China

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China’s loans pushing world’s poorest countries to brink of collapse

A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world’s biggest and most unforgiving government lender, China.

https://apnews.com/article/china-debt-banking-loans-financial-developing-countries-collapse-8df6f9fac3e1e758d0e6d8d5dfbd3ed6?

China plans secret base in Cuba

China has made a secret agreement with Cuba, which is roughly 100 miles from Florida, to establish an electronic eavesdropping facility on the island, The Wall Street Journal scoops (subscription).

• Why it matters: It's a "brash new geopolitical challenge by Beijing to the U.S." — allowing "Chinese intelligence services to scoop up electronic communications throughout the southeastern U.S., where many military bases are located, and monitor U.S. ship traffic," The Journal notes.

US confirms China has had a spy base in Cuba since at least 2019

China has been operating a spy base in Cuba since at least 2019, as part of a global effort by Beijing to upgrade its intelligence capabilities

https://abcnews.go.com/US/wireStory/us-confirms-china-spy-base-cuba-2019-99987323#:~:text=WASHINGTON+--+China+has+been,to+a+Biden+administration+official.?

Yinchuan: China restaurant gas explosion kills 31

Nine people have been detained over an explosion at a barbecue restaurant in north-west China which has killed at least 31 people.

https://www.bbc.com/news/world-asia-china-65982139?

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US Treasury chief Yellen and China’s No. 2 aim for improved communication after trade disputes

BEIJING (AP) — U.S. Treasury Secretary Janet Yellen and Chinese Premier Li Qiang expressed hopes Friday for better communication as Yellen appealed to Beijing not to let frustration over U.S. curbs on technology exports disrupt economic cooperation.

https://apnews.com/article/china-us-yellen-economic-trade-technology-643dd7882e357ecfc94db4c7e7e0d4c5?

Yellen in China

Treasury Secretary Janet Yellen talks to Premier Li Qiang today in the Great Hall of the People in Beijing.

• She criticized China's "punitive" actions against U.S. companies. Get the latest.

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🇨🇳 Charted: China imports fall

Data: Census Bureau. Chart: Simran Parwani/Axios For all that fireworks sales rose again this year — nearly all of them sourced from China — imports from China to the U.S. totaled $130 billion over the four months from February through May. That's down 25% from $175 billion a year ago, Axios' Felix Salmon writes. 🖼️ The big picture: Chinese imports are now at the lowest they've been in 20 years. U.S. exports to China are going up rather than down. The bottom line: The trade deficit between the U.S. and China is shrinking, CFR fellow Brad Setser tells Axios. But "the deep diversification of supply chains that is now sought by U.S. policy is only just starting." Go deeper.

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China kindergarten stabbing: Six dead in Lianjiang

Six people including three children have been killed in a kindergarten stabbing in China's south-eastern Guangdong province.

https://www.bbc.com/news/world-asia-china-66151247

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🇨🇳 China's weakening economy

Illustration: Annelise Capossela/Axios

China's economy is struggling to shake off COVID woes, leaving it tottering on the brink of deflation (falling prices), Matt Phillips writes for Axios Markets. Why it matters: What happens in China — the world's largest exporter and industrial hub — doesn't stay in China. What's happening: New Chinese price data out yesterday was weaker than expected, with the country's consumer price index dead flat over the last year. Producer prices — prices at the factory gate, which are typically seen as a leading indicator of consumer prices — are deeply negative, falling 5.4% compared with June 2022. 👀 What we're watching: If the country's economic engine continues to sputter, China will consume fewer raw materials and put downward pressure on commodities prices — key drivers of short-term swings in consumer prices in the U.S.

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🇨🇳 China hack hits Commerce secretary

Illustration: Annelise Capossela/Axios

A new hack of the Microsoft email accounts of U.S. officials, including Commerce Secretary Gina Raimondo, shows an alarming leap in sophistication by Chinese-state-backed hackers, The Wall Street Journal reports (subscription). Why it matters: The hack "demonstrated a new level of skill from Beijing's large hacker army, and prompted concerns that the extent of its infiltration into U.S. government and corporate networks is far greater than currently known." The hack, which includes State Department officials, is "being rated by some security experts as among the most technically sophisticated and stealthy ever discovered," The Journal adds. Go deeper.

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🇨🇳 Search for Chinese code inside U.S. bases

The U.S. is looking for computer code that it believes China has hidden within power grids and communication systems to disrupt American military operations, The New York Times reports.

• The first signs of a Chinese malware campaign came when Microsoft detected unknown code in telecommunication systems in Guam in May, but the campaign appears to be more widespread than that, U.S. officials and industry experts told the Times.
• The discoveries have raised fears that Chinese hackers have embedded code into U.S. systems that could interfere with an American effort to respond to a Beijing-Taiwan confrontation.

