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April 12, 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? -

Wave of Consequences Following Taiwan Leader’s Visit to the U.S.

U.S. House Speaker Kevin McCarthy meets with Taiwanese President Tsai Ing-wen at the Reagan Library in California on April 5, 2023. (Credit: Mario Tama via Getty Images)

– On April 5, U.S. Speaker of the House Kevin McCarthy met with Taiwanese President Tsai Ing-wen in California, marking the highest-level U.S. official meeting with a Taiwanese president on American soil in decades. Among other issues, the two discussed the rapidly increasing tensions between mainland China and Taiwan.
– In response to Tsai’s visit, a spokesperson of China foreign ministry denounced the McCarthy-Tsai meeting, stating that the U.S. was on a “wrong and dangerous road” and China would take “resolute and forceful measures to defend national sovereignty and territorial integrity.”
– Soonafter, the Chinese People Liberation Army sent in 71 warplanes off the coast of Taiwan to provide a “serious warning against the ‘Taiwan independence.’”
– The Chinese government also imposed sanctions on Hsiao Bi-khim, Taiwan’s equivalent to an ambassador to the U.S., prohibiting her and her family from visiting mainland China.
– President Tsai Ing-wen defied China’s threats before her meeting with House Speaker McCarthy to assert Taiwan’s sovereignty, attracting pro- and anti-Taiwan demonstrators to gather outside of Tsai’s hotel in Los Angeles.
– China warned U.S. House Speaker Kevin McCarthy not to meet Taiwan’s leader Tsai Ing-wen in consideration of regional peace and stability.
– The day before President Tsai visited with Speaker McCarthy, Tsai met with a group of U.S. senators in New York, showing support for the island’s democracy and promoting sanctions against China in case of a military conflict.
– Taiwan’s leader Tsai Ing-wen arrived in New York on March 29 amid threats from Beijing that American politicians engaging with her could lead to retaliation.
– Taiwan is pushing for a tax deal with the U.S. to eliminate double taxation on firms, but such an agreement may escalate tensions with China.

Technology Competition Continues as Private Companies Make Moves

An outdoor view of an Apple store in China in 2021. (Source: Chris Nagahama via Unsplash)

– Tesla CEO Elon Musk stated that Tesla is looking to expand in China and build a new factory to produce 10,000 batteries yearly in Shanghai. The U.S. House congressional committee on China announced serious concern for the new factory, calling for an investigation into Tesla’s federal tax breaks and access to the Chinese market.
– European plane maker Airbus will double production capacity in China, while other multinational companies such as Apple rethink their production lines in China.
– Chinese auto-parts manufacturers may be following in Apple’s footsteps by seeking to establish offshore factories in Indonesia and Vietnam after years of lockdowns and rising trade tensions.
– Beijing petitioned the World Trade Organization to review chip export restrictions from the U.S., Japan and the Netherlands.
– China has begun conducting a review of U.S. chip maker Micron Technology in order to “safeguard the security of the information infrastructure supply chain,” as explained by the Chinese Foreign Ministry.
– Huawei’s recently released annual profit reports showed a nearly 70 percent drop in annual profits in 2022, as the effects of U.S. sanctions begin to show.
– The Walt Disney Company. laid off more than 300 streaming-based employees in Beijing, as a part of a larger restructuring effort.
– Apple CEO Tim Cook met with Chinese Minister of Commerce, Wang Wentao to discuss the stabilization of the technology industry, despite Apple urging suppliers to look elsewhere for production sources.
– New studies by Chinese scientists challenge the U.S. team’s “shocking” claim of superconductivity at usable temperatures.

