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COMMENTS ON CHINA + NON-CHINA MEDIA #497

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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

COMMENTS ON  CHINA + NON-CHINA MEDIA

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#1  HIGH PROFILE MILITARY DISMISSALS IN CHINA

#2 CHINESE COMPANY SET TO OUTSTRIP ZARA ON UK HIGH STREET

#3  CHINA-INDIA COMPETITION IN THE MALDIVES

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#1   HIGH PROFILE MILITARY DISMISSALS IN CHINA

SOUTH CHINA MORNING POST

China’s recent spate of high-profile military dismissals underscores the country’s continued problems with graft despite Chinese leader Xi Jinping’s decade long campaign against corruption. President Xi on Monday attended a meeting of the ruling Communist Party’s Central Commission for Discipline Inspection, which is responsible for rooting out corruption, and acknowledged that more work needs to be done.

“The situation remains grave and complex,” he said.

Xi’s anti-graft crusade, which began shortly after he came to power in 2012, has taken down such prominent figures as former security chief Zhou Yongkang, former Central Military Commission vice chairmen Xu Caihou and Guo Boxiong, and Ling Jihua, once a close aide to Xi’s predecessor, Hu Jintao.

But while the campaign has solidified Xi’s power base and strengthened loyalty toward him within the party and the military, corruption and abuse of power remain a problem. Chinese authorities dealt with 1.28 million reports of suspected discipline violations in the first nine months of 2023, according to the official Xinhua News Agency, up 17% from a year earlier.

A particularly sprawling case that has recently come into the spotlight relates to equipment procurement by the Rocket Force — the People’s Liberation Army force that oversees China’s nuclear and conventional missile arsenal.

The Standing Committee of the National People’s Congress on Dec. 29 announced the removal of nine senior military officials, including former Rocket Force commander Li Yuchao, as lawmakers. Hong Kong newspaper coverage said they were suspected of involvement in the Rocket Force scandal.

The ousted officials are said to include Zhou Yaning, another former Rocket Force commander; Zhang Zhenzhong, a former deputy commander of the force; and former Air Force commander Ding Laihang. All nine reportedly once held senior positions in the Rocket Force or the Central Military Commission’s Equipment Development Department, which is also responsible for procurement.

Two days earlier, the Chinese People’s Political Consultative Conference decided to revoke the memberships of three defense-industry executives, including the chairman of China Aerospace Science and Technology Corp. They may have been entangled in the Rocket Force scandal, according to a Hong Kong media report.

News broke in late July that China replaced two leaders of the Rocket Force at the same time in an unusual move. Li Shangfu, who was ousted as defense minister in October, is also widely believed to have been involved in fraud in his previous role as head of the Equipment Development Department.

Some observers say the Rocket Force provides fertile ground for corruption because its costly gear leads to a larger budget. If data on parts is falsified or quality control suffers, equipment may not perform as well or as safely as needed.

U.S. intelligence assessments have raised doubts about the Rocket Force’s combat readiness, with missiles filled with water instead of fuel and silo lids malfunctioning, Bloomberg reported Saturday.

China’s problem with corruption extends beyond the military.

The Central Commission for Discipline Inspection said Saturday that Xu Wenrong, a former deputy manager of China National Petroleum Corp., had been expelled from the Communist Party for “serious violations of discipline and law.”

In October, authorities ordered the arrest of former Bank of China Chairman Liu Liange on suspicion of bribery and illegal lending.

At Monday’s meeting, Xi stressed the need to eliminate hidden risks in areas where power is concentrated and that are capital-intensive, citing finance, energy, infrastructure and state-owned enterprises as examples.

GRAHAM PERRY COMMENTS;-

Are the revelations about China’s corruption a weakness or a strength? After all corruption is a negative. Some people, often in high places, are benefitting as a result of their prominent status in Chinese society. The culprits are “feathering their own nests” at the expense of the people. It is better that there is no corruption but, if it does exist, it has to be rooted out by ever-present investigation, arrest and imprisonment. (The death penalty does still apply in China but the number of executions for all offences  has fallen from 12,000 per year to 2,000 per year.)

But the issue is not the existence of corruption but the decision of the Chinese Government to publicise the issue – is that a strength or a weakness? There are people who think the existence of the problem should not be revealed. That it is better to keep quiet about problems and not provide opponents of China with material with which to discredit China. But this is an error. Corruption exists and a campaign has to be relentless to continue the process of scaling down and eventual eliminating corruption at all levels in society. It is to China’s credit that it is determined to continue to expose individuals who “look after themselves” at the expense of the people that the leaders represent. The anti-corruption campaign is a positive – not a negative.