🖼️ The big picture: "Chinese cyberoperations seem to have taken a turn. The latest intrusions are different from those in the past because disruption, not surveillance, appears to be the objective," per The Times.

• Read on.

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Exclusive: Beijing's school for authoritarianism

Photo illustration: Sarah Grillo/Axios. Photos: Sebastian Kjeldtoft/Politiken and courtesy Mwalimu Julius Nyerere Leadership School

DAR ES SALAAM, Tanzania — The Chinese Communist Party is teaching African leaders its authoritarian alternative to democracy at its first overseas training school. Why it matters: It's the strongest evidence yet that Beijing is exporting its model of governing in its push to challenge the Western-led world order, Axios China reporter Bethany Allen-Ebrahimian writes. 🔎 Zoom in: At the Mwalimu Julius Nyerere Leadership School in Tanzania, Beijing is countering efforts by the U.S. and other Western countries to shape African politics in a fight for influence on the continent. Cultivating an authoritarian-friendly political bloc could help China reshape global institutions and guarantee markets as Western sanctions seek to isolate certain Chinese industries. Chinese and African government officials and Chinese state media have presented the school as a way to promote Africa's economic and social development. But behind closed doors, economics takes a back seat to political training. Chinese teachers sent from Beijing train African leaders that the ruling party should sit above the government and the courts and that fierce discipline within the party can ensure adherence to party ideology, Axios learned as the first Western news outlet to visit the school. The Mwalimu Julius Nyerere Leadership School is a partnership between the ruling parties from Tanzania, Mozambique, Namibia, Angola, South Africa, Zimbabwe and the CCP. Map: Will Chase/Axios 👀 What to watch: Beijing's efforts to create a bloc of like-minded partners for long-term economic benefits and geopolitical influence have already seen dividends. China is the largest trading partner for numerous African nations and receives strong support from across the continent at the United Nations. "What we see in Tanzania is about building something," Richard McGregor, senior fellow for East Asia at the Lowy Institute in Australia, told Axios. "It's a new era." This story, part of a series supported by the Pulitzer Center, is a joint investigation between Axios and the Danish newspaper Politiken. 🎧 Go deeper: Listen to Bethany discuss this story on the "Axios Today" podcast ... Get her new book "Beijing Rules"

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China bans seafood from Japan as Fukushima nuclear plant begins its wastewater release On Thursday, the first batch of treated and diluted but still slightly radioactive wastewater from the wrecked Fukushima Daiichi nuclear power started to discharge into the Pacific Ocean. The first batch being released over the next 17 days is a small part of the tons of water that have accumulated at the plant since the 2011 earthquake and tsunami. Read more.

Why this matters: The Japanese government and the plant’s operator say releasing the water is an unavoidable step in the decommissioning of the plant, which will take decades.   In response to the release, China banned seafood from Japan, customs authorities announced Thursday.   Shortly after China’s announcement, Tokyo Electric Power Company Holdings said it was preparing to compensate Japanese business owners appropriately for damages suffered by export bans.

Related coverage ➤ Fukushima’s radioactive wastewater is being released in the Pacific. Here’s what you need to know In Japan’s neighbors, fear and frustration are being shared over radioactive water release Events at Fukushima Daiichi nuclear plant since the 2011 earthquake, tsunami and nuclear disaster

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China's slow-moving economic disaster

Illustration: Shoshana Gordon/Axios

China finally reopened its economy earlier this year after years of extreme COVID restrictions. So far, it's a giant fizzle — with profound ramifications for the rest of the globe, Axios' Neil Irwin writes. Why it matters: China has been a reliable engine powering global growth for three decades, becoming the world's second-largest economy. That engine, for now, looks to have stalled out. That creates a new suite of problems for its trading partners and new geopolitical risks. What's happening: Instead of the robust bounceback much of the world experienced with its pandemic reopening, the Chinese economy is muddling along with weak growth, falling prices, a popped real estate bubble, and mass unemployment among young adults. Cracks have been evident in the Chinese growth juggernaut for years, as its government exerted a heavier hand with businesses, constricting private-sector investment. China's growth has been reliant on real estate investment — built on a lending bubble — rather than shifting toward broad consumer demand. Amid intensifying state control of Chinese business and geopolitical tension, American and European governments are restricting investment in China, limiting its ability to expand in high-growth sectors like semiconductors and aerospace. The Economist, two weeks in a row. Rather than grapple with the underlying problems, Chinese leadership has focused on hiding them. After recent reports showing unemployment among young adults reached 21.3% in June, the government suspended release of the data. Hank Paulson, the former Treasury Secretary who deepened U.S.-China economic relations under President George W. Bush, writes in The Washington Post: "Under President Xi Jinping, China has doubled down on the role of the Communist Party as the means to oversee the economy." "This has taken a heavy toll on the entrepreneurial spirit of the Chinese people, which had been the driving force behind past decades of growth." Between the lines: The usual government stimulus strategies — loosening lending and pumping money into the economy — may be less effective at boosting growth than they were in the past. Chinese consumers and businesses have become more inclined to hoard cash, argues economist Adam Posen. What's next: Trade with China is a relatively small — and falling — share of the U.S. economy. But 120 countries worldwide count China as their largest trading partner. So Chinese economic dysfunction could ripple across the global economy and financial markets in unpredictable ways.

