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China and US: Risks Persist That Cold War Turns Hot

Beijing and Washington Swap Competing Visions of Taiwan’s Future An overpowering neighbour threatens invasion to “recover” territory and defend its citizens there. Sounds familiar? Nope, Beijing continues to insist, China and Taiwan are nothing like Russia and Ukraine. But the US sees a strong and alarming parallel, even as Washington vows its opposition to a new Cold War. At the Shangri-La Dialogue in mid-June, a global talkfest on military matters, Chinese Senior Colonel Zhao Xiaozhuo took offence at “aggressive” US comparisons between rising cross-Strait tensions and the war in Ukraine. Lloyd Austin and Wei Fenghe US Defence Secretary Lloyd Austin had told the Singapore-based forum that the US would continue to stand by its allies, including Taiwan. “That’s especially important as the PRC adopts a more coercive and aggressive approach to its territorial claims,” said Austin. His Chinese opposite number left no room for doubt about Beijing’s commitment to backing…

Shanghai Lockdown Speeds China Slowdown

Tough Omicron measures persist despite economic growth impact The Chinese economy’s just fine, thanks. Don’t talk down China GDP, or blame our zero-Covid tactics for slowing growth. Beijing remains publicly committed to maintaining the world’s toughest response to the pandemic, now over two years old. This approach, locking down millions and stifling key ports, still succeeds in keeping China’s Covid death toll at world-beating low levels, but at an increasingly high cost to the domestic and world economy. So the authorities have reverted to another tried and trusted tactic: silencing the naysayers. In recent days, outspoken economists and prominent investors have been silenced on social media in China. Beijing is tightening its grip on online speech amid mounting economic pressure and controversies surrounding its zero-Covid policy. Hong Hao, one of China’s highest-profile market strategists, has left his state-owned employer after his social-media accounts were censored. Based in Hong Kong, Hong’s…

As Russia Wages War in Ukraine, Taiwan Fears China Invasion

Vladimir Putin’s brutal war on Ukraine continues to shock the world and move markets everywhere. These global tremors also highlight the difficult but crucial relationship between two non-combatants, the USA and China, who may one day face off over Taiwan. A conflict over Taiwan is the lightening rod that investors can no longer ignore. For Beijing views the self-ruled island off its southeast coast very much as Vladimir Putin sees Ukraine: sovereign territory that has broken away but must be returned to the motherland. And the USA will likely defend Taiwan against a mainland Chinese invasion. When US President Joe Biden flew to Europe on March 23, to meet allies and keep setting the agenda on the war in Ukraine, China’s perceived support for Russia’s war was expected to feature at all his meetings with the European Council, NATO and the Group of 7 nations. In Brussels, Biden reiterated his…

Chinese New Year 2022

What to expect in the Year of the Tiger? On February 1, as firecrackers deafen and delight families across East Asia, the Chinese New Year festival marks the shift from the Year of the Metal Ox to the Year of the Water Tiger. You may not set great store by zodiac traditions, and Chinese New Year animals, but those who do say: ‘buckle up for a bumpy ride’. In the Chinese horoscope, the Tiger symbolises bravery and confidence but also unpredictability. Like Tiger people, the year ahead may prove dynamic and emotional. Expect action, adventure and the unexpected. The Water element may calm the fiery king of beasts, just as Metal grounded the Ox to steady, hard work in 2021. Like a bold and powerful tiger, China has stood up with confidence and assertiveness in recent years, forging its own development path and carving its place in global affairs. But…

China to Taiwan: “You Can’t Fight Us”

China’s ever-growing military might make the possibility of China Taiwan invasion the biggest geopolitical risk facing investors. China to Taiwan – given China’s growing military power, a potential armed conflict poses the greatest geopolitical risk for investors. And the latest news from the troubled Taiwan Strait offers little hope that both sides can avoid a China Taiwan war. Also that Taiwan could resist invasion, even with US support. On January 11, Chen Yi, 28, the Taiwanese pilot of an US-made F-16V fighter, completed a series of simulated missile launches before his Lockheed Martin jet abruptly nosedived into the sea off the island’s southwest coast. Chen’s death marked the latest tragedy in at least eight major accidents involving F-16s in Taiwan since 1998. President Tsai Ing-wen asked the defence ministry to swiftly investigate the cause of the crash. This dealt a blow to Taiwan’s hopes of using its most advanced warplanes to beef…

