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May 10, 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? -

Naval and Intellectual Forces Boil Around the South China Sea

A woman takes a photo on a warship inside Taiwan's navy camp during a recruiting event at Xinbin Port on March 11, 2023. (Source: Annabelle Chih, Getty Images)

– Taiwan has begun talks with the U.S. Department of Defense to receive US$500 million in free weapons, according to Taiwanese Defense Minister Chiu Kuo-cheng.
– The United States and the Philippines have jointly issued new guidelines which address “bilateral defense guidelines” around possible South China Sea attacks. 
– At a daily press briefing, in response to a question on the renewed U.S.-Philippine security alliance, Chinese ministry spokesperson Mao Ning said the South China Sea “should not be a hunting ground for external forces.”
– U.S. defense contractors and a senior leader from the U.S. Marine Corp pledged together to have deeper cooperation with Taiwan and “be part of the self-defense capabilities of Taiwan.” The joint pledge comes as Taiwanese defense contractor Aerospace Industrial Development Corp. seeks a partnership with the U.S. to produce a fighter jet.
–  The United States has committed to assisting the Philippines in resupplying a grounded naval ship in the South China Sea, in attempts to circumvent the Chinese prevention of resupplying the ship.
– Chinese officials have pushed against U.S. goals of creating a bilateral “hotline” to increase communication in crisis situations, as they provide the U.S. with “cover” for possible operations within the South China Sea and around Taiwan.
– Chinese foreign ministry spokeswoman Mao Ning stated that China firmly opposes deployment of nuclear submarines to South Korea, explaining that doing so is putting “regional security at risk.”

The Power Competition of Artificial Intelligence and App Dominance

Huawei icon in 3D against a red background. (Source: Rubaitul Azad, Unsplash)

– Artificial intelligence (AI) researchers have become concerned that the competition between the U.S. and China to rapidly develop AI softwares could lead the rest of the world behind and unable to compete.
– U.S. sanctions on Chinese technology companies have encouraged accelerated AI research, based on techniques to avoid using American microchips and semiconductors. 
– Chinese technology company Pinduoduo has moved its headquarters from Shanghai, China to Dublin, Ireland, in a move which analysts suggested arises from U.S. scrutiny on Chinese-based tech firms.
– U.S. senators are considering new legislation that would give the Biden administration more power in limiting the video sharing app TikTok, alongside a bipartisan bill to enhance U.S. economic competition with China and respond to Chinese aggression towards Taiwan.
– Chinese technology company Huawei has developed a system to replace U.S. sanction-blocked ERP (enterprise resource planning) programs which had significantly limited international expansion. Despite the development of this new system, Huawei still faced flat revenue growth for the first quarter of 2023, with a marginal growth rate of 0.8% from last year.  
– G-7 nation science ministers are anticipated to create an agreement on funding sources, which would define inappropriate influence on scientific research and address circulation of research while protecting national security.
– U.S. Secretary of Commerce Gina Raimondo stated that Chinese technology companies like Huawei and Alibaba may pose a security threat towards the United States, and promised to review requests to add them to export control lists.

Accusations and Combative Arguments Still Remain in the Public Eye

Secretary Blinken and National Security Advisor Sullivan deliver statements to the press in Anchorage, Alaska on March 19, 2021 following an in-person meeting with their Chinese counterparts. (Source: U.S. Department of State via Flickr)

– Chinese international students in the U.S. have begun to fear that content created while studying abroad may go against the updated Chinese counterespionage law, which goes into effect in July.
– The governor of Florida, Ron Desantis, passed sweeping legislation that limits Chinese citizens from purchasing land in the state, prohibits the use of TikTok on government or school servers, and bans colleges and universities from accepting donations or gifts from “foreign countries of concern” which includes China.
– Chinese Foreign Minister Qin Gang told the U.S. to “reflect deeply” upon bilateral ties before they can return back to a healthy path, arguing that Washington was responsible for the rise in tensions.
– Tsai Ming-yen, the director-general of Taiwan’s National Security Bureau, stated that Chinese President Xi “doesn’t allow any kind of different voice in the Chinese political system,” explaining that this approach increases the “risk of making a wrong decision” on Taiwan.
– John Podesta, Senior Advisor to President Joe Biden for clean energy innovation and implementation, told the Biden Administration that the U.S. is vulnerable to a “lock” on critical mineral processing from China. 
– U.S. Ambassador to China Nicholas Burns expressed the desire to “see from China much more tough-minded” stances on the Russian-Ukrainian war, clarifying that the U.S. desires China to “push Russia to remove its troops.” 
– The Biden administration has decided to remain silent on Indian democratic backsliding and severe challenges to human rights, as competition with China increases the strategic need for U.S.-India cooperation. 
– Leaked U.S. intelligence documents have shown that “key nations” such as India, Brazil, Pakistan and Egypt are determined to avoid the ongoing U.S.-China strategic competition.
– U.S. National Security Advisor Jake Sullivan argued that U.S. subsidies for domestic clean-energy technology will help rather than hurt U.S. international partnerships as the strategy will “build a fairer, more durable international economic order.”
– The Chinese Foreign Ministry has warned the U.S. that “China will resolutely take countermeasures” if the U.S. continues to pursue criminal cases against Chinese officers accused of targeting political dissidents within the U.S.

