China further eases foreign investment curbs on manufacturing


June 30, 2019 / 11:29 AM / Updated 13 minutes ago

BEIJING (Reuters) – China’s state planning agency has reduced the number of sectors subject to foreign investment restrictions, as Beijing moved to fulfill its promise to open major industries.

The National Development and Reform Commission (NDRC) on Saturday further eased foreign investment curbs on sectors including petroleum and gas exploration and widened access to agriculture, mining and manufacturing.

NDRC published on its website the new, shorter so-called negative list that sets out industries where foreign investment is limited or prohibited.

The number of items on the negative list was cut to 40 from 48 in the previous version, which was published in June last year. The new list takes effect on July 30.

The long-anticipated announcement comes after Presidents Donald Trump and Xi Jinping met in Japan, rekindling hope of a deal after negotiations broke down last month.

Reporting by Yilei Sun and Norihiko Shirouzu; Writing by Yawen Chen in Beijing; Editing by Sam Holmes

Source: Reuters “China further eases foreign investment curbs on manufacturing”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

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Putin’s Dream of Russia-India-China Triangle May Come True


The leaders of RIC – Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping – hold a meeting on the sidelines of the G20 summit in Osaka on June 28, 2019. Photo: Mikhail Klimentyev / Sputnik / AFP

The US has tried hard to restore the US-Japan-Australia-India quad to contain China and wanted India to be at the forefront against China. There have been border disputes between India and China for decades, which sometimes gave rise to tension between the two giant neighbors. But people have grown wiser to see that neighborhood may give rise to disputes over possession and supply of land and water but may also facilitate the two neighbors’ prosperity through trade and win-win cooperation. As the leaders of both countries Modi and Xi Jinping are wise, US has so far failed to attract India’s participation in its quad.

Russia’s Putin has a dream to form a Russia-India-China triangle to counter US world hegemony. He succeeded in attracting India into Russia- and China-led Shanghai Cooperation Organization but India’s participation aims at the benefits India may get from Russia and China instead enmity against the US.

In fact India believes that by maintaining good relations with both the Russia-China and US camps, it may benefit from both sides. That can be regarded as its equal-distance diplomacy, which had been successful until the mini-trade war against India launched by the Trump administration – including India’s loss of its special trade status and subject to US punishment for its purchase of Russian S-400 missile systems.

Now Asia Times says in its report “Russia-India-China share a room with a view” on their meeting on the sideline of G20 summit, “Leaders of these three countries met in virtual secrecy. The very few media representatives present in the shabby room were soon invited to leave. Presidents Putin, Xi and Modi were flanked by streamlined teams who barely found enough space to sit down. There were no leaks.”

It seems that the triangle Putin has been dreaming of is being established as the US is now pushing India to Russia and China’s arms.

Comment by Chan Kai Yee on Asia Times’ report, full text of which can be viewed at https://www.asiatimes.com/2019/06/article/russia-india-china-share-a-room-with-a-view/.


China Confirms Submarine-Launched Missile Test


JL-3 is Beijing’s newest nuclear missile capable of ranging US

BY: Bill Gertz
June 28, 2019 3:55 pm

China’s Defense Ministry this week confirmed the test firing of a new submarine-launched ballistic missile the Pentagon regards as a strategic weapon capable of striking anywhere in the United States from underwater launch points.

Asked about the test of the new JL-3 submarine-launched ballistic missile, Sr. Col., Ren Guoqiang, a Defense Ministry spokesman, acknowledged the test firing.

“It is normal for China to conduct scientific research and tests according to plan,” Ren said during the monthly press briefing.

“These tests are not targeted against any country or specific entity,” he said. “China follows a defense policy which is defensive in nature and an active defense military strategy, and our development of weapons and equipment is to meet the basic demand of protecting China’s national security.”

American defense officials disputed the Chinese claim that the test was not targeted at any country and said the missile firing on June 2 coincided with the visit to Asia by then-acting defense secretary Patrick Shanahan.

The test was reported by the Washington Free Beacon on June 13.

Shanahan spoke at a defense conference in Singapore where he indirectly identified China as “the greatest long-term threat” to the vital interests of states in the region for undermining the rules-based international order.

China is engaged in destabilizing actions, what Shanahan termed “a toolkit of coercion,” including the deployment of advanced weapons in militarizing disputed areas and threatening to use force to compel rivals.

