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March 13, 2024

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? -

Navigating U.S.-China Relations Amidst Strong Perceptions and Pressures

U.S. President Joe Biden delivers the annual State of the Union address before a joint session of Congress in the House chamber at the Capitol building on March 7, 2024 in Washington, DC. (Photo by Shawn Thew-Pool/Getty Images)

– Taiwan’s vice president-elect, Hsiao Bi-khim, is reported to be in Washington this week for a low-profile private visit, according to sources cited by The Wall Street Journal.
– U.S. Commerce Secretary Gina Raimondo states that the U.S. may further increase controls on China’s access to sophisticated semiconductor technologies to prevent Beijing’s military advancement. The Biden administration is currently considering imposing new restrictions on Chinese tech firms such as ChangXin Memory Technologies Inc.
– On March 8, President Biden briefly criticized China’s “unfair economic practices” in his State of the Union address, potentially displaying a tougher stance than Trump. This follows accusations by China’s Foreign Minister Wang Yi over U.S. containment efforts that Washington has “wrong perceptions” about Beijing.
– China’s Foreign Minister Wang Yi, speaking at a news conference in Beijing on March 7, criticized the U.S. for maintaining incorrect perceptions of China and failing to fulfill promises made since the meeting between Presidents Joe Biden and Xi Jinping last November. Wang emphasized the necessity for mutual respect and recognition of differences for continued bilateral exchanges.
– Daniel Kritenbrink, the U.S. Assistant Secretary of State for East Asian & Pacific Affairs, criticized China’s intimidation tactics in the South China Sea during a press conference in Bangkok, Thailand on March 7.
– Chinese migrants have increasingly adopted the “Zouxian” or “take the risk” trend of entering the U.S. via the southern border, reportedly driven by economic challenges; a fact that U.S. policymakers have continued to take notice of.

Renewed U.S.-China Cybersecurity Concerns in the Air

(Source: Getty Images, Royalty-Free)

– A report released on March 11 from the Office of the Director of National Intelligence states that the Chinese government is utilizing TikTok to advance its global influence operations, aiming to promote pro-China narratives and undermine U.S. democracy.
– On March 8, President Joe Biden announced that he would sign legislation requiring China’s ByteDance to divest the popular TikTok app within six months, despite objections raised by his predecessor Donald Trump.
– American semiconductor company Advanced Micro Devices (AMD) has failed to secure approval from U.S. regulators for a made-for-China AI chip. This chip, designed by AMD to have reduced performance to comply with U.S. export restrictions, was deemed too advanced by the Commerce Department.
– The Biden administration announced an investigation into Chinese-made “smart cars” over potential national security risks, citing concerns about China’s ability to gather sensitive information on American drivers. Also, the Commerce Department will issue a proposed rulemaking to investigate national security risks posed by connected vehicles from China and other hostile countries, seeking input from the auto industry and the public.
– President Joe Biden is expected to issue an executive order aimed at restricting the transfer of sensitive U.S. personal data overseas amid concerns of potential misuse. The order will task the Justice Department with creating rules to safeguard Americans’ genetic, biometric, and geolocation data from access and exploitation by countries of concern, which could include China, Russia, North Korea, and Iran.

Talk of Secrets and Suspicions of Espionage

Two new $10 million apiece container cranes, manufactured in China by ZPMC, at the Blount Island Marine Terminal in Jacksonville, Florida in January 2012. (Source: JAXPORT, CC2.0 via Flickr)

– Following a security probe by the U.S. Congress, Shanghai Zhenhua Heavy Industries said their “cranes will not pose a network security risk to any port” as they are “designed, manufactured, transported, installed, debugged, accepted and delivered in strict accordance with international standards.”
– In late February, the Biden administration announced it would invest to replace foreign-built cranes with U.S.-manufactured ones as part of a set of maritime cybersecurity measures. A congressional investigation of Chinese-built cargo cranes throughout the U.S. resulted in reports of more than a dozen communications modems being found, sparking security concerns in Washington.
– A former Google software engineer and Chinese national has been charged by the U.S. Department of Justice on four counts of federal trade secret theft related to AI.
– In an ongoing trial against Hunter Biden, son of President Joe Biden, investigating his foreign business operations, confirmed Chinese business partners have not yet appeared on the witness list for testimony.