Third-Party Diplomatic Activities Stay in Play

French President Emmanuel Macron speaking on stage in November 2017. (Source: Flickr, CC2.0)

– French President Emmanuel Macron has received strong criticism after he stated that Europe cannot become a “vassal” and must not be pulled into the increasing U.S.-Chinese tensions.
– The U.S. Trade Representative Katherine Tai says that the U.S. is adopting trade strategies with U.S. allies to counter China’s rise and its increasing takeover of the global economy.
– Former Taiwanese president Ma Ying-jeou spoke out about how cross-strait relations are at a worrying level, citing Covid-19 as a fundamental reason.
– Chinese Premier Li Qiang publicly announced that China will continue to be an “anchor for world peace and development” as concerns build around a possible conflict with Taiwan.
– The Saudi Arabian government is noticeably strengthening its ties with China as its relations with the U.S. begin to deteriorate.
– U.S. Chairman of the Joint Chiefs of Staff General Mark Milley stated that war with China and Russia is “neither inevitable nor imminent.”
– Chinese Premier Li Qiang made statements saying that Asia must stray away from “chaos and conflicts” or the future of the region will be lost.
– Indian Army Chief Manoj Pande warned that increasing U.S.-China rivalries could lead to further Chinese-India border conflicts.
– China’s global campaign to win friends at local levels has come under fire by the U.S. Justice Department for its involvement with Utah officials in an effort for China to enhance its image.

The Great Economies’ Competition is Risking the Global Community

The American and Chinese flags side-by-side along with various U.S. dollars (Source: Karolina Grabowska via Pexel)

– U.S. Treasury Undersecretary Jay Shambaugh stated on Bloomberg TV that the U.S. is not seeking to decouple from China and that both countries should cooperate on global issues.
– Zambia’s president warns that “all parties…[are] not to make Zambia pay a price for a bigger debate,” with debt restructuring as the focus of the ongoing International Monetary Fund and World Bank Spring Meetings.
– China’s state-owned telecom companies are constructing a $500 million undersea fiber-optic internet cable network to rival a similar U.S.-backed project, heightening tech tensions between the two countries.
– The International Monetary Fund warns that rising U.S.-China tensions could cause a 2% loss of global output, making emerging markets particularly vulnerable to changes in foreign investment due to geopolitics.
– Proposals to restrict Chinese purchases of American farmland are gaining traction in 27 U.S. states as lawmakers seek to demonstrate their toughness towards China.
– China’s yuan gains ground in Brazil as Beijing seeks de-dollarization and avoids financial isolation amidst U.S. decoupling, but limited convertibility and Beijing’s capital controls hinder its expansion.
– A former U.S. Commerce Department official sees wider sanctions against China to close loopholes, stating that there is “[n]o line to be drawn” in the tech war, especially regarding semiconductor technology.

U.S. Lawmakers Touch on China and Chinese Activities

Image of various pills on a flat surface. (Source: Getty Images, Royalty Free)

– Mexico’s president asked his Chinese counterpart to assist in stopping Chinese chemicals used by Mexican drug dealers to illegally produce fentanyl. The Chinese government denied that the country had involvement in any illegal fentanyl drug trafficking with Mexico, with the foreign ministry spokesman saying the U.S. “should face up to its own problems.”
– The U.S. House of Representatives voted unanimously in a challenge to China’s international status as a ‘developing nation,’ an appointment which allows for special trade and low-interest loans.
– Top U.S. lawmakers overseeing the Department of Homeland Security have called for hearings to investigate Chinese software that runs over 80% of U.S. port cranes.
– U.S. Undersecretary of State for economic growth and energy, Jose Fernandez, spoke in-favor of the U.S. policies towards the Chinese government, citing that they were necessary to create a “level playing field.”

