August 27, 2021- Stealth War 53: Beijing’s Lawfare in Hong Kong; PLA drills in Tibet; Vaccine Diplomacy; Chinese IPOs; US schools in China

By: Jamestown Foundation

Thu September, 2021, Age: 1 year

 


August 27, 2021

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**The Stealth War Newsletter will be on a break next week, and will return to its regular publishing schedule on September 10, 2021.

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Strategic Indicator

This issue’s number to watch40%

The amount by which international iron ore prices have fallen since mid-July, largely based on concerns that demand from China, which is the world’s largest producer of steel, is weakening.

This Week:

* Beijing Intensifies Lawfare Repression in Hong Kong  

* PLA Drills in Tibet Signal Long-Term Confrontation at Sino-Indian Border

* BRI Roundup – Vaccines Emerge as a Center of Influence Battle During Kamala Harris’ Visit to Vietnam

* Chinese IPOs Affected in U.S., China, as Wall Street Stays Bullish on Chinese Markets

* Education Sector Crackdowns and Growing Concerns About Academic Freedom of U.S. Schools in China

Top Stories

Beijing Intensifies Lawfare Repression in Hong Kong

This June, China’s National People’s Congress (NPC) passed anti-foreign sanctions legislation in response to U.S. and European sanctions against Chinese and Hong Kong officials. A similar law was expected to pass in Hong Kong this week, with full support from the Chief Executive, but it was delayed at the last minute. This sent shockwaves through the business community, which is concerned about their ability to work with Chinese nationals that have been sanctioned abroad. The delay officially gives the NPC more time to deliberate the law, as banks and investors brace for increasing compliance difficulties in one of the world’s leading financial hubs. The Hong Kong anti-sanctions law would add to the growing number of legal tools for repression in Hong Kong; this week the government also proposed an amendment to the film censorship law to ban films retroactively, as determined by an approved censor. At present, films deemed contrary to national security cannot be screened.

These events come as civil and political rights organizations and activists face disbandment and seemingly politically motivated legal prosecutions. Last week, the Civil Human Rights Front, a group that organizes the annual 1989 Tiananmen vigil, announced that it would be disbanding. Four members of the Hong Kong University Student Union have also been arrested for passing a resolution in support of a civilian who stabbed a police officer on 1 July. The student motion lauded his “sacrifice,” which authorities condemned as “lone wolf terrorism.” One of the students arrested was granted bail today.

(sources: SCMP; SCMP)

PLA Drills in Tibet Signal Long-Term Confrontation at Sino-Indian Border

On August 26, the Global Times, a Chinese state-run tabloid, announced that the People’s Liberation Army (PLA) had just concluded large-scale joint exercises in Tibet. The drills featured at least ten brigades and regiments associated with the PLA Tibet Military Command, which is part of China’s Western Theater Command, and took place over two days and one night. According to a video aired on state broadcaster CCTV, Chinese forces were divided into two teams—the PLA and the “blue army.” The PLA then engaged in operations that included the deployment of alpine troops, tank units, artillery personnel, missile forces, drones, and equipment to conduct electromagnetic attacks to seize a 6,100-meter mountain from the “blue army.”

Though not explicitly stated, it is clear that these exercises were intended as a warning to India, which has been locked into a border stand-off with China since May 2020. The ongoing crisis has recently shown some signs of progress, with Chinese and Indian officials agreeing to pull back troops from the Gogra area of eastern Ladakh in early August. In February, both sides also agreed to a pullback in Pangong Tso.

These initial diplomatic successes are welcome signs of de-escalation, but as the recent PLA military drills show, tensions between Beijing and New Delhi remain high. Finding a compromise in the remaining areas of the border stand-off will prove difficult. One such area of disagreement, the Depsang Plains, predates the current crisis. The plains are strategically valuable, as they are located near India’s crucial Darbuk-Shyok-Daulat Beg Oldie Road that connects an Indian advanced landing ground to the Ladakh provincial capital of Leh, and offer a rare terrain for tank operations in the high mountains.

Due to the importance of the strategic geography, and as other aspects of the Sino-Indian relationship are unlikely to engender a cooling of relations, PLA forces are unlikely to give up their valuable positions in this sector and others. Military drills in Tibet aimed at sending a signal to India are likely to continue as the Sino-Indian relationship remains adversarial.

BRI Roundup

Vaccines Emerge as a Center of Influence Battle During Kamala Harris’ Visit to Vietnam

This past week, Vice President Kamala Harris toured Southeast Asia as part of an effort by the Biden administration to counter Chinese influence in the region. Harris repeatedly criticized China during the trip, and stated that the United States would support Vietnam in its maritime border dispute with China in the South China Sea. However, China is actively working to increase its influence in Vietnam. When Harris’ flight to Hanoi was delayed for three hours, the Chinese ambassador to Vietnam had a surprise, unannounced meeting with the Vietnamese Prime Minister, Phanm Minh Chinh. During the meeting, the Chinese ambassador declared that Beijing would send two million vaccine doses to China. Following the meeting, Chinh stated that Vietnam does not take sides in its foreign policy.