Government Barriers to Trade Multiply and Intensify

Wheat being harvested in the U.S. in October 2022. (Source: Getty Images, Royalty-Free)

– China canceled another batch of U.S. wheat export shipments totaling 264,000 metric tons on March 11, marking the third consecutive session of cancellations and bringing the total to 504,000 tons; the highest on record since the USDA began tracking such data in 1999.
– U.S. lawmakers are seeking to reduce reliance on Chinese biotech companies, potentially impacting popular weight loss and diabetes drugs like Eli Lilly & Co.’s Zepbound and Mounjaro, whose active ingredients are supplied by WuXi AppTec Co.
– On March 4, shares of WuXi AppTec and WuXi Biologics surged by 7.3% and 11%, respectively, receding concerns of potential U.S. sanctions after U.S. President Biden issued an executive order restricting activities of genomics companies in the U.S.
– On March 3 in Washington, D.C., U.S. congressional leaders revealed a provision within funding legislation aimed at preventing China from purchasing oil from the Strategic Petroleum Reserve (SPR).
– Boeing announced a $51 million settlement with the U.S. State Department for multiple export violations, including unauthorized downloads of technical data by Chinese employees in China related to the U.S. Defense Department programs.

Caution and Competition Prevailing in Scientific Relations

Scientist holding petri dish at a laboratory. (Source: Unsplash)

– China accused the U.S. of protectionist trade measures as the U.S. Commerce Department announced an investigation into potential cybersecurity risks posed by Chinese electric vehicles and connected cars.
– For the first time, inventors in China have filed more international patents than those in the U.S., marking a significant shift in global science and technology leadership. In 2022, Chinese inventors filed roughly 68,600 patents through the Patent Cooperation Treaty, surpassing the approximately 58,200 applications from U.S.-based inventors.
– The Science and Technology Cooperation Agreement (STA) between the U.S. and China, established in 1979 and renewed every five years, expired on February 27.
– General Stephen Whiting, head of the U.S. Space Command, warned during a Senate Armed Services Committee hearing that China is rapidly advancing its military capabilities in space to counter American satellites and bolster its ability to monitor and target forces on Earth.

- What Are We Reading? -

- What's Happening Around Town? -

Past Events

March 13 hosted by Northeastern University

March 13 hosted by Carnegie Endowment for International Peace

March 1 hosted by Cato Institute

February 28 hosted by Center for Strategic & International Studies

Upcoming Events

March 14 hosted by East-West Center

March 20 hosted by Wilson Center

March 21 hosted by Georgetown University

April 9 hosted by The National Committee on United States-China Relations

May 6 hosted by Wilson Center

- What ICAS Is Up To -

Issue Brief

Building Blocs in Space Diplomacy: China’s Methodology in Collecting Partnerships for Outer Space and the Evolving U.S. Response
by Jessica Martin
March 4, 2024

(Source: Getty Images, Royalty Free)

Key Takeaways:

  • China is in the middle of building a resilient network of largely bilateral partnerships in space operations at a point where the United States’ capabilities and attention to cross-border relationships in the space realm appear to be lagging. Their nature is not only topically but regionally widespread as China continues to garner collaborations with nations from almost every continent and across varying levels of national economic strength.
  • Over the last few years, the focus of the China National Space Administration (CNSA) has turned towards the International Lunar Research Station (ILRS), which it began publicly formalizing with its Russian counterpart Roscosmos in March 2021. Between the existence of this program and several other cases, it is thoroughly supportable that China has long had their attention on being in and then retaining a position of relevance in outer space and is interested in, primarily though its CNSA, establishing a wide-spread, variously-capable collective of established partners from around the world on outer space issues.
  • Traditionally, the U.S. has relied on multinational treaties to maintain order, but the power of such non-binding agreements appears to be waning in the modern age. In addition to assigning a clear, collective spearhead for U.S. collaborations on space, the U.S. needs to instill confidence in the modernity and attention being given to its space operations, or risk losing traction and influence among the rising number of interested stakeholders and capable parties.
  • Despite the historically high levels of tension and lack of a renewed science and technology cooperation agreement, it is a mistake to discount collaboration as an option for the U.S. and China on space issues. Be it through addressing space junk, renewed threats of nuclear missiles, or the lack of communal regulations on space, the U.S. must do more to publicly keep itself not only relevant but a leader, less it fall short as China expands its diplomatic inroads on space.
  • Even more than the historically high levels of mutual distrust, the 2011 U.S. Wolf Amendment is the single most important barrier to U.S.-China cooperation in space. First and foremost, if there is any desire at all for rapport to be reestablished between these two nations on this front, this law needs to be reevaluated and addressed.

MAP Commentary

Spy cranes or not, the U.S. will come after China’s shipping industry
by Yilun Zhang
March 12, 2024

The clash between the world’s two largest economies in the shipping industry is inevitable and the ‘spy cranes’ probe is just the prologue of this new episode of the U.S.-China strategic competition. U.S. reliance on China for global shipping is the fundamental cause for Washington to come after Beijing over shipping-related issues. Recently reported Biden administration’s concern over America’s “overreliance” on Chinese cranes is merely just the tip of the iceberg…

Commentary

Key transformations needed to galvanize China’s economic resurgence
by Sourabh Gupta
March 6, 2024

On the back of a strong 5.7 percent growth rate in 2021, US President Joe Biden boasted that for the first time in 20 years, the US economy had grown faster than China’s. The boast was misleading. China’s economy grew one-and-a-half times faster, registering 8.4 percent growth in 2021. Undeterred, Biden bragged in a Twitter post in December 2022 that the US would “grow faster than China’s economy” in 2022. Despite registering one of its weakest growth rates since the inception of reform and opening-up, China’s growth rate of 3 percent in 2022 was again one-and-a-half times faster than that of the US, which saw growth of 1.9 percent that year…

This commentary was originally released by China Daily on March 4, 2024.

Commentary

Renewal of US-China STA requires reasonable minds to prevail
by Denis Simon
March 4, 2024

Many scientists and researchers in the US and China are continuing to sit on the edge of their seats as they await the final decision on the possible renewal of the US-China Science and Technology Cooperation Agreement (STA). The agreement, which expired in August 2023, was extended by Beijing and Washington to allow for six months of negotiations to develop a new, more relevant agreement. The STA is important as it serves as an umbrella for all activities in the science and technology (S&T) realm. It also holds symbolic value insofar as its existence implies that S&T cooperation has the blessing of both Beijing and Washington.

Since the original agreement was signed in 1979 and many cooperative activities have occurred under the so-called umbrella, a series of new, pressing issues have moved to center stage in terms of constraining or limiting productive engagement in science and technology…Unlike the broad agenda in the past, the US would like to concentrate on a much narrower group of subjects such as climate change and global health, while the Chinese side would prefer to see a more open-ended set of topics…

This commentary was originally published by Global Times on March 4, 2024.