- What Are We Reading? -

- What's Happening Around Town? -

Past Events

April 11 hosted by Wilson Center

April 10 hosted Center for Strategic and International Studies

April 4 hosted by United States Heartland China Association

March 29 hosted by Center for Strategic and International Studies

- What ICAS Is Up To -

ICAS MAP Co-sponsored Event

Roles of Asian Observers in Arctic Governance: Adapting to a Changing Arctic Council

Thursday, April 13, 2023

9:30 AM – 11:00 AM EST

Climate change has increased accessibility to potential Arctic resources, changing the geopolitical landscape and broadening the international focus on the Arctic to include more geographically distant countries such as China, Japan, South Korea, India, and Singapore. Seeking observer status in the Arctic Council is regarded by these Asian countries to be an important step towards ensuring that they are involved in determining the future of the Arctic; a region which they believe will influence their economic interests and global environmental concerns.

Triggered by the Ukraine conflict, the March 2022 joint statement by the Arctic Council states to pause participation in all meetings of the Arctic Council indicates grave impediments to international cooperation in the Arctic. So long as this statement is in play, the premier forum for Arctic governance, which tended to be immune from geopolitical tensions, can no longer function in its consensus-based format. This subsequently opened up an ongoing debate on the future of the Arctic Council.

What does the suspension of the Arctic Council meetings mean for Arctic Council observers? Will Norway, who will take over the chairmanship in May 2023, make any progress to break through the current ties? Will the debate on the concept of an “Arctic Council 2.0” gain support among non-Arctic states who have a deep interest in Arctic governance? Will non-Arctic countries such as China, Japan, South Korea, India, and Singapore — which have growing Arctic interests and have contributed much to Arctic research —welcome the opportunity for them to establish a more solid role in this region’s affairs? How will the observers adapt to a changing Arctic Council?

This event, co-organized by the China Institute of the University of Alberta, will bring together scholars from the five Asian observers of the Arctic Council, China, Japan, South Korea, India, and Singapore to exchange their views on this critical issue.

ICAS Partner Event

The Fight for Representation: The State of Chinese Americans Survey

Thursday, April 27, 2023

7:00 pm EDT

Chinese Americans are historically underrepresented in politics and policy, and underserved in healthcare, education, and social services. How do you work to solve these problems?

The first step is getting clear and concise data on Chinese Americans, one of the fastest growing populations in the U.S.

Chinese Americans have diverse backgrounds and diverse needs – from culture, family, healthcare, education, employment, finances and political engagement. Data disaggregation is the key to addressing the issues, concerns and challenges of Chinese Americans.

In the largest survey of its kind ever conducted, nearly 6,500 Chinese Americans from 46 states answered 77 key questions about the Chinese American experience in research conducted jointly by Columbia University and Committee of 100.

This disaggregated data specifically on Chinese Americans will inform policymakers and the public of the diverse set of opinions, perceptions, and needs of Chinese Americans across the country and will help develop timely and responsive policies, programs, and services to address those needs.

Join experts from Columbia University, Committee of 100 and the worlds of policy, politics and research for the unveiling of this data at a virtual town hall on April 27 at 7:00pm ET.

ICAS MAP Issue Brief

The Maritime Bedrock of the U.S.-Philippines Alliance: Understanding Manila and Washington’s Interests in the South China Sea

By Alec Caruana

April 10, 2023

Key Takeaways:

  • Manila’s recent deepening of military cooperation with the United States is motivated by a perceived need to enhance the Philippines’ maritime security and reinforce its position in disputes with other claimant states—primarily China—in the South China Sea.
  • Washington takes no official position on sovereignty disputes in the South China Sea, but its overall strategy to promote international maritime law and deter Chinese transgressions in the region substantively aligns its interests with the renewed resolve of Philippine President Ferdinand ‘Bongbong’ Marcos Jr., inaugurated last June.
  • The Philippines’ disputed claims in the South China Sea operate on two levels: disputed jurisdiction over maritime space, and disputed sovereignty over mid-ocean territorial features. Both of these categories trace their legal origins back to the Philippines’ time as a U.S. colony between 1898 and 1946.
  • Manila’s rights to resources and jurisdiction in maritime zones extending from its coastline are disputed with Beijing’s overlapping claims to “historic rights” in the South China Sea and jurisdiction over “relevant waters” around its controlled islands. The Arbitral Tribunal established under Annex VII of ​​​​​the United Nations Convention on the Law of the Sea (UNCLOS) ruled in 2016 that China was violating Philippine rights in its entitled maritime zones, but disputes over fishing and hydrocarbon exploration between the two states persist.
  • The Philippines is also engaged in territorial sovereignty disputes with its neighboring states over several islands, reefs, and underwater features in the South China Sea, namely: the Scarborough Shoal, which it disputes with China, and parts of the Spratly archipelago, which it disputes with China, Vietnam, and Malaysia. Both disputes are mired by complicated histories, precarious legal arguments, and ‘might makes right’ attitudes.
  • With the recent expansion of U.S.-Philippine security cooperation, Manila has an opportunity to shrewdly pursue constructive diplomacy with other claimant states alongside targeted maritime capacity-building measures with Washington’s assistance. The Biden administration may facilitate both ‘tracks’ if it wishes to positively contribute to regional stability and mitigate the escalation of tensions.

ICAS Commentary

Why China is hesitant about endorsing marine protected area proposals in the Antarctic

By Nong Hong

April 7, 2023

The Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR, hereafter referred to as the Commission) convenes meetings on a range of topics each year. This includes gatherings to discuss the establishment of Marine Protected Areas (MPA) in the Antarctic. In the 41st Meeting of the Commission, held October 24-November 4, 2022, three MPA proposals were brought to the meeting for discussion: Domain 1 MPA (Western Antarctic Peninsula and South Scotia Arc) submitted by Argentina and Chile; East Antarctic MPA submitted by Australia, the European Union and India, New Zealand, Norway, Korea, Ukraine, the United Kingdom, the United States and Uruguay; and the Weddell Sea MPA (WSMPA) submitted by the EU, Norway, Uruguay, Australia, the UK, New Zealand, the U.S., Korea, India and Ukraine. The Commission did not reach consensus on any of the three MPA proposals at this meeting.

The three proposals were supported by most members of the Commission. Russia and China expressed concerns, such as the need for baseline data collection and research and monitoring plans (RMPs) prior to the establishment of a MPA. The United States explicitly stated that it neither currently agrees with all the conclusions nor endorses all the recommendations made by China and Russia regarding MPAs and associated RMPs. The U.S. also called for attention being given to a more constructive dialogue on MPAs and RMPs in the future, starting with a Special Meeting in 2023.

ICAS TnT Issue Brief

Why China is hesitant about endorsing marine protected area proposals in the Antarctic

By Sourabh Gupta

April 5, 2023

Key Takeaways:

  • China is unique in its farsighted treatment of data as a standalone ‘factor of production’. The goal of the central leadership appears to be to chart out the long-term parameters of a deep and liquid marketplace where data elements can be traded seamlessly, data factors are remunerated fairly, and guardrails erected to prevent the misuse, abuse or weaponization of data against the Party and State.
  • The focus of regulatory action has been four-fold: (a) to rein-in fintech-linked financial instability risks; (b) to rein-in the anti-competitive practices of Big Tech and compel greater data portability across platforms; (c) to rein-in the misuse and misappropriation of personal information; and (d) to streamline processes for classification of data and network security, including for data export purposes. More lately, regulators have sought to monitor network security risks as well as tighten controls over content at social media platforms through ‘golden shares’.    
  • Chinese regulators have not been reticent to move fast and break things to instill order and structure to the marketplace – a far contrast to the all talk and no action mode of regulatory non-accomplishment across the Pacific. The capriciousness of regulation and the lack of due process has been disconcerting though, particularly at a time when China seeks to convey a more predictable business environment to local entrepreneurs and foreign investors.
  • The resemblance of China’s approach to Big Tech regulation – be it with regard to privacy and data handling, how content is treated on major digital platforms, or how gatekeeper platforms treat their smaller peers and vendors – bears significant resemblance to the EU’s General Data Protection Regulation (GDPR), Digital Services Act (DSA), and Digital Markets Act (DMA). Which in turn begs the obvious question: Can Europe and China interconnect their digital ecosystems?  