China also is engaged in influence operations to interfere in the domestic politics of other nations, undermine the integrity of elections, and threaten internal stability. Predatory economics are another feature of Chinese malign activities, along with state-sponsored theft of military and civilian technology.

Shanahan declared that Chinese behavior “that erodes other nations’ sovereignty and sows distrust of China’s intentions must end.”

Ren’s confirmation of the JL-3 was a rare public confirmation of one of the People’s Liberation Army’s most secret military programs.

American officials said the JL-3 was launched from a submarine test platform in the Bohai Sea and flew several thousand miles to a missile impact range in western China.

Adm. Philip Davidson, commander of the Indo-Pacific Command, said in February that the new JL-3 is being developed for a new class of ballistic missile submarines. The four-star admiral said the JL-3 is part of a strategic nuclear modernization program that is adding new capabilities across the spectrum of nuclear forces.

“China’s third generation Type 096 nuclear-powered ballistic missile submarine will be armed with JL-3 sea-launched ballistic missiles and will likely begin construction in the early-2020s,” Davidson said.

Other new strategic missiles include the new road-mobile DF-26 intermediate-range missile and the new DF41 ICBM.

Rick Fisher, a China military expert, said the disclosure by regime is an example of Beijing practicing “transparency concerning nuclear and missile issues only under duress.”

“One conclusion that can be drawn is more official U.S. revelations of Chinese missile tests will force greater transparency on the Chinese Communist dictatorship,” said Fisher, a senior fellow at the International Assessment and Strategy Center.

“There is a great deal of information about Chinese military developments that the U.S. intelligence community should keep classified, but consideration should be given to revealing more about missile tests,” he added. “Many of these are weapons that China is developing to destroy the democracy in Taiwan, to attack U.S. military forces in Japan and to attack U.S. allies like Japan and South Korea. American citizens deserve to know of this growing danger as do our allies in Asia.”

Trump administration officials said earlier this month that the United States would seek to include China in future strategic arms talks aimed at limiting nuclear forces. Chinese officials so far have flatly rejected U.S. appeals.

White House National Security Adviser John Bolton said in a June 18 interview that the concept of bilateral U.S.-Russian arms talks is outdated.

“Cold War style, bilateral strategic arms negotiations don’t make sense when you’re in a multipolar nuclear world,” Bolton said.

Agreements between the United States and Russia, such as the 1987 Intermediate-Range Nuclear Forces Treaty that Moscow later violated, limited Washington and Moscow but not Beijing.

“The whole point is to find a way, whether it’s in a trilateral negotiation, or maybe you could consider even more nuclear powers involved,” he said. “But looking at this as a bipolar nuclear world when it’s manifestly a multipolar nuclear world is just conceptually completely backward.”

Bolton noted China’s reluctance to join arms talks but said the effort should be made because the risks of nuclear arms proliferation spreading to other nations is growing.

The JL-3 is expected to have a range of more than 7,000 miles and likely will be equipped with multiple, independently targetable reentry vehicles.

The June 2 test was the second flight test of the JL-3. The first test took place in December.

The U.S.-China Economic and Security Review Commission stated in one of its recent annual reports that the JL-3 is designed to be more lethal and accurate than the JL-2, the current SLBM. The commission said the JL-3 “will be capable of striking the continental United States from China’s periphery.”

Ren, the Defense Ministry spokesman, also criticized the Pentagon’s recently published Indo-Pacific Strategy that identifies China as a strategic competitor.

“No strategy should go against the times,” Ren said. “The trend of the world is mighty and overwhelming. Those who follow it will prosper while those who resist will perish.”

Source: Washington Free Beacon “China Confirms Submarine-Launched Missile Test”

Note: This is Washington Free Beacon’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


Apple moves Mac Pro production to China from U.S.: Wall Street Journal


June 28, 2019 / 10:09 PM / Updated 4 hours ago

(Reuters) – Apple Inc (AAPL.O) is shifting manufacturing of its new Mac Pro desktop computer to China from the United States, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The move comes at a time when the Trump administration has threatened to impose new levies to cover nearly all imports from China and pressured Apple and other manufacturers to make their products in the United States if they want to avoid tariffs.

Last week, Apple asked its major suppliers to assess the cost implications of moving 15% to 30% of their production capacity from China to Southeast Asia, according to a Nikkei report.