Business Woes Heighten and Actions are Taken as Suspicions Increase

A map of China on a digital display. (Source: GettyImages, Royalty Free)

– Foreign enterprises in China are concerned about the Communist Party’s increasing emphasis on information scrutiny, which implies questioning these firms.
– LinkedIn announced it will cut 700+ jobs and discontinue its China app, following other technology companies in workforce reductions due to the weakening global economic outlook.
– The Chinese authority’s recent challenge to American consulting firm Bain & Co. have led foreign firms to worry about complying with U.S. sanction requirements and the risk of conducting local business.
– FedEx is relocating its Asia headquarters and executives from Hong Kong to Singapore while retaining its office and most staff amid U.S.-China tensions and trade slowdown.
– Despite the escalating U.S.-China tensions, the president of the Chinese-initiated Asian Infrastructure Investment Bank (AIIB) asserts that the bank maintains strong cooperation with American institutions, businesses, and the U.S. Treasury Department. AIIB also called on regional countries to fight for protectionism amidst the ongoing U.S.-China tensions.
– Bipartisan U.S. lawmakers have urged the U.S. Securities and Exchange Commission (SEC) to pause the Chinese fast-fashion company Shein’s initial public offering (IPO), or stock launch, until the absence of Uyghur forced labor is verified through an independent audit.
– Hong Kong criticized the U.S. for its ‘Made in China’ export rule after a World Trade Organization (WTO) forum Geneva meeting, accusing it of undermining WTO’s rules-based trading system, while the U.S. stalls judge appointments to the panel.
– Europe is adopting a tougher stance on China, seemingly aligning more with U.S. policies, as concerns over China’s alliance with Russia and domestic repression prompt increased export and investment controls.
– Airline disputes complicate U.S.-China relations as American carriers lobby against Chinese rivals who are seeking more flights between countries.
– In a recent speech, U.S. National Security Advisor Jake Sullivan clarified that the U.S. aims to “de-risk” rather than decouple from China, emphasizing the importance of resilient supply chains and domestic spending for competition.
– Chinese authorities questioned U.S. consulting company Bain & Co.’s Shanghai staff, reflecting Beijing’s increasing pressure on foreign firms operating in the country.

Desires for Increased Travel to Decrease Tensions

An Air China Boeing 787 landing at Frankfurt Airport. (Source: Andrew Dawes/Unsplash)

– U.S. Secretary of State Antony Blinken plans to make a trip to China in 2023 with a goal of recreating “regular lines of communication at all levels and across our government.”
– The U.S. Department of Defense is looking to schedule a meeting between Secretary of Defense Lloyd Austin and his Chinese counterpart, which is to be held in Singapore as early as June. 
– The U.S. Department of Transportation has decided to allow Chinese commercial airlines to increase weekly flights allowances to 12 round trip flights each week, matching the number China allows for U.S. carriers. 
– John Kerry, the U.S. climate envoy, was invited by the Chinese government to visit in “the near term” to discuss strategies to fight climate change. 
– U.S. Ambassador to China, Nicholas Burns, stated that the U.S. is “ready to talk” with hopes that “the Chinese will meet us halfway.”  
– Chinese President Xi and Ukrainian President Zelensky had a joint call to discuss possible cooperation to establish a just and sustainable peace for Ukraine,” amid rising international pressure from the U.S. and allies for China to take a concrete stance on the war in Ukraine.

