October 16, 2020 – Stealth War Newsletter 12

On Tuesday, Secretary of State Mike Pompeo called for U.S. think tanks and academic institutions to publicly disclose their foreign funding or risk losing access to State Department officials. The move comes amid growing bipartisan concern about the role that foreign governments, ranging from China to the United Arab Emirates, may play in shaping academic and policy debates in the United States. Pompeo’s announcement is the most recent in a wave of U.S. government activity seeking to target Chinese influence operations in the United States. Earlier this year, the State Department designated Confucius Institutes and a number of Chinese media operations to be foreign missions, giving the government greater oversight over their operations in the U.S. A report earlier this year found that foreign governments have given hundreds of millions of dollars to U.S. institutions involved in shaping foreign policy, and think tanks vary in the degrees of transparency with which they reveal foreign funding. Norway, the UK, and the UAE were the top three donors to U.S. think tanks in recent years according to a report published in January. The same report notes that China contributed money to the Center for Strategic and International Studies (CSIS), the Inter-American Dialogue, and the World Resources Institute between 2014 and 2018.

Earlier this year, the Department of Education announced that it is also conducting investigations into elite universities such as Harvard and Yale as part of a continuing review, which claims that U.S. universities have failed to report more than $6.5 billion in foreign funding from countries such as China and Saudi Arabia.

In related news, a new report by the U.S. China Economic and Security Review Commission (USCC) surveys an array of programs and policies the Chinese government has established over decades to exploit the scientific expertise of Chinese students and scholars studying in the United States for the purpose of accelerating China’s economic and military modernization. The overall number of Chinese students and research scholars in the United States was about 370,000 in January 2020, with approximately 130,000 of these students and scholars pursuing research in STEM fields. Chinese students and scholars constitute roughly a third of all foreign students in the U.S. and have made significant contributions to academia and the U.S. economy. While the majority of Chinese students and scholars working in the U.S. engage in legitimate academic activities, a minority of undetermined size participates in China’s technology transfer apparatus, which includes scholarships to study abroad, talent recruitment strategies, and entrepreneurship parks.

Japan’s coast guard reported earlier this week that Chinese ships have intruded in Japanese territorial waters near the Senkaku Islands (which China calls the Diaoyu islands) for a record length of time—more than two straight days. The Chinese ships intimidated a Japanese fishing boat and faced off against two Japanese coast guard vessels sent to the area in response. This marks the longest period that Chinese vessels have intruded in the waters since the Japanese government put the islets under state control in September 2012, after buying out a private Japanese owner. The previous record was set in July. A day after the ships left, the Japanese coast guard reported that it had spotted another pair of Chinese vessels sailing in the so-called contiguous zone outside Japan’s territorial waters, marking the 37^th consecutive day in which Chinese vessels were seen sailing near the Senkakus. Earlier this year, Beijing attempted to offer Tokyo an olive branch, indicating that it would be willing to reduce its naval presence in the East China Sea. The gesture was summarily rejected when right-wing groups in Japan hired fishing ships to skirmish in the contested waters. Tensions have also been rising with the U.S. over naval activities in the region, with the Chinese military challenging the USS John S. McCain’s “[assertion] of navigational rights and freedoms” near the Paracel Islands in the South China Sea last week, and a pass through the Taiwan Strait this Wednesday by the USS Barry.

Despite opposition from activist groups, China beat out Saudi Arabia for a seat on the UN Human Rights Council this past Tuesday. Russia and Cuba, running unopposed, were also two of the 15 new member countries elected to a three-year term on the council. Last week, a coalition of human rights groups from Europe, the United States and Canada called on U.N. member states to oppose the election of China, Russia, Saudi Arabia, Cuba, Pakistan and Uzbekistan, saying their human rights records make them “unqualified.” The UNHCR allocates a number of seats to each region to ensure geographical representation; of the four winners of seats in the Asia-Pacific group, China got the lowest vote – 139 compared to 180 when it last won a seat in 2016. Its comparatively low support implies that China’s aggressive lobbying at the UN may have only eked out a narrow victory this time. Last week, Chinese diplomats were reportedly surprised by a strong showing of support for a German-led initiative to condemn human rights violations in Xinjiang, Tibet, and Hong Kong. The diplomatic tiff marked the latest in a series of increasingly public tensions over Chinese hypocrisy and strong-arm tactics at the UN, which began last summer with an unprecedented joint call for China to end mass abuses in Xinjiang.

And finally, the U.S. State Department is reportedly mulling over adding Ant Group to the Entities List, a trade blacklist, as the Chinese fintech company prepares for what could be a historically large IPO on Shanghai and Hong Kong stock markets. Ant is expected to fetch a valuation of over $200 billion and sell at least 10 percent of its share capital. China’s fintech industry—already arguably the most advanced in the world—has boomed amid the COVID-19 crisis. Due to its success, the company, along with the rest of China’s fintech industry, may soon be seeing increased regulatory oversight from Beijing. If the State Department goes ahead with its decision, Ant Group will join a number of other Chinese companies, including ZTE, Huawei, DJI, and SMIC, that have recently been targeted by the U.S. government. The entities list makes it more difficult for U.S. firms to sell to blacklisted companies and has become the Trump administration’s tool of choice for punishing Chinese companies.

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