The surprise meeting taking advantage of Harris’ delayed flight is the latest example of China’s vaccine diplomacy, itself part of the Belt and Road Initiative-linked Health Silk Road effort to foster greater global public health cooperation that has been revived in the wake of the pandemic. Providing Vietnam with two million vaccines is a success for China’s embattled vaccine program, which has recently been criticized by officials in Southeast Asia. Six months ago, as China began rolling out its vaccine, it promised to provide 255 million doses to the region. Since then, Southeast Asian government officials have raised doubts about the quality of Chinese vaccines as new outbreaks emerged in their countries. Some have complained about the conditions inherent in Chinese vaccine donations, providing room for the United States to provide “no strings attached” vaccines. The US has provided 23 million shots to the region thus far, and Harris reportedly offered vaccine assistance to Vietnamese officials. Though beating Vice President Harris to donate vaccines was a diplomatic win for Beijing, China still has major problems in its vaccine diplomacy in the region. In Vietnam, there is distrust from many corners on the “safety and effectiveness” of Chinese vaccines.

(sources: SCMP, Reuters)

Chinese IPOs Affected in U.S., China, as Wall Street Stays Bullish on Chinese Markets

After the China Securities Regulatory Commission opened a probe into an investment bank and several other firms, 42 initial public offerings (IPOs) were put on hold in Shanghai and Shenzhen. The regulatory move is part of a broader crackdown on the private sector in China and the IPOs affected by the most recent moves include BYD Company’s chip production.

Overseas, the U.S. Securities and Exchange Commission (SEC) has unveiled a new slate of rules expanding disclosure requirements for variable interest entities (VIEs), a common vehicle for Chinese companies to list overseas. In addition, Chinese firms must also disclose investor implications and Chinese state interference in the company. The rules come after the SEC paused the IPOs of Chinese companies seeking to list in the U.S. in July. In 2020, Chinese IPOs in the U.S. stock market were valued at $12.8 billion. Concerns about the risks of doing business with China have been growing across all business sectors. Due to increasing concerns about corporate espionage, it was recently revealed that the FBI has been conducting industry briefings under the Delta Protocol, an operation to warn American startups—especially in the technology sector—of potential espionage risks from state actors such as Russia and China. In recent years, more high-profile instances of information theft have arisen. A list by the Center of Strategic and International Studies details 100 instances of intellectual theft since 2000.

Despite growing awareness over such economic security concerns, Wall Street investors in the US-China Financial Roundtable have recently re-opened Track 1.5 talks with Chinese officials. The group, formed in 2018, paused discussions due to the COVID-19 pandemic, but have continued to lobby for stronger ties with China even as the consensus on strategic competition grows. Members of the roundtable include Blackstone, Goldman Sachs, and Morgan Stanley, financial heavyweights with a vested interest in China’s $54 trillion financial services market. While Washington officials grow suspicious of engaging in business with China, Wall Street investors remain enthusiastic about expanding into the market.

(source: China Daily)

Education Sector Crackdowns and Growing Concerns About Academic Freedom of U.S. Schools in China

Ahead of the start of the fall semester, the U.S. State Department has largely resumed granting visas to Chinese students studying in America at pre-pandemic levels. Based on the continuing high numbers of student visa applicants, the U.S. remains an attractive destination for Chinese students, even as the greater bilateral relationship has rapidly cooled. Student exchanges, as a significant part of broader people-to-people exchanges, have long served as a positive and stabilizing factor in U.S.-China relations, but in recent years their risks and benefits have been called into question.

A new report by the industry publication Inside Higher Ed has noted that the education joint venture New York University (NYU) Shanghai is arguing in an ongoing employee discrimination lawsuit that it is not controlled by the American NYU and therefore not liable under U.S. employment law, despite NYU’s leadership previously testifying to the U.S. Congress in 2015 that the U.S. university had “absolute control” over all of the Shanghai campus’ operations. Apparently contradicting these claims, NYU Shanghai has said that Chinese foreign laws and policies “state that foreign investment in the higher education sector is limited to Sino-foreign jointly run schools and programs…over which the Chinese party must have control.” The lack of foreign oversight over American-branded schools—long known for their norms of academic freedom and nondiscrimination—is particularly concerning in light of recent Chinese education sector crackdowns.

Just this week, the Chinese Ministry of Education published new guidelines to incorporate “Xi Jinping Thought” into national curriculums, aiming to strengthening “resolve to listen to and follow the Party” as well as “cultivat[ing] patriotic feelings” among the country’s youth. The guidelines will affect education policy ranging from primary school to the university level. In another concerning sign, news also came out this week that a major university in Shanghai has ordered its schools and colleges to “investigate” and “report” on students who identify as LGBT. Although  the university has not verified the authenticity of the allegations and it is not known what it intended to do with the information, the news has raised significant concerns for activists amid ongoing crackdowns that appear to be aimed at stifling online criticism and organized dissent from the Chinese LGBT community.


 


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