ICAS Blog Post

Thoughts on the oil price cap and its impact on China’s energy security

By Xiaohang Zhou

April 7, 2023

The recent imposition of price caps on Russian oil and petroleum products by the United States, the European Union, other G7 countries, and Australia (a group loosely being referred to as the “Price Cap Coalition”) following Russia’s invasion of Ukraine in February 2022 has sent continuous shockwaves across the global energy market. As net importers of fossil fuels, Asian countries have frequently faced rising costs and supply chain disruptions due to unilaterally or collectively imposed sanctions, which have exacerbated issues like poverty, inequality and climate change…

ICAS In the News

On Sunday, April 9, 2023, Senior Fellow Sourabh Gupta was quoted in the South China Morning Post on President Macron’s trip to China and EU-China relations.

  • “China would much prefer that its most important geoeconomic partner be the US. But Washington is not willing to play ball”
  • “The essence of the dilemma for Beijing, therefore, is how to balance the [two] relationships … given that Russia and the Europeans are at loggerheads and China is increasingly being placed in the doghouse with Russia in European eyes,”

On Thursday, April 6, 2023, Senior Fellow Sourabh Gupta was quoted in an Inside US Trade article on the restructuring of China’s science and technology ministry.

  • “China is not framing this as a response to the U.S…They’re framing it as ‘What do we need to do to continue with our modernization program in the context of what the U.S. is doing?’”

On Friday, March 31, 2023, Senior Fellow Sourabh Gupta was quoted by the South China Morning Post on the Summit for Democracy and its focus on democratic renewal.

  • The democracy forum was “a very useful platform from which to champion” agreements on technology usage, “regardless of whether or not this summit kind of peters out at the end of the Biden administration.”

On Thursday, March 30, 2023, Senior Fellow Sourabh Gupta discussed the Boao Forum 2023 on CGTN America’s The Heat.

  • “…particularly when the conflict in Europe still continues in Ukraine, one cannot discount that these sort of matters could also, at one point in time, come to Asia, that would be very unfortunate. You know, the security infrastructure of Europe has collapsed in the name of 40 million Ukrainians. We don’t want the Asian security architecture to collapse in the name of 23 million Taiwanese…so obviously one cannot discount these fears…”

On Thursday, March 30, 2023, Senior Fellow Sourabh Gupta discussed the US’ One-China Policy and President Tsai’s Travel on CGTN America The World Today.

  • “Congress has been in Taiwan from the very first day of normalization of relations with the People’s Republic of China. Of course, the U.S. had to move out of Taiwan, but then we had the Taiwan Relations Act and ever since then whenever there have been big period of tension…the administration is forever looking over its shoulders to see as to what the political sentiment is. I think the political sentiment on Congress is so bitter with regard China, particularly vis-a-vis with Taiwan, that I actually commend the Biden administration in this instance to at least, sort of, talk through to Mr. McCarthy and ensure that he doesn’t go to Taiwan like Speaker Pelosi did…” 

On Thursday, March 30, 2023, Senior Fellow Sourabh Gupta was interviewed by Xinhua on China’s Global Security Initiative and its relations to global multilateralism.

  • “It is about there is one world and we can’t run away from that. We have to live together. We have to sort our problems together.”
  • “If we frame our collective action under the UN umbrella, we will be able to have the widest possible buy-in into the system, which will be good for the long-term sustainability and prosperity of all human beings. And I think that was the key point [President Xi Jinping] was making.”
Senior Fellow Sourabh Gupta discussing the Boao Forum 2023 on CGTN America's The Heat.
Senior Fellow Sourabh Gupta discussing the US' One-China Policy and President Tsai's Travel on CGTN America The World Today.