Blog Post

Event Summary: Secretary Raimondo: An Update on CHIPS Act Implementation, CSIS
by Ao Gu
March 1, 2024

On February 26, Center for Strategic and International Studies (CSIS) Renewing American Innovation Project hosted an event inviting U.S. Secretary of Commerce Gina M. Raimondo to discuss “Investing in Leading-Edge Technology: An Update on CHIPS Act Implementation.” CSIS Senior Fellow Sunjai Shivakumar moderated the event with two sections. Initially, Secretary Raimondo gave a presentation about the status quo of the current CHIPS Act with associated opportunities and challenges. Following this, CSIS Senior Adviser Dr. Charles Wessner held a fireside conversation with Secretary Raimondo regarding several issues related to the CHIPS Act…

ICAS In the News

On Saturday, March 9, 2024, Senior Fellow Sourabh Gupta was quoted by China Daily on China’s growth target for 2024 in the context of the Two Sessions meeting

  • “The economy will need to work hard to get to the 5 percent figure, considering the many headwinds that it is facing…[but t]he government has the fiscal ammunition in store to attain its growth target.”

On Friday, March 8, 2024, Senior Fellow Sourabh Gupta reviewed the outcomes of the Two Sessions meeting on CGTN America’s The Heat.

  • “China’s central government has ample fiscal levers, but just because it has them doesn’t mean it needs to be utilized. The goal of the Chinese leadership with regard to the economy is: Our economy, at this point of time, doesn’t have takeoff velocity, so we need to give just that much stimulus to get takeoff velocity to attain cruising altitude, at which point of time we can deepen the structural transformations that are necessary. This is generally where the Two Sessions went in terms of macroeconomic management…”

On Sunday, March 3, 2024, Senior Fellow Sourabh Gupta previewed the upcoming Two Sessions meeting in Beijing on CGTN America’s The World Today

  • “With regard to what they will be looking out for, I think primarily is how China plans to move forward with its own economy in terms of stimulating it so as to move it out from the economic funk that it has found itself in. And much of that is of course, property-created problems in the economy.”

On Sunday, March 3, 2024, Senior Fellow Sourabh Gupta was interviewed about the preparations leading into the Two Sessions meeting on CGTN America.

  • “[President Joe Biden and President Xi Jinping] already have very good channels of communication that they have cultivated over the last six months, so yes, in Washington they will be looking for how China approaches and plans to approach the United States as a partner and a competitor in the year ahead…”

On Saturday, March 2, 2024, Senior Fellow Sourabh Gupta and Distinguished Fellow Denis Simon were quoted by China Daily on the status of the US-China S&T Agreement negotiations

  • Denis Simon: “There is some opposition to having a new science and technology agreement, especially from certain segments of the US Congress…But I think the fact remains that both countries, both governments, least seemingly entered into the negotiations in a good faith position, with the hope that some kind of new arrangement could be worked out.”
  • Sourabh Gupta: “Despite the lack of an update now, I am not pessimistic on this front. The relationship is in a better place, and hence, there might be no pressing need to formally announce the renewal.”

On Thursday, February 29, 2024, Senior Fellow Sourabh Gupta was quoted in South China Morning Post on panda diplomacy.

  • “If Trump wins, the negotiations will get stuck in the mud and the DC panda enclosure will stay empty.”
On Tuesday, March 5, 2024, Senior Fellow Sourabh Gupta discussed the Chinese economy in the context of the Two Sessions Meeting on CGTN America's The World Today.
  • “Yes, I think [the annual growth target of 5%] is a realistic goal. It’s slightly at the higher end…the international economic community believes the more realistic goal is about 4.5%, but by saying that they’re going for 5%, that might be showing that the government might be willing to provide that additional stimulus…”
On Tuesday, March 5, 2024, Senior Fellow Sourabh Gupta discussed the Two Sessions meeting in Beijing on CGTN's The Heat.
  • “The Global South will be watching to see how China goes about its processes [in tackling its economic challenges]. China has talked about every country owning their own modernization and the global South has bought into this, considering and seeing China’s success.”

On Wednesday, February 28, 2024, the ICAS Trade ‘n Technology Program Event on US-China Science and Tech Agreement renewal was referenced by China Daily.

On Tuesday, February 27, 2024, the ICAS Trade ‘n Technology Program Event on US-China Science and Tech Agreement renewal was referenced by Voice of America.