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🇨🇳 Raimondo: U.S. wants action from China

Commerce Secretary Gina Raimondo — who met this week with Chinese officials and U.S. business leaders during a four-day trip to Beijing and Shanghai — said on "Meet the Press" that her message to China was: "Actions speak louder than words."

• "[E]ven the most senior Chinese officials said all of the right things — said that they wanted to have a robust commercial relationship, and treat American businesses fairly on the ground in China," Raimondo told Chuck Todd.
• "[W]e're looking to see whether China does do a better job at treating U.S. businesses fairly."

On the breach of her email by Chinese hackers in July, Raimondo said: "They did hack me, which was unappreciated, to say the least. I brought it up, clearly. Put it right on the table."

• "I brought up many of our grievances ... concerns of U.S. labor, concerns of U.S. business. Didn't pull any punches. It's a complicated relationship. There's no doubt about it. We are in a fierce competition with China at every level. And anyone who tells you differently is naive."

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China flies 103 military planes toward Taiwan in a new spike of activity China’s military sent 103 warplanes toward Taiwan in a 24-hour period in what the island’s defense ministry said was a daily record. The planes were detected between 6 a.m. on Sunday and 6 a.m. on Monday, the ministry said. As is customary, they turned back before reaching Taiwan. Read more.

Why this matters: China, which claims Taiwan as part of its territory, has conducted increasingly large military drills in the air and waters around Taiwan as tensions have grown between the two and with the United States. The U.S. is Taiwan’s main supplier of arms and opposes any attempt to change Taiwan’s status by force.   Experts say it’s the latest example of China’s yearslong “carrots and sticks” approach to signal a choice between peaceful “reunification” and military aggression ahead of a Taiwanese presidential election next year.   Taiwan called the Chinese military action “harassment” and warned the moves could escalate amid the tension.

Related coverage ➤ China promotes economic ‘integration’ with Taiwan while militarily threatening the island China’s foreign minister Wang Yi heads to Moscow after meeting US national security adviser

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🇨🇳 Biden plans for Xi meeting

The White House is making plans for a November meeting in San Francisco between President Biden and China's Xi Jinping during the Asia-Pacific Economic Cooperation summit, The Washington Post's Ellen Nakashima scoops.

• "It's pretty firm," a Biden administration official said, while not yet confirmed.
• A U.S. official said the Chinese "want to do it."

Why it matters: The meeting would be a strong indicator that the U.S.-China relationship is back on steadier ground after the Chinese spy balloon fracas early this year cast a deep chill over the relationship, Axios China author Bethany Allen-Ebrahimian writes.

• Xi's attendance at APEC, especially since it's being hosted in the U.S., would suggest he's not abandoning multilateral summits in favor of China-centric ones — as some observers speculated after he skipped last month's G20 in India and UN General Assembly in New York.

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🤖 Scoop: Biden's new China rules

Sarah Grillo/Axios. Photo: Drew Angerer/Getty Images

The Biden administration is planning to announce new controls on artificial intelligence chips and equipment that can be sold to China, administration officials tell Axios' Hans Nichols. Why it matters: The new restrictions, likely to be announced early next week, will broaden a White House effort to prevent China from gaining a military advantage in AI. Zoom in: The rules are designed to close loopholes on export controls announced a year ago, and apply them to chips that are slightly less powerful than those covered under the initial guidelines — but still have advanced capabilities. The controls will also limit the export of equipment used to produce advanced semiconductors, bringing the U.S. into line with regulations imposed by Japan and the Netherlands. Go deeper.