- What Are We Reading? -

- What's Happening Around Town? -

Past Events

May 4 hosted by Foreign Policy

May 4 hosted by Center for Strategic and International Studies

May 4 hosted by U.S.-China Economic and Security Review Commission

May 2 hosted by Stimson Center

May 1 hosted by Brookings

April 27 hosted by Harvard University Fairbank Center for Chinese Studies

April 26 hosted by U.S.-China Business Council

Upcoming Events

May 10 hosted by Peterson Institute for International Economics

May 11 hosted by Carnegie Endowment for International Peace

May 12 hosted by Center for Strategic and International Studies

May 12 hosted by Foreign Policy

May 16 hosted by Center for Strategic and International Studies

May 22 hosted by Wilson Center

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

- What ICAS Is Up To -

Upcoming Trade ‘n Technology Program Event

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

Wednesday, May 10, 2023
10:00am – 11:20am EDT

IPEF negotiators are known to be eyeing a partial accord by late-May when their trade ministers meet on the sidelines of the APEC Ministerial meeting in Detroit. Digital trade rules are an important component of the IPEF negotiations. President Biden’s U.S. Trade Representative says she is committed to building trust and promoting confidence in the digital economy, while recognizing the need to address legitimate public policy objectives in the digital trade area. The deference to policy space is a bow to the dynamic and fast-changing pace of regulation in the digital sphere—be in terms of anti-monopoly protections, privacy and data protections, fintech-related financial stability risk management, review of liability protection for intermediary service providers, development of rules for artificial intelligence (AI) applications or requiring the transparency of the structure, use, and impacts of algorithmic systems. On the other side of the Pacific meantime, an accession working group has been formed to consider China’s application to join the Digital Economy Partnership Agreement (DEPA).

What is the state of play on IPEF’s digital trade text as well as China’s DEPA accession talks? What are the commercial and regulatory challenges encountered by private businesses as they navigate their way within the Asia-Pacific region’s dynamic digital marketplace? What are the key challenges facing the governance of cross-border data flows at the global level? And how do digital economy chapters and agreements differ in their focus and impact from traditional trade agreements? To listen to these and other answers to pressing digital trade and IPEF-related questions, tune in to the event on May 10th.

Image or Poster Source/Link/Description

Maritime Affairs Program Announcement

The ICAS MAP Handbill Spotlight Archive is Live!

After a successful full year of production, the ICAS Maritime Affairs Program has now developed and released an archive for its Maritime Affairs Program Spotlight analyses in order to provide easier access and encourage sharing.

Maritime Affairs Program Spotlights are a short-form written background and analysis of a specific issue related to maritime affairs, which changes with each issue. The goal of the Spotlight is to help our readers quickly and accurately understand the basic background of a vital topic in maritime affairs and how that topic relates to ongoing developments today.

There is a new Spotlight released with each issue of the ICAS Maritime Affairs Program (MAP) Handbill – a regular newsletter released the last Tuesday of every month that highlights the major news stories, research products, analyses, and events occurring in or with regard to the global maritime domain during the past month.

2023 Spotlights So Far

ICAS Blog Post

Will the US Permit the ROK its Own Nuclear Deterrent?

By Capt. Sukjoon Yoon, ret.
April 25, 2023

The possibility of the ROK acquiring its own nuclear assets to counter the nuclear threat from North Korea is now being openly discussed in South Korea. Despite the US commitment to provide Extended Deterrence and to shelter the ROK under its nuclear umbrella, in recent polls more than 70% of South Koreans supported the development of an indigenous nuclear deterrence by the ROK.

There are, however, several serious obstacles to be overcome if the ROK is to acquire its own nuclear capability: it will likely be a very costly project; developing and testing nuclear weapons within the narrow geographical scope of the Korea Operational Theater will be very challenging, and perhaps would require US assistance; the development timeline is currently unclear; and there are legal and procedural issues regarding compliance with international agreements.

The ROK recognizes a potential nuclear threat from China in the longer term, but the immediate problem is the growing menace of North Korean nuclear and missile threats. There is a clear disparity between the conventional capabilities of the ROK-US alliance and North Korean nuclear capacities…

ICAS Blog Post

Notes & Thoughts on John Kerry’s Discussion with Foreign Policy on Climate Challenge

By Zhangchen Wang
May 5, 2023

On April 20, 2023, the U.S. Special Presidential Envoy for Climate, John Kerry, had a discussion with Foreign Policy regarding the climate policies of the United States and his thoughts on some recent trends. Their discussion covered a range of topics, including the Inflation Reduction Act (IRA), U.S.-China cooperation on climate change, and the upcoming 2023 United Nations Climate Change Conference (COP28). 

What was Discussed in the Interview?

What Did We Learn from the Interview?

ICAS Past Partner Event

The Fight for Representation: The State of Chinese Americans Survey
Thursday, April 27, 2023

Institute for China-America Studies was very proud to be a supporting partner in this insightful, trail-blazing survey on the state of Chinese-Americans which culminated in a free, live webinar revealing the survey’s key findings and results on April 27, 2023! We thank the teams at Committee of 100 and Columbia University School of Social Work for their inspiring dedication to this project, which is only just beginning, and look forward to supporting future similar endeavors.

image: One of several survey data results revealed during the virtual event on April 27, 2023. (Image Source: ICAS)

ICAS In the News

On Friday, May 5, 2023, Senior Fellow Sourabh Gupta discussed the macro-outlook for U.S.-China relations on CGTN America’s The Heat.