There is a broader question. Why does Corruption exist? Individuals are a blend of selflessness and selfishness. All people have a capacity to think of themselves and their families first – ahead of their responsibilities to the people at large.  There is a balance that needs to be maintained which respects hard work, family and self-advancement on the one hand and an awareness of the needs of society on the other hand. Such labour and toil is for personal benefit as well as for collective benefit and where evidence exists which reveals corrupt practice then Government has to act.

Xi Jinping has always focused on the need to root out corruption. His campaign is not, as Western commentators say, to enable him to eliminate political rivals. It has a quite different purpose – to ensure that the people can see that their government at all levels serves the needs of the people. If people think the leadership is corrupt or self-serving the Party will fail in its basic determination to build a socialist society.

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#2   CHINESE FASHION COMPANIES RISE TO THE TOP

       THE SUNDAY TIMES – UK

Shein is set to be bigger than Zara after new figures indicated the controversial fast-fashion giant raked in UK clothing sales of   more than £1.3 billion last year.

Shein has a 2.2% of the UK’s £60.3 billion clothing market according to GlobalData. The research firm predicts Shein will overtake Zara which has a 2.4% market share within two or three years.

Shein, founded by Chinese entrepreneur Chris Xu, exploded onto the UK fashion scene in 2020 when lock down forced shops to shut during the pandemic.

It expects fast fashion – its T-shirts  and dresses cost as little as £2 – direct to shoppers  from China, which does not levy export duty on firms despatching to the West. And because the vast majority of Shein’s UK shipments  are under a value of  £135, it is not liable for import duties. Shein said its success was down to fashionable products  and a flexible supply chain, not tax exemptions.

Its model is being emulated by Temu, a Chinese retailer selling a broader range of goods. Temu is rapidly building market share amid a blizzard of advertising..”                    

GRAHAM PERRY COMMENTS;-

This Column had a choice had to make; to focus on China’s fast growing ethylene capacity or to focus on something quite new – China’ surge in sales by two Chinese fashion giants. Shein who are set to out-perform UK retailer Zara, and Temu.

This significant market development will come as a surprise to readers who are used to reading about China’s progress in technology but fashion? It is not meant to be.

It is useful to recall the two key lessons that the Chinese Communist Party learned form the failure of the Cultural Revolution which ended in 1976 with the death of Mao Tsetung and the arrest of the Gang of Four. First, the Communist Party must remain strong and in control – unlike the USSR Communist Party which began to share power with the Oligarchs and other power brokers especially the Military. Xi Jinping is no Mikhail Gorbachev and he has kept the Communist Party of China as the leading political organ.

The second significant change made by Deng Hsiaoping and followed by Xi Jinping has two aspects – first, to change the focus of economic decision making and to allow a greater role for Provincial initiative.  And also to bring into play the skills and creativity of businessmen. Give them their heads and allow them to help grow the economy and raise living standards.

China now has 800+ Billionaires and their role and existence is just not understood in the West. But the end product of their increased say in the growth of the economy is illustrated by two recent developments – first, Chinese EV’s which have made a big world impact under the leadership of BYD, the South China car manufacturer that is making big strides. And the second – Shein and Temu, two Chinese companies making their presence felt in the UK and US fashion markets. Other Chinese companies will follow. China is not all about heavy industry, military spending and space exploration.

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#3   CHINA-INDIA RIVALRY IN THE MALDIVES

SOUTH CHINA MORNING POST

A Chinese research vessel has been given permission to make a port call in the Maldives. The stop, which authorities said was for resupplying purposes, is likely to heighten tensions in the region, particularly with India.

The Maldives government announced on Tuesday that the Xiang Yang Hong 3, which had earlier been turned down by Sri Lanka, was given permission for the port call. It is expected to dock at Male Sea Port on February 5.

The permission was limited to “rotation of personnel and replenishment” purposes only, and the vessel is not allowed to carry out any research in Maldivian waters, according to the island nation’s foreign ministry.

India has labelled the Xiang Yang Hong 3 a “Chinese spy ship” and expressed its concerns over its “surveillance activity” to Sri Lanka and the Maldives last year.

