August 20, 2021 – Stealth War 51: Beijing and the Taliban; Diplomatic Outreach to Middle East; Energy and Transportation Bids; Further Crackdown; New Coal Mines

(source: Global Times)

Russian media reported on August 10 that the state-owned China Communications Construction Company (CCCC) recently won a contract to develop a $265 million transshipment facility in Bechevinsky Bay, Kamchatka, issued by the Russian LNG company Novatek. The facility is intended to help transfer liquified natural gas (LNG) shipments from ice-class tankers coming along the Northern Sea Route (NSR) to conventional vessels supplying Asian markets. Although the project is scheduled to be completed in 2023, industry experts have observed that due to harsh weather and other difficulties, it could likely be delayed. Once completed, the project would increase Russian energy links with China (decreasing its dependence on European markets) as well as promote the commercialization of the NSR. Russia and China earlier this year pledged greater cooperation on deepening cooperation in the Arctic and in particular strengthening collaboration on the use of the NSR “on the basis of mutual benefit and respect for the interests of the littoral state (i.e., Russia).”

In the Philippines, recent news of a winning Chinese bid to manage the $1.6 billion first phase of a long-anticipated rail project on Mindanao island came just after the government of President Rodrigo Duterte retracted a pending termination of the Philippines-United States Visiting Forces Agreement (VFA), a year and a half after first threatening to do so. Both events are anticipated to shore up Duterte’s legacy as the country prepares for a May 2022 presidential election. Although prohibited from re-election as president, Duterte has signalled that he may seek the vice-presidency alongside his daughter, Sara Duterte, currently the mayor of Davao City on Mindanao island. While the VFA renewal has shored up the Philippines long-standing and domestically popular security ties with the U.S., Duterte has often been vocal in his resentment of Washington and sought to align himself closer with Beijing. The Mindanao railway is particularly significant for him; Duterte campaigned heavily during the 2016 presidential election on his promise to develop a system of rail projects in Mindanao within six years. The Chinese joint venture between China Railway Design and Guangzhou Wanan Construction Supervision beat out two other contestants from an all-Chinese shortlist for the contract, demonstrating the strong influence of Chinese investment in Philippines infrastructure. The government hopes to have the first line enter service in June 2023, with later lines expected to circuit the entire island.

Xi Signals Further Crackdown on the Wealthy and Tech Companies 

Chinese President Xi Jinping described “common prosperity” as an “essential requirement of socialism” at a meeting of the leading financial working group on Tuesday. An official readout later stated that “high-income people and enterprises” should give more resources back to society, building off of the government’s efforts to emphasize the quality rather than quantity of economic growth. Unequal wealth distribution is a major concern in China, and it is likely that new regulations will need to be implemented to define and achieve the goal of “common prosperity.”

Such regulations would come amid an ongoing crackdown against technology companies. Beijing is tightening regulations across a range of industries, with a particular emphasis on privacy and data. For example, on Wednesday the Chinese government issued warnings to 43 apps, including WeChat for illegal data transfer practices and ordered the companies to make rectifications. In addition to tightening regulatory control, the Chinese government has been acquiring ownership stakes in technology companies and increasing the Chinese Communist Party (CCP)’s influence in the private sector. Most recently, it was reported that the Chinese government had taken an ownership stake in a subsidiary of Bytedance, the Beijing-based company that also owns the popular app TikTok. This has increased concerns about the Chinese party-state’s access to foreign data, which is increasingly being viewed as a national security resource. At home, the Standing Committee of the National People’s Congress on Friday passed a new data security law, which is expected to impose some of the world’s strictest privacy regulations. Nevertheless, national security exceptions seen in previous drafts echo carve outs seen in other parts of China’s growing data security regime that do little to offset concerns about the government’s abuses of state surveillance and information collection.

Despite Climate Change Warnings, China Approves New Coal Mines

On August 4, China published its Blue Book on Climate Change outlining the impact of climate change, with increasing extreme weather events worldwide. China itself faces alarming consequences from climate change, according to the Blue Book. China’s annual average temperature rose by 0.26℃ per decade on average from 1951 to 2020, while sea level rose in 2020 by 73 mm compared to the average amount recorded from 1993 to 2011. The Blue Book’s warnings come as extreme weather becomes increasingly frequent both in China and around the world. This year alone, China has seen extreme flooding in central regions; over 300 people died after historic flooding in Henan Province in late July and last week 21 people were killed in floods in Hubei Province. While China has pursued several policies to tackle climate change, including starting the world’s largest carbon trading program earlier this summer, the National Development and Reform Commission (NDRC) has also called for reassessing current decarbonization efforts due to development and stability concerns. NDRC spokesperson Meng Wei pointed at overly ambitious goals and disorganized strategies that caused project shutdowns in the name of carbon reduction, leading to unstable commodity prices, especially amid a post-Covid economic boom.

The NDRC and the National Energy Administration have also jointly approved the construction of 15 new coal mines. The mines will be located in Inner Mongolia, Shanxi, Shaanxi, Ningxia and Xinjiang, and are projected to produce 43.5 million tons annually. The development of the mines is consistent with Xi Jinping’s national coal consumption strategy, which allows for coal consumption to increase from 2021–2025 and decrease onward. While climate change concerns are dire, China has also struggled to meet energy demand from its developing economy, resulting in its continued reliance on coal amid natural disasters and other issues that have caused repeated power outages this summer.