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China picks a side

Illustration: Sarah Grillo/Axios

Beijing is trying to use the outbreak of violence between Israel and Hamas to curry favor among Arab states and gain their support for China's global agenda, Axios China author Bethany Allen-Ebrahimian writes. Why it matters: The Chinese government is seeking to legitimize authoritarian practices and erode human rights protections on the international stage. "China is trying to promote alternative norms in global politics, and China sees Arab states as a natural constituency for China to try to attract," said Jonathan Fulton, a senior non-resident fellow at the Atlantic Council. "By appealing to Arab countries, they'll get more support for the reforms they want to push through in the international system," Fulton said. What's happening: China's foreign ministry condemned the violence against civilians in the Israel-Hamas war but did not denounce Hamas by name. China's immediate statements after the attack, which included calling for an independent state of Palestine, disappointed Israeli officials. "When people are being murdered, slaughtered in the streets, this is not the time to call for a two-state solution," said Yuval Waks, an Israeli official in Beijing, adding that Israel expected China to offer "stronger condemnation" of the attacks. By not condemning Hamas, "China is looking to score points with the Arab countries," Mor Sobol, an assistant professor at Tamkang University in Taiwan who focuses on China-Israel relations, told Axios. "They are trying to portray themselves as neutral but it's very clear which side they support," Fulton said. 👀 What to watch: China's special envoy for Middle East affairs Zhai Jun said this week that China wants to coordinate with Egypt to broker a peace agreement between Israel and the Palestinians. The Chinese government is presenting itself as a better peacemaker than the U.S. on the heels of its successful role in brokering a deal between Saudi Arabia and Iran earlier this year. Go deeper.

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How China’s Belt and Road Initiative is changing after a decade of big projects and big debts China’s Belt and Road Initiative looks to become smaller and greener after a decade of big projects that boosted trade but left large debts and raised environmental concerns. The shift comes as leaders from across the developing world descend on Beijing this week for a government-organized forum. Read more.

Why this matters: The initiative has made China a major financier of development projects around the world, on par with the World Bank. It’s also a major part of Chinese President Xi Jinping’s push for China to play a larger role in global affairs.   The Chinese government says the initiative has “galvanized” nearly $1 trillion in investment. But the U.S. and India allege that China was engaging in “debt trap” diplomacy by making loans they knew governments would default on and allowing Chinese interests to take control of assets.

Related coverage ➤ China’s Xi promises more market openness and new investments for Belt and Road projects Russian President Putin and Chinese leader Xi meet in Beijing and call for close policy coordination

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🇨🇳 China pulls Putin closer

Russian President Vladimir Putin lauded China's Belt and Road Initiative during his visit to Beijing, where leaders from more than 130 countries are gathering for the largest international forum China has hosted since before the pandemic, Axios' Bethany Allen-Ebrahimian reports.

• Why it matters: The Belt and Road Forum shows the convening power Xi Jinping has built in the decade since he launched his signature foreign policy initiative — and the challenge China now poses as Xi envisions China as a rival global power to the U.S.

🔎 Between the lines: Putin echoed Beijing's talking points about Belt and Road.

🖼️ The big picture: Trade between China and Russia has risen dramatically over the past year, and is expected to reach $200 billion by the end of the year, according to Russian projections.

• "For Russia, it's very important to substitute the lost markets in the West," Yurii Poita, head of the Asia-Pacific section at Ukraine's Center for Army, Conversion and Disarmament Studies, told Axios.
• "It's very important to keep its economy afloat, especially ... to fuel the war."

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China said the US is a disruptor of peace in response to Pentagon report on China’s military buildup

BANGKOK (AP) — China said the United States is the “biggest disruptor of regional peace and stability” in the world in a scathing response Wednesday to a Pentagon report on China’s growing military buildup.

https://apnews.com/article/china-responds-pentagon-report-defense-buildup-230f97ab229b03b229ac9cc35f345e22?

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California Gov. Newsom has surprise meeting with China’s leader Xi amid warm welcome in Beijing

BANGKOK (AP) — California Gov. Gavin Newsom had a surprise meeting with Chinese leader Xi Jinping in Beijing on Wednesday after being warmly welcomed by other senior leaders in a display of friendliness that stands in sharp contrast to the dialogue between the United States and China in recent years.

https://apnews.com/article/china-visit-gavin-newsom-wang-yi-us-7f2bcb44d9279296f853f1042b298877?

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How an American meat broker is fueling Amazon deforestation

WASHINGTON (AP) — As incomes in China have grown in the last decade, so has China’s appetite for beef. No longer out of reach for China’s middle class, beef now sizzles in home woks and restaurant kitchens.

https://apnews.com/article/brazil-china-amazon-deforestation-beef-climate-trade-2a7a9a4310b6abca727dabb596e2e84d?