Commissioned in 2016, the Xiang Yang Hong 3 is operated by China’s Ministry of National Resources. With an operational range of 15,000 nautical miles (27,780km), the Xiang Yang Hong 3 can remain at sea for up to 60 days. The ship is equipped with advanced ocean research facilities and has played a key role in China’s oceanic research, mainly in the Pacific and Indian oceans.

Although the Xiang Yang Hong 03 is not a military vessel, India has been suspicious about its activities in the Indian Ocean. The vessel returned to the Indian Ocean region in June 2022, and again in late 2023.

The Indian Ocean has become a frequent destination for Chinese scientific research ships. The Xiang Yang Hong, or “Facing the Red Sun”, vessels are a class of survey and research ships that also includes the Xiang Yang Hong 1, 6 and 19 – all of which have been reported to be operating in the same region.

The Shi Yan, or “Experiment” ships, run by the Chinese Academy of Sciences, is another fleet of China’s active survey vessels. In 2019, India said its navy expelled the Shi Yan 1 from India’s exclusive economic zone in the Andaman Sea, claiming the ship was “spying” on its military.

Other Chinese research vessels have also drawn India’s ire, including the Yuan Wang, or “Looking Far”, fleet, part of the Strategic Support Force under the People’s Liberation Army. It is often sent to the Indian Ocean to track and monitor Chinese space launches.

In August 2022, the Yuan Wang 5 survey ship visited Hambantota International Port in Sri Lanka to resupply. Late last year, Colombo hosted the research ship Shi Yan 6, which conducted a joint maritime survey in Sri Lankan waters.

In recent decades, China has vastly increased its presence in the Indian Ocean through naval patrols, economic activities, and scientific research, all of which India sees as a threat in its backyard. Since a deadly border clash in 2020, the two Asian giants have stepped-up their competition for influence in the region.

But the new Maldivian president, Mohamed Muizzu, is regarded as more Beijing-friendly. Days after his state visit to China – and amid a diplomatic spat with India – he asked for the removal of Indian troops stationed in his nation.

“The Maldives has always been a welcoming destination for vessels of friendly countries, and continues to host both civilian and military vessels making port calls for peaceful purposes,” the Maldivian foreign ministry said, referring to the Xiang Yang Hong 3 visit.

Sri Lanka, on the other hand, under diplomatic pressure from India, has since banned any further visits by Chinese research vessels, and prohibited them from operating within its exclusive economic zone for all of 2024. The move has been hailed by Indian media as a “victory” over China”

GRAHAM PERRY COMMENTS;-

It was Mao Tsetung who, first, characterised relations between big powers as being either collaborative or competitive. Countries can recognise their difference and yet continue to collaborate and develop their economies with harmony and good will on the basis of mutual benefit. There is an alternative which focuses on competition, discord, and strife.

A collaborative relationship can become a competitive relationship with the two countries moving from harmony to confrontation. Equally two countries can resolve fundamental differences and see the wisdom of a close and more intimate relationship – in trade, culture and even politics.

China and India have experienced examples of a good relationship and a bad relationship. In 1962 the two countries engaged in head to head confrontation over disputed boundaries. China, to prove a point made a forward charge to pin back the Indian side and then withdrew ten miles behind the border line that they – the Chinese side – had always regarded as the proper boundary with India. China was making a point and won the day. The two sides agreed on the boundary line and relations improved. But in 2020 on a different part of the border, the two sides clashed and relations ever since have been spiced with tension.

The relationship remains uneasy as the two countries come to be regarded as candidates for a leading role in the developing the Global South region of the world. The US sees India as the much desired political counter-weight to China and hopes that India can come to play a significant role in world affairs going forward. China – with her eyes wide open – has no illusions about the challenge of India. It is part of the ongoing struggle between the US and China. The AUKUS deal brought the US, the UK and Australia together to build nuclear powered submarines for Australia fuelling tensions with China. One key statisticto bear in mind is that the average income in China is five times larger than the average income in India.

The Maldives has extended the hand of friendship to China – much to India’s dismay. As the article states “In recent decades, China has vastly increased its presence in the Indian Ocean through naval patrols, economic activities, and scientific research, all of which India sees as a threat in its backyard. Since a deadly border clash in 2020, the two Asian giants have stepped-up their competition for influence in the region.”

There is no reference to – or, indeed, any evidence of – overseas Chinese military bases or Chinese troops being stationed outside China or Chinese military equipment being installed on non-Chinese territory – as is the case with the US. Just one presence in Djibouti for the purpose of servicing China’s merchant fleet. Who is threatening whom?

GRAHAM PERRY

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