2023

Blue carbon, as a significant carbon sink and a natural defense line of coastal communities, plays an important role in mitigating climate change and preventing climate-related damages. However, many developing countries with rich blue carbon natural resources lack matching funds and technologies. Meanwhile, many countries with more advanced technologies and sufficient funds are inherently insufficient in the stock of blue carbon natural resources. 

Thus, inspired by the “loss and damage” fund of COP27, the Institute for China-America Studies BCCC Program is holding an Expert Voice Initiative (EVI) interview to explore the possibilities for cooperation between developing and developed countries on blue carbon to protect, restore, develop, and utilize blue carbon resources.

This Expert Voices Initiative (EVI) interview, conducted virtually from the ICAS Office in Washington, D.C. on May 25, 2023 by Zhangchen Wang, will be released the first week of June 2023 on the ICAS YouTube page and website.

ICAS Blog Post

Ramifications of ROK President Yoon’s US Visit

By Capt. Sukjoon Yoon, ret.

May 16, 2023

Ramifications of ROK President Yoon’s US Visit

South Korean President Yoon Suk-yeol is facing widespread and vigorous criticism following his state visit to the US on April 26 and his shuttle diplomacy attempts to normalize relations between the ROK and Japan, meeting Japanese Prime Minister Fumio Kishida in Tokyo on March 16, and again in Seoul on May 7. This criticism has not come from North Korea or China, as might be expected, but from domestic commentators concerned that Yoon is pivoting too much towards the US and is overly hasty in his approach to Japan.

The first issue is about nuclear strategy, for which President Yoon has recommitted to the Tailored Deterrence Strategy (TDS) proposed in the US Nuclear Posture Review of October 27, 2022. Some South Korean political factions would prefer the ROK to develop its own independent nuclear deterrent, and there is substantial public support for this…

ICAS In the News

On Saturday, May 20, 2023, Senior Fellow Sourabh Gupta was quoted by South China Morning Post on the G7’s approach on China.

  • “Even on the US-inspired supply chain resilience and decoupling front, the gaps among the G7 powers are beginning to show up, especially as Beijing’s relationship with Brussels thaws,”
  • ​​“So long as the military relationship between Seoul, Tokyo and Washington is expressly directed at North Korea and, more importantly, does not bleed into geopolitical matters beyond the Korean peninsula, Beijing has no reason to be particularly upset with Seoul,”

 

On Monday, May 19, 2022, Senior Fellow Sourabh Gupta discussed the China-Central Asia summit in Xian on CGTN Europe’s Global Business.

  • “I would say it [the China-Central Asia summit] has succeeded, but we must also understand that this is a process, China has been really heavily involved inside Central Asia trade and infrastructure building and right now what we’re seeing is an upgrade of that process.” 
  • “I think it is a very significant player in the region but China has also been wise as well, it is while being a very important commercial player, a business player, that it does not step on Russia’s toes from a strategic perspective. This is Russia’s backyard, and so it makes a point not to step into those areas that might concern Russia, but from an economic, commercial, and infrastructure perspective there is no comparison with regard to China’s role in central Asia and that role will just continue growing larger.”
  • “For China, Central Asia is a permanent neighbor, it helps deepen contacts, deepen ties, creates interconnectivity, but for Central Asian countries this is an opportunity to diversify their economies. Yes they do sell a lot of oil and gas, but with CHina’s industrial movement or China’s industrial processes to Central Asia and these connectivity corridors it can help them diversify their economies, make their economies more resistant more robust, and perhaps a little less dependent on the Russian economy too,”

On Friday, May 19, 2023, Senior Fellow Sourabh Gupta discussed the China-Central Asia summit in Xian on CGTN America’s The Heat.

  • “I think they just want to deepen ties of friendship and cooperation particularly economic cooperation and also cultural interaction and cooperation that are more people-to-people level so that there is a deeper integration between the two sides, but I think the most important points coming out of this Summit is not just that they are meeting and reaching these agreements, but the very fact of the timing of the summit. The fact that this summit is happening at the same time the G7 summit is happening.”
  • “This is a statement that China is making by hosting the Central Asian presidents in-terms of supporting the territorial integrity of each of these Central Asian states in an implicit way, considering that many or some of these central asian states have significant Russian populations and there is a certain analogy with the Ukraine situation so I think it’s a big statement being made in that regard.”
  • “Strategically China has been very very careful in terms of strategic relationships; Russia is number one in the region and will stay that way, and that China is not trying to prod the bear in any respect in regards to that because they know how to share the region and share the region to the benefit of the smaller states in the region.”

On Wednesday, May 17, 2023, Senior Fellow Sourabh Gupta was quoted in the South China Morning Post on the effect of Biden’s cancellation Quad and Papua New Guinea visits.

  • “[Biden’s visit will] serve as an unwelcome reminder of the extent to which the US’ depth of commitment to the Indo-Pacific region is at the mercy of increasingly fickle and idiosyncratic politics on the US home front”

On Thursday, May 11, 2023, Senior Fellow Sourabh Gupta was quoted in China Daily on the major U.S.-China and global policy speeches by U.S. leaders.

  • “The stark truth about the US trade and industrial policies is that while Washington would much prefer that these policies are liberal and lawful, it has no compunction following through with them even if they are protectionist and illegal in the eyes of multilateral trade law,”
  • “And this is the reason that a gap has opened up between what the Biden administration says and what it does, particularly with regard to China.”
  • “I think most of the measures that have been taken … since 2018 when Trump initiated his national security tariffs on steel for the past five years, most of the measures have been to decouple from China, although not across-the-board decoupling, but selectively decoupling from China,”
  • “Yet, rather than engage in fair market exchange in this sector, the US would rather implement tilted policies, including preferential consumer purchase subsidies, that deliberately skew the market, provide an unfair competitive advantage to American producers over Chinese producers and decouple a noncritical supply chain from that of China’s.”
  • “Sullivan’s comments that the administration is still committed to the WTO (World Trade Organization) and the shared values upon which it is built is flat-out inaccurate. Numerous US measures, including against China, have been found by neutral third-party panels to violate WTO rules flagrantly. But rather than make the necessary corrections, the US has essentially dug its feet in…”
Senior Fellow Sourabh Gupta discussing the China-Central Asia summit in Xian on CGTN Europe's Global Business.
Senior Fellow Sourabh Gupta discussing the China-Central Asia summit in Xian on CGTN America's The Heat.