“If true, suggests to me that Apple has tremendous confidence that the U.S. and China will be able to solve their trade dispute and do so in the near-future,” D.A. Davidson analyst Tom Forte said in an email.

China is a key market for Apple as well as a major production center for its devices. The company got nearly 18% of its total revenue from Greater China in the quarter ended March.

Apple’s Mac Pro, a $6,000 machine used by creative professionals, has been facing waning demand, the Journal said here

The company does not break out sales numbers for its Mac Pro machines. The desktop is part of the company’s Mac line of products, which accounted for less than 10% of Apple’s total sales in 2018. In 2018, Apple sold about 18 million Mac products, compared with about 218 million iPhones.

“Like all of our products, the new Mac Pro is designed and engineered in California and includes components from several countries including the United States,” an Apple spokesman said. “Final assembly is only one part of the manufacturing process.”

Apple’s decision coincides with the end of tax subsidies that it got for making the desktop in a plant in Texas run by contract manufacturer Flex Ltd, according to the Journal.

“(This) serves as a reminder that, relative to the U.S., manufacturing in China remains a lower-cost alternative and benefits from an existing infrastructure, versus having to, potentially, rebuild one in the U.S”, Forte said.

The tech giant has tapped contractor Quanta Computer Inc (2382.TW) to manufacture the computer and is ramping up production at a factory near Shanghai, the report said here

Quanta did not respond to a request for comment.

Apple’s shares were down marginally at $198.69.

Reporting by Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva

Source: Reuters “Apple moves Mac Pro production to China from U.S.: Wall Street Journal”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Lawmaker: Human Problem at Pentagon Worse than Tech Problem


Rep. Jim Cooper says Congress shouldn’t accept a government topped by acting political appointees.

Marcus Weisgerber,
Defense One
|
June 27, 2019
Defense Management
Technology

“For all of our love of technology, we could have a greater human problem than we do a tech problem, because you need Senate-confirmed people of ability, competence and vision,” Rep. Jim Cooper, D-Tenn., chairman of the House Armed Services Strategic Forces Subcommittee, said Thursday at the Defense One Tech Summit.

The position of Defense Secretary has been vacant since December, when Jim Mattis abruptly resigned. Then-Deputy Defense Secretary Patrick Shanahan served in an acting capacity for nearly six months, the longest time that the Pentagon has gone without a Senate-confirmed leader. President Trump said he would nominate Shanahan for the position, but Shanahan withdrew his name from consideration and resigned as deputy defense secretary last week after details of a messy divorce became public.

Army Secretary Mark Esper is now the acting defense secretary. David Norquist, the Pentagon comptroller and chief financial officer has been performing the duties of the deputy defense secretary since Mattis’ departure. Ryan McCarthy, the Army undersecretary is now the acting Army secretary.

“You can’t have a government with ‘actings’…and that’s sadly what we increasingly have,” Cooper said. “Our tolerance for that should be zero.”

On June 21, President Trump said that he would nominate Esper, Norquist, and McCarthy to serve permanently. The White House has yet to send those nominations to Congress.

Heather Wilson stepped down as Air Force secretary last month to become president of the University of Texas at El Paso. Trump has said he would nominate Barbara Barrett for the top Air Force job, but the White House has yet to send a formal nomination to Congress.

Moving further down the chain, the vacancies and lack of political appointees has created a dominos effect where deputies are serving as principals. Below that, many underlings have essentially moved up one rung on the org chat. The Pentagon has an acting chief management officer since last year when Mattis dismissed John Gibson.

The lack of key leaders even extends beyond Senate-confirmable positions. Fred Kennedy, head the brand new Space Development Agency, abruptly resigned over reported disagreements with his boss Mike Griffin, the undersecretary of defense for research and engineering. InsideDefense reports that Derek Tournear, who works for Griffin, has been named acting director of the organization tasked with making satellite buying more commercial.

Chris Shank, director of the Strategic Capabilities Office, the office known for modifying existing weapons with new capabilities, resigned on June 14, Breaking Defense reports. David Honey, a senior Defense Advanced Research Projects Agency official, has been tapped as his replacement, Inside Defense reports.