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🇨🇳 Hostility to U.S. declines in China

Data: Morning Consult. Chart: Axios Visuals In China, attitudes toward the U.S. have become friendlier this year, Axios China author Bethany Allen-Ebrahimian writes from a new survey from Morning Consult. One factor could be the slowdown in China's economy. In April 2022, more than 80% of Chinese respondents said they viewed the U.S. as an enemy. By last month, that number had fallen to less than 50%. Amid deepening distrust, President Biden and Chinese President Xi Jinping are expected to meet next week at the APEC summit in San Francisco. Explore the data ... Read on ...

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🇨🇳 Scoop: U.S., China eye hotline restart

Illustration: Sarah Grillo/Axios

President Biden and Chinese President Xi Jinping are preparing to announce the resumption of military-to-military communications when they meet later this month, according to three people familiar with the matter. Why it matters: The Biden administration wants to inject more stability into the U.S.-China relationship and lower the risk of a military misunderstanding, Axios' Hans Nichols and Bethany Allen-Ebrahimian write. Reestablishing military communication channels with Beijing, which China suspended last year to protest the visit of then-Speaker Nancy Pelosi to Taiwan, is a key priority for the White House. Keep reading ...

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🇨🇳 Exclusive: China's global reach

Data: Chinaqw. Map: Will Chase/Axios Axios China author Bethany Allen-Ebrahimian obtained a rare glimpse inside one of the dozens of service centers the Chinese government operates around the world. The centers allow Beijing to help Chinese citizens — but also to keep tabs on them, she reports. 🇨🇳 The big picture: The service center Bethany visited is in Dar es Salaam, Tanzania. It, and others like it, operate under the auspices of a Chinese Communist Party bureau tasked with amplifying political support for the party and marginalizing dissent. That has raised concerns about the CCP's authoritarian reach into overseas Chinese communities. 🔎 Members of Tanzania's Chinese communities come to the service center in Dar es Salaam for assistance with domestic disagreements, immigration issues, short-term unemployment and other household emergencies, and trade and legal disputes. But the center also shares the same leadership, and even the same office, as the local chapter of the China Council for the Promotion of Peaceful National Reunification — which is affiliated with the Chinese Communist Party (CCP), and has faced scrutiny in the U.S. for alleged complicity in Beijing efforts to repress Chinese people beyond China's borders. Go deeper.

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🇨🇳 Xi's military purge

Xi Jinping and his wife, Peng Liyuan, arrive in Hanoi on Dec. 12. Photo: Luong Thai Linh/Pool via Getty Images China expanded an anti-corruption campaign targeting power centers within the military, risking instability during a critical time in China's foreign relations, Axios' Bethany Allen-Ebrahimian writes. Why it matters: Recent purges highlight obstacles facing Xi Jinping as he tries to complete his military modernization drive by 2050. What's happening: Nine Chinese generals and three Chinese defense technology officials were removed from a top Chinese Communist Party advisory body, according to Chinese state media. The generals largely came from the Rocket Force, which oversees China's missile program. The defense industry officials all work at state-owned missile manufacturing companies. Three members of the powerful Politburo once worked at the same three companies of the ousted officials. In China's opaque high-level politics, that kind of link between powerful officials and fallen officials could mean Xi is targeting patronage networks. What to watch: China appointed a new defense minister on Friday, Admiral Dong Jun, who has a South China Sea background. That fills "a monthslong vacancy created by the unexplained disappearance of the previous minister, who appeared to have fallen in an investigation into possible corruption," the N.Y. Times writes.

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🇨🇳 Shake-up in China gaming

Young players compete in a battle match of the mobile game Arena of Valor in Tianjin, China. Photo: Zhang Peng/LightRocket via Getty Images Beijing has reportedly removed a Chinese official involved in overseeing the country's gaming sector a week after proposed rules sent gaming stocks plummeting. Why it matters: The turmoil shows the balancing act Chinese regulators face as they try to reform key sectors without further damaging an already weak economy, Axios' Bethany Allen-Ebrahimian reports. Feng Shixin of the Chinese Communist Party's Publicity Department was removed last week, sources told Reuters. He oversaw the country's video games regulator, which announced new rules last week capping online spending, and banning the practice of rewarding gamers for logging in every day. Shares of online gaming giants NetEast and Tencent fell dramatically. The big picture: China's gaming market, worth $45 billion and with 668 million players, is the largest in the world. Regulators have targeted the sector to try to curb online gaming addiction. In 2019, regulators placed a daily limit of 90 minutes for gamers under the age of 18 and banned them from playing between 10 p.m. and 8 a.m. In 2021, minors were barred from gaming at all during weekdays and limited to one hour per day on weekends.