  • “I think [Senator Lieberman] was absolutely correct…we need to see the big picture and get back to basics. In the course of all these little trade wars and technology wars, and all the bitter rhetoric which has been going on, it is framing a new narrative which is taking us away from the reality in which we exist today. The reality is that these are the two biggest economies, and among the most powerful players in the world, and problems in the world will not be solved without the two countries having some sort of a meeting of minds.”

On Saturday, April 29, 2023, Senior Fellow Sourabh Gupta was quoted in the South China Morning Post on China’s peace brokership role in the Russia-Ukraine conflict

  • “As such, its capacity to underwrite its peace proposals will necessarily be a limited one,”
  • “Until such time one or both sides are keen on ceasing hostilities, China’s proposals will have no lift-off potential.”

On Friday, April 28, 2023, Senior Fellow Sourabh Gupta discussed demographics with India’s growing population on CGTN’s The Point with Liu Xin.

  • “Population is both an asset and a liability, but if you do succeed in educating your population and using it to its maximum productivity, a large population is obviously very helpful because it creates a huge domestic market from an economic standpoint.” 
  • “Population is not all it is cracked up to be, population is important as part of the GDP growth yes, but also the other important transitions like transitioning from farm to city which itself yields huge amounts of productivity and transition from state to market have created the potential for great growth, it just depends on what you do with it.” 

On Friday, April 28, 2023, Senior Fellow Sourabh Gupta was quoted by a South China Morning Post article on China’s wolf warrior diplomats and diplomacy with France.

  • “Lu Shaye’s attempt to present himself as some sort of legal eagle in parsing the meaning of sovereignty ended up with him putting his foot in his mouth, calling it ‘an expression of personal points of view’ by the ambassador will not do much to limit the damage.”
  • “The foreign ministry should express an unreserved apology; the comments were way out of line. I don’t expect the ministry to do so though. Rather, they will hope that with the passage of time, the comments too will be seen as simply water under the bridge. Besides, with China getting active on the Ukraine peace facilitation front, the hope is that policy actions rather than misspoken words will dominate the headlines.”

On Thursday, April 27, 2023, Senior Fellow Sourabh Gupta discussed Secretary Yellen’s new remarks and US-China economic engagement on CGTN’s Dialogue.

  • “(Secretary Yellen) has the more liberal view in the Biden administration in the treasury department, while national security advisor Jake Sullivan has more of the hawkish view, and I would have said in the first two years it was Jake Sullivan who was winning those battles and in fact it was Jake Sullivan who trundled Janet Yellen out last year and talked about friendshoring, which is about resilience in supply chains but it is also about to a certain extent decoupling from China.”
  • “There is more or less a degree of unity of unity within the administration on where it’s going and I would say furthermore that Mr. Sullivan is going to be making an important speech very soon on these matters, so we will see if there are unity on these points. The fundamental point is that she (Secretary Yellen) says that we don’t want to decouple and that is understandable, and the U.S. is not trying to fully decouple, but it is selectively decoupling and what is considered “selective” is getting broader and broader.”

On Thursday, April 27, 2023, Senior Fellow Sourabh Gupta discussed US-South Korea relations and President Yoon’s state visit on CGTN’s World Insight with Tian Wei.

  • “As we’ve see with this South Korean president, he’s not looking necessarily for balance he talks the language of universal values, he wants a tight trilateral relationship with the United States and Japan, so South Korea must seek balance itself in the first place if it wants to have a balanced relationship, and I’m not sure that this SOuth Korean president prioritizes that and that he hopes that through this universal values rhetoric and with the Americans leading that he will be able to deter the North Koreans, but I don’t see how he can actually resolve much on the peninsula unless North Korea collapses.”
  • “Either the North Korean regime has to be completely bought out or it needs to be eliminated, and unfortunately we are not seeing good signs in this regard. Even Mr. Yoon’s audacious initiative has gone nowhere and expectedly it has gone nowhere so I don’t see balance because I don’t think this South Korean president is looking for balance.”
Senior Fellow Sourabh Gupta discussing the macro-outlook for U.S.-China relations on CGTN America’s The Heat.
Senior Fellow Sourabh Gupta discussing demographics with India's growing population on CGTN's The Point with Liu Xin.
Senior Fellow Sourabh Gupta discussing Secretary Yellen's new remarks and US-China economic engagement on CGTN's Dialogue.
Senior Fellow Sourabh Gupta discussing US-South Korea relations and President Yoon's state visit on CGTN's World Insight with Tian Wei.