Source: Government Executive “Lawmaker: Human Problem at Pentagon Worse than Tech Problem”

Note: This is Government Executive’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


US might be the biggest loser in the tech war


Ko Tin-yau
Jun 28, 2019 10:01am

US Treasury Secretary Steven Mnuchin said on Wednesday that the United States and China were close to a trade deal, and that he believes the weekend talks between the two sides will help take the process forward.

“We were about 90 percent of the way there (with a deal) and I think there’s a path to complete this,” Mnuchin told CNBC.

He said he’s confident that US President Donald Trump and Chinese leader Xi Jinping, who will meet during the G20 summit in Japan, can make progress in the stalled trade talks.

“President Trump and President Xi have a very close working relationship. We had a productive meeting at the last G-20,” Mnuchin said, adding that there could be a win-win situation for both nations.

“I think there is a good outcome for their economy and the US economy to get balanced trade and to continue to build on this relationship,” he added.

Mnuchin’s words and tone suggest that Trump may focus more on improving the trade deficit situation and put less emphasis on urging China to reform on matters such as cutting government subsidies, ending forced technology transfers, etc.

Some might question why Washington seems to have suddenly softened its stance.

The answer may lie in a New York Times report that outlined how some big tech firms have found a way to bypass the US government ban on selling products to Huawei.

By manufacturing outside the US, industry leaders including Intel and Micron can avoid labeling goods as American-made, New York Times reported, citing unnamed sources. Sales through this channel ares already said to amount to hundreds of millions of dollars.

If the US-derived content of a product is below 25 percent, they are not subject to the ban.

This underscores how difficult it is for the Trump administration to contain companies like Huawei.

More seriously, if this becomes a trend, Trump’s intention to contain China’s tech industry could backfire and the US may end up the biggest loser.

This article appeared in the Hong Kong Economic Journal on June 27

Source: ejinsight.com “US might be the biggest loser in the tech war”

Note: This is ejinsight.com’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


The Divided China Xi Jinping Inherited from Hu Jintao


In my previous post, I mentioned that Khrushchev had established his powerbase but not strong enough to avoid being forced to resign. That powerbase refers to the powerbase that enables him to remain in his position instead of that enables him to carry out the revolutionary reform that harmed strong vested interests.

Emperor Jiaqing of Qing Dynasty had sound powerbase established by his predecessors and supported by prevailing Confucianism. He was able to punish his father Emperor Qianlong’s favorite high official He Shen and confiscate all He’s assets. However, he was unable to overcome powerful official group’s resistance to his efforts to overcome rampant official corruption given rise by He Shen’s corrupt leadership. Nor could the two succeeding emperors Daoguang and Xianfeng

That was more than 150 years ago. What about CCP top leaders in the People’s Republic of China that Deng Xiaoping regarded as cores of CCP collective leadership?

Deng chose Jiang Zemin as his successor. He regarded Jiang as the core of the third generation of CCP collective leadership, but after Deng died in February 1997 Jiang’s position as the core was challenged by Politburo Standing Committee members Li Peng and Qiao Shi in mid 1997 before the 15th CCP National Congress. Jiang’s position as the core was ensured by powerful elder Bo Yibo. Jiang further strengthened his powerbase later with the development of the most powerful Shanghai faction in CCP. As a result, he was able to have written into CCP constitution his Three Represents that justify China’s development of private sector that was fiercely opposed as capitalism by lots of CCP dogmatists.

Jiang’s successor Hu Jintao set up and developed a large and powerful CYL (Communist Youth League) faction in his 10 years in power. Hu had filled CCP Central Committee and its Politburo with lots of his faction members and appointed them high official posts. However, he was unable to conduct the further reform and opening-up for the transformation from export- and investment-geared economic growth to innovation-, creation and consumption-led growth.

In spite of his top position and powerful faction, Hu was challenged by the conservative faction led by Bo Xilai. There was heated debate between reformists’ idea of further reform and conservatives’ Maoism. Hu had found Bo’s crime of corruption and taken Bo in custody to deprive conservatives of their leader but was unable to punish Bo. As a result, in September 2012, two months before the 18th CCP National Congress, Jiang Zemin had to come out from his retired home in Shanghai to Beijing to personally preside over an expanded Politburo meeting to make the decision to punish Bo severely.

Xi inherited a divided China from Hu Jintao. He would certainly be unable fight rampant corruption and rectify CCP to prevent it from collapse if China remained divided. How could Xi unite China and find some strong force to help him attain his goals?

Article by Chan Kai Yee