Covid-19 Poses New Risks for China in Olympics, Tiger Year

In a year bookended by major events, Xi Jinping can’t back out of strict “zero-Covid” policy China and Xi Jinping should have plenty to celebrate in 2022. The Chinese New Year of the Tiger kicks off on 1 February. Three days later, the Beijing Winter Olympics begin, when Xi can showcase the Chinese Communist Party’s unrivalled organisational abilities. The year should climax with his triumphant emergence, after a crucial Party Congress this coming autumn, as Party chief for a third term. But Covid-19 threatens to spoil all these parties. Despite some of the toughest controls and protocols worldwide, China ended 2021 with Xian in lockdown. A spike in Covid-19 cases confined 13 million people to their homes, shuttered businesses, sparked complaints about food shortages – and led to tragedy. A top health official apologised in January over the miscarriage of an eight-month-pregnant woman. Footage went viral of a hospital refusing…

China Launches Beijing Stock Exchange

A guide to China’s newest stock market What Xi Jinping wants, he generally gets. In September 2021, Xi announced that the Chinese capital would set up the Beijing Stock Exchange (BSE) as China’s primary platform serving innovation-oriented small and medium-sized enterprises (SMEs). Just 74 days later, with the ringing of an old bronze bell, and red ribbons on a new nameplate, the brand-new bourse took flight. On November 15, the BSE kicked off with 81 listed companies and a turnover of $1.5 billion. This move complements the two main bourses, in Shanghai and Shenzhen, and marks another milestone in the expansion of China’s $12.4 trillion equity market, already the world’s largest after the American market. Let Enodo walk you through this development, significant both for Chinese and foreign investors. So, is this Beijing’s first stock market? No. The heritage-minded, stock exchange history enthusiast may hunt for the old building that…

US China Relations: Diplomats Meet – And Talk Past Each Other

Well, at least they met? After political and protocol wrangling symbolic of the troubled relations between China and the USA, Wendy Sherman, the US Deputy Secretary of State, was permitted to visit Tianjin from July 25-26, and meet her counterparts. And the meetings lived down to expectations. This article is a summary of important US China news in July 2021. The State Department at one point cancelled the China leg of Sherman’s Asia trip. Vice Foreign Minister Xie Feng set out lists of remedial actions that Washington must take to get relations back on track. The US should not challenge, smear and seek to subvert China’s socialist system with Chinese characteristics, should not interrupt China’s development or interfere in its sovereignty, Foreign Minister Wang Yi told her. A day later, in Singapore, US Defense Secretary Lloyd Austin said Washington did not seek a military clash with China but would challenge China’s…

This Party Keeps on Rocking

Xi Jinping spoke to China and the world from the balcony of Beijing’s Tiananmen Gate, on the 100th anniversary of the Communist Party’s founding Wearing a grey buttoned-up Mao suit, just like the Chairman himself on the same spot back in 1949, Xi Jinping spoke to China and the world from the balcony of Beijing’s Tiananmen Gate, on the 100th anniversary of the Communist Party’s founding. There was no mistaking this is Xi’s stage now – his fellow leaders wore western business suits and ties. As head of a 95 million-member organisation, Xi emphasised the Party’s role in bringing China to global prominence, and said it would never be divided from the people. China will not allow itself to be bullied and anyone who tries will “have their heads bashed bloody against the Great Wall of Steel forged by the flesh and blood of over 1.4bn Chinese people”. He said China had restored order in…

US China Relations: Competition Replaces the Era of Engagement

The top trade negotiators from the US and China held their first telephone call of the Joe Biden presidency, and stressed the importance of improving trade ties. But the rest of the bilateral relationship remained deeply troubled, with defence chiefs failing to talk, and Beijing angry at Biden ordering an investigation into the origins of Covid-19. This article is a summary of important US China news in May 2021. Get used to these ongoing tensions, advised Kurt Campbell, the US coordinator for Indo-Pacific affairs on the National Security Council. “The period that was broadly described as engagement has come to an end,” he said, as US policy towards China will now operate under a “new set of strategic parameters”, and “the dominant paradigm is going to be competition”. One area of potential optimism is trade, after US Trade Representative Katherine Tai and China’s Vice Premier Liu He had “candid” and “constructive”…

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