The biggest trade war in history got bigger
All the China news you need to know this week: November 28 to December 5
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You’re reading our first trial newsletter of The China Week, a succinct summary of the news you need to know to stay informed about the world’s other superpower.
Each newsletter will contain summaries of the most important stories of the previous seven days, and a curated list of links to other reports and articles of interest. No fat, no padding.
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1. Beijing bans critical mineral exports to US
The latest salvo has been fired in the trade war between China and the United States that Donald Trump launched on July 6, 2018, about half way through his first presidency: China this week restricted exports of gallium, germanium, antimony, graphite, and other key high-tech materials to the U.S.
When Trump first placed new 25% tariffs on a range of Chinese products that media reports at the time said were worth $34 billion, China’s Ministry of Commerce said that U.S. had “ignited the largest trade war in economic history.” That seems accurate in hindsight: The Biden administration did not remove the Trump tariffs‚ in fact, it increased some of the them, and Joe Biden also signed into law a variety of restrictions on high-tech exports to China that have hobbled China’s semiconductor and electronics industries. Just this week, Washington announced new export restrictions targeting China’s semiconductor industry.
Perhaps in reaction to these curbs, and perhaps in anticipation of further trade weaponization during the second Trump presidency, China is fighting back.
Further reading: All the major news organizations have reports on the export restrictions. The Center for Strategic and International studies, a think tank, has a good explainer.
2. China’s beloved romance author Chiung Yao says good bye
The global Chinese-language internet was in mourning on December 4 when news broke that the novelist Chiung Yao瓊瑤 had died at the age of 86 in Taiwan.
Chiung was the pen name of Chen Che 陳喆, born in Chengdu, Sichuan Province in 1938. Her novels and their TV and film adaptations were hugely popular acorss the Chinese-speaking world. The TV adaptation of My Fair Princess 还珠格格 launched the careers of Chinese A-listers Vicky Zhao 趙薇 and Fan Bingbing 范冰冰.
Chiung left behind a suicide note on Facebook explaining that she had decided to die with dignity and joy at the end of a long and fulfilling life, and urging young people to not “give up on life easily,” but do enjoy their days and hopefully “live to be eighty-six or seven years old like me, with no physical strength, and then choose how to face death.” The news has sparked an online debate an China about assisted suicide and euthanasia.
English language news media have not published obituaries at the time of sending this newsletter; Wikipedia has a potted biography.
3. US auto gloom, China auto boom
US auto giant General Motors will reduce the value of their assets and investments in China by more than $5 billion because of weakness in the market. Meanwhile China and the world’s largest electric vehicle manufacturer BYD is eating Tesla’s lunch and China’s share of the global electric car market has risen to 76% .
4. Chinese ship deliberately cut data cables in Baltic
A China-registered cargo ship, the Yi Peng 3, carrying Russian fertilizer—appears to have intentionally damaged two essential undersea cable lines in the Baltic Sea by dragging its anchors for more than 100 nautical miles. The story has not, however been covered heavily in English-language media despite the serious nature of the incident.
5. Ozempic and China’s obesity epidemic
In 2022, 38% of China’s population was overweight and 8% was obese according to the World Health Organization (WHO). That’s a problem, but it’s also an opportunity for pharma companies. Daxue Consulting has an explainer.
Other notables:
Xi Jinping 习近平 continues to purge senior military leaders: A top Chinese commander is suspended under suspicion of corruption (NYT); China targets senior admiral in new round of defense purges (WSJ).
Taiwan’s President William Lai Ching-te 賴清德 held phone calls with U.S. congressional leaders on Thursday while visiting the U.S. territory of Guam, his second U.S. stop on a Pacific Island trip, according to the Associated Press. Related: Beijing vows ‘resolute’ response after U.S. approves $385 million in weapons to Taiwan.
Pharma giant AstraZeneca has appointed a new China head to replace former executive Leon Wang, “who is on extended leave from the company while under investigation.” In 2014, competitor GlaxoSmithKline was fined a $489 million for bribery in China.
The Ministry of State Security is worried about leaks and misuse of open source information.
Critical journalist Dong Yuyu 董郁玉 was sentenced to seven years on espionage charges. He was arrested in 2022 while having lunch with a Japanese diplomat.
Chinese bitcoin billionaire Justin Sun 孙宇晨 who has been charged with fraud by the SEC has become a major financial supporter of Donald Trump.
China will permit wholly foreign-owned hospitals in Beijing, Fuzhou, Guangzhou, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, and Hainan Province.
Tales of stagnation and desperation: China’s local governments hold back wages in desperate scrape for cash (WSJ); China suffers eruptions from its simmering discontents (The Economist); The youth are ‘lifeless’: Economist’s speech goes viral in China (Bloomberg); Opinion: Spate of random killings rooted in China’s social and economic despair (Audrey Jiajia Li in SCMP), China can accept GDP growth of less than 5 %, says People's Daily (Reuters).
Nepal and China have signed a new Belt and Road deal.
India and China continue to mend ties after several years of open hostility.
Australia’s red meat exports to China will fully resume in the latest sign of a thaw, also after years of open hositilies.
“Wolf Warriorism: China's disastrous attempt at aggressive discourse is over,” says a former employee of Chinese state media.
Sign of the times: US law firm Paul Weiss to close Beijing office, joining China exodus — A growing number of major U.S. law firms have left China or shrunk their footprints there over the past two years.
Xinjiang: Volkswagen exits Xinjiang after criticism about complicity in human rights abuses (CDT); ‘Italian’ purees in UK supermarkets likely to contain Chinese forced-labour tomatoes (BBC).
Peru hopes that its new China-built Pacific Ocean megaport at Chancay will result in $30 billion worth of farm exports.
Midnight in Peking author Paul French has a new book out: Here is an interview with him about Her Lotus Year, which tells the story of the yearlong sojourn of American socialite Wallace Simpson in Hong Kong, Shanghai, and Beijing before she married the king of England, forcing him to abdicate.